Document ID: EPA-HQ-OPPT-2011-0380-0070
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2013-06-10T04:00Z

Economic Analysis of the Third-Party Certification Framework for the Formaldehyde Standards for Composite Wood Products Proposed Rule

                                       

                                         
                                       
                                       
                                       
                                       
                                       
                                         
Economic and Policy Analysis Branch
Economics, Exposure and Technology Division
Office of Pollution Prevention and Toxics
              Office of Chemical Safety and Pollution Prevention
                     U.S. Environmental Protection Agency
                                       
                                       
                                       
                                     May 2013
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                         

                                       
                                Acknowledgment
                                       
EPA acknowledges the analytical and draft preparation support of Abt Associates Inc. of Cambridge, Massachusetts in the preparation of this report, provided under Contract No. EP-W-08-10.

	

 Notice

This is not an official guidance document and should not be relied upon to determine applicable regulatory requirements.  This document was prepared to provide economic information for the rulemaking process, and to meet various administrative and legislative requirements.  Due to the nature of the information available to EPA, the document contains various assumptions that may not reflect the regulatory determinations that an individual firm or organization would make were it to apply the rule's requirements to its specific circumstances.  Persons seeking information on specific regulatory requirements should consult 40 CFR Part 770, and the preamble for the regulatory action.

Mention of the names of specific companies, organizations, or entities does not constitute an endorsement by EPA.

Table of Contents

Notice	
1	Summary of Economic Analysis	1
2	Certification System	5
2.1	Certification System Framework	5
2.2	Profile of Third Party Certifiers and Accreditation Bodies	8
3	Costs of the TSCA Title VI TPC Rule	13
3.1	Proposed Rule Requirements	13
3.2	Wage Rates Used in the Analysis	14
3.3	Costs to Accreditation Bodies	15
3.4	Third-Party Certifier Costs	17
3.5	Total Cost to TPCs	25
3.6	Total Costs of the Rule for U.S. Accreditation Bodies and TPCs	26
4	Impact Analyses	29
4.1	Paperwork Reduction Act Analysis	29
4.2	Regulatory Flexibility Act Analysis	30
4.3	Unfunded Mandates Reform Act (UMRA)	34
4.4	Executive Order 13132 - Federalism	35
4.5	Executive Order 13175 - Tribal Implications	35
4.6	Executive Order 13045 - Protection of Children	35
4.7	Executive Order 13211 - Energy Effects	35
4.8	National Technology Transfer and Advancement Act	36
4.9	Executive Order 12898  -  Environmental Justice	36
Appendix A: Wage Rates
Appendix B: Recordkeeping and Reporting Burdens
Appendix C:  Costs and Benefits of Electronic Reporting
Summary of Economic Analysis

This report presents an economic analysis of the U.S. Environmental Protection Agency (EPA)'s proposed Third Party Certification rule.  The Formaldehyde Standards for Composite Wood Products Act, which created Title VI of the Toxic Substances Control Act (TSCA), established formaldehyde emission standards for composite wood products (hardwood plywood, medium-density fiberboard, and particleboard) sold, supplied, offered for sale or manufactured in the United States.  Under TSCA Tile VI, manufacturers of composite wood products must comply with specific formaldehyde emission standards, and their compliance must be verified by a third party certifier (TPC).  

Third-party certification involves a process by which a product, process or service is reviewed by a reputable and qualified independent third-party to verify that a set of norms, criteria, claims, practices or standards are being met. The standards used in a third-party certification process are typically voluntary consensus standards developed by nationally or internationally recognized standards-producing organizations or industry groups. TPCs are overseen by accreditation bodies (ABs), which provide an impartial verification of the competency of the TPCs. 

The proposed TPC rule establishes a framework whereby ABs accredit TPCs so that the TPCs may certify composite wood product manufacturers under TSCA Title VI.  The proposed rule identifies the roles and responsibilities ABs and TPCs, as well as the criteria for participating in the program.  Under the proposed framework, participating ABs would accredit TPCs, audit TPCs, maintain records on their accredited TPCs, and report to EPA on TPCs' activities.  TPCs would be responsible for activities such as regularly auditing manufacturers, conducting and verifying formaldehyde emissions tests, and ensuring that manufacturer quality assurance and quality control procedures and testing comply with the requirements set forth in the TSCA Title VI rule. 

Under the TSCA Title VI rule, participating accreditation bodies will need to familiarize themselves with the rule (in the first year), submit an application and enter into a recognition agreement with EPA (in the first year and every three years thereafter), and provide notifications and reports and keep records (every year).  As shown in Table 1-1, accreditation bodies are expected to incur costs of $1,685 in the first year, $1,070 in years with reapplication and recognition agreement resubmissions, and $633 in other years.  

Table 1-1: Costs per Accreditation Body
Type of Cost
Cost (2010$)

First Year
Reapplication Years[1]
Non-Reapplication Years
Rule Familiarization
                                                                          $615 
                                                                             $0
                                                                             $0
Application or Reapplication Process 
                                                                            $88
                                                                            $88
                                                                             $0
Prepare Recognition Agreement
                                                                           $349
                                                                           $349
                                                                             $0
EPA Notification
                                                                            $57
                                                                            $57
                                                                            $57
TPC Notification
                                                                            $12
                                                                            $12
                                                                            $12
Recordkeeping
                                                                           $308
                                                                           $308
                                                                           $308
Reporting
                                                                           $256
                                                                           $256
                                                                           $256
Cost per Accreditation Body
                                                                         $1,685
                                                                         $1,070
                                                                           $633
[1] Accreditation bodies are required to reapply to the program every three years.

Eight accreditation bodies in the U.S. are assumed to participate in the TSCA Title VI program.  As shown in Table 1-2, total annual costs to U.S. accreditation bodies are estimated to be $13,480 in the first year, $8,560 in years when accreditation bodies must reapply to the program, and $5,064 in other years.  Annualized costs are estimated at $6,303 to $6,320 per year, depending on the discount rate.

Table 1-2: Total Costs for U.S. Accreditation Bodies
Type of Cost
Cost (2010$)

First Year
Reapplication Years[1]
Non-Reapplication Years
Cost per Accreditation Body
                                                                         $1,685
                                                                         $1,070
                                                                           $633
Number of U.S. Accreditation  Bodies
                                                                              8
                                                                              8
                                                                              8
Total Costs for U.S. Accreditation Bodies
                                                                        $13,480
                                                                         $8,560
                                                                         $5,064
                    Annualized Costs (30 years, 3 percent)
                                    $6,303
                    Annualized Costs (30 years, 7 percent)
                                    $6,320
[1] Accreditation bodies are required to reapply to the program every three years.

TPCs participating in the TSCA Title VI program will need to conform to several voluntary standards and guides by the International Organization for Standardization (ISO) and International Electrotechnical Commission (IEC).  Accreditations can cost TPCs up to $25,000 obtain and $5,000 per year to maintain, but most TPCs will already have all the necessary accreditations.  TPCs will also have to familiarize themselves with the rule and submit an application to the TSCA Title VI program (in the first year); reapply to the program (every three years); and submit notifications and reports and maintain records (every year).  As shown in Table 1-3, TPCs that already have all accreditations in place will incur an estimated cost of $2,090 in the first year, $1,475 in reapplication years, and $983 in non-reapplication years.  TPCs that need to obtain an additional accreditation will incur an estimated cost of $27,090 in the first year, $6,475 in reapplication years and $5,983 in non-reapplication years.  

Table 1-3: Costs per TPC
Type of Cost
Cost (2010$)

First Year
Reapplication Years[2]
Non-Reapplication Years

Have Accred.
Need Accred.
Have Accred.
Need Accred.
Have Accred.
Need Accred.
Accreditation[1]
                                                                             $0
                                                                        $25,000
                                                                             $0
                                                                         $5,000
                                                                             $0
                                                                         $5,000
Rule Familiarization
                                                                           $615
                                                                           $615
                                                                             $0
                                                                             $0
                                                                             $0
                                                                             $0
Application or Reapplication Process 
                                                                           $492
                                                                           $492
                                                                           $492
                                                                           $492
                                                                             $0
                                                                             $0
Manufacturer Notification and Recordkeeping
                                                                           $773
                                                                           $773
                                                                           $773
                                                                           $773
                                                                           $773
                                                                           $773
Annual Report and Notifications of Changes
                                                                           $210
                                                                           $210
                                                                           $210
                                                                           $210
                                                                           $210
                                                                           $210
Cost per TPC
                                                                         $2,090
                                                                        $27,090
                                                                         $1,475
                                                                         $6,475
                                                                           $983
                                                                         $5,983
[1] Two-thirds of TPCs are assumed to be accredited for all three standards required by the rule (ISO/IEC Guide 65, 17020, and 17025) and thus incur no cost for accreditation or reaccreditation.  One-third of TPCs will need to become accredited (and maintain accreditation) for one additional standard at a cost of $25,000 in the first year and $5,000 per year in subsequent years.   
[2] TPCs are required to reapply every three years.  CARB TPCs are grandfathered in for the first year.

Nine TPCs in the U.S. are assumed to participate in the TSCA Title VI program.  Six of them are assumed to already have all the necessary accreditations, while three are assumed to need to obtain and maintain an additional accreditation.  As shown in Table 1-4, total annual costs to U.S. TPCs are estimated to be $93,810 in the first year, $28,275 per year in reapplication years, and $23,847 per year in the remaining years.  Total annualized costs are estimated at $27,232 to $28,123 per year, depending on the discount rate.

Table 1-4: Total Costs for U.S. TPCs
Type of Cost
Cost (2010$)

First Year
Reapplication Years[2]
Non-Reapplication Years

Have Accred.
Need Accred.
Have Accred.
Need Accred.
Have Accred.
Need Accred.
Cost per TPC
                                                                        $2,090 
                                                                        $27,090
                                                                        $1,475 
                                                                         $6,475
                                                                          $983 
                                                                         $5,983
Number of U.S. TPCs
                                                                              6
                                                                              3
                                                                              6
                                                                              3
                                                                              6
                                                                              3
Total Cost by Accreditation Status 
                                                                        $12,540
                                                                        $81,270
                                                                         $8,850
                                                                        $19,425
                                                                         $5,898
                                                                        $17,949
Total Costs for U.S. TPCs
                                                                        $93,810
                                                                        $28,275
                                                                        $23,847
Total Annualized Costs (30 years, 3%)
                                   $27,232 
Total Annualized Costs (30 years, 7%)
                                   $28,123 
[1] Two-thirds of TPCs are assumed to be accredited for all three standards required by the rule (ISO/IEC Guide 65, 17020, and 17025) and thus incur no cost for accreditation or reaccreditation.  One-third of TPCs will need to become accredited (and maintain accreditation) for one additional standard.   
[2] TPCs are required to reapply every three years.  CARB TPCs are grandfathered in for the first year.

Table 1-5 summarizes the estimated costs attributable to the proposed rule.  The estimated total cost is $107,290 in the first year.  Total subsequent year costs range from $28,911 to $36,835 depending on whether it is a reapplication year for ABs and TPCs.  Annualized costs, calculated over a 30-year period at three and seven percent discount rates, are $33,535 to $34,443.

Table 1-5:  Summary of Costs to U.S. Accreditation Bodies and TPCs (2010$)
Type of Cost
U.S. ABs
U.S. TPCs
All Affected U.S. Firms

Have Necessary Accreditation
Need Additional Accreditation

Per Firm Costs: Year 1
                                    $1,685
                                    $2,090
                                    $27,090
                                       -
Per Firm Costs: Subsequent Years
                                $633 to $1,070
                                $983 to $1,475
                               $5,983 to $6,475
                                       -
Number of Affected Firms
                                       8
                                       6
                                       3
                                      17
Total Year 1 Costs
                                    $13,480
                                    $12,540
                                    $81,270
                                   $107,290
Total Costs: Subsequent Years
                               $5,064 to $8,560
                               $5,898 to $8,850
                              $17,949 to $19,425
                              $28,911 to $36,835
Total Annualized Costs (30-Years, 3 percent discount rate)
                                    $6,303 
                                    $6,755 
                                   $20,477 
                                   $33,535 
Total Annualized Costs (30-Years, 7 percent discount rate)
                                    $6,320 
                                    $6,706 
                                   $21,416 
                                   $34,443 

The rule will affect an estimated nine small entities in the U.S.  -  four accreditation bodies and five TPCs.  Some of the small entities are expected to be businesses, and others to be non-profit organizations.  The rule's impacts on small entities are analyzed by determining the ratio of costs to revenues for small businesses, and the ratio of costs to expenses for small non-profit organizations.  The cost impacts are then categorized as being under one percent, between one and three percent, and over three percent.
      
As shown in Table 1-6, there five small non-profits predicted to be affected by the rule, all of which are estimated to have cost impacts of less than one percent of expenses.  Four small businesses are predicted to be affected by the rule; two of them are estimated to have cost impacts of less than one percent of revenues, and two are estimated to have cost impacts between one percent and three percent of revenues.  No small entities are predicted to have cost impacts over three percent.

Table 1-6:  Summary of Small Entity Impacts
Entity Type

Number of U.S. Entities that are Small
Estimated Number of Small Entities with Impacts
                                                                               
                                                                               

Under One Percent
Between One and Three Percent 
                              Over Three Percent
                                     TPCs
Non-profit
                                       2
                                       2
                                       0
                                       0
                                       
Business
                                       3
                                       1
                                       2
                                       0
                                      ABs
Non-profit
                                       3
                                       3
                                       0
                                       0
                                       
Business
                                       1
                                       1
                                       0
                                       0
                                   Combined
Non-profit
                                       5
                                       5
                                       0
                                       0
                                       
Business
                                       4
                                       2
                                       2
                                       0
                                       
Total
                                       9
                                       7
                                       2
                                       0

Certification System 

Certification System Framework

The certification system under the proposed TSCA Title VI TPC rule is based on a framework of international standards organizations and existing voluntary consensus standards, accreditation and inspection oversight organizations, accreditation bodies, and third party certifiers, as described below.  See Figure 1 for a diagrammatic approach to the relationships between the organizations in the certification system framework.

	The certification system under the TSCA Title VI TPC rule will be similar, although not identical, to that under the California Air Resources Board's (CARB) Air Toxics Control Measure (ATCM) to reduce formaldehyde emissions from composite wood products.  Under the CARB ATCM, manufacturers of composite wood products must have their compliance with the emission standards verified by a TPC approved by CARB.  The CARB ATCM requires TPCs to: verify that composite wood product manufacturers are complying with the quality assurance requirements; verify formaldehyde emission test results; work with manufacturers to establish quality control limits for each product type and production line; provide independent inspections and audits of manufacturers and records; use laboratories that are certified by an accreditation body that is a signatory to the International Laboratory Accreditation Cooperation Mutual Recognition Arrangement; and provide an annual report to CARB.  In order to implement the ATCM, CARB directly evaluates and approves TPCs seeking to participate in the program.
      
International Standards Organizations

The International Organization for Standardization, known as ISO, is a non-governmental international standard-setting body comprising representatives from various national standards organizations.  The organization promulgates worldwide proprietary industrial and commercial standards.  The International Electrotechnical Commission (IEC) is a non-profit, non-governmental international standards organization that prepares and publishes International Standards for electrical, electronic and related technologies.  The IEC cooperates with the ISO when appropriate.  The use of the ISO/IEC prefix covers publications from ISO/IEC Joint Technical Committee on Information Technology, as well as conformity assessment standards developed by ISO's committee on conformity assessment (CASCO). 

The ISO/IEC standards relevant to the TSCA Title VI TPC rule include ISO/IEC Guide 65, which specifies requirements for bodies operating product certification systems; ISO/IEC 17011, which specifies general requirements for accreditation bodies accrediting conformity assessment bodies; ISO/IEC 17020, which specifies requirements for competence of calibration and testing laboratories; and ISO/IEC 17025, which specifies the general requirements for laboratories to demonstrate they are competent to conduct testing and/or calibrations, including sampling.  
      
Accreditation and Inspection Oversight Organizations 
	
Accreditation and inspection oversight organizations ensure that their accreditation body members only accredit laboratories that are competent to do the work they undertake and are not subject to conflicts of interest.  They also establish mutual recognition arrangements among accreditation bodies to ensure that the results from accredited laboratories will be accepted anywhere in the world.  Examples of accreditation and inspection oversight organizations include the International Accreditation Forum, Inc. (IAF), and the International Laboratory Accreditation Cooperation (ILAC).  
                                       
Figure 1.  TSCA Tile VI Proposed Third-Party Certification Framework
             International Organization for Standardization (ISO) 
                                       
               International Electrotechnical Commission (IEC) 

International Standards 
Organizations
Develop consensus-based international 
standards for quality management
and conformity assessment

                 International Accreditation Forum, Inc (IAF) 
                          or equivalent organization
* Ensures AB conformance to ISO/IEC 17011[1]
* Require member ABs to be a signatory to MLA[2]
          International Laboratory Accreditation Cooperation (ILAC) 
                          or equivalent organization
* Ensures AB conformance to ISO/IEC 17011[1]
* Require member ABs to be a signatory to MRA[3]
Accreditation and InspectionOversight Organizations 
Ensure competency of Accreditation 
Bodies and their conformance with 
international standards:
* Ensures AB conformance to 
ISO/IEC 17011[1]
* Ensure ABs are qualified to oversee 
TPC conformance to ISO/IEC Guide 65
ISO/IEC17020 and/or ISO/IEC 17025

                                  AB Type #1 
                                   Product 
                              Accreditation Body
*  Recognition Agreement with EPA
*  Signatory to IAF MLA or equivalent
*  Ensure TPC conformance to ISO/IEC Guide  65 & ISO/IEC 17020
                                  AB Type #3 
                     Product & Lab Accreditation Body
   *  Recognition Agreement with EPA 
   *  Signatory to IAF MLA and ILAC MRA or equivalents
   *  Ensure TPC conformance to ISO/IEC Guide 65,  ISO/IEC 17020 & ISO/IEC 17025
Accreditation Bodies                   AB Type #2 Laboratory Accreditation Body
   *  Recognition Agreement with EPA
   *  Signatory to ILAC MRA or equivalent
   *  Ensure TPC conformance to ISO/IEC 17025
Ensure competency of TPCs; verify accuracy of emission test procedures; 
monitor quality assurance programs, audit 
and inspect TPCs and panel producers:
* Management systems conform to 
ISO/IEC 17011
* Ensure TPC conformance to 
applicable ISO/IEC Guides & Standards

Third Party Certifiers
                                    TPC #2
         Accredited by AB #3 (acting as both Product AB & Lab AB)
                                       
                                    TPC #1
             Accredited by AB #1 (Product AB) & AB #2 (Lab AB)
Ensure that panel producers are in compliance with statutory 
formaldehyde emission standards:
* Management systems conform to 
ISO/IEC Guide 65
* Conform to applicable ISO/IEC 
Guides & Standards for
Product & Laboratory Certification
and Inspections
                               Panel Producer #4
                              Certified by TPC #2
                                       
                                       
                               Panel Producer #3
                              Certified by TPC #2
                                       
                                       
                               Panel Producer #2
                              Certified by TPC #1
                                       
                                       
                               Panel Producer #1
                              Certified by TPC #1
                                       
                                       
Composite Wood
Product Panel Producer

[1] ISO/IEC 17011  -  General Requirements for Accreditation Bodies Accrediting Conformity Assessment Bodies
[2] MLA  -  IAF's Multilateral Recognition Arrangement requires AB signatories to demonstrate they are capable of accrediting product certification bodies in conformance with ISO/IEC Guide 65  -  General Requirements for Bodies Operating Product Certification Systems and ISO/IEC 17020  -  General Criteria for the Operation of Various Types of Bodies Performing Inspection.
[3] MRA  -  ILAC's Mutual Recognition Arrangement requires AB signatories to demonstrate they are capable of accrediting testing laboratories in conformance with ISO/IEC 17025  -  General Requirements for the Competence of Testing and Calibration Laboratories. 

Accreditation Bodies

An accreditation body (AB) is an organization that provides an impartial verification of the competency of a laboratory or TPC.  In the context of formaldehyde and composite wood products, ABs ensure that TPCs can verify the accuracy of the emission test procedures used by composite wood product manufacturers to conduct formaldehyde emissions tests; monitor manufacturer quality assurance programs; and provide independent audits and inspections of manufacturers' mills and testing facilities.  There are ABs located throughout the world.  ABs in the U.S. that are IAF or ILAC signatories include the AIHA Laboratory Accreditation Program (AIHA-LAP), the American Association for Laboratory Accreditation (A2LA), the American National Standards Institute (ANSI), Forensic Quality Services (FQS), the International Accreditation Service (IAS), the Laboratory Accreditation Bureau (L-A-B), the National Voluntary Laboratory Accreditation Program (NVLAP), and Perry Johnson Laboratory Accreditation, Inc. (PJLA).

The proposed TSCA Title VI TPC rule requires ABs to be either a signatory to IAF's Multilateral Recognition Arrangement (MLA) or the equivalent for inspection and lab competency; ILAC's Mutual Recognition Arrangement (MRA) or the equivalent for product certification competency; or both.  An AB that is an IAF signatory is responsible for ensuring that the TPC is in conformity with ISO/IEC Guide 65 and ISO/IEC 17020.  An AB that is an ILAC signatory is responsible for ensuring that a TPC is in conformity with ISO/IEC 17025.  

Thus, TPCs will need to be accredited by two ABs unless their AB is a signatory to both ILAC and IAF (or equivalent oversight bodies).  In the TSCA Title VI program, a Product AB is an organization that is a signatory to the IAF MLA or the equivalent, and that can verify the accuracy of the test procedures and facilities used by manufacturers to conduct tests, monitor manufacturer quality assurance and quality control programs, and provide audits and inspections.  A Laboratory AB is an organization that is a signatory to the ILAC MRA, or the equivalent, and that is qualified to verify that testing and calibration laboratories can operate a quality management system, are technically competent, and are able to generate technically valid emissions results.

Third Party Certifiers 

	The third-party certifiers (TPCs) are responsible for activities such as regularly auditing manufacturers, conducting and verifying formaldehyde emissions tests, and ensuring that manufacturer quality assurance and quality control procedures and testing complies with TSCA Title VI TPC rule.  Specific requirements include verifying that composite wood product manufacturers have adequate quality assurance controls and are complying with quality assurance and quality control requirements; verifying quality control test results compared with ASTM E-1333-96 test results by having laboratories conduct quarterly tests and evaluate test method equivalence; reviewing applications from manufacturers for reduced testing; working with manufacturers to establish quality control limits, and, if applicable, other limits for each product type and production line; informing manufacturers of criteria that will be used to determine if product lots are consistently exceeding the applicable quality control limit; inspecting and auditing manufacturers and their records at least quarterly; using a testing laboratory or laboratories that comply with ISO/IEC 17025; certifying composite wood product types that comply with requirements under TSCA Title VI; following ISO/IEC Guide 65; following ISO/IEC 17020 in the carrying out of their inspections of the manufacturers; providing an approved TPC number (supplied by the accrediting AB) to the manufacturer for labeling and recordkeeping; and using laboratories that participate in an annual inter-laboratory comparison or proficiency testing program.

In the example shown in Figure 1, TPC #1 is accredited by two ABs:  AB #1 (which is a signatory to the IAF MLA and acts as the Product AB) and AB #2 (which is a signatory to the ILAC MRA and acts a Laboratory AB).  TPC #2 is accredited by a single AB, AB #3, which is a signatory to both the IAF MLA and the ILAC MRA and acts as both a Product AB and a Laboratory AB.  

Profile of Third Party Certifiers and Accreditation Bodies

Third Party Certifiers

CARB has approved nine TPCs located in the U.S. (although most of these U.S. TPCs provide services internationally).  Two of these TPCs are non-profit organizations, and the rest are businesses.  Table 2-1 lists the domestic TPCs approved by CARB, their NAICS code, the type of organization, the sales volume or expenditures and the number of employees for the TPC or its parent organization, the U.S. Small Business Administration's size threshold for the NAICS code, and the TPC's small entity status.   

This analysis assumes that 9 U.S. entities will act as TPCs under the TSCA Title VI program, and uses existing CARB TPCs as a proxy for their size and characteristics, but that does not mean that all of the CARB TPCs will become TPCs under Title VI.  In reality, some of the CARB TPCs may choose not to participate in the federal program, and/or new entities may apply that are not part of the CARB program. 

Size information was available for four of the nine U.S. TPCs, including the two non-profits.  The size of the TPCs ranges from a non-profit with 10 employees and $1.6 million in expenditures to a business with 2,500 employees in 125 offices with parent company that manages $3.1 billion in assets.  

Under the Regulatory Flexibility Act (RFA), unless an agency establishes an alternate definition, the term "small organization" means any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.  The RFA does not provide any guidance on how to judge whether an organization is dominant in its field.  Non-profit TPCs and accreditation bodies perform the same activities (such as conducting and verifying formaldehyde emissions tests, accrediting, and auditing) as their for-profit counterparts.  In order to interpret the RFA criteria for small organizations and treat all affected entities consistently, this analysis determines the size status of non-profits by applying the SBA size thresholds for the NAICS codes the non-profits are classified in.  

Based on the data in Table 2-1, the two U.S. TPCs that are non-profits are classified as small entities, and two of the businesses are classified as large.  The size status for five CARB TPCs could not be determined using the data in Table 2-1, so the small entity analysis in Section 4.2 estimates a generic distribution of sizes based on Census data for the relevant NAICS codes.  

TPCs come from a diverse set of industries  -  the six U.S.-based CARB TPCs for which Dun & Bradstreet listed an industry classification fall into five different NAICS codes.  Thus, the firms that are likely to seek TPC accreditation may be very different from each other in terms of size, organization, and financial condition.  Table 2-2 presents key industry summary statistics for these NAICS codes.  However, the domestic TPCs approved by CARB represent a very small share of the 142,000 firms in these industries.  And comparing Table 2-1 and Table 2-2, the CARB TPCs appear to be larger than the average firms in these industries.  Thus, these Census statistics may not be representative of current CARB TPCs or potential new TSCA Title VI TPCs. 

Table 2-1: CARB-Approved Third Party Certifiers Based in the U.S.
Company Name
NAICS code
Organization  Type
Annual Sales Volume or Expenditures [1]
(millions $)
Total Employees
                             SBA Size Threshold: 
                      Revenues ($ Millions) or Employees
Small Entity Status 
Certification Services International, LLC
                                    Unknown
                                    Unknown
                                    Unknown
                                    Unknown
                                   Unknown 
                                   Unknown 
Composite Panel Association North America, Inc. (CPA)
                                    813910
                                  Non-Profit
                                     $3.0
                                      14
                                     $7.0
                                    Small 
Forestwood Industries, Inc.
                                    Unknown
                                    Unknown
                                    Unknown
                                    Unknown
                                   Unknown 
                                   Unknown 
Hardwood Plywood and Veneer Association (HPVA)
                                    813910
                                  Non-Profit
                                     $1.6
                                      10
                                     $7.0
                                    Small 
NTA Incorporated
                                    541330
                                Private Company
                                     $5.4
                                      80
                                     $4.5
                                    Large 
PFS Corporation
                                    541611
                                Private Company
                                    Unknown
             According to company website, more than 100 employees
                                     $7.0
                                    Unknown
                                       
Professional Service Industries, Inc. (PSI), owned by Olympus Partners
                                    Unknown
                                Private Company
Unknown, but Olympus Partners website reports they manage $3.1 billion in assets.
Unknown, but PSI website reports they have more than 2,500 employees in 125 offices  
                                   Unknown 
               Assumed to be large because of reported assets. 
Scientific Certification Systems (SCS)
                                    541380
                                Private Company
                                    Unknown
                        SCS web site lists 87 employees
                                     $12.0
                                   Unknown 
                                       
TIMBERCO (dba TECO)
                                    561990
                                Private Company
                                    Unknown
                                      31
                                     $7.0
                                   Unknown 
[1] Annual sales volume is reported for businesses, and annual expenditures are reported for non-profits
Sources: California Air Resources Board (CARB) 2011, Dun & Bradstreet 2011, U.S. Small Business Administration 2010 (size standards), and company web sites for data on their sales volume and employees (PSI 2012, PFS 2012, SCS 2012a and SCS 2012b)

Table 2-2: Industry Summary Statistics for NAICS Identified for U.S. Third Party Certifiers
NAICS
                                     Firms
                               Establish- ments
                               Revenues ($1000)
                              Number of Employees
                       Average Revenues per Firm ($1000)
                          Average Employees per Firm
541330 - Engineering services
                                                                         47,714
                                                                         58,391
                                                                   $187,531,866
                                                                        977,031
                                                                        $3,930 
                                                                             20
541380 - Testing laboratories
                                                                          5,288
                                                                          6,549
                                                                    $12,386,831
                                                                        106,618
                                                                        $2,342 
                                                                             20
541611 - Administrative management consulting services
                                                                         59,612
                                                                         61,583
                                                                    $67,994,053
                                                                        351,829
                                                                        $1,141 
                                                                              6
561990 - All other support services
                                                                         12,888
                                                                         14,539
                                                                    $20,897,346
                                                                        195,544
                                                                        $1,621 
                                                                             15
813910 - Business associations
                                                                         16,418
                                                                         17,028
                                                                    $22,482,137
                                                                        116,055
                                                                        $1,369 
                                                                              7
Total
                                                                        141,920
                                                                        158,090
                                                                    311,292,233
                                                                      1,747,077
                                                                        $2,193 
                                                                             12
Note that TPCs could potentially be classified in additional NAICS as well; as a result, this list may not be comprehensive.
Sources: U.S. Census Bureau 2010a; U.S. Census Bureau 2010b; U.S. Census Bureau 2010c; U.S. Census Bureau 2010d

Because Executive Order 12866, the Regulatory Flexibility Act, and the Unfunded Mandates Reform Act are all focused on entities located in the U.S., this analysis estimates costs and small entity impacts based on the expected number of domestic entities.  But because the approval requirements for information collection requests under the Paperwork Reduction Act is not limited to U.S. entities, the reporting and recordkeeping burden of the rule is calculated for both foreign and domestic entities.  Therefore, the analysis estimates the number of TPCs and ABs in other countries that are expected to participate in the Title VI program.

As shown in Table 2-3, there are a total of 27 CARB approved TPCs outside of the U.S., bringing the total number of CARB approved TPCs to 36.  For the purpose of calculating reporting and recordkeeping burden under the Paperwork Reduction Act in Section 4.1, this analysis assumes that there will be 9 domestic and 27 foreign TPCs under the Title VI program, the same number as under the CARB program.      

Table 2-3: CARB-Approved Third Party Certifiers by Country
Country Where TPC is Located
Number of TPCs
Australia
                                       1
Austria
                                       1
Belgium
                                       1
China
                                       5
Czech Republic
                                       1
Denmark
                                       1
France
                                       1
Germany
                                       4
Hong Kong
                                       3
Indonesia
                                       1
Italy
                                       3
New Zealand
                                       1
Poland
                                       1
Spain
                                       1
Sweden
                                       1
Taiwan
                                       1
     Sub-total for TPCs outside the U.S.
                                      27
United States
                                       9
     Total
                                      36
Source: California Air Resources Board (CARB) 2011 

Accreditation Bodies

There are eight ABs in the U.S. that are currently IAF or ILAC signatories. Table 2-4 lists the domestic ABs, their NAICS code, the type of organization, the sales volume or expenditures and the number of employees for the AB or its parent organization, the U.S. Small Business Administration's size threshold for the NAICS code, and the AB's small entity status.   

This analysis assumes that 8 U.S. ABs will participate in the TSCA Title VI program, and uses the characteristics of the ABs in Table 2-4 as proxies to estimate the impacts of the rule.  This assumption may overestimate the number of affected entities, because some ABs that are IAF or ILAC signatories may not choose to participate in the TSCA Title VI program.  And it is unlikely that additional bodies will become signatories as a result of the TSCA Title VI TPC rule, because becoming a signatory to IAF, ILAC, or an equivalent organization is a time-intensive process that may take up to a year to complete (Personal Communication with IAS 2011).  

Five of the domestic ABs that are IAF or ILAC signatories are non-profit organizations, so this analysis assumes that five similarly sized non-profit ABs will participate in the TSCA Title VI program.  Under the Regulatory Flexibility Act (RFA), unless an agency establishes an alternate definition, the term "small organization" means any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.  The RFA does not provide any guidance on how to judge whether an organization is dominant in its field.  Non-profit TPCs and accreditation bodies perform the same activities (such as conducting and verifying formaldehyde emissions tests, accrediting, and auditing) as their for-profit counterparts.  In order to interpret the RFA criteria for small organizations and treat all affected entities consistently, this analysis determines the size status of non-profits by applying the SBA size thresholds for the NAICS codes the non-profits are classified in.  This results in an estimate that three small non-profits and one small business will participate in the TSCA Title VI program as ABs.

Table 2-4: U.S. Accreditation Bodies that are IAF or ILAC Signatories
                                 Company Name
                                  NAICS code
                             Organizat- ion  Type
                         Sales Volume / Expenditures 
                                ($ Millions)[1]
                                Total Employees
                             SBA Size Threshold: 
                                   Revenues 
                           ($ Millions) or Employees
                              Small Entity Status
AIHA Laboratory Accreditation Programs, LLC [2]
                                    561990
                                  Non-Profit
                                    $14.9 
                                      63
                                     $7.0 
                                     Large
American Association For Laboratory Accreditation
                                    813920
                                  Non-Profit
                                    $10.6 
                                      48
                                    $14.0 
                                     Small
American National Standards Institute (ANSI)
                                    813910
                                  Non-Profit
                                    $31.3 
                                      122
                                     $7.0 
                                     Large
Forensic Quality Services, Inc.
                                    541990
                                  Non-Profit
                                     $0.6 
                                       4
                                     $7.0 
                                     Small
International Accreditation Service (IAS)
                                    813319
                                  Non-Profit
                                     $2.5 
                                      54
                                     $7.0 
                                     Small
Laboratory Accreditation Bureau
                                    541712
                                Private Company
                                     $0.4 
                                       6
                                 500 employees
                                     Small
National Voluntary Laboratory Accreditation Program (NVLAP), operated by the National Institute of Standards and Technology (NIST)
                                       -
                              Federal Government
                                       -
                                       -
                                       -
                                     Large
Perry Johnson Laboratory Accreditation Inc.[3]
                                    541618
                                Private Company
                                    $17.0 
                                      147
                                     $7.0
                                     Large
Notes: 1. Sales volume data are presented for businesses. Expenditure data are presented for non-profits. 
2.  Size data for AIHA Laboratory Accreditation Programs, LLC is based on the size of the parent organization, the American Industrial Hygiene Association (AIHA).
3. Sales volume and employee size data for Perry Johnson Laboratory Accreditation Inc. include D&B sales and employee data for "Perry Johnson Laboratory Accreditation" and the American Business Directory sales data for the related companies "Perry Johnson Inc" and "Perry Johnson Registrars".
Sources: American Business Directory 2011 (sales and employee data for Perry Johnson Inc. and Perry Johnson Registrars), Dun & Bradstreet 2011 (business sales volumes and employee data and NAICS codes for all entities), U.S. Internal Revenue Service 2009, 2010 (non-profit expenditures and employees), U.S. Small Business Administration 2010  (size standards), and company web sites for AIHA and Perry Johnson for relationships among entities in their family tree (AIHA-LAP LLC 2012, Perry Johnson & Associates 2012).

Table 2-5 lists the foreign countries with CARB-approved TPCs, the ILAC or IAF signatory ABs in that country, and their status as signatories for ISO/IEC Guide 65, 17020, and 17025.  It is not known which ABs these CARB-approved TPCs use.  However, every country with a CARB approved TPC also has an AB that is an IAF or ILAC signatory, and most of the ABs are signatories to all three relevant ISO/IEC standards.  The exceptions are Australia, New Zealand, and Hong Kong, each of which lacks an AB that is a signatory for ISO/IEC Guide 65.  However, there is a joint AB for Australia and New Zealand that is a signatory for ISO/IEC Guide 65, and there is an AB in China that is a signatory for ISO/IEC Guide 65.  Therefore, each foreign TPC could use a local AB for the TSCA Title VI program.

There are a total of 17 ABs shown in Table 2-5 that are IAF or ILAC signatories and are located in foreign countries with CARB-approved TPCs.  While EPA does not know whether these ABs accredit CARB TPCs or whether some CARB TPCs use ABs located outside their own country, for the purpose of calculating reporting and recordkeeping burdens under the Paperwork Reduction Act, the analysis in Section 4.1 assumes that there will be 17 foreign ABs that participate in the TSCA Title VI program.

Table 2-5: Summary of IAF or ILAC Signatory Accreditation Bodies in Foreign Countries with CARB TPCs
Country
                    Number of CARB-approved TPCs in Country
Accreditation Body
                                   ISO/IEC 
                                   Guide 65
                                 ISO/IEC 17020
                                 ISO/IEC 17025
1. Australia
                                       1
National Association of Testing Authorities, Australia (NATA)
                                       
                                       X
                                       X
2. Australia and New Zealand
                                       
Joint Accreditation System of Australia and New Zealand (JAS-ANZ)
                                       X
                                       
                                       
3. Austria
                                       1
Bundesministerium fur Wirtschaft, Familie und Jugend (BMWA)
                                       X
                                       X
                                       X
4. Belgium
                                       1
Belgian Accreditation Structure (BELAC)
                                       X
                                       X
                                       X
5. China
                                       5
China National Accreditation Service for
Conformity Assessment (CNAS)
                                       X
                                       X
                                       X
6. Czech Republic
                                       1
Czech Accreditation Institute (CAI)
                                       X
                                       X
                                       X
7. Denmark
                                       1
Danish Accreditation (DANAK)
                                       X
                                       X
                                       X
8. France
                                       1
Comite Francais d'Accreditation (COFRAC)
                                       X
                                       X
                                       X
9. Germany
                                       4
Deutsche Akkreditierungsstelle GmbH
(DakkS)
                                       X
                                       X
                                       X
10. Hong Kong
                                       3
Hong Kong Accreditation Service (HKAS)
                                       
                                       X
                                       X
11. Indonesia
                                       1
National Accreditation Body of Indonesia
(KAN)
                                       X
                                       X
                                       X
12. Italy
                                       3
Sistema Italiano di Accreditamento
(ACCREDIA)
                                       X
                                       X
                                       X
13. New Zealand
                                       1
International Accreditation New Zealand
(IANZ)
                                       
                                       X
                                       X
14. Poland
                                       1
Polish Centre for Accreditation (PCA)
                                       X
                                       X
                                       X
15. Spain
                                       1
Entidad Nacional de Acreditacion (ENAC)
                                       X
                                       X
                                       X
16. Sweden
                                       1
Swedish Board for Accreditation and
Conformity Assessment (SWEDAC)
                                       X
                                       X
                                       X
17. Taiwan
                                       1
Taiwan Accreditation Foundation (TAF)
                                       X
                                       X
                                       X
Result: there are a total of 17 ABs that are IAF or ILAC signatories in foreign countries with CARB-approved TPCs 
Sources:  IAF 2011; ILAC 2011; CARB 2011.

Costs of the TSCA Title VI TPC Rule

This section describes the proposed regulatory requirements for accreditation bodies and TPCs and presents the estimated costs for obtaining and maintaining accreditation.

Proposed Rule Requirements

EPA is proposing to administer the TPC program by developing recognition agreements with accreditation bodies.  The ABs would then process TPC applications and oversee the TPCs.  

Requirements for Accreditation Bodies 

As described in Section 2.1, the proposed rule would require ABs to be either a signatory to the International Laboratory Accreditation Cooperation (ILAC) Mutual Recognition Arrangement (MRA) or the equivalent for inspection and lab competency, the International Accreditation Forum, Inc. (IAF) Multilateral Recognition Arrangement (MLA) or the equivalent for product certification competency, or both.  EPA would also require that ABs:

      * Conform with ISO/IEC 17011, which lists the basic criteria for an international accreditation body who reviews and audits the TPC; 
      * Submit an application to enter into a recognition agreement with EPA.  The application would include their contact information; documentation of their IAF MLA, ILAC MRA, or equivalent signatory status; and a description of any other qualifications related to performing product or laboratory accreditation.  The recognition agreement would need to be renewed every three years;
      * Notify EPA in the following instances: loss of signatory status; TPC application; TPC accreditation; TPC compliance failure; organization policy or management structure changes that could adversely affect accreditation program; and with checklists and other records documenting compliance with systems audits and on-site assessments;
      * Notify TPCs if the AB withdraws or is removed from the program;
      * Maintain records documenting TPC accreditation applications, and checklists and other records documenting compliance with systems audits and on-site assessments.  Applications must be retained for three years from the date they were submitted; and
      * Provide an annual report to EPA with the number of TPC applications received; the number of TPCs approved and denied; the names and contact information of all accredited TPCs; the number and locations of systems audits and on-site assessments; and the results of accredited TPC proficiency testing and inter-laboratory comparisons.
          
Requirements for TPCS

The proposed rule would require that TPCs:

      * Conform to ISO/IEC Guide 65 (general requirements for bodies operation product certification systems) and ISO/IEC 17020 (general criteria for the operation of various types of bodies performing inspection);
      * Use a laboratory that conforms to ISO/IEC 17025 (requirements for competence of calibration and testing laboratories); and
      * Be qualified to administer the approved formaldehyde test methods they will be using.
          
       EPA would also require the following recordkeeping and reporting activities for TPCs:
 
      * Submit an application to the Product accreditation body every three years with domestic contact information; type of composite wood product(s) intended to be certified; and a description of experience with ISO/IEC Guide 65, ISO/IEC 17020, and the product(s) the intended to be certified;
      * Submit an application to the Laboratory accreditation body every three years with domestic contact information; and a description of experience with test method ASTM E-1333-96 and in evaluating correlation between tests, performing formaldehyde tests on composite wood products, and operating or using laboratories that comply with ISO/IEC 17025;
      * Maintain records for three years that document the certified manufacturers and products, including those approved for reduced testing; the results of inspections, audits, and emissions tests; the laboratories and tests used; and the methods and results for establishing test method correlations;
      * Provide an annual report to its accreditation body or bodies with a list of manufacturers and products certified during the previous year; a list of non-complying products or events; a list of laboratories and tests used by the TPC; and the results of inter-laboratory comparison or proficiency tests for laboratories used by the TPC; and
      * Inform accreditation body or bodies within 30 days of any changes in personnel qualifications, procedures, or laboratories used by the TPC.
          
Wage Rates Used in the Analysis

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

Loaded wage rates for managerial, technical, and clerical personnel are derived by combining data on wages and fringe benefits with estimates of overhead rates, following the methodology described in "Wage Rates for Economic Analysis of the Toxics Release Inventory Program" (EPA, 2002b).  Wage data for each labor category are provided by the Employer Costs for Employee Compensation (ECEC) Supplemental Tables available on the BLS website (U.S. Bureau of Labor Statistics (BLS) 2011).  The loaded wage rate for managerial labor is $66.78; for technical labor, $56.31; and for clerical labor, $25.65.  Table 3-1 presents the basic data used to calculate the loaded wage rates for all three categories of labor. 
Table 3-1: Loaded Industry Wage Rates, 2010$
Labor Category
                                  Base Wages
                       Fringe benefits + overhead factor
                                 Loaded Wages
Managerial
                                   $42.42[a]
                                   1.57[b,c]
                                    $66.78
Professional/
Technical
                                   $36.57[a]
                                   1.54[b,c]
                                    $56.31
Clerical
                                   $16.72[a]
                                   1.53[b,c]
                                    $25.65
Notes:
a Base wages are estimated in the ECEC Supplemental Tables (U.S. Bureau of Labor Statistics (BLS) 2011).
b Fringe benefits are estimated in the ECEC Supplemental Tables (U.S. Bureau of Labor Statistics (BLS) 2011).
c An overhead rate of 17% of base wages is used here, based on methodology and assumptions in U.S. Environmental Protection Agency (EPA) 2002a, b.
Source:U.S. Bureau of Labor Statistics (BLS) 2011, U.S. Environmental Protection Agency (EPA) 2002a, b.

Costs to Accreditation Bodies 
      
      The proposed TSCA Title VI TPC rule requires accreditation bodies to be signatories to IAF, ILAC or equivalent oversight bodies.  The process of becoming a signatory is time-intensive and may take up to a year to complete, so it is unlikely that additional bodies will become signatories as a result of the TSCA Title VI TPC rule (Personal Communication with IAS 2011).  Thus, costs are estimated assuming that only existing IAF and ILAC signatories will serve as accreditation bodies for the third-party certifiers under this regulation.  Therefore, the estimated incremental costs to the accreditation bodies related to the proposed rule will include:
      
         1. Rule Familiarization:  Reading the rule in order to understand the requirements;
         2. Application Submission:  Submitting an application to enter into a recognition agreement with EPA;
         3. Prepare Recognition Agreement:  If the application is approved, enter into a recognition agreement with EPA;
         4. EPA Notification:  Provide EPA with notifications in the following instances:  loss of signatory status; TPC application; TPC accreditation; TPC compliance failure; organization policy or management structure changes that could adversely affect accreditation program; and provide checklists and other records documenting compliance with systems audits and on-site assessments;
         5. TPC Notification:  Provide TPCs with notifications if the AB withdraws or is removed from the program;
         6. Recordkeeping:  Maintain records documenting TPC accreditation applications, and checklists and other records documenting compliance with systems audits and on-site assessments.  Applications must be retained for three years from the date they were submitted; and
         7. Reporting:  Provide an annual report to EPA with the number of TPC applications received; the number of TPCs approved and denied; the names and contact information of all accredited TPCs; the number and locations of systems audits and on-site assessments; and the results of accredited TPC proficiency testing and inter-laboratory comparisons.
      
      Accreditation bodies are required to renew their recognition agreement with EPA every three years.  This analysis assumes that accreditation bodies incur application submission and recognition agreement preparation costs in the first year and subsequently every three years thereafter.  Costs associated with EPA notification, TPC notification, recordkeeping and reporting are assumed to be incurred annually.  Rule familiarization is a one-time cost incurred in the first year.  As a result, accreditation bodies are expected to incur costs of $1,685 in the first year, $1,070 in reapplication years, and $633 in the non-reapplication years, as summarized below in Table 3-2 and described in more detail in Appendix B (see Table B-1 and Table B-3).  This analysis assumes that eight organizations in the U.S. will become accreditation bodies, resulting in estimated total annualized costs of $6,303 per year at a three percent discount rate, and $6,320 per year at a seven percent discount rate.

Table 3-2: Costs for Accreditation Bodies
Type of Cost
Cost (2010$) [1]

First Year
Reapplication Years [2]
Non-Reapplication Years [3]
Rule Familiarization
                                                                          $615 
                                                                             $0
                                                                             $0
Application or Reapplication Process [1]
                                                                            $88
                                                                            $88
                                                                             $0
Prepare Recognition Agreement
                                                                           $349
                                                                           $349
                                                                             $0
EPA Notification
                                                                            $57
                                                                            $57
                                                                            $57
TPC Notification
                                                                            $12
                                                                            $12
                                                                            $12
Recordkeeping
                                                                           $308
                                                                           $308
                                                                           $308
Reporting
                                                                           $256
                                                                           $256
                                                                           $256
                          Cost per Accreditation Body
                                                                         $1,685
                                                                         $1,070
                                                                           $633
Number of U.S. Accreditation Bodies
                                                                              8
                                                                              8
                                                                              8
Total Costs for U.S. Accreditation Bodies
                                                                        $13,480
                                                                         $8,560
                                                                         $5,064
Total Annualized Costs (30 years, 3%) 4
                                         $6,303 
Total Annualized Costs (30 years, 7%) 4
                                         $6,320 
Notes: 
1 See Table B-1 and Table B-3 for detailed description of these estimates.
[2] Under the proposed rule, accreditation bodies are required to reapply every three years. Reapplication is assumed to occur at the end of years 3, 6, 9, 12, 15, 18, 21, 24, 27, and 30.
[3] Non-reapplication years are years 2, 4, 5, 7, 8, 10, 11, 13, 14, 16, 17, 19, 20, 22, 23, 25, 26, 28, and 29.
4 Costs are annualized over thirty years for 3 and 7 percent discount rates using the following formula: 
(present discounted value of 30-year stream-of-costs)*(discount rate*(1+ discount rate)30)/((1+ discount rate)[31]-1).  Rule familiarization, application costs, and recognition agreement costs are assumed to be incurred immediately and therefore are not discounted.  Other costs are discounted assuming that they are incurred at the end of each year.

	EPA is considering requiring accreditation bodies to submit their notifications and reports to the Agency electronically using the Central Data Exchange (CDX).  Appendix C discusses the incremental change in costs if EPA finalizes a mandatory electronic reporting requirement.  As shown in section C.1.4, the total annualized savings to U.S. accreditation bodies would be $1,193 per year at a 3 percent discount rate, and $1,146 per year at a 7 percent discount rate.  

Third-Party Certifier Costs

Costs that TPCs may incur under the proposed rule can be classified into five categories:  (1) the cost of rule familiarization, (2) the cost of applying to the accreditation body in order to participate in the TSCA Title VI program, (3) the cost to obtain and maintain any necessary accreditations that the TPC does not already have, (4) the annual cost of providing notifications to manufacturers and of maintaining records, and (5) the cost of providing an annual report and other notifications to the AB or EPA.  To the extent that requirements in the TSCA Title VI rule are similar to requirements in the CARB rule, CARB-approved TPCs will incur relatively little additional cost to comply with EPA's rule.

Under the proposed rule, TPCs are required to apply for re-accreditation every three years.  As a result, application and accreditation costs are incurred every third year.  The costs associated with notifications, maintaining records, and providing an annual report are assumed to be incurred on an annual basis.  Rule familiarization is a one-time cost incurred in the first year.  Each of these types of costs is discussed in more detail in the subsections below.

TPC Rule Familiarization

The level of effort associated with rule familiarization was estimated based on professional judgment, and burden hours were multiplied by the corresponding labor category's wage rate as derived in Section 3.2 (U.S. Bureau of Labor Statistics (BLS) 2011) to estimate costs.  As shown in Table 3-3 below, the total cost for each firm is estimated to be $615 in the first year.

Table 3-3: Application Process Burden and Costs for TPCs, by Activity
Activity
Clerical Burden/Cost
Technical Burden/Cost
Managerial Burden/Cost
Total

(hours)[1]
(2010$)
(hours)[1]
(2010$)
(hours)[1]
(2010$)
(hours)[1]
(2010$)

(a)
(b)
(c)
(d)
(e)
(f)
(g)=(a)+(c)+(e)
(h)=(b)+(d)+(f)
Rule Familiarization
                                                                           0.00
                                                                         $0.00 
                                                                           5.00
                                                                       $281.55 
                                                                           5.00
                                                                       $333.90 
                                                                          10.00
                                                                          $615 
Notes: 1. Burden hours are based on best professional judgment.

TPC Application Process

The application process for TPCs includes completing a form with standard information about the firm and also describing the firms experience with the ISO/IEC standards.  The level of effort for these elements were estimated based on prior economic analyses (EPA 2011a), and burden hours were multiplied by the corresponding labor category's wage rate as derived in Section 3.2 (U.S. Bureau of Labor Statistics (BLS) 2011) to estimate costs.  As shown in Table 3-4 below, the total application cost for each firm is estimated to be $492 in reapplication years and $0 in non-reapplication years.  For more information, see Appendix B.

	A TPC must reapply every three years in order to participate in the TSCA Title VI program.  TPCs that are approved by CARB will be grandfathered under the TSCA Title VI rule for one year, provided that they are compliant with all other aspects of the TSCA Title VI rule.  To simplify the analysis, costs are calculated as though all Title VI TPCs are grandfathered in for one year, even though some of them may not have been approved by CARB.  Thus, costs are calculated assuming that reapplication occurs every third year starting three years after the rule is promulgated (i.e., in years 4, 7, 10, etc.).
Table 3-4: Application Process Burden and Costs for TPCs, by Activity
Activity
Clerical Burden/Cost
Technical Burden/Cost
Managerial Burden/Cost
Total

(hours)
(a)
(2010$)[1]
(b)
(hours)
(c)
(2010$)[1]
(d)
(hours)
(e)
(2010$)[1]
(f)
(hours)
(g)=(a)+(c)+(e)
(2010$)[1]
(h)=(b)+(d)+(f)
Product Accreditation Body Application Submission 
Company Information (Name, Address, Telephone Number, and Email Address of Primary Contact) and Type of Composite Wood Products Applicant Intends to Certify[2]
                                                                              0
                                                                         $0.00 
                                                                           0.04
                                                                         $2.25 
                                                                           0.02
                                                                         $1.34 
                                                                           0.06
                                                                         $3.59 
Description of TPC's Experience or Ability in Product Certification and Complying with ISO/IEC Guide 65[3]
                                                                              0
                                                                         $0.00 
                                                                           0.83
                                                                        $46.74 
                                                                           0.51
                                                                        $34.06 
                                                                           1.34
                                                                        $80.80 
Description of TPC's Experience in the Composite Wood Product Industry with the Product(s) Intended to be Certified[3]
                                                                              0
                                                                         $0.00 
                                                                           0.83
                                                                        $46.74 
                                                                           0.51
                                                                        $34.06 
                                                                           1.34
                                                                        $80.80 
Description of TPC's Ability to Inspect and Properly Train and Supervise Inspectors Pursuant to ISO/IEC 17020[3]
                                                                              0
                                                                         $0.00 
                                                                           0.83
                                                                        $46.74 
                                                                           0.51
                                                                        $34.06 
                                                                           1.34
                                                                        $80.80 
Laboratory Accreditation Body Application Submission
Company Information (Name, Address, Telephone Number, and Email Address of Primary Contact; if foreign, name and address of an agent for service located in the U.S.)[2]
                                                                              0
                                                                         $0.00 
                                                                           0.04
                                                                         $2.25 
                                                                           0.02
                                                                         $1.34 
                                                                           0.06
                                                                         $3.59 
Description of TPC's Experience in Performing or Verifying Formaldehyde Testing on Composite Wood Products[3]
                                                                              0
                                                                         $0.00 
                                                                           0.83
                                                                        $46.74 
                                                                           0.51
                                                                        $34.06 
                                                                           1.34
                                                                        $80.80 
Description of TPC's Experience Operating or Using Laboratories that Comply with ISO/IEC 17025[3]
                                                                              0
                                                                         $0.00 
                                                                           0.83
                                                                        $46.74 
                                                                           0.51
                                                                        $34.06 
                                                                           1.34
                                                                        $80.80 
Description of TPC's Experience with Test Method ASTM E-1333-96 (2002) and Experience Evaluating Correlation between Test Methods[3]
                                                                              0
                                                                         $0.00 
                                                                           0.83
                                                                        $46.74 
                                                                           0.51
                                                                        $34.06 
                                                                           1.34
                                                                        $80.80 
                         TOTAL  -  REAPPLICATION YEARS
                                                                           0.00
                                                                         $0.00 
                                                                           5.06
                                                                       $284.93 
                                                                           3.10
                                                                       $207.02 
                                                                           8.16
                                                                          $492 
                       TOTAL  -  NON-REAPPLICATION YEARS
                                                                           0.00
                                                                          $0.00
                                                                           0.00
                                                                          $0.00
                                                                           0.00
                                                                          $0.00
                                                                           0.00
                                                                             $0
Notes: 1. Note that under the proposed rule, TPCs are required to apply for re-accreditation every three years.  As a result, reapplication costs are incurred every third year.  
2. Based on the estimated burden associated with reporting "company information" (EPA 2011a). 
3. Based on the estimated burden associated with answering substantiation questions when making plant site confidentiality claims (EPA 2011a).
Source: EPA 2011a

TPCs Obtaining Accreditation for the Required Standards

Through a series of telephone interviews, representatives from six TPCs that have been approved by CARB for formaldehyde testing provided information about the accreditations they already had, and the costs of receiving and maintaining the accreditation.  Several TPCs also spoke in general terms about the costs of accreditation.  The information collected from each TPC is included in Table 3-5.

As indicated in Table 3-5, the cost to TPCs of obtaining accreditation will depend on whether they have the systems and equipment in place to satisfy the accreditation requirements or whether they will have to establish these.  Based on the telephone interviews, the initial cost of obtaining a single accreditation is about $20,000 to $30,000 for each quality system.  This analysis uses the mid-point of the range, $25,000, as the cost estimate.  The cost would be about three times that if the firm needed to be newly accredited for all three relevant ISO/IEC standards (Guide 65, 17020, and 17025).  Based on discussions with the six TPCs, the analysis assumes that two-thirds of the CARB-certified TPCs will already have all three accreditations in place and that one-third will need to obtain one additional accreditation from an AB.  As a result, this analysis assumes that one-third of TPCs will incur a cost of $25,000 to obtain one additional accreditation, while two-thirds of TPCs will not incur any additional costs associated with obtaining additional accreditations.

In addition to obtaining the initial accreditation, the TPCs will need to maintain and renew their systems and testing certifications.  (A typical accreditation lasts for two years.)  Two of the six TPCs provided information on the cost of maintaining and renewing accreditations.  They reported costs that ranged from $5,000 to $15,000 per year associated with maintaining certification, such as paying audit fees to their AB.  Note that the systems and testing certifications for which the laboratories reported costs may cover more than the specific formaldehyde testing.  Therefore, these estimates may overstate costs if the labs would incur these costs even if they were not acting as TPCs under TSCA Title VI.  Because the audits include tests other than formaldehyde, this analysis uses $5,000 (the low end of the costs reported) as the annual reaccreditation cost for TPCs that need an additional accreditation.  

As discussed above, based on discussions with the six TPCs, the analysis assumes that two-thirds of the CARB-certified TPCs will already be maintaining all three of the relevant accreditations (i.e., ISO/IEC Guide 65, 17020, and 17025) and that one-third of TPCs will need to maintain a single additional accreditation in order to participate in the TSCA Title VI program.  Thus, one-third of TPCs are assumed to incur an annual cost of $5,000 per year in subsequent years for maintaining one additional accreditation, while two-thirds of TPCs will not incur any additional costs associated with maintaining additional accreditations because they were already maintaining all of the necessary accreditations in the baseline.  

In interviews with TPCs, three said they had excess capacity for additional testing and two said they could easily add extra capacity either by building additional chambers or subcontracting the work to accredited laboratories.  For example, one said that while they currently have 3 small chambers, within two months they could add 25 small chambers that would allow them to do 100 tests per day.  In addition, it would be possible to add large chamber capacity within a 3-6 month period.  The firms indicated that if the new equipment added were similar to what they already had in place, their accreditation body would allow for desk audit approval (which could be done quickly, instead of requiring a site visit prior to approval, which would take more time).  Therefore, this analysis assumes there is adequate existing testing capacity, and that no additional costs for adding additional testing capacity will be incurred.  

Table 3-5: CARB TPCs Estimates of Previous Accreditation Costs
TPC
Estimated Cost of Accreditation
Other Information
NSF International [1]
About $5,000 for application process and between $5,000 for approval of 10 test processes to $20,000 for approval of 100 test processes.  (The tests are grouped in disciplines and priced for each discipline.  For this conversation the representative was discussing batteries of tests, for example toys have 10 tests.) 
Estimated that it would cost about $10,000 every two years to get reaccredited (or $5,000 a year average).

PSI, Inc.
$5,000 to $6,000 if laboratory has accreditations, inspections, testing and quality systems in place. Estimated $50,000 to $60,000 to develop the accreditations, inspections, testing and quality systems if they are not in place.

SCS International 
Estimated it cost about $9,000 to $15,000 to write manual and complete application. SCS already had the quality system in place.
Mentioned that CARB does not require ISO accreditation as long as the laboratory has demonstrated ISO equivalence. Getting ISO accreditation is expensive ($25,000). They do not have a lab but contract the testing portion out to labs that are ISO 17025 accredited.
NTA Incorporated
Estimated it cost $10,000 to set up their CARB accredited program. They were already an ISO product certification firm.

Forestwood Industries, Inc
For CARB, they needed ISO 17020 and Guide 65 which they did not have.  Each cost between $20,000 and $30,000 to get.  The application took one day to complete but gathering the information took longer.

PFS Corporation
PFS is a product testing laboratory and had IAS approval for testing formaldehyde. The cost of a new accreditation is at least $2,550 with $800 for additional fields of testing (formaldehyde could be considered a field) and another $250 for each facility.
It costs PFS about $15,000 to get an IAS on-site audit each year although the audit includes more than formaldehyde. The cost for a desk audit to add an additional small test chamber where existing small chambers have already been approved is $600, but it costs at least $2,000 for a standard inspection audit.
[1]NSF International was approved as a TPC by CARB, but has subsequently withdrawn from the program.
Sources: Personal Communication with Forestwood Industries 2011, Personal Communication with NSF International 2011a, b, Personal Communication with NTA Inc. 2011, Personal Communication with PFS Corporation 2011, Personal Communication with PSI 2011, Personal Communication with SCS International 2011.
Annual Cost of TPCs Notifications Relating to Manufacturers

	Under the proposed rule, TPCs would have to provide its third-party certifier number to any manufacturer receiving its TSCA Title VI certification services.  And should a TPC withdraw from the program or lose its accreditation, it would be required to notify all manufacturers that receive its TSCA Title VI certification services.  

Upon request, TPCs must provide EPA with a list of the manufacturers and their product types certified, the results of inspections, audits, and emission tests conducted for each manufacturer and product type, the list of the TPCs laboratories, test methods, and test results, the methods and results for establishing test method correlations and equivalence and the list of manufacturers and products approved for reduced testing.  As shown in Table 3-6 below, the sum of these costs is approximately $773 per firm per year in all years.  For more information, see Appendix B.

Table 3-6: Annual Burden and Cost to TPCs of Notifications Relating to Manufacturers, by Activity
Activity
Clerical Burden/Cost
Technical Burden/Cost
Managerial Burden/Cost
Total

(hours)
(a)
(2010$)
(b)
(hours)
(c)
(2010$)
(d)
(hours)
(e)
(2010$)
(f)
(hours)
(g)=(a)+(c)+(e)
(2010$)
(h)=(b)+(d)+(f)
Notifications to EPA  
Third Party Certifier Number[1]
                                                                              0
                                                                         $0.00 
                                                                           0.04
                                                                         $2.25 
                                                                           0.02
                                                                         $1.34 
                                                                           0.06
                                                                         $3.59 
Withdraw from Program or Lose Accreditation[1]
                                                                              0
                                                                         $0.00 
                                                                           0.01
                                                                         $0.56 
                                                                          0.005
                                                                         $0.33 
                                                                          0.015
                                                                         $0.90 
Recordkeeping and Reporting to EPA
List of Manufacturers and their Product Types (including Resins Used) Certified by TPC[2]
                                                                           0.75
                                                                        $19.24 
                                                                            1.5
                                                                        $84.47 
                                                                           0.75
                                                                        $50.09 
                                                                              3
                                                                       $153.79 
Results of Inspections, Audits, and Emission Tests Conducted for Each Manufacturer and Product Type[2]
                                                                           0.75
                                                                        $19.24 
                                                                            1.5
                                                                        $84.47 
                                                                           0.75
                                                                        $50.09 
                                                                              3
                                                                       $153.79 
List of the TPC's Laboratories, Test Methods (including Test Conditions and Conditioning Time), and Test Results[2]
                                                                           0.75
                                                                        $19.24 
                                                                            1.5
                                                                        $84.47 
                                                                           0.75
                                                                        $50.09 
                                                                              3
                                                                       $153.79 
Methods and Results for Establishing Test Method Correlations and Equivalence[2]
                                                                           0.75
                                                                        $19.24 
                                                                            1.5
                                                                        $84.47 
                                                                           0.75
                                                                        $50.09 
                                                                              3
                                                                       $153.79 
List of Manufacturers and Products Approved for Reduced Testing[2]
                                                                           0.75
                                                                        $19.24 
                                                                            1.5
                                                                        $84.47 
                                                                           0.75
                                                                        $50.09 
                                                                              3
                                                                       $153.79 
                                     TOTAL
                                                                           3.75
                                                                        $96.20 
                                                                           7.55
                                                                       $425.14 
                                                                          3.775
                                                                       $252.09 
                                                                         15.075
                                                                          $773 
Notes: 1. Based on best professional judgment and rule requirements.
2. Based on the estimated burden associated with "recordkeeping" (EPA 2011a). 
Sources: BLS 2011, EPA 2011a

Cost of TPC Annual Reports and Notifications of Changes

Table 3-7 shows the cost of the required annual report to the accreditation bodies that lists the manufacturers and their products certified by TPCs during the previous year, the list of non-complying products or events by manufacturer, the list of laboratories and test methods used by the TPC, and the results of inter-laboratory comparison or proficiency testing for the laboratories used by the TPC.  The cost of notifying the accreditation body of any changes in personnel, procedure, or laboratory changes is also included.  The sum of these costs is approximately $210 per firm per year in all years.  For more information, see Appendix B.
Table 3-7: Annual TPC Burden and Costs for Reporting to Accreditation Body, by Activity
                                   Activity
                             Clerical Burden/Cost
                             Technical Burden/Cost
                            Managerial Burden/Cost
                                     Total
                                       
(hours)
(a)
(2010$)
(b)
(hours)
(c)
(2010$)
(d)
(hours)
(e)
(2010$)
(f)
(hours)
(g)=(a)+(c)+(e)
(2010$)
(h)=(b)+(d)+(f)
Annual Report to Accreditation Bodies
List of Manufacturers and their Products Certified by the TPC during the Previous Year (including Resins Used, and the Average and Range of Formaldehyde Emissions by Manufacturer, Resin, and Product Type)[1]
                                                                           0.25
                                                                         $6.41 
                                                                            0.5
                                                                        $28.16 
                                                                           0.25
                                                                        $16.70 
                                                                              1
                                                                        $51.26 
List of Non-complying Products or Events by Manufacturer[1]
                                                                           0.25
                                                                         $6.41 
                                                                            0.5
                                                                        $28.16 
                                                                           0.25
                                                                        $16.70 
                                                                              1
                                                                        $51.26 
List of Laboratories and Test Methods Used by the TPC[1]
                                                                           0.25
                                                                         $6.41 
                                                                            0.5
                                                                        $28.16 
                                                                           0.25
                                                                        $16.70 
                                                                              1
                                                                        $51.26 
Results of Inter-Laboratory Comparison or Proficiency Testing for the Laboratories Used by the TPC[1]
                                                                           0.25
                                                                         $6.41 
                                                                            0.5
                                                                        $28.16 
                                                                           0.25
                                                                        $16.70 
                                                                              1
                                                                        $51.26 
Accreditation Board Notification
Personnel Qualification Changes[2]
                                                                              0
                                                                         $0.00 
                                                                           0.02
                                                                         $1.13 
                                                                           0.01
                                                                         $0.67 
                                                                           0.03
                                                                         $1.79 
Procedure Changes[2]
                                                                              0
                                                                         $0.00 
                                                                           0.02
                                                                         $1.13 
                                                                           0.01
                                                                         $0.67 
                                                                           0.03
                                                                         $1.79 
Laboratory Change[2]
                                                                              0
                                                                         $0.00 
                                                                           0.02
                                                                         $1.13 
                                                                           0.01
                                                                         $0.67 
                                                                           0.03
                                                                         $1.79 
                                     TOTAL
                                                                              1
                                                                        $25.65 
                                                                           2.06
                                                                       $116.00 
                                                                           1.03
                                                                        $68.78 
                                                                           4.09
                                                                          $210 
Notes: 1. Estimated as one-third of the burden associated with "recordkeeping" (EPA 2011a).  Revised estimate based on best professional judgment.
2. Based on the estimated burden associated with reporting "company information" (EPA 2011a). 
Sources: EPA 2011a

Total Cost to TPCs 

Costs per TPC in the First Year 

Table 3-8 presents the estimated costs for TPCs in the first year.  There are different cost estimates for TPCs that already have all of the necessary accreditations, and TPCs that need to obtain an additional accreditation.  

Table 3-8: Costs per TPC in the First Year
Type of Cost
Cost (2010$)[1]

TPCs with All Necessary Accreditations
TPCs Obtaining One Additional Accreditation
Rule Familiarization
                                                                          $615 
                                                                          $615 
Application Process 
                                                                          $492 
                                                                          $492 
Obtaining Accreditation
                                                                            $0 
                                                                       $25,000 
Manufacturer Notification and Recordkeeping
                                                                          $773 
                                                                          $773 
Annual Report and Notifications of Changes
                                                                          $210 
                                                                          $210 
                                     TOTAL
                                                                        $2,090 
                                                                       $27,090 

Costs per TPC in Subsequent Years

Table 3-9 presents the estimated costs incurred in subsequent years by TPCs.  Again, there are different cost estimates for TPCs that already have all of the necessary accreditations, and TPCs that need to obtain an additional accreditation.  And costs differ between years when the TPC must reapply to the accreditation body to participate in the TSCA Title VI program (which occurs every three years) and the alternate years.

Table 3-9: Costs per TPC in Subsequent-Years
                                Type of Cost[1]
                                Cost (2010$)[2]

TPCs with All Necessary Accreditations
TPCs Obtaining One Additional Accreditation
Reapplication Process
                                                                          $492 
                                                                          $492 
Reaccreditation
                                                                            $0 
                                                                        $5,000 
Manufacturer Notification and Recordkeeping
                                                                          $773 
                                                                          $773 
Annual Report and Notifications of Changes
                                                                          $210 
                                                                          $210 
                         TOTAL  -  REAPPLICATION YEARS
                                                                        $1,475 
                                                                        $6,475 
                       TOTAL  -  NON-REAPPLICATION YEARS
                                                                          $983 
                                                                        $5,983 
Notes: 1. Under the proposed rule, TPCs are required to apply for re-accreditation every three years.  As a result, reapplication and reaccreditation costs are incurred every third year.
2. Costs may not sum due to rounding.

Total Cost to U.S. TPCs 

Table 3-10 summarizes the total costs to U.S. firms assumed to become TPCs under the TSCA Title VI program.  As indicated, the rule is expected to cost the affected TPCs a total of $93,810 in the first year, $28,275 in reapplication years, and $23,847 in non-reapplication years.  Annualized costs were also calculated, over a 30-year period, at three and seven percent discount rates.

Table 3-10:  Total Costs to U.S. TPCs (2010$) 
Cost Component
Cost (2010$)

TPCs with All Necessary Accreditation
TPCs Obtaining One Additional Accreditation
Total
Number of Affected Firms
                                       6
                                       3
                                       9
Per Firm Costs: Year 1
                                                                        $2,090 
                                                                       $27,090 
                                       -
Per Firm Costs: Reapplication Years
                                                                        $1,475 
                                                                        $6,475 
                                       -
Per Firm Costs: Non-reapplication Years
                                                                          $983 
                                                                        $5,983 
                                       -
Total First Year Costs
                                                                       $12,540 
                                                                       $81,270 
                                                                        $93,810
Total Reapplication Year Costs
                                                                        $8,850 
                                                                       $19,425 
                                                                       $28,275 
Total Non-Reapplication Year Costs
                                                                        $5,898 
                                                                       $17,949 
                                                                       $23,847 
30-Year Annualized Costs (3 percent discount rate)
                                                                        $6,755 
                                                                       $20,477 
                                                                       $27,232 
30-Year Annualized Costs (7 percent discount rate)
                                                                        $6,706 
                                                                       $21,416 
                                                                       $28,123 
Note: Costs are annualized over thirty years for 3 and 7 percent discount rates using the following formula: (present discounted value of 30-year stream-of-costs)*(discount rate*(1+ discount rate)[30])/((1+ discount rate)[31]-1).  Rule familiarization costs are assumed to be incurred immediately and therefore are not discounted. Other costs are discounted assuming that they are incurred at the end of each year.

	EPA is considering requiring TPCs to submit their notifications and reports to the Agency electronically using the CDX.  Appendix C discusses the incremental change in costs if EPA finalizes a mandatory electronic reporting requirement.  As shown in section C.1.4, the total annualized savings to U.S. TPCs would be $2,852 per year at a 3 percent discount rate, and $2,754 per year at a 7 percent discount rate.  

Total Costs of the Rule for U.S. Accreditation Bodies and TPCs 

This section calculates the total cost for U.S. TPCs and accreditation bodies as a result of the TSCA Title VI TPC rule.  While the costs analysis is limited to domestic entities, the burden analysis in Section 4.1 includes both foreign and domestic entities.

The different cost components of the rule (initial costs; notification, reporting, and recordkeeping costs; TPC reapplication costs; and AB reapplication costs) are incurred at different times and with different frequencies.  Figure 2 demonstrates how the different cost components occur over the first nine years, and how they are categorized into five different categories of years, depending on which component occurs in that year.  These same five categories are used in Table 3-11 and Table 3-12.   Table 3-11 presents the per-firm costs for accreditation bodies and TPCs in each of these categories of years.  Table 3-12 presents the total costs for the eight U.S. accreditation bodies and nine U.S. TPCs combined.  To estimate total costs, per-firm costs were multiplied by the number of affected firms.  Annualized costs were also calculated, over a 30-year period, at three and seven percent discount rates.

Figure 2.  Timing of Cost Components Over the First Nine Years of the Program
Cost Component
                                    Year 1
                                    Year 2
                                    Year 3
                                    Year 4
                                    Year 5
                                    Year 6
                                    Year 7
                                    Year 8
                                    Year 9
Initial costs
                                       X
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
Notification, reporting, and recordkeeping 
                                       X
                                       X
                                       X
                                       X
                                       X
                                       X
                                       X
                                       X
                                       X
TPC reapplication
                                       
                                       
                                       
                                       X
                                       
                                       
                                       X
                                       
                                       
AB reapplication
                                       
                                       
                                       X
                                       
                                       
                                       X
                                       
                                       
                                       X
All TPCs are assumed to have been approved by CARB and thus grandfathered into the federal program for one year, so TPC reapplication occurs every 3 years starting in Year 4.  AB reapplication occurs every 3 years starting in Year 3.

                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
Key
Description
                                       
                                       
                                       
                                       
                                       
                                       
                                       

Initial Applications for ABs (beginning of Year 1) and TPCs (end of Year 1)
                                       

Non-Reapplication Years for ABs, Non-Reapplication Years for TPCs
                                       
                                       

Non-Reapplication Years for ABs, Reapplication Years for TPCs
                                       
                                       

Reapplication Years for ABs, Non-Reapplication Years for TPCs
                                       
                                       

Reapplication Years for ABs, Reapplication Years for TPCs
                                       
                                       

Table 3-11: Cost per Year for Accreditation Bodies and Third Party Certifiers (2010$)
Year
ABs
TPCs

Have Necessary Accreditation
Need Additional Accreditation
Per Firm Costs: Year 1
                                                                        $1,685 
                                                                        $2,090 
                                                                       $27,090 
Per Firm Costs: Years 2, 5, 8, 11, 14, 17, 20, 23, 26, 29 (Non-Reapplication Years for ABs, Non-Reapplication Years for TPCs)
                                                                          $633 
                                                                          $983 
                                                                        $5,983 
Per Firm Costs: Years 3, 6, 9, 12, 15, 18, 21, 24, 27, 30 (Reapplication Years for ABs, Non-Reapplication Years for TPCs)
                                                                        $1,070 
                                                                          $983 
                                                                        $5,983 
Per Firm Costs: Years 4, 7, 10, 13, 16, 19, 22, 25, 28 (Non-Reapplication Years for ABs, Re-Application Years for TPCs)
                                                                          $633 
                                                                        $1,475 
                                                                        $6,475 

Table 3-12: Total Costs to U.S. Accreditation Bodies and Third Party Certifiers (2010$)
Year
U.S. ABs
U.S. TPCs
All Affected U.S. Firms

Have Necessary Accreditation
Need Additional Accreditation

Number of Affected Firms
                                                                              8
                                                                              6
                                                                              3
                                                                             17
Total Year 1 Costs
                                                                       $13,480 
                                                                       $12,540 
                                                                       $81,270 
                                                                      $107,290 
Total Costs in Years 2, 5, 8, 11, 14, 17, 20, 23, 26, 29 (Non-Reapplication Years for ABs, Non-Reapplication Years for TPCs)
                                                                        $5,064 
                                                                        $5,898 
                                                                       $17,949 
                                                                       $28,911 
Total Costs in Years 3, 6, 9, 12, 15, 18, 21, 24, 27, 30 (Reapplication Years for ABs, Non-Reapplication Years for TPCs)
                                                                        $8,560 
                                                                        $5,898 
                                                                       $17,949 
                                                                       $32,407 
Total Costs in Years 4, 7, 10, 13, 16, 19, 22, 25, 28 (Non-Reapplication Years for ABs, Re-Application Years for TPCs)
                                                                        $5,064 
                                                                        $8,850 
                                                                       $19,425 
                                                                       $33,339 
30-Year Annualized Costs 
(3 percent discount rate)
                                                                        $6,303 
                                                                        $6,755 
                                                                       $20,477 
                                                                       $33,535 
30-Year Annualized Costs 
(7 percent discount rate)
                                                                        $6,320 
                                                                        $6,706 
                                                                       $21,416 
                                                                       $34,443 
Note: Annualized costs are annualized over thirty years for 3 and 7 percent discount rates using the following formula: (present discounted value of 30-year stream-of-costs)*(discount rate*(1+ discount rate)30)/((1+ discount rate)[31]-1).  Rule familiarization, AB application costs, and AB recognition agreement costs are assumed to be incurred immediately and therefore are not discounted. Other costs are discounted assuming that they are incurred at the end of each year.

	EPA is considering requiring accreditation bodies and TPCs to submit their notifications and reports to the Agency electronically using the CDX.  Appendix C discusses the incremental change in costs if EPA finalizes a mandatory electronic reporting requirement.  As shown in section C.1.4, electronic reporting via CDX would reduce the annualized costs of the rule to U.S. accreditation bodies and TPCs from $33,535 to $29,490 per year at a 3 percent discount rate, a savings of $4,045 per year.  At a 7 percent discount rate, costs are estimated to decrease from $34,443 to $30,542, a savings of $3,900 per year.  There are additional unquantified improvements in efficiency and higher data quality due to electronic reporting.

Impact Analyses

In addition to the cost analysis presented in Chapter 3, several other types of impacts are important to consider in evaluating the effects of a regulation.  This chapter presents the incremental impact of the proposed TPC Rule on:

         Paperwork burden, as required by the Paperwork Reduction Act (PRA);
         Financial condition of small entities, as required by the Regulatory Flexibility Act (RFA);
         State and Local Governments, as required by the Unfunded Mandates Reform Act;
         Federalism, as required by Executive Order 13132 - Federalism;
         Tribal governments, as required by Executive Order 13175 - Consultation and Coordination with Indian Tribal Governments;
         The environmental health risk or safety risk to children due to the regulation, as required by Executive Order 13045 - Protection of Children From Environmental Health & Safety Risks;
         Whether voluntary consensus standards are used in its regulatory activities; and
         Low income and minority populations, as required by Executive Order 12898.
       
Paperwork Reduction Act Analysis

This section estimates the burden of reporting and recordkeeping for the proposed Third Party Certification rule.  It presents average annual burden and cost estimates for affected accreditation bodies and third party certifiers over the first three years of the program.  The labor hours and costs per firm are the same as those shown in Chapter 3  -  the sum of the rule familiarization, application, recordkeeping, and reporting burdens and costs.  However, the numbers of firms considered here are greater than in the cost analysis in Chapter 3 because both domestic and foreign firms are included.

Table 4-1 presents the PRA per-firm labor burdens and costs by the type of affected firm.  The total burden and cost are calculated by multiplying the burdens and costs per firm by the number of affected firms.

EPA is considering requiring accreditation bodies and TPCs to submit their notifications and reports to the Agency electronically using the CDX.  Appendix C discusses the incremental change in burden and costs if EPA finalizes a mandatory electronic reporting requirement.  As shown in section C.1.4, electronic reporting via CDX would reduce the average total burden hours for all 61 domestic and foreign respondents from 1,421 hours to 1,029 hours per year, a savings of 392 hours per year.  
Table 4-1: Total PRA Burdens and Costs (2010$)  
Firm Type
Number of Firms
Per Firm Burden and Cost
Total Burden and Cost

Labor 
Non-Labor Cost
Labor  
Non-Labor Cost

Hours
Cost

                                     Hours
                                     Cost

                                    Year 1
Domestic Accreditation Body
                                                                              8
                                                                        29.6042
                                                                        $1,685 
                                                                              
                                                                            237
                                                                       $13,480 
                                                                              
Foreign Accreditation Body
                                                                             17
                                                                        29.6642
                                                                        $1,688 
                                                                              
                                                                            504
                                                                       $28,696 
                                                                              
Domestic TPC obtaining one additional accreditation
                                                                              3
                                                                        37.3250
                                                                        $2,090 
                                                                       $25,000 
                                                                            112
                                                                        $6,270 
                                                                       $75,000 
Domestic TPC with current accreditations
                                                                              6
                                                                        37.3250
                                                                        $2,090 
                                                                              
                                                                            224
                                                                       $12,540 
                                                                              
Foreign TPC obtaining one additional accreditation
                                                                              9
                                                                        37.3550
                                                                        $2,092 
                                                                       $25,000 
                                                                            336
                                                                       $18,828 
                                                                      $225,000 
Foreign TPC with current accreditations
                                                                             18
                                                                        37.3550
                                                                        $2,092 
                                                                              
                                                                            672
                                                                       $37,656 
                                                                              
Year 2
Domestic Accreditation  Body
                                                                              8
                                                                        12.1442
                                                                          $633 
                                                                              
                                                                             97
                                                                        $5,064 
                                                                              
Foreign Accreditation Body
                                                                             17
                                                                        12.2042
                                                                          $636 
                                                                              
                                                                            207
                                                                       $10,812 
                                                                              
Domestic TPC obtaining one additional accreditation
                                                                              3
                                                                        19.1650
                                                                          $983 
                                                                        $5,000 
                                                                             57
                                                                        $2,949 
                                                                       $15,000 
Domestic TPC with current accreditations
                                                                              6
                                                                        19.1650
                                                                          $983 
                                                                              
                                                                            115
                                                                        $5,898 
                                                                              
Foreign TPC obtaining one additional accreditation
                                                                              9
                                                                        19.1950
                                                                          $985 
                                                                        $5,000 
                                                                            173
                                                                        $8,865 
                                                                       $45,000 
Foreign TPC with current accreditations
                                                                             18
                                                                        19.1950
                                                                          $985 
                                                                              
                                                                            346
                                                                       $17,730 
                                                                              
                                         Year 3
Domestic Accreditation Body
                                                                              8
                                                                        19.6042
                                                                        $1,070 
                                                                              
                                                                            157
                                                                        $8,560 
                                                                              
Foreign Accreditation Body
                                                                             17
                                                                        19.6642
                                                                        $1,073 
                                                                              
                                                                            334
                                                                       $18,241 
                                                                              
Domestic TPC obtaining one additional accreditation
                                                                              3
                                                                        19.1650
                                                                          $983 
                                                                        $5,000 
                                                                             57
                                                                        $2,949 
                                                                       $15,000 
Domestic TPC with current accreditations
                                                                              6
                                                                        19.1650
                                                                          $983 
                                                                              
                                                                            115
                                                                        $5,898 
                                                                              
Foreign TPC obtaining one additional accreditation
                                                                              9
                                                                        19.1950
                                                                          $985 
                                                                        $5,000 
                                                                            173
                                                                        $8,865 
                                                                       $45,000 
Foreign TPC with current accreditations
                                                                             18
                                                                        19.1950
                                                                          $985 
                                                                              
                                                                            346
                                                                       $17,730 
                                                                              
                                   Three Year Average
Domestic Accreditation Body
                                                                              8
                                                                        20.4509
                                                                        $1,129 
                                                                              
                                                                            164
                                                                        $9,035 
                                                                              
Foreign Accreditation Body
                                                                             17
                                                                        20.5109
                                                                        $1,132 
                                                                              
                                                                            349
                                                                       $19,250 
                                                                              
Domestic TPC obtaining one additional accreditation
                                                                              3
                                                                        25.2183
                                                                        $1,352 
                                                                       $11,667 
                                                                             76
                                                                        $4,056 
                                                                       $35,000 
Domestic TPC with current accreditations
                                                                              6
                                                                        25.2183
                                                                        $1,352 
                                                                              
                                                                            151
                                                                        $8,112 
                                                                              
Foreign TPC obtaining one additional accreditation
                                                                              9
                                                                        25.2483
                                                                        $1,354 
                                                                       $11,667 
                                                                            227
                                                                        $12,186
                                                                      $105,000 
Foreign TPC with current accreditations
                                                                             18
                                                                        25.2483
                                                                        $1,354 
                                                                              
                                                                            454
                                                                       $24,372 
                                                                              
          All Entities
                                                                             61
                                                                        23.2945
                                                                        $1,262 
                                                                        $2,295 
                                                                           1421
                                                                       $77,010 
                                                                      $140,000 

Regulatory Flexibility Act Analysis

This section presents the impact of the costs of accreditation under the proposed TSCA Title VI TPC rule on the financial condition of small entities. 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. 

The TPC rule will affect small businesses and small non-profit organizations.  (No small governments are expected to be affected by the TPC rule.)  Under the Regulatory Flexibility Act (RFA), a "small business" is determined by the U.S. Small Business Administration's regulations at 13 CFR 121.201 (which create small business size standards using either a sales or employment threshold, depending on the nature of the industry), unless an agency establishes an alternate definition.  And unless an agency establishes an alternate definition, under the RFA the term "small organization" means any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.  The RFA does not provide any guidance on how to judge whether an organization is dominant in its field.  Non-profit TPCs and accreditation bodies perform the same activities (such as conducting and verifying formaldehyde emissions tests, accrediting, and auditing) as their for-profit counterparts.  In order to interpret the RFA criteria for small organizations and treat all affected entities consistently, this analysis determines the size status of non-profits by applying the SBA size thresholds for the NAICS codes the non-profits are classified in.  

To fulfill the requirements of the RFA, this analysis addresses two basic questions regarding the proposed 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 cost-to-revenue ratio for businesses and the cost-to-expenses ratio for small non-profit organizations.  This ratio is a good measure of entities' ability to afford the costs attributable to a regulatory requirement, because comparing compliance costs to revenues or expenses provides a reasonable indication of the magnitude of the regulatory burden relative to a commonly available measure of economic activity.  Where regulatory costs represent a small fraction of a typical entity's revenues or expenses, the financial impacts of the regulation on such entities may be considered as not significant.  The impact ratios are calculated using annualized costs, because these costs are more representative of the continuing costs entities face to comply with the rule.
      
Small Entity Impacts for Accreditation Bodies

As described in Section 2.2.1, five of the eight U.S. accreditation bodies that are IAF or ILAC signatories are non-profit organizations, while two are businesses, and one is a federal government agency.  Using the size standard thresholds from the U.S. Small Business Administration, three of the non-profits and one of the businesses are classified as "small".  Per-firm costs were calculated as the quotient of the 30-year annualized costs and the number of affected firms presented in Table 3-2 (i.e., $6,303 / 8), which results in an annualized cost estimate of $788 per entity per year.  Estimated cost impacts ranged from 0.01 percent to 0.14 percent of expenditures for the three small non-profits, and were 0.21 percent of sales for the small business.  As a result, no small accreditation bodies are expected to be significantly impacted by the rule.

Table 4-2: Small Entity Impacts for U.S. ABs
Type
Annualized Costs 
Per Entity
(3% discount rate)
Estimated Number of Small Entities with Impacts

Under One Percent
Between One and Three Percent 
                              Over Three Percent
Non-profits
                                                                           $788
                                       3
                                       0
                                       0
Business
                                                                           $788
                                       1
                                       0
                                       0
Total
                                       4
                                       0
                                       0

      
Small Entity Impacts for Third-Party Certifiers
      
      The cost of the rule to TPCs depends on whether the TPC already has all of the necessary accreditations.  A TPC with all of the accreditations in place is estimated to incur an annualized cost of $1,126 per year for the required applications, reporting, and recordkeeping, while a TPC that needs to obtain an additional accreditation is estimated to incur an annualized cost of $6,826 per year.  
      
      Data were available to make size determinations for four of the nine U.S. TPCs participating in the CARB program.  Using the data in Table 2-1 and the size standard thresholds from the U.S. Small Business Administration, two of these four TPCs are large businesses, and two are small non-profit organizations.  The small non-profits are assumed to have all of their accreditations currently in place, and thus incur a cost of $1,126 per year due to the rule, as shown in Table 4-3.  Based on the expenditure data in Table 2-1, both of the small non-profit TPCs have cost impacts of less than 0.1%.
      
Table 4-3: Impacts to Small Non-Profit TPCs in the U.S.
Type
Annualized Costs 
Per Entity
(3% discount rate)
Estimated Number of Small Entities with Impacts

Under One Percent
Between One and Three Percent 
                              Over Three Percent
Non-profits
                                                                         $1,126
                                       2
                                       0
                                       0
      
      Size information was not located for the remaining five U.S. TPCs.  This analysis assumes that 50 percent of the remaining five TPCs are small businesses, which rounds up to three additional firms.  Based on the information in Section 3.4.3, the analysis also assumes that two of the three will already have all their accreditations in place and that one will need to obtain an additional accreditation.  As a result, the two TPCs with accreditations in place will incur an estimated annualized cost of $1,126 and the TPC that needs to obtain an additional accreditation will incur an estimated annualized cost of $6,826. 
      
      Data from the 2007 Economic Census data (U.S. Census Bureau 2007) was used to estimate impacts on the three TPCs that are assumed to be small businesses.  The Census data provided the number of firms in different revenue brackets (less than $100,000 per year, $100,000 to $499,999, $500,000 to $999,999, etc.) for the affected NAICS codes (541330, 541380, 541611, and 561990).  Revenue thresholds were then back-calculated such that annualized compliance costs created a one or three percent impact.  For example, revenue would have to be less than $112,600 in order for a firm with all of its accreditations to have at least a one percent impact, and less than $37,533 in order to have an impact of at least three percent.
      
      The next step was to interpolate the number of firms below each of these revenue thresholds, assuming that firms are evenly distributed within a revenue bracket.  For example, out of 123,359 firms in these NAICS codes, the Census reported that 32,987 firms had revenues of less than $100,000, and 49,013 firms had revenues between $100,000 and $499,999.  Therefore, as shown in Table 4-4, an estimated 34,222 firms have revenues below $112,600.
      
      In this example, these 34,222 firms represent 28% of the firms in these NAICS codes.   Multiplying the two small business TPCs with all necessary accreditations by 28%, and rounding to the nearest whole number, yields the result that one of these firms is estimated to have impacts over the one percent level.  Performing a similar calculation for the three percent impact level yields the result that neither of the two small business TPCs with all their accreditations are predicted to have an impact over the three percent level.  So the second TPC with all of its accreditation has an impact of less than one percent (not shown in Table 4-4).  Repeating these calculations for the small business TPC that needs an additional accreditation yields the result that it is estimated to have a cost impact between one percent and three percent. 

Table 4-4: : Impacts to Small Business TPCs in the U.S.
                                   Firm Type
                 Annualized Costs Per Firm (3% discount rate)
                         Associated Revenue Thresholds
                      Number of Firms Below Threshold[1]
                      Percent of Firms Below Threshold[2]
              Estimated Number of Small TPCs with Impacts Over[3]

                                   1% Impact
                                   3% Impact
                                   1% Impact
                                   3% Impact
                                   1% Impact
                                   3% Impact
                                   1% Impact
                                   3% Impact
Firms with all necessary accreditations
(n = 2)
                                                                        $1,126 
                                                                      $112,600 
                                                                       $37,533 
                                                                         34,222
                                                                         12,381
                                                                            28%
                                                                            10%
                                                                              1
                                                                              0
Firms that need to obtain one additional accreditation
(n = 1)
                                                                        $6,826 
                                                                      $682,600 
                                                                      $227,533 
                                                                         84,700
                                                                         45,489
                                                                            69%
                                                                            37%
                                                                              1
                                                                              0
Notes: 1. The analysis assumes that firms are distributed evenly within a revenue bracket.
2. The percentage of firms below the threshold is calculated by dividing the number of firms below the threshold by 123,359 (the total number of firms in NAICS codes 541,330, 541380, 541611, and 561990.  
3. The analysis assumes that two of the three small business TPCs will already have accreditations in place and that one will need to obtain additional accreditation.  
      
As described in Section 2.2.1, the CARB TPCs appear to be larger than the average firms in these industries, so Census statistics may underestimate the revenues and overestimate the impacts on TPCs (which represent just 0.006 percent of the firms in these NAICS codes).

Table 4-5 summarizes the annualized per-firm costs, and the number of affected number of TPCs with impacts exceeding the one and three percent levels.  Costs are estimated to exceed the one percent level for two small businesses.  However, given that these firms have the incentive to seek accreditation only if they can pass through their costs to the firms they are certifying, they are not expected to experience a negative economic impacts as a result of this proposed rule.  

Table 4-5: Small Entity Impacts for U.S. TPCs
Certification Status
 Annualized Costs Per Entity
(3% discount rate)
Small Entity Type
Estimated Number of Small Entities 
with Impacts

Under One Percent
Between One and Three Percent 
                              Over Three Percent
TPCs with current AB certification
                                                                        $1,126 
Non-profit
                                       2
                                       0
                                       0

                                                                               
Business
                                       1
                                       1
                                       0
TPCs that need to obtain new AB certification
                                                                         $6,826
Non-profit
                                       0
                                       0
                                       0
                                       
                                                                               
Business
                                       0
                                       1
                                       0
Combined
Non-profit
                                       2
                                       0
                                       0

Business
                                       1
                                       2
                                       0

Total
                                       3
                                       2
                                       0

      
Summary of Small Entity Impacts to ABs and TPCs
      
As shown in Table 4-6, there are a total of 9 small entities in the U.S. assumed to be directly affected by the Title VI TPC rule.  Five of these are non-profits, all of which are estimated to have cost impacts of less than one percent of expenditures.  Four are businesses, two of which are estimated to have cost impacts of less than one percent of revenues, and two of which are estimated to have cost impacts between one percent and three percent of revenues.  

Table 4-6:  Summary of Small Entity Impacts to ABs and TPCs
Entity Type

Number of U.S. Entities that are Small
Estimated Number of Small Entities with Impacts
                                                                               
                                                                               

Under One Percent
Between One and Three Percent 
                              Over Three Percent
                                     TPCs
Non-profit
                                       2
                                       2
                                       0
                                       0
                                       
Business
                                       3
                                       1
                                       2
                                       0
                                      ABs
Non-profit
                                       3
                                       3
                                       0
                                       0
                                       
Business
                                       1
                                       1
                                       0
                                       0
                                   Combined
Non-profit
                                       5
                                       5
                                       0
                                       0
                                       
Business
                                       4
                                       2
                                       2
                                       0
                                       
Total
                                       9
                                       7
                                       2
                                       0

Unfunded Mandates Reform Act (UMRA)

	Title II of the Unfunded Mandates Reform Act of 1995, Pub. L. 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and Tribal governments, and the private sector.  Under section 202 of the UMRA, EPA generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with "Federal mandates" that might result in expenditures by State, local, and Tribal governments, in the aggregate, or by the private sector, of $100 million or more (when adjusted annually for inflation) in any one year.

The cost of the proposed TPC rule is well below $100 million per year in any one year.  The rule is not expected to affect State, local, and Tribal governments.

Executive Order 13132 - Federalism

Executive Order 13132, entitled Federalism (64 FR 43255, August 10, 1999), directs federal agencies to consider whether a rule has federalism implications (i.e. whether it has substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132). 

The TPC rule does not have a substantial direct effects on states or local governments (individually or collectively), on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. No state or local governments are expected to become TPCs or accreditation bodies, and thus state and local governments will not incur direct compliance costs as a result of the rule. The rule does not preempt state or local law, and the rule is required by statute. 

Executive Order 13175 - Tribal Implications

Executive Order 13175, entitled Consultation and Coordination with Indian Tribal Governments (59 FR 22951, November 6, 2000), directs federal agencies to consider whether a rule has tribal implications (i.e. whether it has substantial direct effects on tribal governments, on the relationship between the Federal government and the Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes). No tribal government is expected to become a TPC or an accreditation body, and thus tribal governments will not incur direct compliance costs as a result of the rule. The rule does not change the relationship between the Federal government and Indian tribes, or change the distribution of power. 

Executive Order 13045 - Protection of Children

Under Executive Order 13045, a regulation must be reviewed if the regulatory action is economically significant and concerns an environmental health risk or safety risk that may disproportionately affect children.  The proposed TPC rule is not economically significant because it will not have an annual impact on the economy of $100 million or more.

Executive Order 13211 - Energy Effects
	Executive Order 13211, entitled Actions Concerning Regulations that Significantly Affect Energy Supply, Distribution, or Use (66 FR 28355, May 22, 2001), directs federal agencies to identify actions that will have a significant adverse energy effect.  Adverse effects are defined as:

   * Reductions in crude oil supply in excess of 10,000 barrels per day; 
   * Reductions in fuel production in excess of 4,000 barrels per day; 
   * Reductions in coal production in excess of 5 million tons per year; 
   * Reductions in natural gas production in excess of 25 million mcf per year; 
   * Reductions in electricity production in excess of 1 billion kilowatt-hours per year or in excess of 500 megawatts of installed capacity; 
   * Increases in energy use required by the regulatory action that exceed any of the thresholds above; 
   * Increases in the cost of energy production in excess of one percent; 
   * Increases in the cost of energy distribution in excess of one percent; or 
   * Other similarly adverse outcomes. 

The regulations under consideration will not significantly reduce energy production nor significantly increase energy costs.

National Technology Transfer and Advancement Act
      
	Section 12(d) of the National Technology Transfer and Advancement Act of 1995 ("NTTAA"), Public Law No. 104-113 (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical.  Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, business practices, etc.) that are developed or adopted by voluntary consensus standards bodies.  NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards. 

	This proposed rulemaking involves technical standards, and EPA proposes to use voluntary consensus standards.  The proposed framework of this third party certification program is based on the ability of ABs to review TPCs for their conformity to ISO/IEC Guide 65, ISO/IEC 17025, and ISO/IEC 17020.  Both Product ABs and Laboratory ABs must maintain their conformity to ISO/IEC 17011 and ISO/IEC Guide 65.

Executive Order 12898  -  Environmental Justice

Under Executive Order 12898, when promulgating a regulation, EPA investigates whether there are disproportionately high and adverse human health or environmental effects on minority and low-income populations. Since this proposed rulemaking addresses the process for accreditation bodies and TPCs, this proposed rule does result in any adverse human health or environmental effects.
      

References
AIHA-LAP LLC. 2012. About AIHA Laboratory Accreditation Programs. Available at: http://www.aihaaccreditedlabs.org/about/pages/default.aspx (Accessed April 27, 2012)
American Business Directory. 2011. 2011 American Business Information: Perry Johnson Inc. and Perry Johnson Registrars.
California Air Resources Board (CARB). 2011. List of CARB Approved Third Party Certifiers.
Dun & Bradstreet. 2011. Company Reports. Proprietary Database.
International Accreditation Forum (IAF). 2011. Signatories to the IAF MLA for ISO 9001, ISO 14001, Product, 31 May 2011.
International Laboratory Accreditation Cooperation (ILAC). 2011. Signatories to the ILAC Mutual Recognition Arrangement, Updated 16 May 2011.
Perry Johnson & Associates. 2012. Contact us - Perry Johnson & Associates, Inc. Available at: www.pjats.com/contact-us/ (Accessed April 27, 2012)
Personal Communication with Forestwood Industries. 2011. Conversation between Gary Poserina (Forestwood Industries, Inc.) and Abt Associates Inc. . March 2, 2011.
Personal Communication with IAS. 2011. Conversation between Patrick McCullen (International Accreditation Service) and Abt Associates Inc. June 22, 2011.
Personal Communication with NSF International. 2011a. Conversation between Kerri Levanseler (NSF International) and Abt Associates Inc. March 2, 2011.
Personal Communication with NSF International. 2011b. Conversation between Craig Moore (NSF International) and Abt Associates Inc. March 11, 2011.
Personal Communication with NTA Inc. 2011. Conversation between Dale Arter (NTA Inc.) and Abt Associates Inc. March 2, 2011.
Personal Communication with PFS Corporation. 2011. Conversation between James Van Schoyck and Ron Reindl (PFS Corporation, Inc.) and Abt Associates Inc. February 25, 2011.
Personal Communication with PSI. 2011. Conversation between Randy Webb (Professional Service Industries, Inc.) and Abt Associates Inc. February 14, 2011.
Personal Communication with SCS International. 2011. Conversation between Michael Wolfe (SCS International) and Abt Associates Inc. February 28, 2011.
PFS Corporation. 2012. History - PFS Corporation. Available at: www.pfscorporation.com/history.php (Accessed April 27, 2012)
Professional Service Industries Inc. (PSI). 2012. Welcome to PSI. Available at: www.psiusa.com (Accessed April 27, 2012)
Scientific Certification Systems (SCS). 2012a. Staff Roster - Scientific Certification Systems. Available at: www.scscertified.com/scs_staff.php (Accessed April 27, 2012)
Scientific Certification Systems (SCS). 2012b. Management Roster - Scientific Certification Systems. Available at: www.scscertified.com/scs_management.php (Accessed April 27, 2012)
U.S. Bureau of Labor Statistics (BLS). 2011. Employer Costs for Employee Compensation: Supplementary Tables: Historical Data: December 2006 - March 2011.
U.S. Census Bureau. 2010a. Sector 54: EC0754SSSZ4: Professional,  Scientific, and Technical Services: Subject Series - Estab & Firm Size: Receipts/Revenue Size of Firms for the United States: 2007.
U.S. Census Bureau. 2010b. Sector 56: EC0756SSSZ4: Administrative and Support and Waste Management and Remediation Services: Subject Series - Establishment and Firm Size: Receipts Size of Firms for the United States: 2007.
U.S. Census Bureau. 2010c. Sector 81: EC0781SSSZ4: Other Services (Except Public Administration): Subject Series - Estab & Firm Size: Receipts/Revenue Size of Firms for the United States: 2007.
U.S. Census Bureau. 2010d. Sector 31: EC0731I1: Manufacturing: Industry Series: Detailed Statistics by Industry for the United States: 2007.
U.S. Environmental Protection Agency (EPA). 2002a. Economic Analysis for the Amended Inventory Update Rule: Final Report (EPA-HQ-OPPT-2002-0054-0260). August 2002.
U.S. Environmental Protection Agency (EPA). 2002b. Wage Rates for Economic Analysis of the Toxics Release Inventory Program. June 10, 2002.
U.S. Environmental Protection Agency (EPA). 2009. Economic Analysis of the Premanufacture Notification Electronic Reporting Final Rule. U. S. E. P. A. Office of Pollution Prevention and Toxics. July 13, 2009.
U.S. Environmental Protection Agency (EPA). 2011a. Supporting Statement for a Request for OMB Review under the Paperwork Reduction Act: the Final Rule Addendum to Partial Update of the TSCA Section 8(b) TSCA Inventory Data Base, Production and Site Reports.
U.S. Environmental Protection Agency (EPA). 2011b. Supporting Statement for EPA Information Collection Request Number 2002.05, "Cross-Media Electronic Reporting Rule" Office of Environmental Information, U.S. Environmental Protection Agency. June 22, 2011.
U.S. Internal Revenue Service. 2009. Form 990: Return of Organization Exempt from Income Tax for Nonprofit ABs and TPCs.
U.S. Internal Revenue Service. 2010. Form 990: Return of Organization Exempt from Income Tax for Nonprofit ABs and TPCs.
U.S. Small Business Administration. 2010. Table of Small Business Size Standards Matched to North American Industry Classification System Codes.
Weinstein, H. G. and M. A. Loewenstein. 2004. Comparing Current and Former Industry and Occupation ECEC Series. August 25, 2004.

Appendix A --------------------------------------------------------------------------------

Appendix A --------------------------------------------------------------------------------
 -  Wage Rate Calculations
This appendix describes the derivation of the fully loaded wage rates and inflation factors used in calculating costs of labor, materials, and other inputs. All cost estimates are presented in fourth quarter, calendar year 2010 dollars, representing the most recent full year of data available.

The fully loaded unit labor cost for managerial, professional/technical, and clerical labor in the regulated industry and for EPA staff is estimated by adding fringe benefits and overhead costs to the hourly wage or annual salary for each category following the method described in Wage Rates for Economic Analysis of the Toxics Release Inventory Program  (EPA 2002b). This appendix describes the method employed to estimate the fully loaded unit labor costs for each labor category and presents the results of the analysis.

Labor categories used in the analysis correspond to the U.S. Bureau of Labor Statistics (BLS) Standard Occupational Classification (SOC) system. In March 2004, BLS began using the North American Industry Classification System (NAICS) instead of the Standard Industrial Classification (SIC) System, and the Standard Occupational Classification (SOC) system instead of the Occupational Classification System (OCS). Exhibit A-1 summarizes the crosswalk between old and new occupational titles, and lists the SOC titles that correspond to the managerial, professional/technical, and clerical labor categories used in this analysis (Weinstein and Loewenstein 2004).

Exhibit A-1: Detail of Labor Categories Used in the Analysis
Labor Category Used in the Analysis
BLS Old Title (OCS)
BLS New Title (SOC)
Managerial
Executive, administrative, and managerial 
Management, business, and financial
Professional/Technical
Professional specialty and technical
Professional and related
Clerical
Administrative support, including clerical 
Office and administrative support
Source: Weinstein and Loewenstein 2004

Wages and fringe benefit data for managerial, professional/technical, and clerical labor are from the BLS Employer Costs for Employee Compensation (ECEC) historical data for December 2006  -  March 2011 (BLS 2011).

The costs of fringe benefits such as paid leave and insurance, specific to each labor category, are taken from the same BLS report (BLS 2011). Fringe benefits as a percentage of wages are calculated separately for each labor category. For example, for December 2010, the average wage rate for professional/ technical labor was $36.57, and the average fringe benefit was $13.52. Therefore, fringe benefits as a percentage of wages were $13.52/$36.57, or approximately 37 percent (see Exhibit A-2).

An additional loading factor of 17 percent is applied to wages to account for overhead. This approach is used for consistency with Office of Pollution Prevention and Toxics (OPPT) economic analyses for two major rulemakings: Wage Rates for Economic Analyses of the Toxics Release Inventory Program, June 2002 (EPA 2002b), and the Revised Economic Analysis for the Amended Inventory Update Rule: Final Report, August 2002 (EPA 2002a). This overhead loading factor is added to the benefits loading factor, and the total is then applied to the base wage to derive the fully loaded wage. For example, the December 2010 fully loaded wage for professional/technical labor is $36.97 x (1+ 0.37 + 0.17) = $56.31. 

Fully loaded costs for managerial and clerical labor are calculated in a similar manner, as shown in Exhibit A-2.

Exhibit A-2: Derivation of Loaded Industry Wage Rates
Labor Category
Data Source for Wage Information
Date
Wage
Fringe Benefit
Fringes as % wage
Overhead as % wage [a]
Fringe + overhead factor
Loaded Wages

(a)
(b)
(c)=(b)/(a)
(d)
(e)=(c)+(d)+1
(f)= (a)*(e)
Clerical 
BLS ECEC, Private Professional and Business Services Industries, "Office and Administrative Support"[2]
                                    Dec-10
                                    $16.72 
                                    $6.09 
                                    36.42%
                                      17%
                                     1.53
                                    $25.65
Professional/
Technical
BLS ECEC, Private Professional and Business Services Industries, "Professional and related"[2]
                                    Dec-10
                                    $36.57 
                                    $13.52 
                                    36.97%
                                      17%
                                     1.54
                                    $56.31
Managerial 
BLS ECEC, Private Professional and Business Services Industries, "Mgt, Business, and Financial"[2]
                                    Dec-10
                                    $42.42 
                                    $17.15 
                                    40.43%
                                      17%
                                     1.57
                                    $66.78
Notes:
[a] An overhead rate of 17% is used based on assumptions in EPA (2002a) and EPA (2002b).
[b] Data for this occupational series found in BLS (2011).

Appendix B --------------------------------------------------------------------------------
  -  Recordkeeping and Reporting Burdens
Table B-1 and Table B-2 present the estimated per-activity recordkeeping and reporting burdens for accreditation bodies and third party certifiers, respectively.  Table B-3 and Table B-4 present the estimated annual frequency of the recordkeeping and reporting activity as well as the associated clerical, technical, and managerial cost.  Total costs are calculated as the sum of the component costs. 

Table B-1: Recordkeeping and Reporting Burden for Accreditation Bodies, by Activity
Activity[1]
Per Activity Burden Hours
Number of Annual Activities
(d)

Clerical
Technical
Managerial

 Total Burden (hours)

(a)
(b)
(c)

(e) = (d)*{(a)+(b)+(c)}
1. Rule Familiarization
                                                                           0.00
                                                                           5.00
                                                                           5.00
                                                                           1.00
                                                                        10.0000
2. Application Submission 
  Company Information (Name, Address, Telephone Number, and Email Address of Primary Contact)[2]
                                                                           0.00
                                                                           0.04
                                                                           0.02
                                                                           1.00
                                                                         0.0600
  Documentation of IAF MLA, ILAC MRA, or Equivalent Signatory Status[2]
                                                                           0.00
                                                                           0.04
                                                                           0.02
                                                                           1.00
                                                                         0.0600
  Description of Any Other Qualifications Related to Experience in Performing Accreditation of Conformity Assessment Bodies or Third Party Certifiers[3]
                                                                           0.00
                                                                           0.83
                                                                           0.51
                                                                           1.00
                                                                         1.3400
3. Recognition Agreement[4]
                                                                           1.00
                                                                           1.00
                                                                           4.00
                                                                           1.00
                                                                         6.0000
4. EPA Notification
  Loss of Status as a Signatory to the IAF MLA, ILAC MRA, or Equivalent Organization[5]
                                                                           0.00
                                                                           0.08
                                                                           0.04
                                                                           0.05
                                                                         0.0060
  Third Party Certifier Applications[5]
                                                                           0.00
                                                                           0.08
                                                                           0.04
                                                                           3.00
                                                                         0.3600
  Third Party Certifier Accreditation[5]
                                                                           0.00
                                                                           0.08
                                                                           0.04
                                                                           3.00
                                                                         0.3600
  Third Party Certifier Compliance Failure[5]
                                                                           0.00
                                                                           0.08
                                                                           0.04
                                                                           0.33
                                                                         0.0396
  Third Party Certifier Accreditation Suspension or Revocation (Product ABs) / Accredited Laboratory Compliance Failure (Laboratory ABs)[5]
                                                                           0.00
                                                                           0.08
                                                                           0.04
                                                                           0.33
                                                                         0.0396
  Change to Organizational Policy or Management Structure that Could Adversely Affect Accreditation Program[5]
                                                                           0.00
                                                                           0.08
                                                                           0.04
                                                                           0.20
                                                                         0.0240
  Checklists and Other Records Documenting Compliance with the Requirements for Systems Audits and On-site Assessment of Third Party Certifiers[5]
                                                                           0.00
                                                                           0.08
                                                                           0.04
                                                                           1.00
                                                                         0.1200
  Change in Name or Address of Domestic Agent (Foreign Entities Only)[5] 
                                                                           0.00
                                                                           0.08
                                                                           0.04
                                                                           0.50
                                                                         0.0600
5. Third Party Certifier Notification
  Unique Tracking Number[2]
                                                                           0.00
                                                                           0.04
                                                                           0.02
                                                                           3.00
                                                                         0.1800
  Withdraw from or be Removed from Program[2]
                                                                           0.00
                                                                           0.04
                                                                           0.02
                                                                           0.25
                                                                         0.0150
6. Recordkeeping
  Accreditation Applications[6]
                                                                           0.75
                                                                           1.50
                                                                           0.75
                                                                           1.00
                                                                         3.0000
  Checklists and Other Records Documenting Compliance with the Requirements for Systems Audits and On-site Assessment of Third Party Certifiers[6]
                                                                           0.75
                                                                           1.50
                                                                           0.75
                                                                           1.00
                                                                         3.0000
7. Annual Report to EPA
  Number of Third Party Certifier Applications Received[7]
                                                                           0.25
                                                                           0.50
                                                                           0.25
                                                                           1.00
                                                                         1.0000
  Number of Third Party Certifier Applications Approved and Denied[7]
                                                                           0.25
                                                                           0.50
                                                                           0.25
                                                                           1.00
                                                                         1.0000
  The Names and Contact Information of All Accredited Third Party Certifiers[7]
                                                                           0.25
                                                                           0.50
                                                                           0.25
                                                                           1.00
                                                                         1.0000
  Number and Locations of Systems Audits and On-site Assessments[7]
                                                                           0.25
                                                                           0.50
                                                                           0.25
                                                                           1.00
                                                                         1.0000
  Results of Accredited Third Party Certifier Laboratory Proficiency Testing or Inter-laboratory Comparisons[7]
                                                                           0.25
                                                                           0.50
                                                                           0.25
                                                                           1.00
                                                                         1.0000
Domestic Total in First Year
                                                                               
                                                                               
                                                                               
                                                                               
                                                                        29.6042
Foreign Total in First Year
                                                                               
                                                                               
                                                                               
                                                                               
                                                                        29.6642
Domestic Total in Year 2(Non-Reapplication Year)
                                                                               
                                                                               
                                                                               
                                                                               
                                                                        12.1442
Foreign Total in Year 2 (Non-Reapplication Year)
                                                                               
                                                                               
                                                                               
                                                                               
                                                                        12.2042
Domestic Total in Year 3 (Reapplication Year)
                                                                               
                                                                               
                                                                               
                                                                               
                                                                        19.6042
Foreign Total in Year 3 (Reapplication Year)
                                                                               
                                                                               
                                                                               
                                                                               
                                                                        19.6642
Notes: 1. Under the proposed rule, accreditation bodies are required to submit an application to renew their recognition agreement every three years.  As a result, this analysis assumes that accreditation bodies incur application submission and recognition agreement preparation costs in the first year and subsequently every three years thereafter.
2. Based on the estimated burden associated with reporting "company information" (EPA 2011a). 
3. Based on the estimated burden associated with answering substantiation questions when making plant site confidentiality claims (EPA 2011a).
4. Based on conversations with accreditation bodies.
5. Based on the estimated burden associated with reporting "company information" (EPA 2011a). Values have been doubled based on best professional judgment.
6. Based on the estimated burden associated with "recordkeeping" (EPA 2011a). The rule requires that records be kept for 3 years that show the
production volume, plant site, and site-limited status of each reported substance.
7. Estimated as one-third of the burden associated with "recordkeeping" (EPA 2011a). Estimate based on best professional judgment.
Sources: (1) U.S. Bureau of Labor Statistics. 2011. Employer Costs for Employee Compensation: Supplementary Tables: Historical Data: December 2006 - March 2011, and (2) U.S. Environmental Protection Agency. 2011a. Supporting Statement for a Request for OMB Review under the Paperwork Reduction Act: the Final Rule Addendum to Partial Update of the TSCA Section 8(b) TSCA Inventory Data Base, Production and Site Reports.

Table B-2: Recordkeeping and Reporting Burden for Third Party Certifiers, by Activity

Per Activity Burden Hours
Number of Annual Activities
(d)
 Total Burden (hours)
(e) = (d)*{(a)+(b)+(c)}
Activity[1]
Clerical 
Technical 
Managerial 

(a)
(b)
(c)

1. Rule Familiarization
                                                                           0.00
                                                                           5.00
                                                                           5.00
                                                                           1.00
                                                                          10.00
2. Product Accreditation Body Application Submission 
  Company Information (Name, Address, Telephone Number, and Email Address of Primary Contact) and Type of Composite Wood Products Applicant Intends to Certify[2]
                                                                           0.00
                                                                           0.04
                                                                           0.02
                                                                           1.00
                                                                           0.06
  Description of TPC's Experience or Ability in Product Certification and Complying with ISO/IEC Guide 65[3]
                                                                           0.00
                                                                           0.83
                                                                           0.51
                                                                           1.00
                                                                           1.34
  Description of TPC's Experience in the Composite Wood Product Industry with the Product(s) Intended to be Certified[3]
                                                                           0.00
                                                                           0.83
                                                                           0.51
                                                                           1.00
                                                                           1.34
  Description of TPC's Ability to Inspect and Properly Train and Supervise Inspectors Pursuant to ISO/IEC 17020[3]
                                                                           0.00
                                                                           0.83
                                                                           0.51
                                                                           1.00
                                                                           1.34
3. Laboratory Accreditation Body Application Submission
  Company Information (Name, Address, Telephone Number, and Email Address of Primary Contact; if foreign, name and address of an agent for service located in the U.S.)[2]
                                                                           0.00
                                                                           0.04
                                                                           0.02
                                                                           1.00
                                                                           0.06
  Description of TPC's Experience in Performing or Verifying Formaldehyde Testing on Composite Wood Products[3]
                                                                           0.00
                                                                           0.83
                                                                           0.51
                                                                           1.00
                                                                           1.34
  Description of TPC's Experience Operating or Using Laboratories that Comply with ISO/IEC 17025[3]
                                                                           0.00
                                                                           0.83
                                                                           0.51
                                                                           1.00
                                                                           1.34
  Description of TPC's Experience with Test Method ASTM E-1333-96 (2002) and Experience Evaluating Correlation between Test Methods[3]
                                                                           0.00
                                                                           0.83
                                                                           0.51
                                                                           1.00
                                                                           1.34
4. Manufacturer Notification
  Third Party Certifier Number2
                                                                           0.00
                                                                           0.04
                                                                           0.02
                                                                           1.00
                                                                           0.06
  Withdraw from Program or Lose Accreditation2
                                                                           0.00
                                                                           0.04
                                                                           0.02
                                                                           0.25
                                                                          0.015
5. Recordkeeping
  List of Manufacturers and their Product Types (including Resins Used) Certified by TPC[4]
                                                                           0.75
                                                                           1.50
                                                                           0.75
                                                                           1.00
                                                                           3.00
  Results of Inspections, Audits, and Emission Tests Conducted for Each Manufacturer and Product Type[4]
                                                                           0.75
                                                                           1.50
                                                                           0.75
                                                                           1.00
                                                                           3.00
  List of the TPC's Laboratories, Test Methods (including Test Conditions and Conditioning Time), and Test Results[4]
                                                                           0.75
                                                                           1.50
                                                                           0.75
                                                                           1.00
                                                                           3.00
  Methods and Results for Establishing Test Method Correlations and Equivalence[4]
                                                                           0.75
                                                                           1.50
                                                                           0.75
                                                                           1.00
                                                                           3.00
  List of Manufacturers and Products Approved for Reduced Testing[4]
                                                                           0.75
                                                                           1.50
                                                                           0.75
                                                                           1.00
                                                                           3.00
6. Annual Report to Accreditation Bodies
  List of Manufacturers and their Products Certified by the TPC during the Previous Year (including Resins Used, and the Average and Range of Formaldehyde Emissions by Manufacturer, Resin, and Product Type)[5]
                                                                           0.25
                                                                           0.50
                                                                           0.25
                                                                           1.00
                                                                           1.00
  List of Noncomplying Products or Events by Manufacturer[5]
                                                                           0.25
                                                                           0.50
                                                                           0.25
                                                                           1.00
                                                                           1.00
  List of Laboratories and Test Methods Used by the TPC[5]
                                                                           0.25
                                                                           0.50
                                                                           0.25
                                                                           1.00
                                                                           1.00
  Results of Inter-Laboratory Comparison or Proficiency Testing for the Laboratories Used by the TPC[4]
                                                                           0.25
                                                                           0.50
                                                                           0.25
                                                                           1.00
                                                                           1.00
7. Accreditation Board Notification
  Personnel Qualification Changes[2]
                                                                           0.00
                                                                           0.04
                                                                           0.02
                                                                           0.50
                                                                           0.03
  Procedure Changes[2]
                                                                           0.00
                                                                           0.04
                                                                           0.02
                                                                           0.50
                                                                           0.03
  Laboratory Changes[2]
                                                                           0.00
                                                                           0.04
                                                                           0.02
                                                                           0.50
                                                                           0.03
8. EPA Notification
 Change in Name or Address of Domestic Agent (Foreign TPCs Only)[2]
                                                                           0.00
                                                                           0.04
                                                                           0.02
                                                                           0.50
                                                                           0.03
Domestic Total in First Year
                                                                               
                                                                               
                                                                               
                                                                               
                                                                         37.325
Foreign Total in First Year
                                                                               
                                                                               
                                                                               
                                                                               
                                                                         37.355
Domestic Total in Non-Reapplication Year
                                                                               
                                                                               
                                                                               
                                                                               
                                                                         19.165
Foreign Total in Non-Reapplications Year 
                                                                               
                                                                               
                                                                               
                                                                               
                                                                         19.195
Domestic Total in Reapplication Year 
                                                                               
                                                                               
                                                                               
                                                                               
                                                                         27.325
Foreign Total in Reapplications Year 
                                                                               
                                                                               
                                                                               
                                                                               
                                                                         27.355
Notes: 1. Under the proposed rule, TPCs are required to apply for re-accreditation every three years.  As a result, application and accreditation costs are incurred every other year.
2. Based on the estimated burden associated with reporting "company information" (EPA 2011a). 
3. Based on the estimated burden associated with answering substantiation questions when making plant site confidentiality claims (EPA 2011a).
4. Based on the estimated burden associated with "recordkeeping" (EPA 2011a). The rule requires that records be kept for 3 years that show the
production volume, plant site, and site-limited status of each reported substance.
5. Estimated as one-third of the burden associated with "recordkeeping" (EPA 2011a). Estimate based on best professional judgment.
Sources: (1) U.S. Bureau of Labor Statistics. 2011. Employer Costs for Employee Compensation: Supplementary Tables: Historical Data: December 2006 - March 2011, and (2) U.S. Environmental Protection Agency. 2011a. Supporting Statement for a Request for OMB Review under the Paperwork Reduction Act: the Final Rule Addendum to Partial Update of the TSCA Section 8(b) TSCA Inventory Data Base, Production and Site Reports.
       
Table B-3: Recordkeeping and Reporting Labor Costs for Accreditation Bodies, by Activity (2010$)
Activity
Estimated Annual Frequency[1]
Clerical Cost[2]
Technical Cost[2]
Managerial Cost[2]
Total Cost
1. Rule Familiarization
                                                                              1
                                                                         $0.00 
                                                                       $281.55 
                                                                       $333.90 
                                                                          $615 
2. Application Submission 
  Company Information (Name, Address, Telephone Number, and Email Address of Primary Contact)[3]
                                                                              1
                                                                         $0.00 
                                                                         $2.25 
                                                                         $1.34 
                                                                         $3.59 
  Documentation of IAF MLA, ILAC MRA, or Equivalent Signatory Status[3]
                                                                              1
                                                                         $0.00 
                                                                         $2.25 
                                                                         $1.34 
                                                                         $3.59 
  Description of Any Other Qualifications Related to Experience in Performing Accreditation of Conformity Assessment Bodies or Third Party Certifiers[4]
                                                                              1
                                                                         $0.00 
                                                                        $46.74 
                                                                        $34.06 
                                                                        $80.80 
  Application Submission Subtotal
                                                                               
                                                                               
                                                                               
                                                                               
                                                                            $88
3. Recognition Agreement[5]
                                                                              1
                                                                        $25.65 
                                                                        $56.31 
                                                                       $267.12 
                                                                          $349 
4. EPA Notification
  Loss of Status as a Signatory to the IAF MLA, ILAC MRA, or Equivalent Organization[6]
                                                                           0.05
                                                                         $0.00 
                                                                         $0.23 
                                                                         $0.13 
                                                                         $0.36 
  Third Party Certifier Application[6]
                                                                              3
                                                                         $0.00 
                                                                        $13.51 
                                                                         $8.01 
                                                                        $21.53 
  Third Party Certifier Accreditation[6]
                                                                              3
                                                                         $0.00 
                                                                        $13.51 
                                                                         $8.01 
                                                                        $21.53 
  Third Party Certifier Compliance Failure[6]
                                                                           0.33
                                                                         $0.00 
                                                                         $1.49 
                                                                         $0.88 
                                                                         $2.37 
  Third Party Certifier Accreditation Suspension or Revocation (Product ABs) / Accredited Laboratory Compliance Failure (Laboratory ABs)[6]
                                                                           0.33
                                                                         $0.00 
                                                                         $1.49 
                                                                         $0.88 
                                                                         $2.37 
  Change to Organizational Policy or Management Structure that Could Adversely Affect Accreditation Program[6]
                                                                            0.2
                                                                         $0.00 
                                                                         $0.90 
                                                                         $0.53 
                                                                         $1.44 
  Checklists and Other Records Documenting Compliance with the Requirements for Systems Audits and On-site Assessment of Third Party Certifiers[6]
                                                                              1
                                                                         $0.00 
                                                                         $4.50 
                                                                         $2.67 
                                                                         $7.18 
  Change in Name or Address of Domestic Agent (Foreign Entities Only)[6]
                                                                            0.5
                                                                         $0.00 
                                                                         $2.25 
                                                                         $1.34 
                                                                         $3.59 
  EPA Notification Subtotal (Domestic)
                                                                               
                                                                               
                                                                               
                                                                               
                                                                            $57
  EPA Notification Subtotal (Foreign)
                                                                               
                                                                               
                                                                               
                                                                               
                                                                            $60
5. Third Party Certifier Notification
  Unique Tracking Number[3]
                                                                              3
                                                                         $0.00 
                                                                         $6.76 
                                                                         $4.01 
                                                                        $10.76 
  Withdraw from or be Removed from Program[3]
                                                                           0.25
                                                                         $0.00 
                                                                         $0.56 
                                                                         $0.33 
                                                                         $0.90 
  TPC Notification Subtotal
                                                                               
                                                                               
                                                                               
                                                                               
                                                                            $12
6. Recordkeeping
  Accreditation Applications[7]
                                                                              1
                                                                        $19.24 
                                                                        $84.47 
                                                                        $50.09 
                                                                       $153.79 
  Checklists and Other Records Documenting Compliance with the Requirements for Systems Audits and On-site Assessment of Third Party Certifiers[7]
                                                                              1
                                                                        $19.24 
                                                                        $84.47 
                                                                        $50.09 
                                                                       $153.79 
  Recordkeeping Subtotal
                                                                               
                                                                               
                                                                               
                                                                               
                                                                           $308
7. Annual Report to EPA
  Number of Third Party Certifier Applications Received[8]
                                                                              1
                                                                         $6.41 
                                                                        $28.16 
                                                                        $16.70 
                                                                        $51.26 
  Number of Third Party Certifier Applications Approved and Denied[8]
                                                                              1
                                                                         $6.41 
                                                                        $28.16 
                                                                        $16.70 
                                                                        $51.26 
  The Names and Contact Information of All Accredited Third Party Certifiers[8]
                                                                              1
                                                                         $6.41 
                                                                        $28.16 
                                                                        $16.70 
                                                                        $51.26 
  Number and Locations of Systems Audits and On-site Assessments[8]
                                                                              1
                                                                         $6.41 
                                                                        $28.16 
                                                                        $16.70 
                                                                        $51.26 
  Results of Accredited Third Party Certifier Laboratory Proficiency Testing or Inter-laboratory Comparisons[8]
                                                                              1
                                                                         $6.41 
                                                                        $28.16 
                                                                        $16.70 
                                                                        $51.26 
  Annual Report Subtotal
                                                                               
                                                                               
                                                                               
                                                                               
                                                                           $256
Domestic Total in First Year
                                                                               
                                                                               
                                                                               
                                                                        $1,685 
Foreign Total in First Year
                                                                               
                                                                               
                                                                               
                                                                        $1,688 
Domestic Total in Year 2(Non-Reapplication Year)
                                                                               
                                                                               
                                                                               
                                                                          $633 
Foreign Total in Year 2 (Non-Reapplication Year)
                                                                               
                                                                               
                                                                               
                                                                          $636 
Domestic Total in Year 3(Reapplication Year)
                                                                               
                                                                               
                                                                               
                                                                         $1,070
Foreign Total in Year 3 (Reapplication Year)
                                                                               
                                                                               
                                                                               
                                                                         $1,073
Notes: 1. Based on best professional judgment and rule requirements. Under the proposed rule, accreditation bodies are required to submit an application to renew their recognition agreement every three years.  As a result, this analysis assumes that accreditation bodies incur application submission and recognition agreement preparation costs in the first year and subsequently every three years thereafter.
2. Based on Employer Costs for Employee Compensation wage and benefit data for private professional and business services industries (BLS 2011a). Clerical costs are estimated using data from the "office and administrative support" occupational group; technical costs are estimated using data from the "professional and related" occupational group; and managerial costs are estimated using data from the "management, business, and financial" occupational group.
3. Based on the estimated burden associated with reporting "company information" (EPA 2011a). 
4. Based on the estimated burden associated with answering substantiation questions when making plant site confidentiality claims (EPA 2011a).
5. Based on conversations with accreditation bodies.
6. Based on the estimated burden associated with reporting "company information" (EPA 2011a). Values have been doubled based on best professional judgment.
7. Based on the estimated burden associated with "recordkeeping" (EPA 2011a). The rule requires that records be kept for 3 years that show the production volume, plant site, and site-limited status of each reported substance.
8. Estimated as one-third of the burden associated with "recordkeeping" (EPA 2011a). Estimate based on best professional judgment.
Sources: (1) U.S. Bureau of Labor Statistics. 2011. Employer Costs for Employee Compensation: Supplementary Tables: Historical Data: December 2006 - March 2011, and (2) U.S. Environmental Protection Agency. 2011a. Supporting Statement for a Request for OMB Review under the Paperwork Reduction Act: the Final Rule Addendum to Partial Update of the TSCA Section 8(b) TSCA Inventory Data Base, Production and Site Reports.

Table B-4: Recordkeeping and Reporting Labor Costs for Third Party Certifiers, by Activity  (2010$)
Activity
Estimated Annual Frequency[1]
Clerical Cost[2]
Technical Cost[2]
Managerial Cost[2]
Total Cost
1. Rule Familiarization
                                                                           1.00
                                                                         $0.00 
                                                                       $281.55 
                                                                       $333.90 
                                                                          $615 
2. Product Accreditation Body Application Submission 
  Company Information (Name, Address, Telephone Number, and Email Address of Primary Contact; if foreign, name and address of an agent for service located in the U.S.) and Type of Composite Wood Products Applicant Intends to Certify[3]
                                                                           1.00
                                                                         $0.00 
                                                                         $2.25 
                                                                         $1.34 
                                                                         $3.59 
  Description of TPC's Experience or Ability in Product Certification and Complying with ISO/IEC Guide 65[4]
                                                                           1.00
                                                                         $0.00 
                                                                        $46.74 
                                                                        $34.06 
                                                                        $80.80 
  Description of TPC's Experience in the Composite Wood Product Industry with the Product(s) Intended to be Certified[4]
                                                                           1.00
                                                                         $0.00 
                                                                        $46.74 
                                                                        $34.06 
                                                                        $80.80 
  Description of TPC's Ability to Inspect and Properly Train and Supervise Inspectors Pursuant to ISO/IEC 17020[4]
                                                                           1.00
                                                                         $0.00 
                                                                        $46.74 
                                                                        $34.06 
                                                                        $80.80 
  Product Accreditation Subtotal
                                                                               
                                                                               
                                                                               
                                                                               
                                                                           $246
3. Laboratory Accreditation Body Application Submission
  Company Information (Name, Address, Telephone Number, and Email Address of Primary Contact; if foreign, name and address of an agent for service located in the U.S.)[3]
                                                                           1.00
                                                                         $0.00 
                                                                         $2.25 
                                                                         $1.34 
                                                                         $3.59 
  Description of TPC's Experience in Performing or Verifying Formaldehyde Testing on Composite Wood Products[4]
                                                                           1.00
                                                                         $0.00 
                                                                        $46.74 
                                                                        $34.06 
                                                                        $80.80 
  Description of TPC's Experience Operating or Using Laboratories that Comply with ISO/IEC 17025[4]
                                                                           1.00
                                                                         $0.00 
                                                                        $46.74 
                                                                        $34.06 
                                                                        $80.80 
  Description of TPC's Experience with Test Method ASTM E-1333-96 (2002) and Experience Evaluating Correlation between Test Methods[4]
                                                                           1.00
                                                                         $0.00 
                                                                        $46.74 
                                                                        $34.06 
                                                                        $80.80 
  Laboratory Accreditation Subtotal
                                                                               
                                                                               
                                                                               
                                                                               
                                                                           $246
4. Manufacturer Notification
  Third Party Certifier Number[3]
                                                                           1.00
                                                                         $0.00 
                                                                         $2.25 
                                                                         $1.34 
                                                                         $3.59 
  Withdraw from Program or Lose Accreditation[3]
                                                                           0.25
                                                                         $0.00 
                                                                         $0.56 
                                                                         $0.33 
                                                                         $0.90 
  Manufacturer Notification Subtotal
                                                                               
                                                                               
                                                                               
                                                                               
                                                                             $4
5. Recordkeeping
  List of Manufacturers and their Product Types (including Resins Used) Certified by TPC[5]
                                                                           1.00
                                                                        $19.24 
                                                                        $84.47 
                                                                        $50.09 
                                                                       $153.79 
  Results of Inspections, Audits, and Emission Tests Conducted for Each Manufacturer and Product Type[5]
                                                                           1.00
                                                                        $19.24 
                                                                        $84.47 
                                                                        $50.09 
                                                                       $153.79 
  List of the TPC's Laboratories, Test Methods (including Test Conditions and Conditioning Time), and Test Results[5]
                                                                           1.00
                                                                        $19.24 
                                                                        $84.47 
                                                                        $50.09 
                                                                       $153.79 
  Methods and Results for Establishing Test Method Correlations and Equivalence[5]
                                                                           1.00
                                                                        $19.24 
                                                                        $84.47 
                                                                        $50.09 
                                                                       $153.79 
  List of Manufacturers and Products Approved for Reduced Testing[5]
                                                                           1.00
                                                                        $19.24 
                                                                        $84.47 
                                                                        $50.09 
                                                                       $153.79 
  Recordkeeping Subtotal
                                                                               
                                                                               
                                                                               
                                                                               
                                                                           $769
6. Annual Report to Accreditation Bodies
  List of Manufacturers and their Products Certified by the TPC during the Previous Year (including Resins Used, and the Average and Range of Formaldehyde Emissions by Manufacturer, Resin, and Product Type)[6]
                                                                           1.00
                                                                         $6.41 
                                                                        $28.16 
                                                                        $16.70 
                                                                        $51.26 
  List of Noncomplying Products or Events by Manufacturer[6]
                                                                           1.00
                                                                         $6.41 
                                                                        $28.16 
                                                                        $16.70 
                                                                        $51.26 
  List of Laboratories and Test Methods Used by the TPC[6]
                                                                           1.00
                                                                         $6.41 
                                                                        $28.16 
                                                                        $16.70 
                                                                        $51.26 
  Results of Inter-Laboratory Comparison or Proficiency Testing for the Laboratories Used by the TPC[6]
                                                                           1.00
                                                                         $6.41 
                                                                        $28.16 
                                                                        $16.70 
                                                                        $51.26 
  Annual Report to AB Subtotal
                                                                               
                                                                               
                                                                               
                                                                               
                                                                           $205
7. Accreditation Board Notification
  Personnel Qualification Changes[3]
                                                                           0.50
                                                                         $0.00 
                                                                         $1.13 
                                                                         $0.67 
                                                                         $1.79 
  Procedure Changes[3]
                                                                           0.50
                                                                         $0.00 
                                                                         $1.13 
                                                                         $0.67 
                                                                         $1.79 
  Laboratory Changes[3]
                                                                           0.50
                                                                         $0.00 
                                                                         $1.13 
                                                                         $0.67 
                                                                         $1.79 
  Accreditation Board Notification Subtotal
                                                                               
                                                                               
                                                                               
                                                                               
                                                                             $5
8. EPA Notification
  Change in Name or Address of Domestic Agent (Foreign TPCs Only)[3]
                                                                           0.50
                                                                         $0.00 
                                                                         $1.13 
                                                                         $0.67 
                                                                             $2
Domestic Total in First Year
                                                                               
                                                                               
                                                                               
                                                                        $2,090 
Foreign Total in First Year
                                                                               
                                                                               
                                                                               
                                                                        $2,092 
Domestic Total in Non-Reapplication Year
                                                                               
                                                                               
                                                                               
                                                                          $983 
Foreign Total in Non-Reapplications Year
                                                                               
                                                                               
                                                                               
                                                                          $985 
Domestic Total in Reapplication Year 
                                                                               
                                                                               
                                                                               
                                                                        $1,475 
Foreign Total in Reapplications Year 
                                                                               
                                                                               
                                                                               
                                                                        $1,477 
Notes: 1. Based on best professional judgment and rule requirements. Under the proposed rule, TPCs are required to apply for re-accreditation every three years.  As a result, application and accreditation costs are incurred every third year.  2. Based on Employer Costs for Employee Compensation wage and benefit data for private professional and business services industries (BLS 2011a). Clerical costs are estimated using data from the "office and administrative support" occupational group; technical costs are estimated using data from the "professional and related" occupational group; and managerial costs are estimated using data from the "management, business, and financial" occupational group. 3. Based on the estimated burden associated with reporting "company information" (EPA 2011a).  4. Based on the estimated burden associated with answering substantiation questions when making plant site confidentiality claims (EPA 2011a).
5. Based on the estimated burden associated with "recordkeeping" (EPA 2011a). The rule requires that records be kept for 3 years that show the production volume, plant site, and site-limited status of each reported substance. 6. Estimated as one-third of the burden associated with "recordkeeping" (EPA 2011a). Estimate based on best professional judgment.
Sources: (1) U.S. Bureau of Labor Statistics. 2011. Employer Costs for Employee Compensation: Supplementary Tables: Historical Data: December 2006 - March 2011, and (2) U.S. Environmental Protection Agency. 2011a. Supporting Statement for a Request for OMB Review under the Paperwork Reduction Act: the Final Rule Addendum to Partial Update of the TSCA Section 8(b) TSCA Inventory Data Base, Production and Site Reports.

           Appendix C  -  Costs and Benefits of Electronic Reporting

	EPA is considering requiring mandatory electronic reporting requirement for accreditation bodies and TPCs (both referred to here as respondents).  If EPA adopts this requirement for the TPC rule, respondents would submit their notifications and reports to EPA using the Central Data Exchange (CDX).  The costs and benefits to respondents and to EPA are described below.

C.1  Costs and Benefits of Electronic Reporting to Accreditation Bodies and TPCs

	All respondents incur costs in the first year to complete a subscriber agreement and register with CDX.  Some respondents will incur CDX costs in subsequent years due to employee turnover or compromised electronic signatures.  These costs are offset by reductions in reporting and recordkeeping costs due to electronic reporting.

	CDX users are assigned to one of two roles in the CDX system, an Authorizing Official or a Support Registrant.

Authorized Official (AO):  The AO is the person legally responsible for the submission.  The AO is typically a senior official for the respondent.  The AO is the only user who can start a new form, or reopen a completed form to begin the amendment process, and is the only user who can electronically sign and submit a form.  AOs can also assign Support Registrants to edit and complete forms on his or her behalf.  AOs must submit a subscriber agreement to EPA, and register with CDX.

Support Registrants:  A Support Registrant is a person designated by an AO to submit supporting documents on his or her behalf.  Support Registrants can edit a submission that is created by the AO.  Support Registrants are only allowed to edit submissions that the AO has granted him or her access.  Support Registrants do not have any access rights to create or submit a form.  Once the AO creates a form, they will provide the Support Registrant with a passphrase to access the submission and complete all sections of the form.  Once the Support Registrant has finished completing the form, the AO will access the submission, review it, and submit it.  Support Registrants must register with CDX, but do not need to submit a subscriber agreement to EPA.

	This analysis uses a simplifying assumption that an average of five employees at each respondent will register with CDX:  one manager (who will serve as AO) four technical staff members (who will serve as Support Registrants).  

C.1.1  First Year Costs for Accreditation Bodies and TPCs 

	Respondents will incur electronic reporting costs in the first year to submit a subscriber agreement, register with CDX, and contact EPA's CDX Help Desk.

Subscriber Agreement.  An AO must complete a subscriber agreement in order to establish their identity and their relation to the entity for which they will submit electronic documents, as well as to document a unique correlation with the device that will be used to create their electronic signature.  Users can comply with the subscriber agreement provisions in CDX either by submitting a paper subscriber agreement with a wet-ink signature, or by submitting an electronic signature agreement.

 Paper subscriber agreement.  Preparing, submitting, and filing a paper subscriber agreement is estimated to require an average of 20 minutes of time per registrant (EPA 2011b), which is assumed to be managerial time.  

 Electronic signature agreement.  Preparing, submitting, and filing an electronic signature agreement is estimated to require an average of 15 minutes of time per registrant (EPA 2011b), which is assumed to be managerial time. 

CDX Registration.  CDX users will need to register with CDX, which involves selecting a user name and password, providing contact information, and identifying the facility and the registrant's role at the facility.  This is estimated to take an average of 10 minutes per user (EPA 2011b).  This results in an estimate that each respondent will spend 10 minutes of managerial time and 40 minutes of technical time to register with CDX.  

Help Desk.  CDX users are assumed to spend an average of 4 minutes contacting EPA's CDX Help Desk for technical support (EPA 2011b), which results in an estimate of 4 minutes of managerial time and 16 minutes of technical time per respondent.  

Problem Resolution.  Three percent of respondents each year are assumed to spend an average of one hour of technical time working with EPA's CDX Help Desk to resolve problems involving their registrations or agreements (EPA 2011b).

C.1.2  Subsequent Year Costs for Accreditation Bodies and TPCs

	In subsequent years, respondents may incur electronic reporting costs due to employee turnover and compromised electronic signatures.

Employee Turnover.  It is assumed that each year 10 percent of CDX users will be replaced by new employees, who will have to comply with the subscriber agreement and/or CDX registration requirements (EPA 2011b).  Thus, in subsequent years 10 percent of AOs will spend 15 to 20 minutes of managerial time to complete a subscriber agreement.  In addition, 10 percent of all users (both managerial and technical) will spend 10 minutes to register with CDX and 4 minutes contacting EPA's CDX Help Desk.

Report Compromised Signature.  Each year 1 percent of respondents are assumed to report a compromised or surrendered electronic signature, which requires the submittal of a new subscriber agreement (EPA 2011b).  This will entail 15 to 20 minutes of managerial time to prepare, submit, and file a new agreement, and 4 minutes of managerial time to contact EPA's CDX Help Desk.

C.1.3  Savings for Accreditation Bodies and TPCs

	Electronic reporting is assumed to reduce the recordkeeping burden by 50 percent, and to eliminate the use of clerical time for reporting and recordkeeping(EPA 2009).  For ABs, this is estimated to result in average savings of 3.75 hours of clerical time in the first year and 2.75 hours in subsequent years, as well as 1 hour of technical time and 0.5 hours of managerial time in all years.  For TPCs, this is estimated to result in average savings of 4.75 hours of clerical time, 2.5 hours of technical time, and 1.25 hours of managerial time per year.

	Electronic reporting also has the following benefits for respondents:

 The number of forms that need to be resubmitted because they are incomplete or invalid should be greatly reduced because forms cannot be submitted via CDX if any required fields are incomplete, or if the submission fails internal validation checks;

 All of the respondent's relevant staff will be able to access the CDX forms easily and directly input their information, so the system will facilitate easier internal review by the respondent prior to submission;

 Filling out a form similar to one previously submitted will be faster with electronic reporting, as the respondent will already have an electronic copy of the earlier form to edit rather than having to fill out a new form; and

 All routine correspondence with the Agency (including submission of supporting documents) will be via CDX, which saves time and delivery costs and reduces delays in EPA's review.

EPA has not estimated the value of these additional savings to respondents. 

C.1.4  Changes in Costs to Accreditation Bodies and TPCs due to Electronic Reporting 

	As shown in Table C-1, accreditation bodies would accrue savings of $99 to $177 per year (depending on whether it is the initial year, reapplication year, or non-reapplication year).  TPCs would accrue savings of $259 to $337 per year (depending on whether it is the initial year, a reapplication year, or non-reapplication year), as shown in Table C-2.  The total savings for U.S. accreditation bodies would be $1,193 per year using a 3 percent discount rate and $1,146 per year using a 7 percent discount rate, as shown in Table C-3.  As shown in Table C-4, the total savings for U.S. TPCs would be $2,852 per year using a 3 percent discount rate and $2,754 per year using a 7 percent discount rate.  

	As shown in Table C-5, electronic reporting via CDX would reduce the annualized costs of the rule to U.S. accreditation bodies and respondents from $33,535 to $29,490 per year using a 3 percent discount rate, a savings of $4,045 per year.  Using a 7 percent discount rate, costs are estimated to decrease from $34,443 to $30,542, a savings of $3,900 per year.  There are additional unquantified improvements in efficiency and higher data quality due to electronic reporting.

	As shown in Table C-6, electronic reporting via CDX would reduce the average total burden hours for all 61 domestic and foreign respondents from 1,421 hours to 1,029 hours per year, a savings of 392 hours per year.  

Table C-1: Incremental Cost of Electronic Reporting Requirements: Burden and Cost Per Accreditation Body
Activity
Per Activity Burden Hours
Number of Annual Activities
(d)
 Total Burden (hours)
Total Cost

Clerical
Technical
Managerial

Clerical
($25.65/hr)
Technical
($56.31/hr)
Managerial
($66.78/hr)
Total

(a)
(b)
(c)

(e) = (d)*{(a)+(b)+(c)}
(f)
(g)
(h)
(i)
1. CDX Electronic Reporting (First Year)
  Electronic Subscriber Agreements (domestic firms)
                                       -
                                       -
                                                                          0.250
                                                                           1.00
                                                                          0.250
                                       -
                                       -
                                                                         $16.70
                                                                         $16.70
  Paper Subscriber Agreements (foreign firms)
                                       -
                                       -
                                                                          0.330
                                                                           1.00
                                                                          0.330
                                       -
                                       -
                                                                         $22.04
                                                                         $22.04
  CDX Registration
                                       -
                                                                          0.670
                                                                          0.170
                                                                           1.00
                                                                          0.840
                                       -
                                                                         $37.73
                                                                         $11.35
                                                                         $49.08
  Help Desk
                                       -
                                                                          0.270
                                                                          0.070
                                                                           1.00
                                                                          0.340
                                       -
                                                                         $15.20
                                                                          $4.67
                                                                         $19.88
  Problem Resolution
                                       -
                                                                          1.000
                                                                              -
                                                                           0.03
                                                                          0.030
                                       -
                                                                          $1.69
                                                                              -
                                                                          $1.69
  Subtotal (domestic)
                                                                               
                                                                               
                                                                               
                                                                               
                                                                          1.460
                                                                               
                                                                               
                                                                               
                                                                         $87.00
  Subtotal (foreign)
                                                                               
                                                                               
                                                                               
                                                                               
                                                                          1.540
                                                                               
                                                                               
                                                                               
                                                                         $93.00
2. CDX Electronic Reporting (Subsequent Years)
  Electronic Subscriber Agreements (domestic firms)
                                       -
                                       -
                                                                          0.250
                                                                           0.10
                                                                          0.025
                                       -
                                       -
                                                                          $1.67
                                                                          $1.67
  Paper Subscriber Agreements (foreign firms)
                                       -
                                       -
                                                                          0.330
                                                                           0.10
                                                                          0.033
                                       -
                                       -
                                                                          $2.20
                                                                          $2.20
  CDX Registration
                                       -
                                                                          0.670
                                                                          0.170
                                                                           0.10
                                                                          0.084
                                       -
                                                                          $3.77
                                                                          $1.14
                                                                          $4.91
  Help Desk
                                       -
                                                                          0.270
                                                                          0.070
                                                                           0.10
                                                                          0.034
                                       -
                                                                          $1.52
                                                                          $0.47
                                                                          $1.99
  Report Compromised Signature
                                                                               
                                                                               
                                                                          0.400
                                                                           0.01
                                                                          0.004
                                       -
                                       -
                                                                          $0.27
                                                                          $0.27
  Subtotal (domestic)
                                                                               
                                                                               
                                                                               
                                                                               
                                                                          0.147
                                                                               
                                                                               
                                                                               
                                                                          $9.00
  Subtotal (foreign)
                                                                               
                                                                               
                                                                               
                                                                               
                                                                          0.155
                                                                               
                                                                               
                                                                               
                                                                          $9.00
3. Recognition Agreement
                                                                        (1.000)
                                       -
                                       -
                                                                          1.000
                                                                        (1.000)
                                                                       $(25.65)
                                       -
                                       -
                                                                       ($26.00)
4. Recordkeeping
  Accreditation Applications
                                                                        (0.750)
                                                                        (0.500)
                                                                        (0.250)
                                                                          1.000
                                                                        (1.500)
                                                                       ($19.24)
                                                                       ($28.16)
                                                                       ($16.70)
                                                                       ($64.09)
  Checklists and Other Records Documenting Compliance with the Requirements for Systems Audits and On-site Assessment of Third Party Certifiers
                                                                        (0.750)
                                                                        (0.500)
                                                                        (0.250)
                                                                          1.000
                                                                        (1.500)
                                                                       ($19.24)
                                                                       ($28.16)
                                                                       ($16.70)
                                                                       ($64.09)
  Subtotal
                                                                               
                                                                               
                                                                               
                                                                               
                                                                        (3.000)
                                                                               
                                                                               
                                                                               
                                                                      ($128.00)
5. Annual Report to EPA
  Number of Third Party Certifier Applications Received
                                                                        (0.250)
                                       -
                                       -
                                                                          1.000
                                                                        (0.250)
                                                                        $(6.41)
                                       -
                                       -
                                                                        $(6.41)
  Number of Third Party Certifier Applications Approved and Denied
                                                                        (0.250)
                                       -
                                       -
                                                                          1.000
                                                                        (0.250)
                                                                        $(6.41)
                                       -
                                       -
                                                                        $(6.41)
  The Names and Contact Information of All Accredited Third Party Certifiers
                                                                        (0.250)
                                       -
                                       -
                                                                          1.000
                                                                        (0.250)
                                                                        $(6.41)
                                       -
                                       -
                                                                        $(6.41)
  Number and Locations of Systems Audits and On-site Assessments
                                                                        (0.250)
                                       -
                                       -
                                                                          1.000
                                                                        (0.250)
                                                                        $(6.41)
                                       -
                                       -
                                                                        $(6.41)
  Results of Accredited Third Party Certifier Laboratory Proficiency Testing or Inter-laboratory Comparisons
                                                                        (0.250)
                                       -
                                       -
                                                                          1.000
                                                                        (0.250)
                                                                        $(6.41)
                                       -
                                       -
                                                                        $(6.41)
  Subtotal
                                                                               
                                       
                                       
                                                                               
                                                                        (1.250)
                                                                               
                                       
                                       
                                                                       $(32.00)
Domestic Total in First Year
                                                                               
                                                                               
                                                                               
                                                                               
                                                                        (3.790)
                                                                               
                                                                               
                                                                               
                                                                       ($99.00)
Foreign Total in First Year
                                                                               
                                                                               
                                                                               
                                                                               
                                                                        (3.710)
                                                                               
                                                                               
                                                                               
                                                                       ($93.00)
Domestic Total in Non-Reapplication Year 
                                                                               
                                                                               
                                                                               
                                                                               
                                                                        (4.103)
                                                                               
                                                                               
                                                                               
                                                                      ($151.00)
Foreign Total in Non-Reapplications Year  
                                                                               
                                                                               
                                                                               
                                                                               
                                                                        (4.095)
                                                                               
                                                                               
                                                                               
                                                                      ($151.00)
Domestic Total in Reapplication Year  
                                                                               
                                                                               
                                                                               
                                                                               
                                                                        (5.103)
                                                                               
                                                                               
                                                                               
                                                                      ($177.00)
Foreign Total in Reapplications Year  
                                                                               
                                                                               
                                                                               
                                                                               
                                                                        (5.095)
                                                                               
                                                                               
                                                                               
                                                                      ($177.00)
Notes:
   1. CDX Electronic Reporting (first year): 
             *       Electronic signature agreement.  Preparing, submitting, and filing an electronic signature agreement is estimated to require an average of 15 minutes of time per respondent, which is assumed to be managerial time (EPA 2011b).  
             *       Paper subscriber agreement.  Preparing, submitting, and filing a paper subscriber agreement is estimated to require an average of 20 minutes of time per respondent, which is assumed to be managerial time (EPA 2011b). 
             *       CDX Registration.  CDX users will need to register with CDX, which involves selecting a user name and password, providing contact information, and identifying the facility and the registrant's role at the facility.  This is estimated to take an average of 10 minutes per user  (EPA 2011b).  This results in an estimate that each respondent will spend 10 minutes of managerial time and 40 minutes of technical time to register with CDX.  
             *       Help Desk.  CDX users are assumed to spend an average of 4 minutes contacting EPA's CDX Help Desk for technical support (EPA 2011b), which results in an estimate of 4 minutes of managerial time and 16 minutes of technical time per respondent.  
             *       Problem Resolution.  Three percent of respondents each year are assumed to spend an average of one hour of technical time working with EPA's CDX Help Desk to resolve problems involving their registrations or agreements (EPA 2011b).
   2. CDX Electronic Reporting (subsequent years): 
             *       Employee Turnover.  It is assumed that each year 10 percent of CDX users will be replaced by new employees, who will have to comply with the subscriber agreement and/or CDX registration requirements (EPA 2011b).  Thus, in subsequent years 10 percent of CDX users will spend 15 to 20 minutes of managerial time to complete a subscriber agreement.  In addition, 10 percent of all CDX users (both managerial and technical) will spend 10 minutes to register with CDX and 4 minutes contacting EPA's CDX Help Desk. 
             *       Report Compromised Signature.  Each year 1 percent of respondents are assumed to report a compromised or surrendered electronic signature, which requires the submittal of a new subscriber agreement (EPA 2011b).  This will entail 15 to 20 minutes (20 assumed here) of managerial time to prepare, submit, and file a new agreement, and 4 minutes of time to contact EPA's CDX Help Desk.
             *       
   3. Recognition Agreement 
             *       Electronic reporting is assumed to eliminate the use of clerical time for the recognition agreement.
   4. Recordkeeping
             *       Electronic reporting is assumed to reduce the recordkeeping burden by 50 percent (EPA 2009).  
   5. Annual Report to EPA
             *       Electronic reporting is assumed to reduce the recordkeeping burden by 50 percent (EPA 2009).
Sources: (1) U.S. Bureau of Labor Statistics. 2011. Employer Costs for Employee Compensation: Supplementary Tables: Historical Data: December 2006 - March 2011, and (2) U.S. Environmental Protection Agency. 2011a. Supporting Statement for a Request for OMB Review under the Paperwork Reduction Act: the Final Rule Addendum to Partial Update of the TSCA Section 8(b) TSCA Inventory Data Base, Production and Site Reports.

Table C-2: Incremental Cost of Electronic Reporting Requirements: Burden and Cost Per Third Party Certifier
Activity
Per Activity Burden Hours
Number of Annual Activities
(d)
 Total Burden (hours)
Total Cost

Clerical
Technical
Managerial

Clerical
($25.65/hr)
Technical
($56.31/hr)
Managerial
($66.78/hr)
Total

(a)
(b)
(c)

(e) = (d)*{(a)+(b)+(c)}
(f)
(g)
(h)
(i)
1. CDX Electronic Reporting (First Year)
  Electronic Subscriber Agreements (domestic firms)
                                       -
                                       -
                                                                          0.250
                                                                           1.00
                                                                          0.250
                                       -
                                       -
                                                                         $16.70
                                                                         $16.70
  Paper Subscriber Agreements (foreign firms)
                                       -
                                       -
                                                                          0.330
                                                                           1.00
                                                                          0.330
                                       -
                                       -
                                                                         $22.04
                                                                         $22.04
  CDX Registration
                                       -
                                                                          0.670
                                                                          0.170
                                                                           1.00
                                                                          0.840
                                       -
                                                                         $37.73
                                                                         $11.35
                                                                         $49.08
  Help Desk
                                       -
                                                                          0.270
                                                                          0.070
                                                                           1.00
                                                                          0.340
                                       -
                                                                         $15.20
                                                                          $4.67
                                                                         $19.88
  Problem Resolution
                                       -
                                                                          1.000
                                                                              -
                                                                           0.03
                                                                          0.030
                                       -
                                                                          $1.69
                                                                               
                                                                          $1.69
  Subtotal (domestic)
                                                                               
                                                                               
                                                                               
                                                                               
                                                                          1.460
                                                                               
                                                                               
                                                                               
                                                                         $87.00
  Subtotal (foreign)
                                                                               
                                                                               
                                                                               
                                                                               
                                                                          1.540
                                                                               
                                                                               
                                                                               
                                                                         $93.00
2. CDX Electronic Reporting (Subsequent Years)
  Electronic Subscriber Agreements (domestic firms)
                                                                              -
                                                                              -
                                                                          0.250
                                                                           0.10
                                                                          0.025
                                                                          $0.00
                                                                          $0.00
                                                                          $1.67
                                                                          $1.67
  Paper Subscriber Agreements (foreign firms)
                                                                              -
                                                                              -
                                                                          0.330
                                                                           0.10
                                                                          0.033
                                                                          $0.00
                                                                          $0.00
                                                                          $2.20
                                                                          $2.20
  CDX Registration
                                                                              -
                                                                          0.670
                                                                          0.170
                                                                           0.10
                                                                          0.084
                                                                          $0.00
                                                                          $3.77
                                                                          $1.14
                                                                          $4.91
  Help Desk
                                                                              -
                                                                          0.270
                                                                          0.070
                                                                           0.10
                                                                          0.034
                                                                          $0.00
                                                                          $1.52
                                                                          $0.47
                                                                          $1.99
  Report Compromised Signature
                                                                              -
                                                                              -
                                                                          0.400
                                                                           0.01
                                                                          0.004
                                                                          $0.00
                                                                          $0.00
                                                                          $0.27
                                                                          $0.27
  Subtotal (domestic)
                                                                               
                                                                               
                                                                               
                                                                               
                                                                          0.147
                                                                               
                                                                               
                                                                               
                                                                          $9.00
  Subtotal (foreign)
                                                                               
                                                                               
                                                                               
                                                                               
                                                                          0.155
                                                                               
                                                                               
                                                                               
                                                                          $9.00
3. Manufacturer Notification and Recordkeeping
  List of Manufacturers and their Product Types (including Resins Used) Certified by TPC
                                                                        (0.750)
                                                                          (0.5)
                                                                        (0.25) 
                                                                           1.00
                                                                        (1.500)
                                                                       ($19.24)
                                                                       ($28.16)
                                                                       ($16.70)
                                                                       ($64.09)
  Results of Inspections, Audits, and Emission Tests Conducted for Each Manufacturer and Product Type
                                                                        (0.750)
                                                                         (0.5) 
                                                                        (0.25) 
                                                                           1.00
                                                                        (1.500)
                                                                       ($19.24)
                                                                       ($28.16)
                                                                       ($16.70)
                                                                       ($64.09)
  List of the TPC's Laboratories, Test Methods (including Test Conditions and Conditioning Time), and Test Results
                                                                        (0.750)
                                                                          (0.5)
                                                                        (0.25) 
                                                                           1.00
                                                                        (1.500)
                                                                       ($19.24)
                                                                       ($28.16)
                                                                       ($16.70)
                                                                       ($64.09)
  Methods and Results for Establishing Test Method Correlations and Equivalence
                                                                        (0.750)
                                                                          (0.5)
                                                                        (0.25) 
                                                                           1.00
                                                                        (1.500)
                                                                       ($19.24)
                                                                       ($28.16)
                                                                       ($16.70)
                                                                       ($64.09)
  List of Manufacturers and Products Approved for Reduced Testing
                                                                        (0.750)
                                                                         (0.5) 
                                                                         (0.25)
                                                                           1.00
                                                                        (1.500)
                                                                       ($19.24)
                                                                       ($28.16)
                                                                       ($16.70)
                                                                       ($64.09)
  Subtotal
                                                                               
                                                                               
                                                                               
                                                                               
                                                                        (7.500)
                                                                               
                                                                               
                                                                               
                                                                      $(320.00)
4. Annual Report and Notifications of Changes
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
  List of Manufacturers and their Products Certified by the TPC during the Previous Year (including Resins Used, and the Average and Range of Formaldehyde Emissions by Manufacturer, Resin, and Product Type)
                                                                        (0.250)
                                       -
                                       -
                                                                           1.00
                                                                        (0.250)
                                                                        ($6.41)
                                       -
                                       -
                                                                        ($6.41)
  List of Noncomplying Products or Events by Manufacturer
                                                                        (0.250)
                                       -
                                       -
                                                                           1.00
                                                                        (0.250)
                                                                        ($6.41)
                                       -
                                       -
                                                                        ($6.41)
  List of Laboratories and Test Methods Used by the TPC
                                                                        (0.250)
                                       -
                                       -
                                                                           1.00
                                                                        (0.250)
                                                                        ($6.41)
                                       -
                                       -
                                                                        ($6.41)
  Results of Inter-Laboratory Comparison or Proficiency Testing for the Laboratories Used by the TPC
                                                                        (0.250)
                                       -
                                       -
                                                                           1.00
                                                                        (0.250)
                                                                        ($6.41)
                                       -
                                       -
                                                                        ($6.41)
  Subtotal
                                                                               
                                                                               
                                                                               
                                                                               
                                                                         (1.00)
                                                                               
                                                                               
                                                                               
                                                                       $(26.00)
Domestic Total in First Year

                                                                        (7.040)
                                                                               
                                                                               
                                                                               
                                                                      ($259.00)
Foreign Total in First Year

                                                                        (6.960)
                                                                               
                                                                               
                                                                               
                                                                      ($253.00)
Domestic Total in Non-Reapplication Year 

                                                                        (8.353)
                                                                               
                                                                               
                                                                               
                                                                      ($337.00)
Foreign Total in Non-Reapplications Year  

                                                                        (8.345)
                                                                               
                                                                               
                                                                               
                                                                      ($337.00)
Domestic Total in Reapplication Year

                                                                        (8.353)
                                                                               
                                                                               
                                                                               
                                                                      ($337.00)
Foreign Total in Reapplications Year

                                                                        (8.345)
                                                                               
                                                                               
                                                                               
                                                                      ($337.00)
Notes:
   1. CDX Electronic Reporting (first year): 
             *       Electronic signature agreement.  Preparing, submitting, and filing an electronic signature agreement is estimated to require an average of 15 minutes of time per user, which is assumed to be managerial time (EPA 2011b).  
             *       Paper subscriber agreement.  Preparing, submitting, and filing a paper subscriber agreement is estimated to require an average of 20 minutes of time per user, which is assumed to be managerial time (EPA 2011b). 
             *       CDX Registration.  CDX users will need to register with CDX, which involves selecting a user name and password, providing contact information, and identifying the facility and the registrant's role at the facility.  This is estimated to take an average of 10 minutes per registrant (EPA 2011b).  This results in an estimate that each respondent will spend 10 minutes of managerial time and 40 minutes of technical time to register with CDX.  
             *       Help Desk.  CDX users are assumed to spend an average of 4 minutes contacting EPA's CDX Help Desk for technical support (EPA 2011b), which results in an estimate of 4 minutes of managerial time and 16 minutes of technical time per respondent.  
             *       Problem Resolution.  Three percent of respondents each year are assumed to spend an average of one hour of technical time working with EPA's CDX Help Desk to resolve problems involving their registrations or agreements (EPA 2011b).
   2. CDX Electronic Reporting (subsequent years): 
             *       Employee Turnover.  It is assumed that each year 10 percent of CDX users will be replaced by new employees, who will have to comply with the subscriber agreement and/or CDX registration requirements (EPA 2011b).  Thus, in subsequent years 10 percent of CDX users will spend 15 to 20 minutes of managerial time to complete a subscriber agreement.  In addition, 10 percent of all registrants will spend 10 minutes to register with CDX and 4 minutes contacting EPA's CDX Help Desk.  Paper subscriber agreement.  Preparing, submitting, and filing a paper subscriber agreement is estimated to require an average of 20 minutes of time per registrant (EPA 2011b).  This results in an estimate of 20 minutes of managerial time per respondent submitting a paper subscriber agreement.  
             *       Report Compromised Signature.  Each year 1 percent of respondents are assumed to report a compromised or surrendered electronic signature, which requires the submittal of a new subscriber agreement (EPA 2011b).  This will entail 15 to 20 minutes (20 assumed here) of managerial time to prepare, submit, and file a new agreement, and 4 minutes of time to contact EPA's CDX Help Desk.
             *       Problem Resolution.  Three percent of respondents each year are assumed to spend an average of one hour of technical time working with EPA's CDX Help Desk to resolve problems involving their registrations or agreements (EPA 2011b).
   3. Recordkeeping
             *       Electronic reporting is assumed to reduce the recordkeeping burden by 50 percent (EPA 2009).  
   4. Annual Report to Recordkeeping Bodies
             *       Electronic reporting is assumed to reduce the recordkeeping burden by 50 percent (EPA 2009).
Sources: (1) U.S. Bureau of Labor Statistics. 2011. Employer Costs for Employee Compensation: Supplementary Tables: Historical Data: December 2006 - March 2011, and (2) U.S. Environmental Protection Agency. 2011a. Supporting Statement for a Request for OMB Review under the Paperwork Reduction Act: the Final Rule Addendum to Partial Update of the TSCA Section 8(b) TSCA Inventory Data Base, Production and Site Reports.

Table C-3: U.S. Accreditation Body Cost Summary With Electronic Reporting Requirements
Type of Cost
Cost (2010$)

First Year
Reapplication Years[1]
Non-Reapplication Years
Costs without CDX Requirements
Rule Familiarization
                                                                          $615 
                                                                             $0
                                                                             $0
Application or Reapplication Process 
                                                                            $88
                                                                            $88
                                                                             $0
Prepare Recognition Agreement
                                                                           $349
                                                                           $349
                                                                             $0
EPA Notification
                                                                            $57
                                                                            $57
                                                                            $57
TPC Notification
                                                                            $12
                                                                            $12
                                                                            $12
Recordkeeping
                                                                           $308
                                                                           $308
                                                                           $308
Reporting
                                                                           $256
                                                                           $256
                                                                           $256
Cost per Accreditation Body
                                                                         $1,685
                                                                         $1,070
                                                                           $633
Number of Accreditation Bodies
                                                                              8
                                                                              8
                                                                              8
Total Costs for U.S. Accreditation Bodies
                                                                        $13,480
                                                                         $8,560
                                                                         $5,064
                    Annualized Costs (30 years, 3 percent)
                                    $6,303 
                    Annualized Costs (30 years, 7 percent)
                                    $6,320 
Incremental Costs for CDX Requirements
CDX Registration
                                                                           $87 
                                                                            $9 
                                                                            $9 
Prepare Recognition Agreement
                                                                          ($26)
                                                                          ($26)
                                                                              
Recordkeeping
                                                                         ($128)
                                                                         ($128)
                                                                         ($128)
Reporting
                                                                          ($32)
                                                                          ($32)
                                                                          ($32)
Cost per Accreditation Body
                                                                          ($99)
                                                                         ($177)
                                                                         ($151)
Number of Accreditation Bodies
                                                                              8
                                                                              8
                                                                              8
Total Costs for U.S. Accreditation Bodies
                                                                         ($792)
                                                                       ($1,416)
                                                                       ($1,208)
                    Annualized Costs (30 years, 3 percent)
                                   ($1,193)
                    Annualized Costs (30 years, 7 percent)
                                   ($1,146)
Total Costs, Including Incremental Costs for CDX Requirements
Rule Familiarization
                                                                          $615 
                                                                            $0 
                                                                            $0 
CDX Registration
                                                                           $87 
                                                                            $9 
                                                                            $9 
Application or Reapplication Process 
                                                                           $88 
                                                                           $88 
                                                                            $0 
Prepare Recognition Agreement
                                                                          $323 
                                                                          $323 
                                                                            $0 
EPA Notification
                                                                           $57 
                                                                           $57 
                                                                           $57 
TPC Notification
                                                                           $12 
                                                                           $12 
                                                                           $12 
Recordkeeping
                                                                          $180 
                                                                          $180 
                                                                          $180 
Reporting
                                                                          $224 
                                                                          $224 
                                                                          $224 
Cost per Accreditation Body
                                                                        $1,586 
                                                                          $893 
                                                                          $482 
Number of Accreditation Bodies
                                                                              8
                                                                              8
                                                                              8
Total Costs for U.S. Accreditation Bodies
                                                                       $12,688 
                                                                        $7,144 
                                                                        $3,856 
                    Annualized Costs (30 years, 3 percent)
                                    $5,102 
                    Annualized Costs (30 years, 7 percent)
                                    $5,167 

Table C-4: U.S. TPC Cost Summary With Electronic Reporting Requirements
Type of Cost
Cost (2010$)

First Year
Reapplication Years[1]
Non-Reapplication Years

Have Accred.
Need Accred.
Have Accred.
Need Accred.
Have Accred.
Need Accred.
Costs without Electronic Reporting Requirements
Accreditation
                                                                             $0
                                                                        $25,000
                                                                             $0
                                                                         $5,000
                                                                             $0
                                                                         $5,000
Rule Familiarization
                                                                           $615
                                                                           $615
                                                                             $0
                                                                             $0
                                                                             $0
                                                                             $0
Application or Reapplication Process 
                                                                           $492
                                                                           $492
                                                                           $492
                                                                           $492
                                                                             $0
                                                                             $0
Manufacturer Notification and Recordkeeping
                                                                           $773
                                                                           $773
                                                                           $773
                                                                           $773
                                                                           $773
                                                                           $773
Annual Report and Notifications of Changes
                                                                           $210
                                                                           $210
                                                                           $210
                                                                           $210
                                                                           $210
                                                                           $210
Cost per TPC
                                                                         $2,090
                                                                        $27,090
                                                                         $1,475
                                                                         $6,475
                                                                           $983
                                                                         $5,983
Number of TPCs
                                                                              6
                                                                              3
                                                                              6
                                                                              3
                                                                              6
                                                                              3
Total Costs for U.S. TPCs
                                                                        $12,540
                                                                        $81,270
                                                                         $8,850
                                                                        $19,425
                                                                         $5,898
                                                                        $17,949
                    Annualized Costs (30 years, 3 percent)
                                   $27,232 
                    Annualized Costs (30 years, 7 percent)
                                   $28,123 
Incremental Costs for Electronic Reporting Requirements
CDX Electronic Reporting
                                                                            $87
                                                                            $87
                                                                             $9
                                                                             $9
                                                                             $9
                                                                             $9
Manufacturer Notification and Recordkeeping
                                                                         ($320)
                                                                         ($320)
                                                                         ($320)
                                                                         ($320)
                                                                         ($320)
                                                                         ($320)
Annual Report and Notifications of Changes
                                                                          ($26)
                                                                          ($26)
                                                                          ($26)
                                                                          ($26)
                                                                          ($26)
                                                                          ($26)
Cost per TPC
                                                                         ($259)
                                                                         ($259)
                                                                         ($337)
                                                                         ($337)
                                                                         ($337)
                                                                         ($337)
Number of TPCs
                                                                              6
                                                                              3
                                                                              6
                                                                              3
                                                                              6
                                                                              3
Total Costs for U.S. TPCs
                                                                       ($1,554)
                                                                         ($777)
                                                                       ($2,022)
                                                                       ($1,011)
                                                                       ($2,022)
                                                                       ($1,011)
                    Annualized Costs (30 years, 3 percent)
                                   ($2,852)
                    Annualized Costs (30 years, 7 percent)
                                   ($2,754)
Total Costs, Including Incremental Costs for Electronic Reporting Requirements
Accreditation
                                                                             $0
                                                                        $25,000
                                                                             $0
                                                                         $5,000
                                                                             $0
                                                                         $5,000
Rule Familiarization
                                                                           $615
                                                                           $615
                                                                             $0
                                                                             $0
                                                                             $0
                                                                             $0
CDX Electronic Reporting
                                                                            $87
                                                                            $87
                                                                             $9
                                                                             $9
                                                                             $9
                                                                             $9
Application or Reapplication Process 
                                                                           $492
                                                                           $492
                                                                           $492
                                                                           $492
                                                                             $0
                                                                             $0
Manufacturer Notification and Recordkeeping
                                                                           $453
                                                                           $453
                                                                           $453
                                                                           $453
                                                                           $453
                                                                           $453
Annual Report and Notifications of Changes
                                                                           $184
                                                                           $184
                                                                           $184
                                                                           $184
                                                                           $184
                                                                           $184
Cost per TPC
                                                                         $1,831
                                                                        $26,831
                                                                         $1,138
                                                                         $6,138
                                                                           $646
                                                                         $5,646
Number of TPCs
                                                                              6
                                                                              3
                                                                              6
                                                                              3
                                                                              6
                                                                              3
Total Costs for U.S. TPCs
                                                                        $10,986
                                                                        $80,493
                                                                         $6,828
                                                                        $18,414
                                                                         $3,876
                                                                        $16,938
                    Annualized Costs (30 years, 3 percent)
                                   $24,380 
                    Annualized Costs (30 years, 7 percent)
                                   $25,368 

Table C-5: Cost Summary for U.S. Accreditation Bodies and TPCs With Electronic Reporting Requirements
Type of Cost
Cost (2010$)

First Year
Reapplication Years[1]
Non-Reapplication Years
Costs without CDX Requirements
Accreditation Bodies
                                                                        $13,480
                                                                         $8,560
                                                                         $5,064
Third Party Certifiers 
                                                                        $93,810
                                                                        $28,275
                                                                        $23,847
Total Costs
                                                                       $107,290
                                                                        $36,835
                                                                        $28,911
                    Annualized Costs (30 years, 3 percent)
                                   $33,535 
                    Annualized Costs (30 years, 7 percent)
                                   $34,443 
Incremental Costs for CDX Requirements
Accreditation Bodies
                                                                         ($792)
                                                                       ($1,416)
                                                                       ($1,208)
Third Party Certifiers 
                                                                       ($2,331)
                                                                       ($3,033)
                                                                       ($3,033)
Total Costs
                                                                       ($3,123)
                                                                       ($4,449)
                                                                       ($4,241)
                    Annualized Costs (30 years, 3 percent)
                                   ($4,045)
                    Annualized Costs (30 years, 7 percent)
                                   ($3,900)
Total Costs, Including Incremental Costs for CDX Requirements
Accreditation Bodies
                                                                        $12,688
                                                                         $7,144
                                                                         $3,856
Third Party Certifiers 
                                                                        $91,479
                                                                        $25,242
                                                                        $20,814
Total Costs
                                                                       $104,167
                                                                        $32,386
                                                                        $24,670
                    Annualized Costs (30 years, 3 percent)
                                   $29,490 
                    Annualized Costs (30 years, 7 percent)
                                   $30,542 

Table C-6: Total Bottom Line Burden and Costs (Domestic and Foreign)
 
                                    Year 1
                                    Year 2
                                    Year 3
                                    Average
Costs without Electronic Reporting  Requirements
Number of Respondents and Responses
                                                                             61
                                                                             61
                                                                             61
                                                                             61
Total Burden Hours
                                                                       2,085.64
                                                                        995.38 
                                                                       1,181.88
                                                                          1,421
Total Cost
                                                                      $417,470 
                                                                      $111,318 
                                                                      $122,243 
                                                                       $217,010
Incremental Burden and  Costs for Electronic Reporting Requirements
Number of Respondents and Responses
                                                                             61
                                                                             61
                                                                             61
                                                                             61
Total Burden Hours
                                                                       (344.67)
                                                                       (402.93)
                                                                       (427.93)
                                                                          (392)
Total Cost
                                                                      ($11,535)
                                                                      ($15,907)
                                                                      ($16,557)
                                                                      ($14,666)
Total Burden and Costs, Including Incremental Burden and Costs for Electronic Reporting Requirements
Number of Respondents and Responses
                                                                             61
                                                                             61
                                                                             61
                                                                             61
Total Burden Hours
                                                                      1,740.97 
                                                                        592.44 
                                                                        753.94 
                                                                          1,029
Total Cost
                                                                      $405,935 
                                                                       $95,411 
                                                                      $105,686 
                                                                      $202,344 

C.2  Costs and Benefits of Electronic Reporting to EPA 

	A portion of the cost that EPA incurs to operate the CDX system can be attributed to the TSCA Title VI program.  These costs are described below.

CDX O&M  -  The cost of CDX operations and maintenance for TSCA Title VI electronic reporting is estimated to be approximately $3,000 per year.

CDX Application Support O&M  -  The cost of application support operations and maintenance (for Help Desk support, resolving technical problems, software maintenance and upgrades, etc.) for TSCA Title VI electronic reporting is estimated to be approximately $25,000 per year.

CDX Software Licensing Costs  -  EPA's cost of software licensing attributable to TSCA Title VI is estimated to be approximately $6,000 per year.

CDX CBI LAN O&M  -  The cost attributable of operations and maintenance of EPA's confidential business administration (CBI) local area network (LAN) attributable to TSCA Title VI is estimated to be approximately $15,000 per year.

EPA staff  -  Managing the CDX system related to the TSCA Title VI program is estimated to require approximately 0.1 FTE per year of EPA staff.  Based on the 2010 Washington/Baltimore area annual salary rate for a GS-13, Step 5 employee ($100,904) and a loading factor of 1.6 for overhead and fringe benefits, the cost of the EPA staff needed to manage the CDX program attributable to the TSCA Title VI is estimated to be $16,145 per year. 

Overall, EPA's cost for operating the CDX system that can be attributed to the TSCA Title VI program is estimated at $65,145 per year.

	The use of electronic reporting and CDX also has benefits for EPA.  It is expected to improve efficiency and lead to higher quality data being available more quickly to EPA.  EPA typically keys or scans in the data from paper submissions, which can result in errors.  Consequently, EPA must perform quality assurance checks on extracted and scanned information.  When data is submitted electronically, the time required for EPA staff to review and process the information is reduced because manual data entry or processing is eliminated.  Electronic reporting also improves data quality because it facilitates data correction and validation by highlighting fields with omitted or inconsistent data prior to submission.  EPA has not estimated the value of these efficiencies and improvements in data quality.