Document ID: EPA-HQ-OPPT-2007-0531-0581
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2011-01-07T05:00Z

``

  SEQ CHAPTER \h \r 1 Economic Analysis for the Section 4 Final Test
Rule for High Production Volume Chemicals – Second Group of Chemicals

Final Report

—Does not contain TSCA CBI—

Prepared by:

Economic and Policy Analysis Branch

Economics, Exposure and Technology Division

Office of Pollution Prevention and Toxics

U.S. Environmental Protection Agency

1200 Pennsylvania Avenue

Washington, D.C.  20460

November 2010TABLE OF CONTENTS

EXECUTIVE
SUMMARY………………………………………………………
…………..ES-1

    E.1	     INDUSTRY COMPLIANCE AND GOVERNMENT
………...……..………….…….ES-1

    E.2	    
IMPACTS………………………………………….……………
…..……..….……ES-2

    E.3	     Benefits……………………….
………………………….…………….........….ES-2

  TOC \o "3-3" \h \z \t "Heading 1,1,Heading 2,2,Header,1,Style Heading
1 + Left,1"    HYPERLINK \l "_Toc262219177"  CHAPTER 1 – INTRODUCTION	
 PAGEREF _Toc262219177 \h  1-1  

  HYPERLINK \l "_Toc262219178"  1.1	Statement of Need	  PAGEREF
_Toc262219178 \h  1-1  

  HYPERLINK \l "_Toc262219179"  1.1.1	Inadequate Information	  PAGEREF
_Toc262219179 \h  1-2  

  HYPERLINK \l "_Toc262219180"  1.1.2	Externalities	  PAGEREF
_Toc262219180 \h  1-2  

  HYPERLINK \l "_Toc262219181"  1.2	Organization of This Report	 
PAGEREF _Toc262219181 \h  1-3  

  HYPERLINK \l "_Toc262219182"  CHAPTER 2 – USE, PRODUCTION, AND
MARKET INFORMATION	  PAGEREF _Toc262219182 \h  2-1  

  HYPERLINK \l "_Toc262219183"  2.1	Introduction	  PAGEREF _Toc262219183
\h  1  

  HYPERLINK \l "_Toc262219184"  2.2	Chemical Use and Market Information	
 PAGEREF _Toc262219184 \h  2-4  

  HYPERLINK \l "_Toc262219185"  2.3	Chemical-Specific Use and Market
Information	  PAGEREF _Toc262219185 \h  2-11  

  HYPERLINK \l "_Toc262219186"  2.3.1	Acetaldehyde  [CASRN 75-07-0]	 
PAGEREF _Toc262219186 \h  2-11  

  HYPERLINK \l "_Toc262219187"  2.3.2	Pentaerythritol tetranitrate 
[CASRN 78-11-5]	  PAGEREF _Toc262219187 \h  2-11  

  HYPERLINK \l "_Toc262219188"  2.3.3	9,10-Anthracenedione  [CASRN
84-65-1]	  PAGEREF _Toc262219188 \h  2-12  

  HYPERLINK \l "_Toc262219189"  2.3.4
1H,3H-Benzo[1,2-c:4,5-c']difuran-1,3,5,7-tetrone  [CASRN 89-32-7]	 
PAGEREF _Toc262219189 \h  2-12  

  HYPERLINK \l "_Toc262219190"  2.3.5	Sorbic acid [CASRN 110-44-1]	 
PAGEREF _Toc262219190 \h  2-13  

  HYPERLINK \l "_Toc262219191"  2.3.6	Phenol,
4,4'-methylenebis[2,6-bis91,1-dimethylethyl-)]  [CASRN 118-82-1]	 
PAGEREF _Toc262219191 \h  2-13  

  HYPERLINK \l "_Toc262219192"  2.3.7	Methanone, diphenyl-  [CASRN
119-61-9]	  PAGEREF _Toc262219192 \h  2-13  

  HYPERLINK \l "_Toc262219193"  2.3.8	Ethanedioic acid  [CASRN 144-62-7]
  PAGEREF _Toc262219193 \h  2-14  

  HYPERLINK \l "_Toc262219194"  2.3.9	Methanesulfinic acid, hydroxy-,
monosodium salt [CASRN 149-44-0]	  PAGEREF _Toc262219194 \h  2-14  

  HYPERLINK \l "_Toc262219195"  2.3.10	Phosphorochloridothioic acid,
O,O-diethyl ester  [CASRN 2524-04-1]	  PAGEREF _Toc262219195 \h  2-15  

  HYPERLINK \l "_Toc262219196"  2.3.11
1,3,5-Triazine-1,3,5(2H,4H,6H)-triethanol [CASRN 4719-04-4]	  PAGEREF
_Toc262219196 \h  2-15  

  HYPERLINK \l "_Toc262219197"  2.3.12	Sodium erythorbate [CASRN
6381-77-7]	  PAGEREF _Toc262219197 \h  2-16  

  HYPERLINK \l "_Toc262219198"  2.3.13	D-gluco-Heptonic acid, monosodium
salt, (2.xi.)- [CASRN 31138-65-5]	  PAGEREF _Toc262219198 \h  2-16  

  HYPERLINK \l "_Toc262219199"  2.3.14	C.I. Leuco Sulphur Black 1 [CASRN
66241-11-0]	  PAGEREF _Toc262219199 \h  2-17  

  HYPERLINK \l "_Toc262219200"  2.3.15	Castor oil, sulfated, sodium salt
[CASRN 68187-76-8]	  PAGEREF _Toc262219200 \h  2-17  

  HYPERLINK \l "_Toc262219201"  2.3.16	Castor oil, oxidized [CASRN
68187-84-8]	  PAGEREF _Toc262219201 \h  2-17  

  HYPERLINK \l "_Toc262219202"  2.3.17	Benzenediamine,
ar,ar-diethyl-ar-methyl- [CASRN 68479-98-1]	  PAGEREF _Toc262219202 \h 
2-18  

  HYPERLINK \l "_Toc262219203"  2.3.18	Alkenes, C12-24, chloro [CASRN
68527-02-6]	  PAGEREF _Toc262219203 \h  2-18  

  HYPERLINK \l "_Toc262219204"  2.3.19	Hydrocarbons, C>4 [CASRN
68647-60-9]	  PAGEREF _Toc262219204 \h  2-19  

  HYPERLINK \l "_Toc262219205"  CHAPTER 3 – COSTS	  PAGEREF
_Toc262219205 \h  3-1  

  HYPERLINK \l "_Toc262219206"  3.1	Industry Compliance Costs	  PAGEREF
_Toc262219206 \h  3-1  

  HYPERLINK \l "_Toc262219207"  3.1.1	Laboratory Testing Costs	  PAGEREF
_Toc262219207 \h  3-1  

  HYPERLINK \l "_Toc262219208"  3.1.2	Analytical Methodology Validation
Costs	  PAGEREF _Toc262219208 \h  3-11  

  HYPERLINK \l "_Toc262219209"  3.1.3	Administrative Costs	  PAGEREF
_Toc262219209 \h  3-12  

  HYPERLINK \l "_Toc262219210"  3.1.4	Export Notification Costs	 
PAGEREF _Toc262219210 \h  3-15  

  HYPERLINK \l "_Toc262219211"  3.1.5	Total Industry Compliance Costs	 
PAGEREF _Toc262219211 \h  3-16  

  HYPERLINK \l "_Toc262219212"  3.1.6	Non-Monetized Costs	  PAGEREF
_Toc262219212 \h  3-16  

  HYPERLINK \l "_Toc262219213"  3.2	EPA Costs	  PAGEREF _Toc262219213 \h
 3-17  

  HYPERLINK \l "_Toc262219214"  3.3	Summary of Total Social Costs	 
PAGEREF _Toc262219214 \h  3-18  

  HYPERLINK \l "_Toc262219215"  CHAPTER 4 – ECONOMIC IMPACT ANALYSIS	 
PAGEREF _Toc262219215 \h  4-1  

  HYPERLINK \l "_Toc262219216"  4.1	Impact on All Regulated Companies	 
PAGEREF _Toc262219216 \h  4-1  

  HYPERLINK \l "_Toc262219217"  4.1.1	Calculate Annualized Costs	 
PAGEREF _Toc262219217 \h  4-1  

  HYPERLINK \l "_Toc262219218"  4.1.2	Compare Annualized Compliance
Costs to Annual Revenues	  PAGEREF _Toc262219218 \h  4-2  

  HYPERLINK \l "_Toc262219219"  4.1.3	Sensitivity Analysis	  PAGEREF
_Toc262219219 \h  4-6  

  HYPERLINK \l "_Toc262219220"  4.2	Small Entity Impact Analysis	 
PAGEREF _Toc262219220 \h  4-7  

  HYPERLINK \l "_Toc262219221"  4.2.1	Identify the Affected Population	 
PAGEREF _Toc262219221 \h  4-7  

  HYPERLINK \l "_Toc262219222"  4.2.2	Select a Relevant Small Business
Definition	  PAGEREF _Toc262219222 \h  4-8  

  HYPERLINK \l "_Toc262219223"  4.2.3	Identify Small Businesses	 
PAGEREF _Toc262219223 \h  4-8  

  HYPERLINK \l "_Toc262219224"  4.2.4	Calculate Each Company’s Share
of Testing Costs	  PAGEREF _Toc262219224 \h  4-8  

  HYPERLINK \l "_Toc262219225"  4.2.5	Determine the Size of the Adverse
Impact for Small Businesses	  PAGEREF _Toc262219225 \h  4-9  

  HYPERLINK \l "_Toc262219226"  CHAPTER 5 – BENEFITS	  PAGEREF
_Toc262219226 \h  5-1  

  HYPERLINK \l "_Toc262219227"  5.1	Potential Users of Chemical-Specific
Information	  PAGEREF _Toc262219227 \h  5-1  

  HYPERLINK \l "_Toc262219228"  5.2	Potential Uses of Toxicologic
Information Generated by the Final Rule	  PAGEREF _Toc262219228 \h  5-2 

  HYPERLINK \l "_Toc262219229"  5.2.1	Consumers/Buyers	  PAGEREF
_Toc262219229 \h  5-2  

  HYPERLINK \l "_Toc262219230"  5.2.2	Workers	  PAGEREF _Toc262219230 \h
 5-3  

  HYPERLINK \l "_Toc262219231"  5.2.3	Science and Health Communities	 
PAGEREF _Toc262219231 \h  5-3  

  HYPERLINK \l "_Toc262219232"  5.2.4	The General Public	  PAGEREF
_Toc262219232 \h  5-4  

  HYPERLINK \l "_Toc262219233"  5.2.5	Firms and their Shareholders	 
PAGEREF _Toc262219233 \h  5-4  

  HYPERLINK \l "_Toc262219234"  5.2.6	Government	  PAGEREF _Toc262219234
\h  5-5  

  HYPERLINK \l "_Toc262219235"  5.3	Summary	  PAGEREF _Toc262219235 \h 
5-7  

  HYPERLINK \l "_Toc262219236"  CHAPTER 6 – OTHER IMPACT ANALYSES	 
PAGEREF _Toc262219236 \h  6-1  

  HYPERLINK \l "_Toc262219237"  6.1	Unfunded Mandates Statement	 
PAGEREF _Toc262219237 \h  6-1  

  HYPERLINK \l "_Toc262219238"  6.2	Environmental Justice Statement	 
PAGEREF _Toc262219238 \h  6-2  

  HYPERLINK \l "_Toc262219239"  6.3	Children’s Health Statement	 
PAGEREF _Toc262219239 \h  6-2  

  HYPERLINK \l "_Toc262219240"  6.4	Burden Hour Estimate	  PAGEREF
_Toc262219240 \h  6-2  

  HYPERLINK \l "_Toc262219241"  6.4.1	Industry Burden	  PAGEREF
_Toc262219241 \h  6-2  

  HYPERLINK \l "_Toc262219242"  6.4.2	Government Burden	  PAGEREF
_Toc262219242 \h  6-4  

 REFERENCES……………………………………….……………
……………………………………..R-1

APPENDIX A – WAGE RATE
CALCULATIONS…………………………………………………...
A-1

A.1.    DERIVATION OF LOADED WAGE
RATES…………………...............……….…………A-1

A.1.1.   Derivation of Unit Labor Rates for Technical, Managerial, and
Clerical Industry
Employees..……………………………………………………
……………………………………..A-2

A.1.2   Derivation of Unit Labor Rates for EPA
Staff……………………………………………..A-2

APPENDIX B – COST
DETAILS………………………………………………………
………………B-1

EXECUTIVE SUMMARY

In 1998, EPA challenged the chemical industry to develop basic toxicity
information on thousands of chemicals for which information was not
publicly available.  To support this effort, EPA is finbalizing a test
rule under Section 4 of the Toxic Substances Control Act (TSCA) for 19
chemicals that have annual production and/or importation volumes above 1
million pounds.  These chemicals are classified as high production
volume (HPV) chemicals.  The final rule is motivated by the premise
that, at a minimum, basic toxicity information comparable to that
generated by the Organization for Economic Cooperation and
Development’s (OECD) Screening Information Data Set (SIDS) Tier 1
testing battery should be available for all HPV chemicals.

The 19 chemicals included in the rule are manufactured and/or imported
by 48 companies.  The analysis assumes that these companies will
generate and provide required testing data on their chemicals.  Some
information is available from existing studies, so the rule only
requires that a test be conducted if prior data are unavailable.

Industry Compliance and Government Costs

In complying with the rule, industry will incur costs associated with
the laboratory testing, analytical methodology validation,
administration, and export notification requirements of the final test
rule.  Table ES-1 summarizes these compliance costs under the least and
average cost scenarios considered in this analysis.      

Table ES-1

Summary of Total Industry Compliance Costs Triggered by the Final  Rule:
 $2006, millions

Compliance Cost Category	Cost ($million, unadjusted)

	Least Cost Scenario	Average Cost Scenario

Laboratory Costs	$2.01	$2.60

Analytical methodology validation	$0.23	$0.23

Administration Costs	$0.90	$1.04

Export Notification Costs	$0.01	$0.03

Total Industry Compliance Costs	$3.15	$3.90

Average Compliance Cost per Chemical	$0.17	$0.21

The government will also incur costs associated with the final rule,
estimated at $0.04 million.  Exhibit ES-2 summarizes the total social
costs of the rule, estimated as the sum of government and industry
compliance costs.  As shown, the estimate of total social costs of the
final rule under the average cost scenario is $3.90 million.  The
annualized social costs of the rule under the average cost scenario are
estimated at $1.38 million when annualized over three years using a
three percent discount rate, and $1.49 million when annualized over
three years using a seven percent discount rate.   



Table ES-2

Summary of Total Social Costs Triggered by the Final Rule:  $2006,
millions

Cost Category	Cost 

($2006, millions)

	Least Cost Scenario	Average Cost Scenario

Total Industry Compliance Cost (unadjusted)a	$3.15	$3.90

Total Government Cost (unadjusted)	$0.04	$0.04

Total Social Cost Triggered by the Final Rule (unadjusted)	$3.19	$3.94

Annualized Social Cost (3 years, 3% discount rate)	$1.13	$139

Annualized Social Cost (3 years, 7% discount rate)	$1.21

	$1.50

Notes:

a Total industry compliance cost includes laboratory, administration,
and export notification costs.

EPA considered the effect of the test rule on laboratory capacity;
however, the Agency does not think that this will be a significant
factor in a company’s ability to comply with the final rule because
EPA anticipates that the majority of testing required by the final rule
will be conducted through Contract Research Organizations and that firms
will form consortia to obtain the testing.  In addition, recent market
information suggests that there is adequate capacity to allow firms to
meet testing requirements.  In particular, demand for screening-level
testing, such as that required in the final rule, has been less than
expected for the HPV Challenge Program, which allows adequate
availability of capacity to meet the requirements of this rule.

Impacts

The costs of complying with a mandatory test rule can potentially
decrease the profitability of affected products.  EPA conducted
assessments of the impact of the rule on all regulated companies by
looking at the relationship between the compliance costs of the rule and
individual chemical sales.  EPA estimated that two to four chemicals
were likely to experience compliance costs that were greater than or
equal to one percent of individual sales of the chemical.

EPA also evaluated impacts of the final rule on small businesses.  Small
businesses were defined as those with 1,500 or fewer employees.  Using
this definition, EPA identified 20 small companies.  EPA estimated that
no small businesses would experience costs greater than one percent of
company sales.     

Benefits

The basic toxicity information developed as a result of this rule will
be made publicly available and will increase scientific understanding of
the health and environmental effects of the 19 chemicals included in the
rule.  A wide range of groups is expected to benefit from the
availability of this information, including consumers, workers,
scientists, industry representatives, government, public health
officials, the medical community, and foreign interests.   

Scientists can use the information developed as a result of this rule to
further refine the understanding of the risks posed by these chemicals. 
Consumers of the chemicals will have a 

better understanding of the hazards associated with the chemicals they
are using and can therefore make more informed choices about the use of
the chemical.  Companies benefit because they can promote the safe use,
manufacture, and disposal of chemicals and meet Responsible Care
Initiative® requirements.  EPA itself can use the test results to guide
future regulations.  Finally, other regulatory authorities can use this
information, in conjunction with exposure-related information, to
identify and prioritize risks and to target monitoring efforts.

 – INTRODUCTION

	

Under the Toxic Substances Control Act (TSCA), the U.S. Environmental
Protection Agency (EPA) can impose information reporting and other
requirements on producers, importers, processors, users, distributors,
and disposers of chemicals to ensure the safe management of toxic
chemicals.  Under TSCA Section 4, EPA is authorized to require by rule
that manufacturers and/or processors of chemical substances conduct
testing to determine the effect of chemical substances on human health
and the environment.  In particular, if the Agency finds that:

(1)(A)(i) the manufacture, distribution in commerce, processing, use, or
disposal of a chemical substance or mixture, or that any combination of
such activities, may present an unreasonable risk of injury to health or
the environment,

(ii) there are insufficient data and experience upon which the effects
of such manufacture, distribution in commerce, processing, use, or
disposal of such substance or mixture or of any combination of such
activities on health or the environment can reasonably be determined or
predicted, and 

(iii) testing of such substance or mixture with respect to such effects
is necessary to develop such data; or

(B)(i) a chemical substance or mixture is or will be produced in
substantial quantities, and (I) it enters or may reasonably be
anticipated to enter the environment in substantial quantities or (II)
there is or may be significant or substantial human exposure to such
substance or mixture,

(ii) there are insufficient data and experience upon which the effects
of the manufacture, distribution in commerce, processing, use, or
disposal of such substance or mixture or of any combination of such
activities on health or the environment can reasonably be determined or
predicted, and 

(iii) testing of such substance or mixture with respect to such effects
is necessary to develop such data   

the Administrator shall require that testing be conducted.

In 1998, a national effort was announced to expand the availability of
information regarding the most widespread chemicals in commerce.  To
support this effort, EPA promulgated in 2006 its first test rule for 17
high production volume (HPV) chemicals that, under TSCA Section 4, have
annual production and/or importation volumes of one million pounds or
more.   EPA is now finalizing a second test rule for an additional 19
HPV chemicals.  The rule requires the development of data similar to
that specified under the Organization for Economic Cooperation and
Development’s (OECD’s) Screening Information Data Set (SIDS) testing
battery.

Statement of Need 

Fully functioning competitive markets result in a socially efficient
allocation of resources.  Thus, efficient allocation of resources will
occur if each seller and each buyer has complete information on their
own actions and makes decisions based on the full costs of their own
actions.  A market failure exists when the market is unable to
efficiently allocate goods and services.  Executive Order 12866 requires
identification of whether a significant rule addresses a market failure.

The major causes of market failure identified in the Office of
Management and Budget (OMB) guidance (OMB, 2003) on Executive Order
12866 are externality, natural monopoly, market power, and inadequate or
asymmetric information.  The final test rule is designed to address the
issue of inadequate information and to help address certain
externalities resulting from the manufacture/use of certain high
production chemicals.

Inadequate Information

		

Economic theory supports perfect information among buyers and sellers as
a requirement for rational decision making and for the efficient
allocation of resources.  When buyers or sellers do not have complete
information about their choices, rational decision making cannot occur
and the market fails.  As an example, a producer may not consider
substituting a less hazardous chemical for a hazardous chemical if
knowledge about either chemical's hazard is unknown or uncertain.  More
complete information on the hazards associated with the chemical will
allow a producer to make better decisions.

For many reasons information regarding the hazards associated with a
chemical substance may not be widely known.  Two of these reasons are:

	Producers may know this information, but have no incentive to reveal it
to their customers.

	This information may be unknown to both the producers and their
customers.

The first of these conditions is known as asymmetric information; that
is, consumers and producers do not have the same level of information
regarding the hazards posed by a chemical substance.  Typically, the
producers’ level of information regarding a product exceeds the
consumers’ level of information.

In the second case, chemical hazard information is inadequate (e.g.,
unknown to both consumers and producers); producers may have little
incentive to acquire such information due to the costs associated with
its acquisition.  Because information is by nature a public good it
reduces the incentive for producers to develop information.  Information
is neither depletable—one person’s use of information does not
diminish the amount remaining for other users—nor excludable.  Once
made available, information cannot be easily withheld from others. 
Thus, where information is provided by one person, others are free to
use and benefit from that information without having made a contribution
to its development.  This reduces the incentive to provide the
information, resulting in a failure of the market to efficiently provide
the information.  In addition, individual consumers are unlikely to be
willing to pay the cost of chemical tests to acquire the information if
they can use information developed and paid for by others.  

Externalities

Externalities, another cause of market failure, occur when the actions
of one economic entity impose costs (or benefits) on parties that are
“external” to the market transaction.  Such is the case where
manufacturing or other business activities harm human health or the
environment.  When information is inadequate, external costs cannot be
recognized by the business entity and, thus, cannot be incorporated into
business decision making.  The result can be the overuse or
overproduction (as is the case when an externality is negative) of
certain harmful products. 

EPA often intervenes when externalities pose risks to human health and
the environment.  For example, risks may arise as a result of chemical
exposure to the general population from the manufacture, processing, and
use of chemicals.  As a first step in mitigating externalities, the EPA
Office of Pollution Prevention and Toxics (OPPT) routinely screens
chemicals for the potential risks they may pose.  This screening is used
to determine if risks from the manufacture, processing, or use of
chemicals are of sufficient concern to warrant risk management.  Given
that EPA’s TSCA Inventory recognizes more than 75,000 chemicals in
commerce, chemical risk screening represents a significant effort.  Risk
is a function of hazard and exposure, and when information on either is
lacking, EPA’s ability to effectively identify significant risks
arising from externalities is compromised.

By providing information, the test regulation will address market
failure due to inadequate information by ensuring that basic information
about the health and environmental effects of certain HPV chemicals is
available to the public.  This information can be used by consumers,
producers, the public sector, and others to make more informed decisions
regarding chemicals.  These users may also apply this information
towards remedying externalities.

Organization of This Report

This report presents EPA’s economic analysis for this final rule. 
Regulated chemicals and companies are characterized in Chapter 2. 
Costs, including laboratory, administrative, export notification, and
government costs, are reported in Chapter 3.  The economic impact
analysis for the final rule is presented in Chapter 4.  This chapter
also includes a small business impact analysis as mandated by the
Regulatory Flexibility Act (RFA), and amended by the Small Business
Regulatory Enforcement Fairness Act (SBREFA).  Chapter 5 addresses the
issue of the benefits of the final rule using the “value of
information” framework. The benefits analysis was undertaken to
address the implicit call for cost-benefit balancing contained in TSCA,
as well as the requirements of Executive Order 12866.  Several
additional impact analyses are presented in Chapter 6.  An unfunded
mandates statement is required by the Unfunded Mandates Reform Act
(UMRA); an environmental justice statement addresses the requirements of
Executive Order 12898; a children’s health statement is mandated by
Executive Order 13045; and the burden hour analysis responds to the
requirements of the Paperwork Reduction Act (PRA). 

Note that all dollar amounts in this analysis are reported in 2006
dollars.  For cost inputs that were estimated prior to 2006, EPA applied
the most relevant adjustment factor to ensure that all costs were
comparable. 

– USE, PRODUCTION, AND MARKET INFORMATION

Introduction

This chapter presents use, production and market information for the 19
chemicals included in the final rule.  Table 1 provides the Chemical
Abstracts Service Registry Number (CASRN) assigned by the Chemical
Abstracts Service (CAS) to each of these chemicals, the chemicals’
common names, and other synonyms used to research information on the
chemicals.,

Table 2-1

Chemicals Included in the Final Rule

CASRN 	Common Chemical Name	Synonyms

75-07-0	Acetaldehyde 	Acetic aldehyde; Ethanal; Ethyl aldehyde

78-11-5	Pentaerythritol tetranitrate	1,3-Propanediol,
2,2-bis[(nitrooxy)methyl]-, dinitrate (ester); Neopentanetetrayl
nitrate; Nitropenta; Nitropentaerythrite; Nitropentaerythritol;
Nitropenton; Pentaerythrityl tetranitrate; PET; PETN;
Tetranitropentaerythrite; Tetranitropentaerythritol; Tetrasule;
2,2-Bis(Hydroxymethyl)-1,3-propanediol tetranitrate; Pentaerythritol
tetran; 1-3 Propanediol,2,2-bis(nitroxy)methyl-,dinitrate(ester);
1,3-Propanediol, 2,2-bis[(nitrooxy)methyl]-, dinitrate; Pentaerithrityl
Tetranitrate; 2,2-Bis[(nitrooxy)methyl]-1,3-propanediol dinitrate
(ester)

84-65-1	9,10-Anthracenedione	9,10-Anthraquinone, Anthraquinone;
Anthradione; Anthracene, 9,10-dihydro-9,10-dioxo-; 9,10-Dioxoanthracene;
9,10-Anthrachinon; Anthracene-9,10-quinone; Anthra-9,10-quinone;
9,10-anthracenequinone; anthracene-9,10-dione

89-32-7	1H,3H-Benzo[1,2-c:4,5-c']difuran-1,3,5,7-tetrone 
1,2,4,5-Benzenetetracarboxylic anhydride; 1,2,4,5-Benzenetetracarboxylic
dianhydride; Pyromellitic dianhydride; Benzene-1,2,4,5-tetracarboxylic
dianhydride; Benzene-1,2:4,5-tetracarboxylic dianhydride; Pyromellitic
acid anhydride; Pyromellitic acid dianhydride; Pyromellitic anhydride;
1,2,4,5-Benzenetetracarboxylic 1,2:4,5-dianhydride

110-44-1	Sorbic acid	2,4-Hexadienoic acid, (E,E)-; Sorbic acid, (E,E)-;
α-trans-γ-trans-Sorbic acid; trans,trans-Sorbic acid;
trans,trans-2,4-Hexadienoic acid; 1,3-Pentadiene-1-carboxylic acid;
2-Propenylacrylic acid; 2,4-Hexadienoic acid; Acetic acid,
(2-butenylidene)-; Acetic acid, crotylidene-; Hexadienic acid;
Hexadienoic acid

118-82-1	Phenol, 4,4'-methylenebis[2,6-bis(1,1-dimethylethyl)-	Phenol,
4,4'-methylenebis[2,6-di-tert-butyl-;
4,4'-Methylenebis[2,6-Di-tert-butylphenol];
4,4'-Dihydroxy,3,3'-5,5'-tetra-t-butyldiphenylmethane;
4,4'-Methylenebis(2,6-di-t-butylphenol);
4,4'-Dihydroxy-3,5,3',5'-tetra-tert-butyldiphenylmethane;
Di(4-hydroxy-3,5-di-tert-butylphenyl)methane

119-61-9	Methanone, diphenyl- 	Benzophenone; α-Oxodiphenylmethane;
α-Oxoditane; Benzene, benzoyl-; Benzoylbenzene; Diphenyl ketone;
Diphenylmethanone; Phenyl ketone; Ketone, diphenyl;
a-Oxodiphenylmethane; Diphenyl-methanon

144-62-7	Ethanedioic acid 	Oxalic acid; Oxiric acid; Ethanedionic acid;
Ethane-1,2-dioic acid

149-44-0	Methanesulfinic acid, hydroxy-, monosodium salt	Sodium
formadehydesulfoxylate, sodium sulfoxylate formaldehyde (anhydrous);
Formaldehyde sodium sulfoxylate; Hydroxymethanesulfinic acid sodium
salt; Sodium (hydroxymethyl)sulfinate;  Sodium hydroxymethanesulphinate

2524-04-1	Phosphorochloridothioic acid, O,O-diethyl ester 
Diethoxythiophosphoryl chloride; Diethyl chlorothiophosphate; Diethyl
phosphorochloridothioate; Diethyl phosphorochloridothionate; Diethyl
phosphorochlorothioate; Diethyl phosphorothiochloridate; Diethyl
thiophosphoric chloride; Diethyl thiophosphoryl chloride;
Diethylthiophosphoric acid chloride; O,O-Diethyl
chloridophosphorothioate; O,O-Diethyl chloridothionophosphate;
O,O-Diethyl chlorothionophosphate; O,O-Diethyl chlorothiophosphate;
O,O-Diethyl chlorothiophosphonate; O,O-Diethyl phosphorochloridothioate;
O,O-Diethyl phosphorochlorothioate; O,O-Diethyl phosphorothiochloridate;
O,O-Diethyl phosphorothionochloridate; O,O-Diethyl thionophosphoric acid
ester chloride; O,O-Diethyl thionophosphoric chloride 

4719-04-4	1,3,5-Triazine-1,3,5(2H,4H,6H)-triethanol
1,3,5-Tris(hydroxy-ethyl)s-hexahydrotriazine;
2,2',2''-(Hexahydro-1,3,5-triazine-1,3,5-triyl)triethanol; 
Hexahydro-1,3,5-tris(hydroxyethyl)triazine; 
s-Triazine-1,3,5(2H,4H,6H)-triethanol

6381-77-7	Sodium erythorbate
2,3-Didehydro-3-O-sodio-D-erythro-hexono-1,4-lactone;
D-erythro-Hex-2-enonic acid, gamma-lactone, monosodium salt

31138-65-5	D-gluco-Heptonic acid, monosodium salt, (2.xi.)- 	Sodium
glucoheptonate; Monosodium D-glucoheptonate

66241-11-0	C.I. Leuco Sulphur Black 1 	C.I. 53185

68187-76-8	Castor oil, sulfated, sodium salt 	Castor oil, sulfate,
sodium salt; Castor oil, sulfated sodium salts; Castor oil, sulfated,
sodium salt; Sulfated castor oil, sodium salt; Turkey red oil, sodium
salt

68187-84-8	Castor oil, oxidized 	Castor oil, partially oxidized;
Oxidized castor oil

68479-98-1	Benzenediamine, ar,ar-diethyl-ar-methyl- 
Diethyltoluenediamine; Diethylmethylbenzenediamine;
ar,ar-Diethyl-ar-methylbenzenediamine

68527-02-6	Alkenes, C12-24, chloro 	Chlorinated olefins (C12-C24) 

68647-60-9	Hydrocarbons, C>4 	N/A

Sources: National Institute of Standards and Technology (NIST) WebBook
and the National Institutes of Health ChemIDplus Lite.

Chemical Use and Market Information

Chemical use and market information were collected for the chemicals
included in the final rule in order to facilitate analysis of the
rule’s potential impact on manufacturers of these substances.  For
example, chemical use information is useful in determining the markets
the chemicals are sold in and the general profitability of those
markets.  Producer, price, and production volume data are used more
specifically to estimate the annual revenue each manufacturer of the
chemicals in the final rule generates from those chemicals, and to
compare these revenues to the compliance costs for each chemical
pursuant to the final rule.  

The current chapter discusses methods employed to evaluate use and
market information for each chemical included in the final rule, and
presents a summary of results.  Market information presented includes
publicly available producer, production, trade, and price information,
where these data were available.  Chemical-specific use and market
information for each chemical included in the final rule are presented
in Section 2.2.   

Chemical Use Information.  To find information on chemical uses, EPA
relied on readily available sources of information.  The review is meant
to provide a broad review of uses and is not expected to be a complete,
exhaustive review.  EPA was able to obtain use information for 16 of the
19 chemicals and was not able to locate use information for the
remaining 3 chemicals.  

Chemical Producer and Production Information.  EPA acquired chemical
producer and production information from the Toxic Substances Control
Act (TSCA) Inventory Update Reporting rule (IUR) 2006.  At the time this
report was developed, the 2006 IUR data were not yet publicly available.
 Therefore, the data used for the analysis are considered preliminary. 
The IUR requires manufacturers and importers of certain chemical
substances contained in the TSCA Chemical Substances Inventory to
identify themselves and report current data on their production volumes,
plant sites, and other information related to the manufacture of the
chemicals.,  Importantly, the Inventory contains both confidential
business information (CBI) and non-CBI of producers and production
volumes for the chemicals it contains.  Production volume ranges used in
calculations are considered CBI, however, this section presents those
data in a non-CBI format.   

While this section presents sales and employee data for all companies
(CBI and non-CBI) that produce chemicals included in the final rule,
specific producer information is presented only from the public, non-CBI
IUR data.  Overall, EPA identified 46 global ultimate parent companies,
based on 2006 IUR reporting, that produce the 19 chemicals included in
the final rule.  This figure may not include all potentially affected
entities because, for example, companies that manufactured or imported
less than 25,000 pounds of a subject chemical at an individual site in
2006 are not required to comply with IUR reporting, however, EPA
believes the figure presents a reasonable estimate for the purpose of
analyzing the effects of the final rule.  

Once producers of each chemical were identified, EPA used
facility-specific Dun & Bradstreet identification numbers (DUNS numbers)
from Dun & Bradstreet’s Duns Market Identifier database (Dun &
Bradstreet, 2007) and information about facility location provided in
the IUR database to identify facilities and their global ultimate parent
companies.  A search conducted using the Dun and Bradstreet database
also provided data on annual sales and number of employees at the parent
company level for all facilities determined to be potentially subject to
the final rule.  EPA was able to collect publicly available information
on sales and employment for most of the parent companies using the Dun
and Bradstreet database.  Annual sales data were available for 45 of the
48 companies and employee data were available for 46 of the 48 companies
identified.  Table 2-2 provides summary statistics of the available data
for the 48 companies included in this analysis.  As shown in Table 2-2,
potentially impacted companies vary widely as measured by both number of
employees and annual sales.

Table 2-2

Employee and Sales Information for Potentially Impacted Companies
Included in the Analysis

Statistical Measure	Number of Employees	Annual Sales

Number of Companies With Dun and Bradstreet Data Available	46	45

Minimum Value	11	$1,300,000

Maximum Value	85,270	$51,715,200,000

Median Value	1,564	$549,300,000

Mean Value	8,651	$5,037,480,338

Standard Deviation	17,070	$11,231,074,823

Source: Dun & Bradstreet, 2008.

Figures 2-1 and 2-2 show the distribution of potentially impacted
companies considered in the analysis by number of employees and annual
sales, respectively.  Approximately 52 percent of the companies for
which employee information was available employ 2,500 or fewer
employees, and approximately 51 percent of the companies for which
annual sales information was available have annual sales of less than or
equal to $1 billion.



Figure 2-1

Distribution of Potentially Impacted Companies by Number of Employees

Source: Dun & Bradstreet, 2008.

Figure 2-2

Distribution of Potentially Impacted Companies by Annual Sales

Source: Dun & Bradstreet, 2008.

The distribution of chemicals included in the final rule by production
volume range is illustrated in Figure 2-3.  As shown, approximately 68
percent of the chemicals included in the final rule are produced in
volumes of 10 million pounds or less annually. 

Figure 2-3

Distribution of Production Volumes for Chemicals Included in the Final
Rule (2006)

Source: 2006 IUR data (electronic file).

Chemical Price Information.  Published price data were available for 8
chemicals from the Chemical Market Reporter (CMR, 2006) and from the
U.S. International Trade Commission’s report entitled Synthetic
Organic Chemicals (USITC, 1996); for the remainder of chemicals, EPA
derived prices from these and other publications using a number of
assumptions.  This section first discusses the methodology used to
obtain chemical prices from CMR and USITC, and then discusses the
methodologies used to derive chemical prices for the remaining
chemicals.  Based on this chemical price search methodology, EPA has
either obtained or derived chemical price data for all 19 chemicals
included in the final rule.  Table 2-4 presents summary statistics of
this price information.  

Table 2-4

Summary Statistics for Chemical Prices:  $2006

Minimum Price/lb	$0.43

Maximum Price/lb	$6.75

Mean Price/lb	$1.65

Median Price/lb	$1.03

Standard Deviation	$1.75

Price Data Available from CMR and USITC.  Using the following sequential
methodological steps, EPA was able to locate price data for twenty-three
chemicals in the CMR and USITC sources:

CMR: First, EPA searched CMR for price data using common chemical names.
 Where this method was unsuccessful, EPA searched CMR for price data
using synonyms for each common chemical name as summarized in Table 2-1.
 EPA acquired price data for five chemicals from CMR.

USITC: If price data were unavailable from CMR, EPA used production
volumes and sales of groups of chemicals contained in the Harmonized Tax
Schedule (HTS) of the USITC’s report entitled Synthetic Organic
Chemicals.  EPA divided the sales by the volume for each HTS chemical
group to derive an average price per pound, and assigned this price to
the chemical in this final rule that would logically belong to that
group.  EPA acquired price data for two chemicals using this method.

EPA-Derived Price Data 

Similar Chemical Prices.  For one chemical (CASRN 78-11-5), EPA used CMR
data for another chemical that is similar in chemical composition, use,
or manufacture (pentaerythritol). 

Small Quantity Catalog Prices.  Online chemical catalogs published by
Sigma-Aldrich Company (2006), Spectrum Quality Products (2006), and
Fischer Chemical Company (2006) provided small quantity price
information for 8 of the remaining chemicals for which data were not
available using the sources and methods described above.   However,
because small quantity catalog prices are often significantly higher
than the bulk quantity prices reported in the CMR, EPA adjusted the
small quantity catalog prices for these 8 chemicals to approximate bulk
quantity prices.  To determine the appropriate adjustment factor, 12
chemicals for which price data were available from both CMR (2006) and
Sigma-Aldrich (2006) were randomly selected and compared to develop
adjustment factors, which are summarized in Table 2-5.  For example,
Sigma-Aldrich (2006) quotes a price of $102.50 for 500 grams of the
chemical 1H,3H-Benzo[1,2-c:4,5-c']difuran-1,3,5,7-tetrone (CASRN
89-32-7).  Using standard conversion methods (1 kilogram = 2.204
pounds), the implied small quantity price per pound for this chemical is
$93 per pound.  This small quantity price is then divided by a scaling
factor of 996.88 to arrive at an estimated bulk quantity price of
$1.25/lb for this chemical.

  

American Chemistry Council Prices.  The American Chemistry Council
publishes a Guide to the Business of Chemistry, which contains price
information for certain types of chemicals.  According to the guide
published in 2005 (ACC 2006), a rule of thumb for specialty chemicals is
that the price is greater than $1.00 per pound and a rule of thumb for
basic chemicals is that the price is less than $0.50 per pound.  To be
conservative, EPA uses the price of $0.50 per pound for the remaining
three chemicals.   Table 2-5

Comparison Between Chemical Marketing Reporter (CMR) and Sigma-Aldrich
Prices

CAS Number	CMR Price/lb	Sigma-Aldrich Price (Varies by Quantity (Q))

Q  1kg	 

 	500g  Q  100g

Q  50g

Stated Price	Units

(kg)	Implied Price/lba	Scaling Factorb

Stated Price	Units (grams)	Implied Price/lba	Scaling Factorb

Stated Price	Units (grams)	Implied Price/lba	Scaling Factorb

108-31-6	$0.50	$17.70	1	$8.03	16.06

 ---	 --- 	 --- 	 --- 	 	$14.00	25	$254.08	508.17

64-19-7	$0.46	$270.00	10	$12.25	26.92

 ---	 ---	 ---	 ---

 ---	 ---	 ---	 --- 

58-08-2	$7.00	$128.50	1	$58.30	8.33

$21.90	100	$99.36	14.19

$2.30	5	$208.71	29.82

75-20-7	$0.23	$30.40	2	$6.90	30.38

$23.70	500	$21.51	94.74

$21.50	25	$390.20	1718.94

67-48-1	$0.54	$79.70	1	$36.16	67.59

$27.10	250	$49.18	91.93

$12.80	50	$116.15	217.11

85-44-9	$0.55	$13.40	1	$6.08	11.05

 ---	 ---	 ---	 ---

 ---	 ---	 ---	  ---

532-32-1	$0.81	$19.90	1	$9.03	11.15

 ---	 ---	 ---	 ---

$6.30	25	$114.34	141.16

112-57-2	$1.70	$54.60	1	$24.77	14.57

$19.90	100	$90.29	53.11

$13.10	5	$1,188.75	699.26

7446-70-0	$0.85	$38.60	1	$17.51	20.60

$22.20	100	$100.73	118.50

$20.00	5	$1,814.88	2135.16

1317-39-1	$1.54	 ---	 ---	 ---	 ---

 ---	 ---	 ---	 ---

$70.90	25	$1,286.75	835.55

143-07-7	$0.29	$34.00	1	$15.43	54.13

 ---	 ---	 ---	 ---

 ---	 ---	 ---	 --- 

108-31-6	$0.50	$17.70	1	$8.03	16.06

 ---	 ---	 ---	 ---

$14.00	25	$254.08	508.17

7719-12-2	$0.49	 ---	 ---	 ---	 ---

$184.50	100	$837.11	 ---

$59.70	25	$1,083.48	2211.19

7447-40-7	$0.54	 ---	 ---	 ---	 ---

$133.50	100	$605.72	 ---

$48.30	25	$876.59	1623.31

7646-69-7	$6.15	$184.00	2	$41.74	6.79

$30.20	100	$137.02	 ---

$22.90	5	$2,078.04	337.89

112-27-6	$0.70	$22.60	1	$10.25	14.65

  ---	  ---	  ---	  ---	 	$20.40	25	$370.24	 

Average	22.95

	74.50

	996.88

Notes:

aThe implied price per pound is calculated by dividing $/kg by 2.204
lbs/kg.

bThe scaling factor is equal to the ratio of the Sigma-Aldrich implied
price/lb divided by the CMR price/lb.

Sources: Chemical Market Reporter.  November, 2006,
www.chemicalmarketreporter.com; and Sigma-Aldrich Company. November
2006, www.sigmaaldrich.com.



Table 2-6 presents a summary of the price data collection effort
following the methodologies discussed above.  Figure 2-4 presents the
distribution of chemical prices.  

Table 2-6

Summary of Price Data Collection Effort

Data Source for Price Data	Number of Chemicals	Percent

Chemical Marketing Reporter (CMR)	6	32%

Harmonized Tariff Schedule (HTS) Group Price	2	11%

Estimated from Small Quantity Catalog Price	8	42%

American Chemistry Council 	3	16%

Total Number of Regulated Chemicals	19	100%

Figure 2-4

Distribution of Prices for Chemicals Included in the Final Rule: $2006



Chemical-Specific Use and Market Information

This section presents use and market information separately for each of
the chemicals included in the final rule.  Producer and production
volume data are taken from the 2002 IUR (online) because 2006 IUR data
were not publicly available at the time this report was prepared.  All
of the information presented is based on publicly available data. 
Chemicals are presented in the order listed in Table 1.

Acetaldehyde  [CASRN 75-07-0]

Use Information

Acetaldehyde is a chemical intermediate and can be used in the
manufacture of many products including pyridines, acetate esters,
pentaerythritol, peracetic acid, 1,3-butylene glycol (1,3-Butanedoil),
and acetic acid.  Pyridines are used in the manufacture of chemicals for
pesticide synthesis, and pentaerythritol’s end uses are in alkyd resin
production and other small volume applications.  Peracetic acid is used
to manufacture epoxidized oil, caprolactone, aliphatic epoxides and
small volume specialty chemicals.  Esters of 1,3-bytylene glycol are
used as plasticizers for cellulosics and polyvinyl chloride resins.  The
diacetate is a plasticizer for cigarette filter tow.  Acetic acid is
used primarily in the manufacture of rubber, plastics, acetate fibers,
pharmaceuticals, and photographic chemicals.  (Hazardous Substances
Databank.).  

Market Information for Acetaldehyde

CAS #75-07-0

Market Information	Results for Chemical	Source

Price/lb

($2006)	$0.46	CMR

Production Volume Range

(lbs)	>100M - 500M	2006 IURa 

aData from the 2006 IUR reporting period were extracted December 2007
and are preliminary.  

Pentaerythritol tetranitrate  [CASRN 78-11-5]

Use Information

Pentaerythritol tetranitrate is used in the manufacturing of demolition
explosive and blasting caps. (Hazardous Substances Databank, National
Library of Medicine Specialized Information Services ChemIDplus Lite).

Market Information for Pentaerythritol tetranitrate

CAS# 78-11-5

Market Information	Results for Chemical	Source

Price/lb

($2006)	$1.48	CMR, based on price for Pentaerythritol

Production Volume Range

(lbs)	>1M-10M	2006 IURa

aData from the 2006 IUR reporting period were extracted December 2007
and are preliminary.

9,10-Anthracenedione  [CASRN 84-65-1]

Use Information

9,10-Anthracenedione serves as the basis for the production of a large
number of acid and base dyes, vat dyes, disperse dyes, and reactive
dyes. It is used as an additive in the soda and kraft chemical alkaline
pulping processes in the paper pulping industry.  It also used as an
intermediate in the manufacture of the laxative Danthron, and as a
catalyst in isomerization of linseed and other vegetable oils.  Other
uses include an accelerant in nickel electroplating, and improving
adhesion and heat stability of tire cords.  Its common commercial uses
are as a repellent of geese in terrestrial areas at airports,
commercial, industrial, and municipal sites, and at dumpsites,
landfills, golf courses, ornamental, and conifer nurseries. (Hazardous
Substances Databank, National Library of Medicine Specialized
Information Services ChemIDplus Lite).

Market Information for 9,10-Anthracenedione  

CAS# 84-65-1

Market Information	Results for Chemical	Source

Price/lb

($2006)	$2.75	Spectrum w/ Bulk Adjustment Factor

Production Volume Range

(lbs)	>10M-50M	2006 IURa

aData from the 2006 IUR reporting period were extracted December 2007
and are preliminary.

1H,3H-Benzo[1,2-c:4,5-c']difuran-1,3,5,7-tetrone  [CASRN 89-32-7]

Use Information

This chemical is used as a curing agent for epoxy resins used in high
temperature laminates, molds, coatings, and as a cross-linking agent for
epoxy plasticizers in vinyls, alkyd resins.  It is also used as an
intermediate for pyromellitic acid, and in the manufacture of aromatic
polyamides (synthetic fibers manufacture) and plasticizers. (Hazardous
Substances Databank.)

Market Information for 1H,3H-Benzo[1,2-c:4,5-c']difuran-1,3,5,7-tetrone 

CAS# 89-32-7

Market Information	Results for Chemical	Source

Price/lb

($2006)	$1.25	Aldrich w/ Bulk Adjustment Factor

Production Volume Range

(lbs)	>1M-10M	2006 IURa

aData from the 2006 IUR reporting period were extracted December 2007
and are preliminary.



Sorbic acid [CASRN 110-44-1]

Use Information

Sorbic acid is a mold and yeast inhibitor, mainly used in foods, animal
feeds, tobacco, cosmetics, and pharmaceuticals, as well as in packing
materials for these substances and in other products that come in
contact with human or animal skin.  As a food preservative, sorbic acid
is used to reduce the total number of viable bacteria and double the
refrigerated shelf life for fresh poultry.  This chemical is also used
as an intermediate in plasticizers and lubricants, to impregnate
polyethylene wrappers for raw farm products, to improve characteristics
of drying oils, in alkyd type coatings to improve gloss, and to improve
milling characteristics of cold rubber.  (Hazardous Substances Databank,
National Library of Medicine Specialized Information Services ChemIDplus
Lite).

Market Information for Sorbic acid  

CAS# 110-44-1

Market Information	Results for Chemical	Source

Price/lb

($2006)	$5.68	CMR

Production Volume Range

(lbs)	>1M-10M	2006 IURa

aData from the 2006 IUR reporting period were extracted December 2007
and are preliminary.

Phenol, 4,4'-methylenebis[2,6-bis91,1-dimethylethyl-)]  [CASRN 118-82-1]

Use Information

This chemical is used in metalworking fluids and as a primary
antioxidant/stabilizer in plastics. (Scorecard: The Pollution
Information Site) 

Market Information for Phenol,
4,4'-methylenebis[2,6-bis91,1-dimethylethyl-)] 

CAS# 118-82- 

Market Information	Results for Chemical	Source

Price/lb

($2006)	$0.72	CMR

Production Volume Range

(lbs)	>1M-10M	2006 IURa

aData from the 2006 IUR reporting period were extracted December 2007
and are preliminary.

Methanone, diphenyl-  [CASRN 119-61-9]

Use Information

This chemical may be found in hair mousse, as a fixative for heavy
perfumes, especially when used in soaps.  It is used in the manufacture
of antihistamines, hypnotics, and insecticides, and in organic synthesis
from which derivatives are used as ultraviolet absorbers, flavoring, and
as a polymerization inhibitor for styrene.  The chemical is also used in
industry product finishes excluding pigment dispersions and ink vehicles
but including packaging inks, screen printing inks, and sheet-fed inks. 
(Scorecard: The Pollution Information Site; Hazardous Substances
Databank.)

Market Information for Methanone, diphenyl- 

CAS# 119-61-9 

Market Information	Results for Chemical	Source

Price/lb

($2006)	$0.74	Aldrich w/ Bulk Adjustment Factor

Production Volume Range

(lbs)	>1M-10M	2006 IURa

aData from the 2006 IUR reporting period were extracted December 2007
and are preliminary.

Ethanedioic acid  [CASRN 144-62-7]

Use Information

Ethanedioic acid is used most often in metal and textile treatment, to
remove rust (oxide films that form by reaction of metal surface with
oxygen) in cooling systems and industrial equipment like boilers.  Acid
and salts are used as components in antirust metal cleaners and
coatings.  In the treatment of textiles, it is used to dissolve rust and
kill bacteria, as a flame-proofing and cross-linking agent in cellulose
fabrics, as a reducing agent in mordent wool dying, and as an acid dye
stabilizing agent in nylon.  This chemical is also used as scouring
agent for cotton printing, a dye stripper for wool, and in degumming of
silk.  Ethanedioic acid is used to form insoluble rare earth complexes
in hydrochloric solutions during separation and recovery of rare earth
elements from ore.  Once precipitated, the reoxilates are separated and
ignited to form oxides.  Finally, ethanedioic acid can be used in
bleaching of leather, masonry (marble and tile polishing), to clean
aluminum and wood decks, and as a synthetic intermediate for
pharmaceuticals.  (Hazardous Substances Databank).

Market Information for Ethanedioic acid  

CAS# 144-62-7

Market Information	Results for Chemical	Source

Price/lb

($2006)	$1.22	Fischer w/ Bulk Adjustment Factor

Production Volume Range

(lbs)	>1M-10M	2006 IURa

aData from the 2006 IUR reporting period were extracted December 2007
and are preliminary.

Methanesulfinic acid, hydroxy-, monosodium salt [CASRN 149-44-0]

Use Information

This chemical is used as a stripping and discharge agent for textiles,
and as a bleaching agent for molasses.  It is also used in vat color
printing pastes, in polymerization of ethylenic compounds, and in
manufacturing of arsphenamines. (Hazardous Substances Databank; National
Library of Medicine Specialized Information Services ChemIDplus Lite).

Market Information for Methanesulfinic acid, hydroxy-, monosodium salt  

CAS# 149-44-0

Market Information	Results for Chemical	Source

Price/lb

($2006)	$1.02	Aldrich w/ Bulk Adjustment Factor

Production Volume Range

(lbs)	>1M-10M	2006 IURa

aData from the 2006 IUR reporting period were extracted December 2007
and are preliminary.

Phosphorochloridothioic acid, O,O-diethyl ester  [CASRN 2524-04-1]

Use Information

This chemical is used as an intermediate for pesticides, as an oil and
gasoline additive, in flame-retardants, and in flotation agents. 
(Hazardous Substances Databank.)

Market Information for Phosphorochloridothioic acid, O,O-diethyl ester  

CAS# 2524-04-1

Market Information	Results for Chemical	Source

Price/lb

($2006)	$1.03	Aldrich w/ Bulk Adjustment Factor

Production Volume Range

(lbs)	>10M-50M	2006 IURa

aData from the 2006 IUR reporting period were extracted December 2007
and is preliminary.

1,3,5-Triazine-1,3,5(2H,4H,6H)-triethanol [CASRN 4719-04-4]

Use Information

This chemical is used in the manufacture of bactericides and biocides. 
(Hazardous Substances Databank.)

Market Information for 1,3,5-Triazine-1,3,5(2H,4H,6H)-triethanol

CAS# 4719-04-4

Market Information	Results for Chemical	Source

Price/lb

($2006)	$1.74	Aldrich w/ Bulk Adjustment Factor

Production Volume Range

(lbs)	>10M-50M	2006 IURa

aData from the 2006 IUR reporting period were extracted December 2007
and are preliminary.

Sodium erythorbate [CASRN 6381-77-7]

Use Information

Sodium erythorbate is used as an antioxidant in food applications for
which the vitamin activity of ascorbic acid (Vitamin C) is not required.
 Specifically, the compound is most frequently used to develop and
retain the coloring and taste in meat products.  It is also used for
seafood products, fruit and vegetable preservation, in beverages, and as
a developing agent in photographic applications. (Roquette, “Sodium
Erythorbate in photographic applications, available at   HYPERLINK
"http://roquette.fr/fr/bibliotheque/Erythorbate.pdf" 
http://roquette.fr/fr/bibliotheque/Erythorbate.pdf , and Roquette, Food
Business Unit Newsletter, Number 8, June 2000, available at   HYPERLINK
"http://www.esters-cationic-anionic-ethers-starches.com/fr/Qnews/pub/act
ualites/foodnews08-2000-10-13-15-25-53.PDF" 
http://www.esters-cationic-anionic-ethers-starches.com/fr/Qnews/pub/actu
alites/foodnews08-2000-10-13-15-25-53.PDF , accessed on August 31, 2007)

Market Information for Sodium erythorbate

CAS# 6381-77-7

Market Information	Results for Chemical	Source

Price/lb

($2006)	$2.55	Spectrum w/ Bulk Adjustment Factor

Production Volume Range

(lbs)	>1M-10M	2006 IURa

aData from the 2006 IUR reporting period were extracted December 2007
and are preliminary.

D-gluco-Heptonic acid, monosodium salt, (2.xi.)- [CASRN 31138-65-5]

Use Information

This organic salt is used as a chelating agent in cosmetics, dairy
cleaners, bottle cleaners, food-contact paper and paperboard
manufacturing, metal cleaning, kier boiling, caustic boil-off, paint
stripping, boiler water additive for food processing, and as an
ingredient in aluminum etchant.  This chemical is also used as a
sequestrant, latex stabilizer and in intravenous pharmaceuticals. 
(Specialty Chemicals Electronic Source)

Market Information for D-gluco-Heptonic acid, monosodium salt, (2.xi.)-

CAS# 31138-65-5

Market Information	Results for Chemical	Source

Price/lb

($2006)	$1.61	USITC based on HTS price

Production Volume Range

(lbs)	>1M-10M	2006 IURa

aData from the 2006 IUR reporting period were extracted December 2007
and are preliminary.

C.I. Leuco Sulphur Black 1 [CASRN 66241-11-0]

Use Information

C.I. Leuco Sulphur Black 1 is used as a fingerprint dye. (Colour Index
International Online, available at   HYPERLINK
"http://www.colour-index.org/content/fingerprint.asp?cino=3928" 
http://www.colour-index.org/content/fingerprint.asp?cino=3928 , accessed
on August 30, 2007)

Market Information for C.I. Leuco Sulphur Black 1

CAS# 66241-11-0

Market Information	Results for Chemical	Source

Price/lb

($2006)	$6.75	USITC based on HTS price

Production Volume Range

(lbs)	>1M-10M	2006 IURa

aData from the 2006 IUR reporting period were extracted December 2007
and are preliminary.

Castor oil, sulfated, sodium salt [CASRN 68187-76-8]

Use Information

Castor oil is an inedible, viscous, non-volatile, non-drying oil with a
pale yellow color.  Castor seed, from which the oil is produced through
mechanical pressing and solvent extraction, is toxic to humans and
animals due to the ricin, ricinine, and allergens contained in the
seeds.  Castor oil and its derivatives are used in a wide variety of
industrial applications, including as a raw material for paints,
coatings, inks, lubricants, perfume formulations, and adhesives, and
interest in the oil continues to grow because it is renewable and
biodegradable.  Sulphated castor oil is produced through the addition of
sulphuric acid to the oil at temperatures of 25 to 30 degrees Celsius. 
The mixture is then washed and neutralized with a sodium hydroxide
solution.  Sulfated castor oil is a wetting agent used in dyeing and
finishing cotton and linen fabrics.  Adding sulphuric acid to castor oil
also produced an emulsifier for insecticidal oils.  (D.S. Ogunniyi,
“Castor oil: A vital industrial raw material”, Bioresource
Technology 97 (2006), pp. 1086-1091)

Market Information for Castor oil, sulfated, sodium salt

CAS# 68187-76-8

Market Information	Results for Chemical	Source

Price/lb

($2006)	$0.43	CMR

Production Volume Range

(lbs)	>1M-10M	2006 IURa

aData from the 2006 IUR reporting period were extracted December 2007
and are preliminary.

Castor oil, oxidized [CASRN 68187-84-8]

Use Information

Oxidized castor oil is produced by blowing air or oxygen into the oil at
temperatures of 80 to 130 degrees Celsius.  Oxidized castor oil is used
extensively as a plasticizer in lacquers, artificial leathers, hydraulic
fluids, and adhesives.  Also see use information presented in 2.1.34
Castor oil, sulfated, sodium salt.  (D.S. Ogunniyi, “Castor oil: A
vital industrial raw material”, Bioresource Technology 97 (2006), pp.
1086-1091)

Market Information for Castor oil, oxidized

CAS# 68187-84-8

Market Information	Results for Chemical	Source

Price/lb

($2006)	$0.43	CMR

Production Volume Range

(lbs)	>1M - 10M	2006 IURa

aData from the 2006 IUR reporting period were extracted December 2007
and are preliminary.

Benzenediamine, ar,ar-diethyl-ar-methyl- [CASRN 68479-98-1]

Use Information

No current chemical use information identified.

Market Information for Benzenediamine, ar,ar-diethyl-ar-methyl-

CAS# 68479-98-1

Market Information	Results for Chemical	Source

Price/lb

($2006)	$0.50	American Chemistry Council

Production Volume Range

(lbs)	>10M-50M	2006 IURa

aData from the 2006 IUR reporting period were extracted December 2007
and are preliminary.

Alkenes, C12-24, chloro [CASRN 68527-02-6]

Use Information

No chemical use information identified.

Market Information for Alkenes, C12-24, chloro

CAS# 68527-02-6

Market Information	Results for Chemical	Source

Price/lb

($2006)	$0.50	American Chemistry Council

Production Volume Range

(lbs)	>1M-10M	2006 IURa

aData from the 2006 IUR reporting period were extracted December 2007
and are preliminary.

Hydrocarbons, C>4 [CASRN 68647-60-9]

Use Information

No chemical use information identified.

Market Information for Hydrocarbons, C>4

CAS# 68647-60-9

Market Information	Results for Chemical	Source

Price/lb

($2006)	$0.50	American Chemistry Council

Production Volume Range

(lbs)	>1B	2006 IURa

aData from the 2006 IUR reporting period were extracted December 2007
and are preliminary.

 – COSTS

							

This chapter presents estimates of the compliance and social costs
industry (chemical manufacturers and other entities affected by the
final rule) and EPA may incur pursuant to requirements included in the
final rule, and discusses the method used to measure each.  Industry may
incur costs related to laboratory testing requirements, analytical
methodology validation, administrative activities, and export
notification requirements.  EPA may incur costs related to reviewing and
processing letters of intent, study plans, final reports, and exemption
applications submitted by industry.

Industry Compliance Costs

Industry compliance costs include laboratory testing costs, analytical
methodology validation costs, administrative costs, and export
notification costs.  Each of these cost types is described below in
greater detail.

Laboratory Testing Costs

Tests Required for Chemicals Included in the Final Rule

The final rule is motivated by the premise that, at a minimum, basic
toxicity information comparable to that generated by OECD’s Screening
Information Data Set (SIDS) Tier 1 testing battery should be available
for all HPV chemicals included in the rule.  The OECD HPV SIDS Program
seeks information on the identity of each chemical, its uses, sources
and extent of exposure; physical and chemical properties; environmental
fate; and certain limited toxicity data for humans and the environment. 
While SIDS is more comprehensive in data coverage than the requirements
of the final rule (e.g., uses, sources and extent of exposure), it is
not intended to describe a chemical thoroughly, but rather to provide
enough information to support an initial (or screening level) assessment
and to assign a priority for further work, if necessary.  Included in
the OECD HPV SIDS Program is the development of test data, if such data
are not already available, related to six health and environmental
effect endpoints for international HPV chemicals.  The test data
identified under SIDs have been internationally agreed upon by the 29
member countries of the OECD as providing the minimum data set required
to make an informed preliminary judgment about the hazards of a given
HPV chemical. 

EPA’s final required testing follows the SIDS model.  In order to
determine which testing would be required for each chemical, EPA
examined available test data for the chemicals in the final rule.  Based
upon this review, EPA is only requiring testing for those endpoints
where data are unavailable or deemed inadequate.  Tests required for
each chemical included in the final rule are summarized in Table 3-1. 
These tests and the methods used to estimate their costs are discussed
in the next section on test cost methodology.  



Table 3-1

Test Requirements for Chemicals Included in the Final Rule

CAS No.	Chemical Name	Required Tests1

75-0-70	Acetaldehyde	C2, F2

78-11-5	Pentaerythritol tetranitrate	C4

84-65-1	9,10-Anthracenedione	C6

89-32-7	1H,3H-Benzo[1,2-c:4,5-c']difuran-1,3,5,7-tetrone	A3, A4, A5, B,
C1, D, E1, F1

110-44-1	Sorbic acid	C6

118-82-1	Phenol, 4,4'-methylenebis[2,6-bis(1,1-dimethylethyl)-	C1

119-61-9	Methanone, diphenyl-	B, C2

144-62-7	Ethanedioic acid	A1, A2, A3, A5, B, C1, E2

149-44-0	Methanesulfinic acid, hydroxy-, monosodium salt	E1

2524-04-1	Phosphorochloridothioic acid, O,O-diethyl ester	A1, A2, A3,
A4, A5, B, C1, E1, E2, F2

4719-04-4	1,3,5-Triazine-1,3,5(2H,4H,6H)-triethanol	C6

6381-77-7	Sodium erythorbate	A4, B, C1

31138-65-5	D-gluco-Heptonic acid, monosodium salt, (2.xi.)-	A1, A2, A4,
A5, B, C1, D, E1, E2, F1

66241-11-0	C.I. Leuco Sulphur Black 1	A1, A2, A3, A4, A5, B, C1, D, E1,
E2, F1

68187-76-8	Castor oil, sulfated, sodium salt	A1, A2, C1, D, E1, E2, F1

68187-84-8	Castor oil, oxidized	A1, A2, B, E1, E2, F1

68479-98-1	Benzenediamine, ar,ar-diethyl-ar-methyl-	A1, A3, A4, A5, C1,
E1, E2, F1

68527-02-6	Alkenes, C12-24, chloro	A1, A2, A3, A4, A5, B, C1, E2, F2

68647-60-9	Hydrocarbons, C>4	A2, A3, A5, B, C1, D, E1, E2, F1

1 Table 3-2 identifies the corresponding tests and protocols

.

Test Cost Methodology 

This section describes the test cost methodology used to estimate test
costs for each of the six health and environmental effect endpoints
included in the final rule test requirements.  As stated in the previous
section, the final rule requires that manufacturers test the chemicals
included in the rule according to specific testing protocols and
guidelines that yield SIDS information.  Although the rule includes a
variety of voluntary consensus standard protocols (e.g., ASTM E 729 for
acute toxicity or ISO 9408 for Ready Biodegradation), cost estimates are
based on OECD or EPA protocols, which are expected to be representative
of the voluntary consensus standards.  These testing cost estimates
generally include direct labor, overhead, other direct costs such as
laboratory supplies, and general and administrative services.

Estimating potential testing costs for each chemical pursuant to testing
requirements contained in the final rule is difficult because industry
may have choices associated with the species and/or route of
administration used in a particular test, as well as choices between
multiple tests to satisfy a particular endpoint testing requirement. 
Therefore, if cost data for a specific OECD test protocol were available
for multiple species and routes of administration, the average cost for
all available species and routes of administration was used as the test
cost estimate.  In addition, a “least cost” and “average cost”
scenario were computed where multiple test protocols are available to
satisfy a test requirement.  The “least cost” scenario assumes that
manufacturers will choose the least costly protocol when choices are
available.  The “average cost” scenario, on the other hand, assumes
that the manufacturer may choose any of the available tests that fulfill
the testing requirement, and is therefore calculated as the average of
the testing options’ costs.  Table 3-2 at the end of this section
presents costs for each test required in the final rule.  Note that in
Table 3-2, cost estimates presented in bold represent the final cost
estimates used in the analysis.  Individual estimates of test costs will
vary across testing laboratories based upon factors such as labor costs,
discounts provided to clients for volume testing, profit margins, and
other testing.  In some cases, EPA has accommodated this variation by
developing multiple estimates for a particular test and using the
average of the estimates to represent the cost of the test.

It is important to note that because some of the SIDS test data are
already available from existing studies, and because the final rule only
requires that a test be conducted on a particular chemical where
existing test data are unavailable, total laboratory testing costs
associated with each chemical included in the final rule will differ
depending on the degree to which testing is required.

Category A. Physical/chemical property testing	

Physical/chemical property testing includes tests to measure the melting
point (A1; ASTM E 324), boiling point (A2; ASTM E 1719), vapor pressure
(A3; ASTM E 1782), n-Octanol/Water Partition Coefficient (log 10 basis)
or log KOW (A4; 40 CFR 799.6755, ASTM E 1147, or 40 CFR 799.6756,
depending on the estimated log KOW of the chemical), and water
solubility (A5; ASTM E 1148, 40 CFR 799.6784, 40 CFR 799.6784, or 40 CFR
799.6786, depending on the chemical’s estimated water solubility) of a
chemical.  Table 3-2 presents the cost estimates for each individual
test.  

Category B.  Environmental fate testing

In testing environmental fate, a manufacturer can choose one of the
following ready biodegradation tests: ASTM 1720 (sealed vessel CO2
production test), ISO 14593 (CO2 headspace test), ISO 7827 (analysis of
DOC), ISO 9408 (determination of oxygen demand in a closed
respirometer), ISO 9439 (CO2 evolution test), ISO 10707 (closed bottle
test), or ISO 10708 (two-phase closed bottle test).  OECD protocols for
ready biodegradation, on which cost estimates are based, are the
following: OECD 301A (DOC die-away test), OECD 301B (carbon dioxide
evolution test), OECD 301C (modified MITI test (I)), OECD 301D (closed
bottle test), OECD 301E (modified OECD screening Test), and OECD 301F
(manometric respirometry test).  For this test category, the test cost
used in the least cost scenario is based on the cheaper of the OECD
tests (OECD 301D).  The test cost used in the average cost scenario is
based on the average of all of the OECD tests, because there are no
special conditions requiring a manufacturer to use one or the other.   

Category C. Aquatic toxicity testing

If aquatic toxicity testing is required for a particular chemical, a
manufacturer must determine if the test chemical falls into one of two
Test Groups, based on the chemical’s Log Octanol-Water Partition
Coefficient (log Kow).  Test Group 1 consists of chemicals with a log
Kow of less than 4.2.  Test Group 2 consists of test chemicals with a
log Kow greater than or equal to 4.2.  Each Test Group has different
testing requirements and, therefore, different testing costs.  Because
EPA does not know which Test Group a chemical will fall within (i.e.,
the log Kow is unknown), the testing costs of both groups are estimated.
 For example, the following situations occur under testing categories C1
and C2:

	C1:  Conduct the Acute Toxicity to Fish test (ASTM E 729), Acute
Toxicity to Daphnia test (ASTM E 729), and the Toxicity to Plants test
(ASTM E 1218) [Test Group 1] or conduct the Chronic Toxicity to Daphnia
test (ASTM E 1193) and the Toxicity to Plants test (ASTM E 1218) [Test
Group 2].  In this case, the sum of the acute testing costs is averaged
with the chronic test cost to obtain the testing cost estimate for
testing categories C1 and C2 under both the least and average cost
scenarios. 

	C2:  Conduct the Acute Toxicity to Daphnia test (ASTM E 729) and the
Toxicity to Plants test (ASTM E 1218) [Test Group 1] or conduct the
Chronic Toxicity to Daphnia test (ASTM E 1193) and the Toxicity to
Plants test (ASTM E 1218) [Test Group 2].  In this case, the two test
costs are averaged to obtain the testing cost estimate for testing
category C2 under both the least and average cost scenarios.

Category D. Mammalian toxicity testing - acute

The acute mammalian toxicity testing requirement is met by implementing
one of two methods defined in the final rule (Method A or Method B). 
The method a manufacturer selects is based on the chemical’s physical
state at room temperature.  For those test substances that are gases at
room temperature, Method A is required; otherwise, Method B is required.
 Method A requires an Acute Inhalation Toxicity Test in Rats (40 CFR
799.9130).  Method B requires an Acute Oral Toxicity Test (ASTM E 1163
or 40 CFR 799.9110(d)(1)(i)(A) and, if the manufacturer chooses to, a
Neutral Red Uptake Cytotoxicity Test (BALB/c 3T3 or BHK).  The cost of
the cytotoxicity test is estimated as the sum of the two cytotoxicity
test costs (BALB/c 3T3 plus BHK), which is a conservative estimate that
likely overestimates actual cytotoxicity test costs.  Because the
chemical physical state at room temperature is unknown, a least and
average cost scenario are estimated.  Under the least cost scenario, the
cost of the acute mammalian toxicity testing requirements is assumed to
be the cost of the Acute Oral Toxicity Test, which is the cheaper of the
two methods.  Under the average cost scenario, the cost of the acute
mammalian toxicity testing requirements is assumed to be the average of
the Method A testing requirement and the sum of the Method B testing
requirement and the least expensive cytotoxicity test.  The cytotoxicity
tests are included in the average cost scenario even though they are
optional because they are animal-saving tests that may be preferable to
test panels.

Category E. Mammalian toxicity testing - genotoxicity

For gene mutations (E1), manufacturers are required to conduct the in
vitro Bacterial Reverse Mutation test (40 CFR 799.9510). 

For chromosomal damage (E2), manufacturers can conduct one of three
tests: the in vitro Mammalian Chromosome Aberration Test (40 CFR
799.9537), the Mammalian Bone Marrow Chromosomal Aberration Test (40 CFR
799.9538), or the Mammalian Erythrocyte Micronucleus Test (40 CFR
799.9539).  Under the least cost scenario, the cost of chromosomal
testing is assumed to be the cost of the least expensive test (40 CFR
799.9539), while under the average cost scenario, the cost of
chromosomal testing is assumed to be the average of all three test
options because the test the manufacturer may conduct is unknown. 

Category F.  Mammalian toxicity testing – repeated
dose/reproduction/developmental

For test category F1, a manufacturer can either conduct the Combined
Repeated Dose Toxicity Study with the Reproduction/Developmental
Toxicity Screening Test (40 CFR 799.9365) or the manufacturer can
conduct the Reproduction/Developmental Toxicity Screening Test (40 CFR
799.9355) and the Repeated Dose 28-Day Oral Toxicity Study in rodents
(40 CFR 799.9305). The testing cost under the least cost scenario is
assumed to be the cheaper of these two options (conducting 40 CFR
799.9365). Testing costs under the average cost scenario is assumed to
be the higher cost option (conducting both 40 CFR 799.9355 and 40 CFR
799.9305).  For test category F2, the manufacturer would conduct the
individual protocol 40 CFR 799.9355 under both the least and average
cost scenarios. 

Estimated Total Test Costs

Because the test costs in Table 3-2 were estimated in different years,
EPA used the Employment Cost Index (ECI) Historical Listing from the
Bureau of Labor Statistics (BLS, 2006), U.S. Department of Labor to
convert all test cost estimates to $2006.  In order to obtain the total
test costs under the final rule, the cost of each test required for each
chemical was summed across all required tests, and then the total cost
per chemical was summed across all chemicals included in the final rule.
 Following this method, the total laboratory cost for testing the
chemicals included in the final rule is estimated to range from
approximately $2.14 million under the least cost scenario to
approximately $2.79 million under the average cost scenario.  These
estimates may overstate the true testing burden because they are based
on the assumption that each chemical is tested independently.  If more
than one chemical is tested at a time, testing costs could be lower due
to economies of scale.  Dividing these totals by the 19 chemicals in the
final rule yields an average laboratory test cost per chemical of
approximately $112,000 under the least cost scenario and approximately
$147,000 under the average cost scenario.

Table 3-2

EPA Estimates of Laboratory Costs of Final Tests: $2006

Testing Category	Test	Protocol Name	Required Protocol Number(s)	Basis
for Cost Estimate	Cost Estimate

$2006 

Physical/Chemical Properties	A1	Melting Point	ASTM E 324	OECD 102	$1,547

	A2	Boiling Point	ASTM E 1719	OECD 103	$1,580

	A3	Vapor Pressure	ASTM E 1782	OECD 104	$9,434

	A4	Partition Coefficient	Method A: 799.6755; or Method B: ASTM E 1147;
or Method C: 799.6756	OECD 107	$3,913

	A5	Water Solubility	Method A: ASTM E 1148; or Methods B or C: 799.6784
(shake flask and column elution); or Method D: 799.6786	OECD 105	$6,594

	Sum (Least & Average Cost Scenarios)	$23,067

Environmental Fate and Pathways	B	Ready Biodegradation	Choice of: ASTM
1720 (sealed vessel CO2 production test), ISO 14593 (CO2 headspace
test), ISO 7827 (analysis of DOC), ISO 9408 (determination of oxygen
demand in a closed respirometer), ISO 9439 (CO2 evolution test), ISO
10707 (closed bottle test), or ISO 10708 (two-phase closed bottle test)
OECD 301A	$9,952

OECD 301B	$8,721

OECD 301C	$22,083

OECD 301D	$7,223

OECD 301E	$9,898

OECD 301F	$9,751

301D (Least Cost Scenario)	$7,223

Average of All OECD 301 Protocols (Average Cost Scenario)	$11,271

Aquatic Toxicity	C1 (Test Group 1)	Acute Toxicity to Fish	ASTM E 729
OECD 203	$10,910

Acute Toxicity to Daphnia	ASTM E 729	OECD 202 (Part 1)	$5,419

Acute Toxicity to Plants	ASTM E 1218	OECD 201	$9,845

Test Group 1 Sum	$16,330

	C1 (Test Group 2)	Chronic Toxicity to Daphnia	ASTM E 1193	OECD 202
$35,425

Acute Toxicity to Plants	ASTM E 1218	OECD 201	$9,845

Test Group 2 Sum	$45,269

	C1 Test Group 1 and 2 Average (Least & Average Cost Scenarios)	$30,799

	C2 (Test Group 1)	Acute Toxicity to Daphnia	ASTM E 729	OECD 202 (Part
1)	$5,419

Acute Toxicity to Plants	ASTM E 1218	OECD 201	$9,845

Test Group 1 Sum	$15,264

	C2 (Test Group 2)	Chronic Toxicity to Daphnia	ASTM E 1193	OECD 202
$35,425

Acute Toxicity to Plants	ASTM E 1218	OECD 201	$9,845

Test Group 2 Sum	$45,269

	C2 Test Group 1 and 2 Average (Least & Average Cost Scenarios)	$30,267

	C3 (Test Group 1)	Acute Toxicity to Fish	ASTME 729	OECD 203	$10,910

Acute Toxicity to Plants 	ASTM E 1218	OECD 201	$9,845

Test Group 1 Sum	$20,755

	C3 (Test Group 2)	Chronic Toxicity to Daphnia	ASTM E 1193	OECD 202
$35,425

Acute Toxicity to Plants 	ASTM E 1218	OECD 201	$9,845

Test Group 2 Sum	$45,269

	C3 Test Group 1 and 2 Average (Least & Average Cost Scenarios)	$33,012

	C4 (Test Group 1)	Acute Toxicity to Fish	ASTME 729	OECD 203	$10,910

Acute Toxicity to Daphnia	ASTM E 729	OECD 202 (Part 1)	$5,419

Test Group 1 Sum	$16,330

	C4 (Test Group 2)	Chronic Toxicity to Daphnia	ASTM E 1193	OECD 202
$35,425

	C4 Test Group 1 and 2 Average (Least & Average Cost Scenarios) 	$25,877

	C5 (Test Group 1)	Acute Toxicity to Daphnia	ASTM E 729	OECD 202 (Part
1)	$5,419

	C5 (Test Group 2)	Chronic Toxicity to Daphnia	ASTM E 1193	OECD 202
$35,425

	C5 Test Group 1 and 2 Average (Least & Average Cost Scenarios) 	$20,422

	C6	Acute Toxicity to Plants	ASTM E 1218	OECD 201 

(Least & Average Cost Scenarios)

	$9,845

Mammalian Toxicity - Acute	D (Method A3)	Acute Inhalation Toxicity
799.913	OECD 403	$13,290

	or;  

D (Method B3)	Acute Oral Toxicity	ASTM E 1163 or 799.9110	OECD 423
$2,431

BALB/c 3T3 Neutral Red Uptake Cytotoxicity; or	N/A	N/A	$3,631

BHK Neutral Red Uptake Cytotoxicity	N/A	N/A	$4,687

Sum of Cytotoxicity Tests	$8,317

	OECD 423 (Least Cost Scenario)	$2,431

	Average of 403 and (423 + least expensive Cytotoxicity test (Average
Cost Scenario))	$9,676

Mammalian Toxicity - Genotoxicity	E1	Bacterial Reverse Mutation	799.951
OECD 471 

(Least & Average Cost Scenarios)	$7,932

	E2	Chromosome Aberration, in vitro; or	799.9537	OECD 473	$22,378

In Vivo Mammalian Cytogenetics Tests: Bone Marrow Chromosomal Analysis;
or	799.9538	 N/A	$47,025

Erythrocyte Micronucleus (bone marrow), in vivo	799.9539	OECD 474 (Least
Cost Scenario)	$17,479

	Average of 473, 799.9538, and 474 (Average Cost Scenario)	$28,960

Mammalian Toxicity – 

Repeated Dose/

Reproduction/ Developmental	F1	Repeated Dose Oral Toxicity; and,
799.9305	OECD 407	$60,200

Repro/Devel Toxicity Screening; 	799.9355	OECD 421	$124,277

or,

Combined Repeated Dose with Repro/Devel Toxicity Screen	799.9365	OECD
422	$125,861

OECD 422 (Least Cost Scenario)	$125,861

Sum of OECD 407 and OECD 421 (Average Cost Scenario)	$184,477

	F2	Repro/Devel Toxicity Screening	799.9355	OECD 421 

(Least & Average Cost Scenarios)	$59,694

Analytical Methodology Validation Costs

	

When conducting tests, laboratories perform analytical methodology
validation to ensure that proper dose concentrations are used in
toxicity studies.  An analytical methodology validation approach assumes
that an acceptable analytical method is available for a particular
chemical and that the method is directly related to the matrix used for
the test.  When analytical methodologies are not suitable or known, they
must be developed or modified. 

Analytical method validation includes all of the procedures that
demonstrate that a particular method used for quantitative measurement
of analytes in a given matrix is reliable and reproducible for the
intended use. The fundamental parameters for this validation include (1)
accuracy, (2) precision, (3) selectivity, (4) sensitivity, (5)
reproducibility, and (6) stability. Validation involves documenting,
through the use of specific laboratory investigations, that the
performance characteristics of the method are suitable and reliable for
the intended analytical applications. The acceptability of analytical
data corresponds directly to the criteria used to validate the method.

 Factors that may increase the cost of analytical method development and
validation costs include: (1) testing new chemicals that lack any
established methodology or historical analytical data to use as a
starting point, and (2) testing chemicals that present challenging
conditions or possess characteristics that require special or additional
procedures during sample preparation and analysis.  If previous testing
on a chemical of interest has been conducted by either a laboratory or
client, information may be available that can assist with sample
preparation and analytical testing.  This can help to minimize the costs
of method development and validation.  

Analytical method development and analytical costs can also vary
depending on characteristics of the test substance.  Characteristics of
chemicals that may impact the cost of analytical method development and
validation include chemical stability, chemical properties, matrix
properties and interactions with the chemical, and whether the chemicals
are mixtures or multi-component chemicals or polymers.  For example,
chemicals are not always stable under every test or analysis condition
and a chemical could decompose or transform into a different chemical
under testing condition, which will invalidate the test results.  Such
chemicals will require additional effort to identify alternate
conditions or matrices for testing to eliminate the potential for
stability issues to affect the testing results.  Certain properties may
also affect the costs of analytical method development.  Some chemicals
may interact with the dosing matrix and require special or even
different handling and processing procedures that can impact the level
of methods development efforts.  

Once analytical methodology validation is completed for a specific
chemical, however, it need not be repeated for tests of a similar nature
(e.g., tests using the same dosing matrix), provided testing is done at
the same laboratory.  However, it is possible that analytical
methodology validation may be required for both short-term and long-term
tests where there are separate requirements for dose concentration
ranges (e.g., ppm for acute tests and ppb for chronic tests).

For this proposal, EPA has assumed   SEQ CHAPTER \h \r 1 an exposure
concentration in the ppb range requiring multi-step preparation,
concentration, and clean-up before analysis by gas or high pressure
liquid spectroscopy, resulting in an estimated analytical method
validation cost ranging from $2,500 to $10,000.   For the purpose of
this analysis, a cost of $3,500 has been assigned for short-term tests
(acute) and a cost of $8,500 has been assigned for tests that are
assumed to be long-term tests (genotoxicity and
reproductive/developmental toxicity).  Because analytical method
validation may not be necessary for all tests when multiple tests are
completed on the same chemical, these costs could be overestimated.

		

Table 3-3

Costs for Analytical Methodology Validation

Testing Category	Test Symbol

Cost Estimate

$2006

Physical Chemical Properties	A

no additional costs

Environmental Fate and Pathways	B

no additional costs

Aquatic Toxicity	C	Test Group 1	$3,500

Test Group 2	$8,500

Test Group 1 and 2 Average	$6,000

Mammalian Toxicity - Acute	D

$3,500

Mammalian Toxicity - Genotoxicity	E

$3,500

Mammalian Toxicity – Repeated Dose/ Reproduction/ Developmental	F

$3,500

Administrative Costs

In addition to laboratory costs, entities subject to the final test rule
will also incur expenses associated with the administration of the
testing program itself.  Administrative activities include “reporting
activities,” such as preparing letters of intent, study plans,
exemption applications, and final reports, and “non-reporting
activities,” such as soliciting laboratory bids, selecting
laboratories, monitoring tests under progress, developing cost-sharing
agreements, and auditing the laboratories for compliance with EPA’s
Good Laboratory Practice (GLP) standards.  Total administrative costs
are calculated as the sum of the costs of reporting and non-reporting
activities.  This section discusses the methodologies employed to
estimate reporting and non-reporting costs.

Reporting Activities.  

Reporting activities include preparing letters of intent, study plans,
exemption applications, final reports, and robust summaries.  Typically,
manufacturers form a “task force” or panel through a common trade
organization to coordinate testing and reporting required by TSCA
Section 4.  One panel may often represent groups of chemicals.  EPA
reviewed the list of chemicals subject to the final test rule, and
sorted them into groups of similar chemicals (e.g., organic acids, dyes,
sulfurs and oxides, etc.).  This sorting results in an estimated 15
chemical groupings.  With each grouping sponsored by a panel, an
estimated 15 panels will be formed in response to the rule.  

Reporting costs per panel include costs associated with submitting
letters of intent, study plans, final reports, and exemption
applications.  The analysis assumes that the panels will each submit one
letter of intent and one set of study plans for their group of
chemicals, resulting in 15 letters of intent and 15 study plans
submitted to EPA.  In addition, one final report is assumed to be
required for each test conducted for each chemical.  To estimate the
total number of final reports, the total number of tests required for
each chemical is summed across all chemicals, which results in an
estimated 101 final reports that will be submitted to EPA in response to
this rule.  EPA also assumes that it will receive five exemption
applications per panel, resulting in a total of 75 requests.  

Finally, respondents may choose to develop and submit robust summaries
of the full, final toxicological study reports.  The robust summaries
should contain technical information to adequately describe the study
and results, and should be written such that the information provided is
sufficient to allow a technically qualified person to evaluate study
results without needing to review an entire study report.  Typically, a
robust summary would include a description of the test substance,
methods, results, conclusions, data quality description, and references
associated with the full study.  EPA estimates that 8 to 16 hours of
technical time are needed to develop and QA/QC a robust summary,
depending on the type of study conducted.  For this analysis, EPA
assumes an average of 12 hours of technical time to prepare a robust
summary.  Because submission of robust summaries is voluntary, EPA does
not expect that many companies will undertake this activity.  EPA
estimates that 10% of full, final toxicological study reports may
include a robust summary.  Because the maximum number of studies
associated with any of the chemicals included in the final rule is
eleven (which yields an estimated maximum of 1.1 robust summaries for
any chemical included in the final rule), EPA assumes that each chemical
will have one robust summary.  Therefore, EPA assumes that 19 robust
summaries will be submitted pursuant to the final rule.  This assumption
may overestimate the actual number of robust summaries submitted
pursuant to the final rule because some of the chemicals have fewer than
10 required tests, and therefore are estimated to have less than one
robust summary under the assumption that 10% of the final reports for
their required testing will include a robust summary.

Estimates are that it takes a respondent 40 hours to prepare a letter of
intent and study plan, 73 hours to write a final report, and 2 hours to
prepare an exemption application (U.S. Environmental Protection Agency,
2002).  These unit labor hours were derived from previous information
collection requests and are believed to reflect the burdens that will be
incurred for the final test rule.

Wage rates associated with the predominant skill level (managerial,
technical, and clerical) required to complete each of the reporting
activities described in this section are presented in Table 3-4.  These
wage rates have been estimated following the method described in a memo
titled, “Wage Rates for Economic Analyses of the Toxics Release
Inventory Program,” (Rice, 2002).  This method uses average 2006
wages, benefits, and total compensation data extracted from the Employer
Costs for Employee Compensation Summary available from the BLS website. 
Appendix A provides detailed information on the estimation of these wage
rates.



Table 3-4

Derivation of Loaded Hourly Rates by Labor Category

Labor Category	2006 Wage Rate	2006 Benefits and Overhead

Loading Factor	2006 Loaded 

Hourly Wage Rate

Managerial	$39.77	1.64	$65.36 

Technical	$32.38	1.69	$54.65 

Clerical	$16.07	1.68	$27.00 

Source: Methodology from Wage Rates for Economic Analyses of the Toxics
Release Inventory Program  (Rice, 2002).  Wage rates and benefits
extracted from the Employer Costs for Employee Compensation Summary,
Bureau of Labor Statistics (BLS, 2006b); assumed overhead rate of 17%
applied to wage rates based on assumptions in Wage Rates for Economic
Analyses of the Toxics Release Inventory Program  (Rice, 2002), and the
Revised Economic Analysis for the Amended Inventory Update Rule: Final
Report  (EPAB, 2002).

Table 3-5 details the respondents’ reporting cost and burden
estimates.  As shown, the total reporting cost and burden estimates are
approximately $404,000 and 8,351 hours, respectively.

Table 3-5

Industry Reporting Cost and Burden Estimate for the Final Rule:  $2006

Reporting Activity	Unit Labor	Annual

Submissions	Total

	Category1	Hours	Wage Rate	Cost

Hours	Cost

Letter of Intent and 

Study Plan	T	40	$54.65	$2,186	15	600	$32,793

Final Report

	Record & Prepare 

              Test for Submission

	Laboratory Review

	Corporate Review

	Type & Print Results

	Record Keeping

	

T

T

M

C

C

	

40

6

6

20

1

	

$54.65

$54.65

$65.36

$27.00

$27.00

	

$2,186

$328

$392

$540

$27

	

98

98

98

98

98	

3,920

588

588

1,960

98	

$214,246

$32,137

$38,432

$52,924

$2,646

Robust Summaries	T	12	$54.65	$656	19	228	$12,461

Exemption Applications	T	2	$54.65	$109	75	150	$8,198

TOTAL	8,132	$393,837

Notes: 

1Labor categories are as follows: T = Technical; M = Management; C =
Clerical.

Non-Reporting Activities.  In addition to reporting activities,
manufacturers need to conduct a number of non-reporting activities.  In
January 2007, EPA conducted a brief study to investigate the types of
non-reporting activities manufacturers conduct and the magnitude of
associated costs.  The non-reporting activities identified include
soliciting laboratory bids, selecting laboratories, monitoring tests in
progress, developing cost-sharing agreements, and auditing the
laboratories for compliance with EPA’s Good Laboratory Practice (GLP)
standards.  These activities, in addition to identifying manufacturers,
arranging meetings, and employing toxicologists who may be hired to
provide testing expertise for the testing, are considered to represent
the costs of managing the testing consortium.  While these costs will
vary based on a number of circumstances, the report suggests that
managing the testing consortium is equivalent, on average, to 15% of the
chemical testing costs, which is the assumption used in this analysis. 
Based on the study, an additional 10% of the testing cost is estimated
to cover the costs of the technical expert that may work for the
consortium, including that expert’s study review and site visits to
the laboratory.  Therefore, total non-reporting administrative costs are
assumed to equal an additional 25% of the total testing costs.  Because
laboratory-testing costs are estimated as $2.01 million under the least
cost scenario and $2.60 million under the average cost scenario,
non-reporting costs are approximately $503,000 and $651,000 under the
least and average cost scenarios, respectively.   

	

Total Administrative Costs. As stated previously, total administrative
costs pursuant to the final rule are estimated as the sum of reporting
and non-reporting costs.  Thus, total administrative costs are estimated
to be approximately $897,000 under the least cost scenario and $1.0
million under the average cost scenario.  

Export Notification Costs

Under Section 12(b) of TSCA, exporters must notify EPA if they export or
intend to export a chemical subject to various TSCA sections (40 CFR
§707.60 through 75).  Therefore, all exporters of chemicals regulated
under the final rule must notify EPA about each country to which a
chemical included in the final rule is shipped.  This is a one-time
notification requirement, and the exporter only needs to submit the
notice when it is exporting a particular chemical for the first time to
a country for which it has not previously submitted a notification.

A detailed analysis of the impact of export notifications would require
data on the identity and/or number of exporters exporting chemicals
included in the final rule and the identity and/or number of countries
to which each chemical included in the final rule is exported.  While
data on aggregate export volumes for various chemicals are published in
U.S. Department of Commerce publications, detailed data identifying
exporters and destination countries for all the chemicals included in
the final rule are not readily available from secondary data sources. 
For this reason, it is difficult to estimate the number of export
notifications that would be triggered by the promulgation of the final
rule.

Given these data limitations, the costs of export notifications for the
final rule are based on data available from EPA’s Export Notifications
Tracking System (U.S. Environmental Protection Agency, 2004a). 
According to these data, EPA received approximately 786 export
notifications associated with 30 unique chemicals.  Therefore, on
average, there were approximately 25 TSCA Section 4 related export
notifications per chemical in 2003.  This analysis assumes that there
will also be 25 export notifications per chemical subject to the final
rule.

Silagi (1992) estimated that the export notification burden was 1.5
hours per notification letter.  In particular, the analysis assumed that
it takes 1 hour of technical time to write each export notification
letter and 0.5 hours of clerical time to print and send out each letter.
 However, most of the repeat submissions received by EPA are only
computer-generated form letters (Blake-Hedges, 1999).  While it might
take one hour of technical time to prepare an initial letter, subsequent
submissions would require only 0.5 hours of clerical time to reproduce. 
Because notification letters are expected from both first time filers
and more experienced filers, the present analysis assumes that the
export notification burden of the final rule ranges from 0.5 hours to
1.5 hours.  The current wage rate for a technical person is $54.65 per
hour while that for a clerical person is $27.00 per hour (see Table
3-4).  This translates into a low-end labor cost estimate of $13.50 per
notice and a high-end labor cost estimate of $68.16 per notice.  In
addition, industry incurs approximately $12.06 per notice ($2006) for
sending each notice to EPA via registered mail ($9.50 for registered
mail, $2.15 for a return receipt, and $0.41 for postage) (USPS, 2006). 
Accounting for labor and shipping costs, the total cost of preparing and
submitting an export notification is estimated to range from $25.56 per
notice to $80.22 per notice.  For the least cost scenario, the analysis
uses the 0.5 hour labor burden and $25.56 cost per notice; for the
average cost scenario, the analysis uses 1.0 hour labor burden and the
average of the low-end and high-end notification cost, which is $52.89. 
Assuming that 19 chemicals are regulated under the final rule, and that
25 notifications will be submitted for each chemical, it is estimated
that a total of 475 notifications will be submitted in response to the
final rule.  Thus, the total cost of export notifications triggered by
the final rule is $12,141 under the least cost scenario and $25,123
under the average cost scenario.

Total Industry Compliance Costs

The total compliance cost borne by the regulated industry is summarized
in Table 3-6. The total industry compliance cost triggered by the final
rule is estimated to equal $3.15 million under the least cost assumption
and $3.90 million under the average cost assumption. These estimates
include laboratory, administration, and export notification costs.
Laboratory costs may be overestimated due to the economies of scale that
could arise if multiple chemicals are tested together.  Total compliance
costs may also be overestimated to the extent that firms can claim tax
deductions for some of these costs.    

 

Table 3-6

Summary of Total Industry Compliance Costs Triggered by the Final Rule: 
$2006

Compliance Cost Category	Cost ($million, unadjusted)

	Least Cost Scenario	Average Cost Scenario

Laboratory Costs  (section 3.1.1)	$2.01	$2.60

Analytical methodology validation (section 3.1.2)	$0.23	$0.23

Administration Costs (section 3.1.3)	$0.90	$1.04

Export Notification Costs (section 5.1.4)	$0.01	$0.03

Total Industry Compliance Costs	$3.15	$3.90

Average Compliance Cost per Chemical	$0.17	$0.21

Non-Monetized Costs

The final rule requires that manufacturers, importers, and/or processors
of chemicals included in the final rule perform screening-level toxicity
tests on the chemicals.  EPA routinely conducts an assessment of
laboratory capacity and applied those findings to this analysis, which
allowed EPA to examine the potential for laboratory capacity to become a
factor in the economic impact of the rule (U.S. Environmental Protection
Agency, 2004b).  

Pharmaceutical testing demands currently dictate laboratory capacity for
the chemical testing industry.  For example, one major testing
laboratory indicated that its non-pharmaceutical market (e.g.,
industrial chemicals) accounts for only 6 to 8 percent of its total
sales. Therefore, changes in testing demand generated by the
pharmaceutical industry are expected to dominate other influences on
laboratory testing capacity, such as EPA regulatory activity.     

EPA anticipates that Contract Research Organizations (CROs) will conduct
the majority of testing rather than in-house laboratories.  The
Agency’s communication with laboratories indicates that there has been
a downward trend in testing demand over the last two or three years
attributed (at least in part) to consolidations and mergers among major
pharmaceutical clients (for example, the merger of Bayer and Aventis). 
These mergers have had several effects, including consolidation of
product lines, with fewer new products translating into fewer required
tests, and greater reliance on in-house testing capabilities.  The
increase in in-house testing at pharmaceutical companies may result in
increased testing capacity at CROs.  For example, one CRO laboratory,
approximately 65,000 square feet in size, reports that it currently
performs 200 to 300 acute toxicity studies in a year but could easily
double the volume of acute toxicity studies it conducts if sufficient
demand existed.  However, other fields of testing (biodegradation tests,
tests of reproductive toxicity, and toxicity tests involving inhaled
chemicals) are currently operating closer to current laboratory test
capacity.

EPA’s communication with laboratories also indicates that testing
resulting from EPA’s voluntary HPV Challenge Program has not produced
the amount of new business for the chemical testing industry that was
anticipated when the Challenge Program was originally announced.  The
testing demand generated by the HPV Challenge Program has been lower
than expected because many of the data gaps identified by the initiative
have been filled using existing, unpublished research rather than new
testing.  In addition, manufacturers have used Program guidance
concerning the use of Structure Activity Relationships (SAR) and
category proposals extensively, which has also reduced the need for new
testing.  New testing has been proposed for fewer than 10% of the
chemicals’ endpoints (U.S. Environmental Protection Agency, 2004b) 

Overall, the current economic condition of the chemical testing industry
is mixed.  Some testing laboratories report slack demand while others
(particularly those with a strong base of clients in pharmaceutical
research and development) report excellent sales and ongoing facility
expansion.  The ability of laboratories to expand capacity depends on
several factors, such as equipment, building costs, and test complexity.
 For example, laboratories that do not conduct inhalation tests may
require extensive new equipment in order to do so.  However, the
screening tests that are required by the final rule are less complex
than inhalation tests, and would likely be easier for laboratories to
expand capacity to implement.

Given that the amount of testing required by the final rule is not
extensive and the tests are not significantly complex, it appears that
testing capacity is not a significant factor in meeting the requirements
of the final rule.  In addition, the less than expected level of demand
for screening-level testing resulting from the HPV Challenge Program
should allow CROs to meet testing needs as a result of the final rule. 

EPA Costs

EPA will also incur costs resulting from the final rule.  Once data are
collected and submitted by industry, EPA must review and process letters
of intent, study plans, final reports, robust summaries, and exemption
applications for completeness, adherence to protocols, and findings.

EPA assumes that, on average, a Federal GS-13, Step 1, full-time
equivalent (FTE), equivalent to 2,080 hours per year, will conduct its
collection procedures under the final rule.  The annual 2007 fully
loaded salary for a GS-13, Step 1, FTE is $127,035.  This includes a
base salary of $79,397 plus 60 percent for overhead and benefits (i.e.,
$47,638).  Dividing the fully loaded annual salary by 2,080 (i.e., the
number of hours in a work year) yields an hourly wage rate of $60.86 for
the FTE.  Appendix A provides a detailed description of these
calculations.  

	

As explained earlier in Section 3.1.2, approximately 15 letters of
intent and study plans, 75 exemption applications, 98 final reports, and
19 robust summaries are estimated to be filed in response to the final
rule.  It is estimated that it takes on average three hours to process a
letter of intent and study plan, five hours to process a final report,
one hour to review a robust summary, and one hour to review each
exemption application.  Table 3-7 presents the estimated total
government costs based on these assumptions.  As shown, the total
government cost for the final rule is estimated to be approximately
$38,000.

Table 3-7

Estimated Government Cost for the Final Rule:  $2006

Item	Unit Labor	Total Items	Total Cost

	Hours	Rate	Cost/Item

Letter of Intent and Study Plans	3	$60.86	$182.58	15	$2,739

Final Reports	5	$60.86	$304.30	98	$29,821

Robust Summaries	1	$60.86	$60.86	19	$1,156

Subtotal	$33,716

Exemption Applications	1	$60.86	$60.86	75	$4,565

Total	$38,281

Summary of Total Social Costs

The estimated total social cost of the final rule to both industry and
EPA is summarized in Table 3-8.  The total social costs under the least
and average cost scenarios are $3.19 million and $3.94 million,
respectively.  Industry compliance costs are presented before tax.  As
with any costs, tax deductions would lower the portion borne by
industry, but the amount deducted would still represent a cost to
society since the costs borne by the government will increase. 
Similarly, some costs may be passed on to customers, suppliers, and/or
workers in the form of changed prices and wages. However, a detailed
analysis of such cost redistribution is beyond the scope of this report.

Chemical-specific estimates of laboratory, administration, export
notification, and government costs under the least and average cost
scenarios can be found in Appendix B of this report.  These costs are
not expected to occur in a single year, however.  They are expected to
occur over the several years during which the actual testing occurs and
EPA reviews studies.  A three-year time period is assumed for this
analysis.  Thus, total social costs of the rule have been annualized
over three years as presented in Table 3-8.  

The issues involved in selecting the appropriate social discount rate
are complex and subject to considerable debate in the economics
literature.  This literature largely focuses on the appropriate
treatment of displaced private investment, often referred to as the
private rate of return to capital, and displaced consumption, often
referred to as the consumption rate of interest.  The literature and
EPA’s economic guidance document suggest that the appropriate rate to
use for environmental actions is usually the consumption rate of
interest.  Historical rates of return on relatively risk-free
investments, adjusted for taxes and inflation, suggest a consumption
rate of interest of two to three percent is appropriate (U.S. EPA,
Guidelines for Preparing Economic Analyses, EPA 240-R-00-003, 2000).  A
three percent discount rate is used for the primary analysis in this
report, following common EPA convention.  EPA guidance also recommends
following OMB’s basic guidance on discount rates for regulatory and
other analyses provided in OMB Circular A-94, recently updated by
Circular A-4.  The OMB suggests using both a three and a seven percent
discount rate, in real terms.  Therefore, while using a three percent
discount rate for the primary analysis, results using a seven percent
rate are also presented.  As shown, total annualized social costs under
the least cost scenario range from $1.13 to $1.21 million using a three
and seven percent discount rate, respectively.  Total annualized social
costs under the average cost scenario range from $1.39 to $1.50 million
using a three and seven percent discount rate, respectively.

Detailed social cost estimates are presented in Appendix B, in Tables
B-1 through B-3.  

Table 3-8

Summary of Total Social Cost Triggered by the Final Rule:  $2006

Cost Category	Cost ($ million)

	Least Cost Scenario	Average Cost Scenario

Total Industry Compliance Cost (unadjusted)a	$3.15	$3.90

Total Government Cost (unadjusted)	$0.04	$0.04

Total Social Cost Triggered by the Final Rule (unadjusted)	$3.19	$3.94

Annualized Social Cost (3 years, 3% discount rate)	$1.13	$1.39

Annualized Social Cost (3 years, 7% discount rate)	$1.21	$1.50

Notes:

a Total industry compliance cost includes laboratory, administration,
and export notification costs.

 – ECONOMIC IMPACT ANALYSIS

This chapter of the economic analysis assesses the impact of the final
High Production Volume (HPV) test rule on the companies that the rule
affects.  EPA conducted two analyses to provide this information. 
First, the impact of the rule on all regulated companies is described. 
Second, the impact of the rule on small businesses is described.  The
latter assessment also satisfies the requirements of the Regulatory
Flexibility Act (RFA) of 1980, as amended by the Small Business
Regulatory Enforcement Act (SBREFA) of 1996.

Impact on All Regulated Companies

When a chemical manufacturer/importer faces a mandatory test rule, it
must decide whether to comply with the testing requirement or to
discontinue production/importation of the chemical. Once the rule is
published, a company would have 30 days to stop production/importation
before it becomes responsible for testing.   The costs associated with
testing requirements increase the cost of manufacturing/importing
chemicals for these companies and decrease the overall profitability of
the affected products.  If profitability falls below acceptable levels,
firms may choose to discontinue production of the chemical (provided
this can occur within 30 days of publication of the final rule), to
raise prices of products, or to suffer reduced profitability for
continued production of the chemical.

The profitability of producing and selling a chemical is measured by the
flow of costs and revenues associated with the chemical over time. 
Testing is a short-term effort to develop basic toxicological data. 
Evaluations of profitability of a chemical product line, however, are
not based on one or even a very few years’ results, but rather on the
total earnings stream associated (appropriately discounted) with a
chemical over time.  Thus, losses in one year may be appropriately
balanced against revenues in another to assess the net present value of
the stream of earnings (revenues less costs) of a chemical.

The development of a complete net present value analysis of the
profitability of a particular chemical with and without testing costs
requires specific information on costs and revenues that is difficult to
obtain.  Therefore, this analysis uses a simplified screening approach
for potential economic impacts based on the relationship between testing
costs and revenues.  This approach uses standard values for the economic
life of the chemical and the discount rate for all chemicals considered.
 An annualized cost of testing is compared with typical annual revenues
for the chemical in question to account for differences in the timing of
compliance costs and revenues.  The major steps used in this analysis
are described below.

Calculate Annualized Costs

Annualized costs represent the amount that one would have to pay each
year to sum to the same amount as the overall cost of the rule when
those costs are presented in present value terms.  

 [I(1 + i)n / ((1 + i)n - 1)]

where A equals the annualized amount, I is the initial lump sum
investment cost, i is the discount rate, and n is the useful life of the
investment.  

The initial lump sum costs under the least and average cost scenarios
are presented in Chapter 3.  Testing costs represent an opportunity cost
to the company conducting the testing, as the company is not able to
otherwise use or invest the money spent on testing.  In order to
annualize those costs, they are discounted over an appropriate time
period at a discount rate that reflects the opportunity cost of capital.
  The discount rate reflecting the opportunity cost of capital is
estimated to be 7 percent and is consistent with OMB Circular A-4.  This
represents the average rate of return on low-yielding capital
investments, such as housing, and the returns on high-yielding
investments, such as corporate capital.  Determining the number of
years, n, to use in the annualization formula requires consideration of
the "useful life" of the investment, which is longer than the time in
which costs are actually incurred.  This is because the analysis of
impacts looks at the long-term profitability of the chemical product
line, and it is not uncommon for product lines to be profitable is some
years and operate at a loss during others, with overall profitability in
the long-term.  For this analysis, the life of the chemical is assumed
to be 15 years.  The one-time testing costs are thus annualized over a
15-year period using a 7 percent discount rate.  Table 4-1 summarizes
EPA’s estimates of annualized testing costs under both the least and
the average cost scenarios.  The annualized industry compliance cost is
$0.35 million under the least cost scenario and $0.43 million under the
average cost scenario.  Appendix C presents chemical-specific estimates
of annualized costs.  Industry compliance costs are likely to be
overstated because this analysis does not account for the tax
deductibility of these costs.

Table 4-1

Annualized Costs Under Least and Average Cost Scenarios:  $2006

Category	Cost ($ million) a

	Least Cost Scenario	Average Cost Scenario

Annualized Laboratory Cost	0.22	0.29

Annualized Methodology Development Cost	0.02	0.02

Annualized Administration Cost	0.10	0.11

Annualized Export Notification Cost	0.001	0.003

Annualized Industry Compliance Costb	0.35	0.43

Notes:

a All costs were annualized over a 15-year time horizon using a 7
percent discount rate.

b Industry compliance cost includes laboratory cost, methodology
development cost, administration cost, and export notification cost.

Compare Annualized Compliance Costs to Annual Revenues

To determine if the annualized compliance costs of testing could
potentially result in an adverse economic impact for a given chemical,
the annualized compliance costs of testing specific chemicals were
compared to the annual revenues for those chemicals.  A threshold of one
percent was used as a benchmark over which further analysis was
conducted to evaluate the potential of test costs to adversely affect
the profitability of the affected company.

To develop an estimate of annual revenue, the price per pound of each
chemical was multiplied by its total volume (of production and
importation in the United States).  The annualized cost of testing each
of these chemicals was then compared to the annual sales revenue the
chemical was expected to generate.  If a chemical-specific cost-to-sales
ratio is less than one percent, the test rule is assumed to have low
potential for an adverse economic impact on the affected chemicals.  If
a chemical-specific cost-to-sales ratio is greater than one percent, it
is assumed that there is a potential for an adverse impact on a
chemical’s profitability.  Figures 4-1 and 4-2 illustrate the
distribution, under the least and average cost scenarios respectively,
of cost-to-sales ratios for the chemicals for which prices are
available.  Table 4-2 presents summary statistics for chemical-specific
cost-to-sales ratios.  Table 4-3 presents a summary of the results under
both the least and the average cost scenarios.

Under the least cost scenario, 17 out of the 19 chemicals 89 percent)
are affected at less than the one percent level.  Under the average cost
scenario, 15 out of 19 chemicals (79 percent) are affected at less than
the one percent level.  Therefore, the potential for adverse economic
impacts due to the final test rule is judged to be low for at least 79
percent of the regulated chemicals.  Two chemical (10 percent) and four
chemicals (21 percent) of the 19 chemicals are affected at a level
greater than one percent of their sales under the least and average cost
scenarios, respectively.



Figure 4-1

Distribution of Chemicals in the Final Rule by Cost-to-Sales Ratio
Range: Least Cost Scenario

Figure 4-2

Distribution of Chemicals in the Final Rule by Cost-to-Sales Ratio
Range: Average Cost Scenario

Table 4-2

Summary Statistics for Chemical-Specific Cost-to-Sales Ratiosa

Statistical Measure	Least Cost Scenario	Average Cost Scenario

Total Number of Regulated Chemicals	19	19

Number of Chemicals with Production Volume Data	19	19

Number of Chemicals with Price Data	19	19

Mean Cost-to-Sales Ratio	0.63%	.83%

Median Cost-to-Sales Ratio	0.16%	0.16%

Standard Deviation	1.30%	1.80%

Notes:

a Compliance costs were annualized over a 15-year time horizon using a 7
percent discount rate.

Table 4-3

Impact of Final Test Rulea

Impact Category	Least Cost Scenario	Average Cost Scenario

Total Number of Regulated Chemicals	19	19

Number of Chemicals with Production Volume Data	19	19

Number of Chemicals with Price Data	19	19

Number of Chemicals with Cost-to-Sales Ratio <1 percent	17	15

Number of Chemicals with Cost-to-Sales Ratio (1 percent	2	4

Number of Chemicals with Cost-to-Sales Ratio (3 percent	1	1

Number of Chemicals with Cost-to-Sales Ratio (5 percent	1	1

Notes:

a Compliance costs were annualized over a 15-year time horizon using a 7
percent discount rate.

 

As stated, EPA uses a one percent threshold to determine whether to
conduct additional analysis of the impact of test costs on
profitability.  To further understand potential impacts on companies
that produce chemicals with test cost-to-sales ratios greater than one
percent (see Figure 4-1 and 4-2), EPA examined the markets these
companies operate in and these companies’ individual revenue data. 
EPA’s review of the companies with test cost-to-sales ratios greater
than one percent for chemicals included under in the HPV rule reveals
that these companies produce a wide variety of chemicals for sale in a
number of large markets, including the pharmaceuticals, agrochemicals,
cosmetics, nutritional pharmaceuticals, food, coatings, inks and
adhesives markets, the textile industry; and the leather and paper
industry.  In addition, chemicals with a cost-to-sales ratio greater
than one percent are mostly basic chemicals, representing a large market
worth roughly $199 billion in 2006.  Profits for the basic chemical
industry typically represent five percent of the total cost structure
while profits in the specialty chemical industry have higher
profitability.  However, the chemical industry as a whole tends to
exhibit profits that are above the average for all manufacturing
industries.

Using global parent company revenue data for those companies that
produce chemicals whose test cost-to-sales ratio is greater than one
percent, EPA concludes that the cost of the testing requirements for
chemicals produced by a specific company do not exceed one percent of
company revenues for any of the companies.  This conclusion is supported
by the analysis presented in Table 4-4, which demonstrates that the
average impact of each companies’ share of testing costs for all
chemicals they produce is less than one percent of that company’s
revenues.  As Table 4-4 shows, the impacts of company-specific testing
costs to the respective company range from 0 percent to roughly 0.22
percent of revenues.  These data and the market information discussed in
the preceding paragraph suggest that even if revenues generated from the
tested chemical included in the final rule would not support the cost of
its testing, other product lines in the company could.  In addition, as
discussed in Section 4.1, testing is a short-term effort to develop
basic toxicological data while the profitability of a company is based
on the total earnings stream associated with a chemical over time and
appropriately discounted.  For this reason, a company that experiences
losses in a product line in one year due to testing requirements may
also recoup these losses through profits earned in future years from the
tested chemical or from other product lines.  Finally, it may be
possible for companies to increase the prices of the chemicals somewhat
to recoup testing costs; however, because price elasticity information
was not available for the chemicals, it is not possible to estimate the
extent to which this could occur.

Table 4-4

Summary Statistics for Company-Specific Cost-to-Sales Ratios

Statistical Measure	Least Cost Scenario	Average Cost Scenario

Total Number of Affected Companies	48	48

Number of Companies with Employment Data	46	46

Number of Companies with Sales Data	45	45

Minimum Cost-to-Sales Ratio	0.00%	0.00%

Maximum Cost-to-Sales Ratio	0.22%	0.22%

Mean Cost-to-Sales Ratio	0.02%	0.02%

Median Cost-to-Sales Ratio	0.00%	0.00%

Standard Deviation	0.05%	0.05%

Sensitivity Analysis

Many chemicals may have a useful life that differs from the 15-year
assumption used above.  Therefore, a sensitivity analysis was conducted
to examine the robustness of the results to a change in the
annualization assumptions.  If total compliance costs are annualized
over a shorter horizon of seven years, 79 percent of the chemicals are
affected at less than the one percent level under the least cost
scenario, and 68 percent of the chemicals are affected at less than the
one percent level under the average cost scenario.  Table 4-5 summarizes
the impact of the final rule if costs are annualized over a 7-year time
horizon.

A maximum of two and four chemicals are affected at greater than the one
percent level if costs are computed under the least and average cost
methods, respectively, and annualized over a seven-year period.  Using
the alternative scenario assumptions shifts two chemicals from the less
than one percent level to the greater than one percent level under the
least and average cost scenarios..   



	

Table 4-5

Sensitivity Analysisa

Impact Category	Least Cost Scenario	Average Cost Scenario

Total Number of Regulated Chemicals	19	19

Number of Chemicals with Production Volume Data	19	19

Number of Chemicals with Cost-to-Sales Ratio <1 percent	15	13

Number of Chemicals with Cost-to-Sales Ratio >1 percent	4	7

Number of Chemicals with Cost-to-Sales Ratio >3 percent	2	2

Notes:

a Compliance costs were annualized over a 7-year time horizon using a 7
percent discount rate.

Small Entity Impact Analysis

To further interpret the significance of the impact that the rule might
have on businesses, an additional analysis examining the relationship
between the compliance costs and company sales was developed.  While the
profitability of an individual chemical product may potentially be
adversely affected by the final rule (see previous section), a company
often uses other funds to pay for expenses related to products. 
Therefore, an additional analysis comparing the costs of compliance to
the sales of companies was developed.  Those companies that would be
most likely to be adversely affected by the rule would be those
considered to be small.  The analysis primarily focuses on these
companies.

In addition, the RFA of 1980, as amended by the SBREFA of 1996, requires
that special consideration be given to small entities affected by
Federal regulations.  The final rule is not expected to affect small
governments and small organizations, as defined under RFA Section 601. 
However, some small businesses may be potentially affected by the final
rule.  Thus, this section provides a screening-level analysis to assess
the potential impact of the final rule on small businesses.  The major
steps used in the analysis are described below.

Identify the Affected Population

For each manufacturer/importer of the chemicals identified in Chapter 2,
the ultimate parent company was identified and sales and employment data
were obtained for companies for which data are available from Dun &
Bradstreet Market Identifier (Dun & Bradstreet, 2007).

The search identified 46 affected global ultimate parent companies as
defined by their global DUNS number or the highest parent level found in
other sources.  Sales data could be found for 45 of the companies, while
employment data could be found for 46 of the companies.  EPA was not
able to locate the global ultimate parent company for two companies that
submitted production information for the 2006 IUR rule.

Select a Relevant Small Business Definition

EPA examined several definitions of “small business.”  Under the
first, a manufacturer or importer is defined as small under 40 CFR 704.3
if it meets either of the following criteria:

	(1)	Total annual sales of the company, combined with those of any
parent company, are below $40 million and annual production volume or
importation volume at the facility is less than or equal to 100,000
lbs.; or 

	(2)	Total annual sales of the company, combined with those of any
parent company, are below $4 million.

This “sales-based definition” also includes a provision that allows
adjustment to the total annual sales values for inflation whenever EPA
deems it necessary to do so.

An alternative “employment-based definition” established by the U.S.
Small Business Administration (SBA) under 13 CFR 131 was also used to
examine the sensitivity of this analysis to choice of the small business
definition.  The SBA has developed six-digit NAICS industry segment
specific size standards based on employment thresholds (SBA, 2004). 
These size standards range from 500 employees to 1,500 employees for the
six-digit NAICS codes that are potentially affected by the final rule. 
For example, the SBA defines a company in NAICS 325314 (Mixing-Only
Fertilizer Manufacturing) as small if it has fewer than 500 employees. 
On the other hand, a company in NAICS 324110 (Petroleum Refineries) is
considered to be small if it has fewer than 1,500 employees.  To obtain
a worst-case estimate of the number of small businesses affected by the
final rule, EPA chose an employment threshold of 1,500 employees to
determine small business status.

Identify Small Businesses

Parent company sales data, collected as explained above, were used to
identify companies that qualified for the “small business” status,
per both the sales-based and the employment-based definitions specified
above.  Based on the sales criteria, one company (2%) was identified as
small.  Furthermore, 20 companies (42%) were identified as small
according to the employment criteria (with 1,500 or fewer employees). 

Calculate Each Company’s Share of Testing Costs

As explained in Chapter 3, the industry compliance costs (the sum of
laboratory costs, analytical methodology development costs,
administration costs, and export notification costs) were computed under
least and average cost scenarios.  These costs were annualized over a
15-year time horizon using a 7 percent discount rate.  The annualized
compliance cost for all 19 chemicals was approximately $0.35 million
under the least cost scenario and was approximately $0.43 million under
the average cost scenario.  Note that industry compliance costs may be
overestimated to the extent that companies can claim tax deductions for
some of these costs.

To calculate each company’s share of compliance costs, EPA assumed
that the cost of performing chemical-specific testing is borne by
companies in proportion to their production and/or importation volume. 
For example, Company A’s cost share for testing chemical X was
computed by first calculating Company A’s fraction of overall chemical
X production (the volume of chemical X produced/imported by Company A
divided by the total production of chemical X.)  This fraction was then
multiplied by the total annualized test costs for the chemical to obtain
Company A’s cost share.  The cost share was computed under both the
least and average cost scenarios.

Determine the Size of the Adverse Impact for Small Businesses

Each small company’s share of testing costs (for all chemicals it
manufactures/imports) was then compared to its total sales. 
Cost-to-sales ratios were computed using the combined cost of testing
all chemicals rather than on a chemical-by-chemical basis to get a
worst-case estimate of the rule’s impact on small businesses.  For
example, if Company A produced Chemicals X, Y, and Z, then one combined
cost-to-sales ratio was computed rather than three chemical-specific
ratios. 

The significance of the impact of the final rule on small businesses was
analyzed by examining the number of small entities that experienced
different levels of costs as a percentage of their sales.  Small
businesses were placed in the following categories on the basis of
cost-to-sales ratios: less than one percent, greater than one percent,
and greater than three percent.  Table 4-6 presents summary statistics
for company-specific cost-to-sales ratios for small companies.  Table
4-7 presents a summary of the results using the employment-based, as
well as the sales-based definition of a small business, under both the
least and the average cost scenarios.

Table 4-7 indicates that the number of small businesses affected at the
one and three percent levels is identical regardless of the small
business definition used.  Therefore, the analysis based on employment
data correlates quite closely with the one based on sales data for the
companies.  Of the 20 companies that qualified for small business status
per the employment criteria, none had cost-to-sales ratios of greater
than 1 percent under the least and average cost scenarios.  The results
are identical if the sales definition is used. 

	

Table 4-6

Summary Statistics for Company-Specific Cost-to-Sales Ratios for Small
Companies

Statistical Measure	Employ Def. 

Least Cost Scenario	Employ Def. 

Average Cost Scenario	Sales Def. 

Least Cost Scenario	Sales Def. 

Avg. Cost Scenario

Total Number of Identified Small Companies	20	20	1	1

Number of Companies with Sales Data	19	19	1	1

Minimum Cost-to-Sales Ratio	0.00%	0.00%	0.22%	0.22%

Maximum Cost-to-Sales Ratio	0.22%	0.22%	0.22%	0.22%

Mean Cost-to-Sales Ratio	0.02%	0.02%	0.22%	0.22%

Median Cost-to-Sales Ratio	0.00%	0.00%	0.22%	0.22%

Standard Deviation	0.05%	0.05%	N/A	N/A

Notes:

a Compliance costs are annualized over a 15-year time horizon using a 7
percent discount rate.

		

Table 4-7

Small Business Effects

Impact Measure	Employment Definition	Sales Definition

	Least Costa	Average Costa	Least Costb	Average Costb

Total Number of Identified Companies	48	48	48	48

Number of Companies with Data	46	46	45	45

Number of Small Companies	20	20	1	1

Number of Small Companies with Data	19	19	1	1

Number Impacted at >1 percent	0	0	0	0

Number Impacted at >3 percent	0	0	0	0

Notes:

a Companies with fewer than 1,500 employees are considered small under
this definition.

b Companies with either (1) total annual sales below $40 million and
annual production volume or importation volume less than or equal to
100,000 lbs.; or (2) total annual sales below $4 million are considered
small under this definition.

c Total costs were annualized over a 15-year time horizon using a 7
percent discount rate.

4.2.6	Companies without Data

	Data on sales and employees are missing for two of the 48 companies. 
An analysis was done to determine the potential impact on these
companies if they were small.  The median sales for small companies with
sales data is $52 million.  If this figure represented the sales for the
companies without sales data, the impact would be below 1% of sales. 
The overall sales of the two companies would need to be less than
$600,000 each in order for price impacts to be near or exceed 1% of
sales.  This value is 50% below the sales of the company with the lowest
sales.  The same is true for the single company identified as small with
employment data but lacking sales data.  Finally, none of the companies
without data manufacture any of the chemicals for which the cost impact
of the testing exceeds 1% of the sales of the chemicals. – BENEFITS

Benefits derived from a regulation can be interpreted as the value of
the advantages that result from implementation of the rule.  Regulations
under Section 4 of TSCA require the testing of specified chemicals to
provide information on the effects of those chemicals on human health
and the environment.  The final rule is no exception.  The final rule
targets chemicals for which basic toxicological (hazard) information is
unavailable despite their high level of production.  The benefits of the
testing requirements derive from the development of a basic set of
hazard information on these chemicals and from its provision to and use
by the public, industry, and government.

The final rule can be viewed as a necessary correction of the failure of
a market to independently provide a socially optimal level of hazard
knowledge.  The information developed as a result of the rule will be
made publicly available and will increase scientific understanding of
the health and environmental effects of a number of chemicals to which
individuals and the environment are exposed.  A wide range of groups is
expected to benefit from the availability of this information, including
consumers, workers, scientists, industry representatives, government
organizations, public health officials, the medical community, and
foreign interests.

The toxicological information provided by this rule may also enable
users to make better-informed decisions about where to work and live and
what chemicals to use.  The use of this information will help address
externalities that occur because hazard information is lacking. 

The current economics literature on the theoretical value of information
can be traced to Arrow (1962) who argues that the value of information
is inextricably tied to its expected future use.  Therefore, to
understand the value of toxicity data from the final test rule, and,
thus, the benefits of the rule, it is necessary to understand the users
and the expected use of the hazard information to be generated.

Potential Users of Chemical-Specific Information

Numerous databases and sources contain toxicological information.  A few
examples of these sources include the Hazardous Substances Data Bank
(HSDB), Registry of Toxic Effects of Chemical Substances (RTECS),
Integrated Risk Information System (IRIS), the Toxic Substances Control
Act Test Submissions (TSCATS), and TOXicology information onLINE
(TOXLINE).  These databases provide a variety of toxicological
information in the form of study abstracts, information on effects, and
more comprehensive information combining hazard and exposure information
to provide risk information (e.g., IRIS).  A wide community extensively
uses the databases.

The National Library of Medicine (NLM) houses TOXLINE, a bibliographic
database that includes the toxicological effects of drugs and other
chemicals.  Users can access TOXLINE through the Internet.  NLM
estimates that a single month’s access to the database (November,
2003) consisted of 80,962 searches via the Internet (Hudson, 2003). 
Usage of another database housed by NLM, the HSDB, suggests the breadth
of users of toxicologic information in 1998 (see Table 5-1) (Hudson,
1998).  According to the NLM, however, this information is no longer
allowed to be released, though they stated that current HSDB usage is
similar to the distribution of users found in 1998.

Table 5-1

Distribution of the Users of the HSDB Database through the National
Library of Medicine for October 1998

User Category	Percentage of Use

Industry	41%

Healthcare	8%

Foreign	7%

Government	10%

Education	2%

State	5%

Library User	8%

Other	19%

Source: Hudson, Vera.  National Library of Medicine.  Personal
communication with Lynne Blake-Hedges, USEPA.  November 1998.

In addition, the distribution of TSCATS user accounts purchased through
the vendor, Chemical Information System (CAS) supports that the users of
toxicological data are diverse.  In 1998, CAS suggested that 6 percent
of account holders were government, 38 percent were the private sector,
4 percent were academic organizations, 40 percent were foreign
interests, and 11 percent were nonsubscribers (estimates may not add due
to rounding) (Hoffman, 1998).  Since then, these data are no longer
tracked by CAS.  However, they do track the subscribers and
non-subscribers to whom CAS supplies copies of toxicological studies
cited in the TSCATS database.  CAS supplies approximately 38 percent of
the copies to U.S. industrial entities, 27 percent to U.S.
non-industrial entities, 19 percent to non-U.S. governments, 7 percent
to US consultants, and 11 percent to international consultants (Earle,
2003).

Potential Uses of Toxicologic Information Generated by the Final Rule

 Consumers/Buyers

Economic theory maintains that competitive markets provide goods and
services to the extent that the marginal benefit of the good or service
to consumers is greater than or equal to the marginal cost of
production.  Underlying this conclusion are two assumptions: both
consumers and producers have perfect information, and the cost of
conducting a market transaction is negligible.  The need for chemical
testing information stems from the fact that, in some cases, neither
producers nor consumers have perfect information regarding the hazards
associated with certain chemicals.  If basic information on chemical
hazards were known, consumers may alter the amount they would be willing
to pay for the chemical.  Therefore, in the absence of complete
information, the private market may be misallocating resources to the
production of the chemical substance. 

Thus, one advantage of mandatory testing and dissemination of test
results is that consumers can make better choices about products
containing chemicals if they are better aware of the potential hazards. 
Consumers can respond to additional information by changing their
purchasing decisions (i.e., increasing or decreasing consumption, as
appropriate); by reducing the amount they are willing to pay for the
product; or by changing the way they handle, store, use, or dispose of
the product.  This may move the market toward a more efficient
allocation of resources.  Thus, the role of toxicity information in
resolving uncertainties can be particularly valuable.

Workers

Hazard information can play a role in guiding workers’ employment
decisions and work practices.  If workers are aware of workplace hazards
(e.g., the hazard associated with chemical substances to which they are
exposed), they may choose not to work at a particular facility.  If they
decide to work there, informed workers can make better decisions about
what precautions, if any, should be taken to reduce their exposure to
that chemical.  These precautions may include taking proper care while
handling and using certain chemicals or wearing protective clothing. 
Alternatively, a worker may seek a wage premium to compensate for
increased workplace risk.  Viscusi and O’Connor (1984) conclude that
the value of new information to the worker can be measured by the
increase in the wage premium (differential) as a greater understanding
of workplace risk is gained.  Thus, workers can seek a risk premium or
take averting actions to protect themselves if information is available
about the health effects of the chemicals they come into contact with at
work.  EPA expects the potential benefits to be large for chemicals on
the final rule since they are manufactured and processed in large
volumes.

Science and Health Communities

Chemical toxicity information is useful to a variety of scientific and
health communities.  For example, medical professionals are concerned
about the health of patients exposed to chemicals, poison control
centers distribute information on toxicity and treatment associated with
poisoning, and scientists use toxicity information to characterize the
effects of chemicals and to assess risks of chemical exposure.  The
literature includes specific examples where toxicity data have been
summarized and interpreted.  Kapp et al. (1996) summarize the results of
TSCA Section 4 test rule studies for Isopropanol.  Other examples
include Glickman et al. (1995) who report the results of aquatic
toxicity studies for Cumene (Isopropyl Benzene), and Bogdanffy et al.
(1990) who present results of subchronic inhalation tests for Vinyl
Fluoride.

In addition, several published studies also rely on information from the
RTECs database.  RTECS is a database of toxicological information
compiled, maintained, and updated by the National Institute of
Occupational Safety and Health (NIOSH).  Numerous vendors currently
offer access to the database.  RTECS currently covers more than 152,000
chemicals and provides data on mutagenic effects, reproductive effects,
tumorgenic effects, and acute toxicity effects, for example (NIOSH,
2005).  Examples of published scientific literature using this
particular database include Ruder et al. (1990) and Jones et al. (1998).
 The former study uses toxicity data available from the RTECS database
to compute national estimates of occupational exposure to animal bladder
tumorigens, while the latter study uses toxicological data from the
RTECs database to compute relative potency factors for chemical
compounds associated with increased risk of atherosclerosis to humans.  

The test results generated by the final rule are also expected to be
used by scientists to increase the understanding of the health and
environmental effects of these chemicals to which people may be exposed
in the places where they live, work, study, and play. 

The General Public

In addition to its impact on consumers of chemicals or products, the
production or use of a chemical substance may impose external costs on
society in the form of increased health risks to the general public and
increased risks to the physical environment.  If these external costs
are known, individuals can take averting actions to protect themselves. 
However, if the existence of such externalities is unknown to the
public, inefficiencies in the production and consumption of the chemical
substance will persist.

The final test rule is valuable because the health and environmental
data it generates provide a better understanding of the external costs
involved in the production and use of chemical substances.  Because the
information will be made publicly available, the general public is then
empowered to help address the market failure through individual actions
they may take to protect themselves from exposure to the chemical
substance (averting behaviors) or activities designed to pressure firms
or governments to reduce the externalities associated with production
(e.g., lobbying activities).

One can expect that if reliable test data are disseminated to the
public, community and public interest groups can initiate a dialogue
with the manufacturers of hazardous chemicals and encourage them to
improve their safety measures and assess their environmental management
plans.

Firms and their Shareholders

As noted earlier, industry is an important user of chemical hazard
information.  Such information is used to understand better the handling
and safety of chemicals, develop emergency preparedness plans, follow
principles of Responsible Care®, and competitively participate in
today’s chemical market.

The American Chemistry Council’s (ACC) Responsible Care® Initiative
includes as guiding principles the following:

	“To make health, safety, the environment, and resource conservation
critical considerations for all new and existing products and processes;

	To work with customers, carriers, suppliers, distributors, and
contractors to foster the safe use, transport, and disposal of
chemicals; and

	To support education and research on the health, safety, and
environmental effects of our products and processes” (American
Chemistry Council, 2005).

Consideration of these principles supports the need for toxicologic
information on chemical products used and manufactured by this industry.
 The Chemical Industry Institute of Toxicology (CIIT), a research
institute sponsored by ACC, government, and industry, notes that
chemical research has helped companies ensure safety in manufacturing,
use, and disposal of chemicals (Chemical Industry Institute of
Toxicology, 2001, 1998).  Thus, companies are more likely to avoid
potential liability concerns from inappropriate handling of chemicals. 
Similar advantages are expected from the information developed as a
result of the final rule.

Data generated as a result of the final rule are also expected to be
sufficient for the Organization for Economic Cooperation and
Development’s (OECD) Screening Information Data Set (SIDS) program. 
Data meeting the requirements of the SIDS program can be used to develop
initial assessments of chemicals that are shared worldwide.  Because
this information is shared, companies may avoid duplicative efforts to
meet the requirements of other countries where they may also manufacture
and sell certain chemicals.  This could lead to cost savings for
companies that operate internationally. 

Corporate shareholders also benefit from the data developed in the rule.
 Basic microeconomic theory assumes that the primary objective of any
firm, whether privately or publicly held, is to maximize profits.  When
a firm is incorporated and its shares are traded on the stock market,
maximizing a firm’s profits is analogous to maximizing shareholder
value.  There are a number of ways in which the provision of information
regarding the production practices and output of a firm can affect
shareholder value.  First, production processes and output that result
in adverse consequences to human health and the environment may
eventually result in substantial liabilities to the firm.  Therefore,
any new information regarding potential threats to human health or the
environment may cause investors to re-evaluate the potential future
liabilities (and hence profitability) of a firm.  Second, when an
investor who prefers providing capital to environmentally benign
companies discovers that a firm’s use of toxics is inconsistent with
his or her preferences, he or she may move their investment funds toward
other more environmentally friendly firms.

There is a growing body of empirical literature evaluating the effects
of environmental information disclosures on firms and their
shareholders.  In an effort to estimate the economic cost of hazardous
waste mismanagement, Muoghalu and Rogers (1992) modeled the effect of
Superfund lawsuit announcements on firms’ stock values.  The authors
estimated that stock values dropped an average of $30.7 million when
news of a new Superfund lawsuit was made public.  Blacconiere and Patten
(1994) examined the effect of the 1984 Union Carbide chemical leak in
Bhopal, India, on other chemical firms’ stock prices.  They found that
firms in which chemical operations made up a larger portion of total
revenue experienced greater losses in stock value immediately following
the leak. 

Thus, some evidence suggests that investors respond to new information
regarding a firm’s potential environmental liabilities by reassessing
the value of the firm’s stock.  If test results are disseminated to
the public, shareholders can better consider the importance placed on
the firm’s manufacture or use of particular chemicals and may
encourage the firm to address shareholder concerns regarding chemical
production and use to avoid potential losses in the capital markets.  It
is clear that, while beneficial to shareholders, this information may
also cost the company if share values drop.  These costs would offset
some of the benefits to shareholders.

Government

The information developed in response to the final rule will benefit
society by reducing cost and improving the quality of government
decision and policy making.  EPA itself is a user of TSCA Section 4 test
results in three primary ways.  First, EPA can use the chemical-specific
information acquired through a test rule to help identify hazards of
concern and to screen and prioritize regulatory activities, including
identifying areas where regulatory intervention is not required. 
Second, EPA can serve its "clients" by providing these test results to
other agencies within the Federal government as well as to public
agencies at other levels of government.  Finally, EPA can use
information reporting rules as an alternative to other forms of
regulation.  Each of these uses is discussed below.

Support EPA Regulatory Activities.  When developing risk management
strategies, EPA must decide whether or not to regulate the use of a
chemical substance or mixture to protect society.  Basic toxicity data
are not available for many chemicals, but exposure controls have no
environmental value if these chemicals are not a concern.  The lack of
data on health and environmental effects can affect sound
decision-making by government and others (Wehmeier, 2001). Regulating
most certainly involves costs to both EPA (e.g., resources required to
develop, promulgate, and enforce a regulation) and to society at large
(e.g., foregone benefits derived from the use of the chemical substance,
resources diverted from other uses).  Although not regulating avoids
these costs, society will face a welfare loss if the chemical turns out
to harm human health and the environment.

Taylor et al (1993) considered the value of test information in
supporting decisions about the control of chemicals whose cancer potency
is untested or unknown.  While not specifically addressing the value of
the basic toxicity testing data required by this final rule, their
results suggest there is value to (cancer) testing information,
particularly at intermediate levels of anticipated human exposure to a
chemical.  The authors contend that information (from cancer testing)
may be less valuable where very high levels of exposure are expected
because no test can perfectly distinguish carcinogens from
noncarcinogens.  

In the EPA context, the probability that a chemical poses a risk depends
on the chemical’s toxicological properties, exposure pathways,
dose-response relationships, and other factors.  Testing rules help
resolve some of these uncertainties.  Thus, test information can help
EPA decision makers avoid over-regulating a relatively safe chemical and
under-regulating a risky chemical.

Provide Information to Other Government Agencies.  Under TSCA Section 4,
EPA has the authority to require firms to conduct tests of specific
chemicals to determine the potential risk posed by these substances. 
However, other governmental agencies, such as the FDA, CPSC, NIOSH, and
OSHA, share regulatory authority over chemical substances or products
containing them, or, in the case of NIOSH, compile summaries of
available information and recommend exposure limits.  Therefore, EPA
serves as a conduit for chemical hazard information between the chemical
producers and these other agencies.  In addition to providing chemical
test results to other Federal agencies, EPA may make this information
available to other interested parties such as State, local, and tribal
government agencies, which can use the data to inform their own decision
making.  

The toxicity data developed as a result of the test rule is also
expected to save other countries expense of collecting and interpreting
toxicological data.  At the United Nations Conference on Environment and
Development (UNCED) in 1992, delegates adopted Agenda 21 of Chapter 19,
which discusses chemical safety and includes program areas.  One program
area is international assessments of chemical risks, part of which
includes the assessment of chemical hazards.  The International Forum on
Chemical Safety (IFCS) was formed in 1994 and has developed priorities
for action in the implementation of Agenda 21.  These include
recognition of the activities sponsored by the OECD in the area of
chemical management and encouragement of the use of the OECD as a means
to carry out activities on chemical safety (IFCS, 1998).  Data developed
as a result of the final rule will be sufficient for the development of
initial assessments of chemicals under OECD’s SIDS program.  Thus,
other countries will benefit from the development of these data and can
use the data without having to independently develop the information. 
Such information exchange will result in cost savings to other countries
and will enable their governments to more effectively manage chemicals
for safety as adopted under Agenda 21.

Information Provision as an Alternative to Traditional Regulation. 
Publicly disclosing TSCA Section 4 chemical test results also provides
an alternative to traditional regulation.  As described above, the
provision of chemical pollution and hazard information can be used to,
among other things, empower individuals to take actions that they deem
appropriate in response to chemical risks.  In addition to fulfilling
democratic notions of "right-to-know" information, regulations provide a
low-cost avenue for pollution and hazard control when the regulatory
resources are scarce due to the large number of substances to be
controlled (Tietenberg, 1998).

Summary

Clearly numerous people use toxicological data.  It is expected that the
same people and organizations that currently use toxicological data will
use the data developed as a result of the final test rule.  

The basic toxicity information generated by this final rule will also
provide a better understanding of the effects related to many chemicals
that are produced in high volumes and to which there may be exposure to
humans and/or the environment.  Scientists can use this information to
further refine the understanding of the risks posed by these chemicals. 
Consumers of the chemicals will have a better understanding of the
hazards associated with the chemicals they are using and can, thus, make
more informed choices about the use of the chemical.  Companies benefit
because they can promote the safe use, manufacture, and disposal of
chemicals and meet Responsible Care Initiative® requirements.  EPA
itself can use the test results to guide future regulations.  Finally,
other regulatory authorities can use this information, in conjunction
with exposure-related information to identify and prioritize risks and
to target monitoring efforts. – OTHER IMPACT ANALYSES

Several statutes and Executive Orders pertain to the final test rule. 
This chapter presents statements discussing unfunded mandates,
environmental justice, children’s health, and paperwork burden.

Unfunded Mandates Statement

Federal agencies are required to assess the effects of Federal
regulations on State, local, or tribal governments, and on the private
sector under Title II of the Unfunded Mandates Reform Act of 1995
(UMRA).  In particular, UMRA requires that agencies prepare a written
statement to accompany any rulemaking that "includes any Federal mandate
that may result in the expenditure by State, local, and tribal
governments, in the aggregate, or to the private sector, of $100 million
or more (annually adjusted for inflation) in any one year" (Section
202(a)).  The written impact statement under Section 202 must include
(1) an identification of the statutory authority; (2) an assessment of
the benefits and costs of the rule; and (3) a description of the
agency’s consultation with State, local, and tribal government
officials during the development of the rule.

EPA estimates that the final rule will not cost the private or public
sectors $100 million or more in any one year.  As shown in Chapter 3,
the maximum total cost incurred by the private sector in complying with
the final rule and associated requirements triggered by the rule is
approximately $3.90 million (average cost scenario).  This includes
laboratory and administrative costs, as well as the cost of export
notifications under the average cost scenario.  Assuming a 7 percent
discount rate and a 15-year amortization period, the maximum annualized
compliance cost for industry is approximately $0.43 million per year
(average cost scenario).  Government cost, annualized using similar
assumptions, is estimated to equal $4,300 per year.

Furthermore, because the final rule is focused on manufacturers and
importers of chemicals, EPA does not believe that it imposes costs on
any non-Federal governmental entity, or on State, local, and tribal
governments.  Moreover, while it does not impose costs on State, local,
and tribal governments, the final rule can be of value to these
agencies.  As explained in Chapter 5, if EPA makes the test data
collected as a result of the final rule publicly available, then other
governmental agencies can use the data to inform their own regulations
and decision making.

Executive Order 12875, Enhancing the Intergovernmental Partnership (58
FR 58093, Oct. 28, 1993), requires Federal agencies to determine whether
certain regulatory actions create unfunded Federal mandates on State,
local, or tribal governments.  Executive Order 13084, Consultation and
Coordination with Indian Tribal Governments (63 FR 27655, May 19, 1998),
requires Federal agencies to determine whether certain regulatory
actions significantly or uniquely affect the communities of Indian
tribal governments.

EPA’s determination under UMRA and Executive Orders 12875 and 13084
that no State, local, or tribal governments would be affected by this
final rule is based on a search conducted in March 1999 of past
submissions to EPA.  This search demonstrated that State, local, or
tribal governments have never submitted letters of intent to test,
exemption applications, or export notifications to EPA.

Environmental Justice Statement

Executive Order 12898, Federal Actions to Address Environmental Justice
in Minority Populations and Low Income Populations, requires each agency
to address and identify “....disproportionally high and adverse human
health or environmental effects of its programs, policies, and
activities on minority and low-income populations....” (59FR 7629;
Section 1.1).

The final rule is directed at 19 chemicals listed on the final rule for
which basic toxicity information is currently unavailable even though
they are widely used in commerce.  All consumers of these chemical
products and all workers who come into contact with these chemicals
could potentially benefit if data regarding the chemicals’ health and
environmental effects were developed.  Therefore, it does not appear
that the costs and the benefits of the final rule will be
disproportionately distributed across different geographic regions or
among different categories of individuals.

Children’s Health Statement

Executive Order 13045, Protection of Children from Environmental Health
Risks and Safety Risks, requires that Federal agencies examine the
impacts of each regulatory action on children for any economically
significant regulation (as defined by Executive Order 12866) that the
agency has reason to believe may disproportionately affect children. 
Although the final  rule is not subject to the Executive Order, for the
reasons described in the rule, the information obtained by the testing
in this rule will be used to inform the Agency’s decision making
process regarding chemicals to which children may be disproportionately
exposed.  This information will also assist the Agency and others in
evaluating these chemical substances for potential health or safety risk
concerns, and will serve to further the Agency’s goal of identifying
and controlling human and environmental risks as well as provide greater
protection and knowledge to the public. 

Burden Hour Estimate

The Paperwork Reduction Act mandates that Federal agencies estimate the
record keeping and reporting burden of a rule.  In this context, the
term "burden" is interpreted as the total time, effort, or financial
resources expended by people to generate, maintain, retain, or disclose
or provide information to or for a Federal agency.  This includes the
time needed by regulated entities to review instructions and to develop,
acquire, install, and use technology and systems to collect, validate,
verify, and disclose information.  Time taken to adjust existing ways to
comply with any previously applicable instructions and requirements and
to train personnel to respond to the information collection task is also
included.  In this section, burden hours for both the industry
respondents and the government are estimated.

Industry Burden

In this report, total industry burden hours represent the sum of time
spent on reporting and on other administrative activities.  Industry
respondents will spend time on reporting activities associated with TSCA
Section 4 test rules:  preparing letters of intent and study plans,
preparing test results for submission to EPA, recording test results,
preparing laboratory reviews, preparing corporate reviews, conducting
associated clerical work for final report preparation, conducting record
keeping activities, and applying for exemptions.  Under this rule,
respondents are also asked to submit robust summaries on a voluntary
basis.  In addition to the reporting burden, respondents will spend
additional time on other administrative activities such as soliciting
laboratory bids, comparing standard laboratory fee schedules, developing
cost-sharing agreements, and preparing for and overseeing the testing
program.  The procedure for estimating the total industry burden
follows.

Reporting Burden.  As shown in Section 3.1.3 of this report, EPA
estimates that approximately 15 panels will submit letters of intent and
study plans resulting in 98 final reports.  EPA also assumes that it
will receive five exemption applications per panel, resulting in a total
of 75 requests pursuant to the final rule.  Additionally, it is
estimated that 10% of final test reports will be accompanied by a robust
summary of results.  It is estimated that it takes a respondent 40 hours
to prepare a letter of intent and study plan, 73 hours to write a final
report for a short-term study, 12 hours to prepare a robust summary, and
2 hours to prepare an exemption application.  The unit labor hours are
derived from the previous information collection requests and are
believed to reflect the burden that will be incurred for the final rule.
 The reporting burden estimates for this rule are detailed in Table 6-1.
 The total reporting burden generated by the rule is estimated to be
approximately 8,351 hours.

Table 6-1

Reporting Burden Estimate for the Final Rule

Item	Hours Per Item	Total Items	Total Hours

Letter of Intent and Study Plans	40	15	600

Final Reports	73	98	7,154

Robust Summaries	12	19	228

Exemption Requests	2	75	150

Total	8,132

Other Administrative Burden.  Respondents also spend time on other
administrative activities including development of cost-sharing
agreements, organization of a testing program, obtaining and reviewing
bids from laboratories that would conduct the testing, and preparing and
submitting samples to the laboratory for testing, and monitoring
testing.  EPA has calculated the costs and burdens of these activities
as 25% of the total laboratory testing costs discussed in Section 3.1.1.
 Based on this calculation, other administrative costs associated with
laboratory testing are estimated to cost approximately $503,000
($651,000) under the least (average) cost assumption.  These costs are
translated into burden estimates using an average labor cost of $51.27
per hour, which is based on a labor mix that is 20 percent managerial,
60 percent technical, and 20 percent clerical.  The estimated
administrative burden based on this approach is 9,819 (12,698) hours
under the least (average) cost assumption. 

Estimate Export Notification Burden.  As explained in Section 3.1.4, EPA
expects 25 export notifications to be filed for each chemical included
in the final rule.  This analysis assumes that the export notification
burden ranges from 0.5 hours to 1.5 hours per notice.  Thus, this report
assumes that export notification requires 0.5 hours per notice under the
least cost scenario and one hour per notice under the average cost
scenario.  Consequently, the export notification burden triggered by the
final rule is estimated to equal 238 hours (475 hours) under the least
(average) cost scenario.

Estimate Total Industry Burden.  The total industry burden is the sum of
the total administrative burden and the export notification burden. 
Total industry burden estimates are summarized in Table 6-2.  The total
industry burden is estimated to equal 18,189 hours (23,439 hours) in the
least (average) cost scenario.    The average burden per panel is
estimated to be 1,267 (1,496) hours in the least (average) cost
scenario. 

Table 6-2

Total Industry Burden Hour Estimate for the Final Rule

Activity	Least Cost Scenario

(Hours)	Average Cost Scenario

(Hours)

Reporting Activities	8,132	8,132

Other Administrative Activities	9,819	12,698

Total Administrative Burden	17,951	20,830

Export Notification Burden	238	475

Total Industry Burden	18,189	21,305

Burden Per Panel (15 panels)1	1,213	1,420

Notes

1 The per panel cost assumes that the export notification burden is
distributed evenly across all panels.

Government Burden

The government will also spend time processing, reviewing, and analyzing
the information that will be collected under the final test rule.  As
explained in Section 3.2, this work is assumed to be performed by a
GS-12, Step 1, FTE employee.

			

It is further assumed that 15 letters of intent and study plans, 98
final reports, 19 robust summaries, and 75 exemption requests will be
filed in response to this rule.  The estimated unit government burden
for processing letters of intent and study plans (3 hours), final
reports (5 hours), and robust summaries and exemption applications (1
hour each) is derived from the previous information collection requests.
 Table 6-3 presents the estimated government burden hours based on these
assumptions.  The total government burden is estimated to equal 629
hours.

Table 6-3

Estimated Government Burden for the Final Test Rule

Item	Hours Per Item	Total Items	Total Hours

Letter of Intent and Study Plans	3	15	45

Final Reports	5	98	490

Robust Summaries	1	19	19

Exemption Requests	1	75	75

Total	207	629

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APPENDIX A – WAGE RATE CALCULATIONS

This appendix describes the derivation of the fully loaded labor rates
and inflation factors used in calculating costs of labor, materials, and
other inputs. All cost estimates are presented in 2006 dollars.

A.1.	Derivation of Loaded Wage Rates

The fully loaded unit labor cost for technical, managerial 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 (Rice, 2002). 
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).  Table A.1 summarizes the crosswalk between old and new
occupational titles, and lists the SOC titles that correspond to the
managerial, technical, and clerical labor categories used in this
analysis. 

Table 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: Employer Costs for Employee Compensation: Changes to NAICS and
SOC, Table 2. ECEC Occupational Comparability between SOC and OCS (BLS,
2006a); and Weinstein, 2004.



A.1.1	Derivation of Unit Labor Rates for Technical, Managerial, and
Clerical Industry Employees

Wages and fringe benefit data for technical, managerial, and clerical
labor are from the Bureau of Labor Statistics (BLS) Employer Costs for
Employee Compensation (ECEC) data, for December 2006, for manufacturing
industries.

The cost of fringe benefits such as paid leave and insurance, specific
to each labor category, are taken from the same ECEC series (December
2006).  Fringe benefits as a percent of wages are calculated separately
for each labor category.  For example, for December 2006, the average
wage rate for professional/technical labor was $32.38 and the average
fringe benefit was $16.77.  Therefore, fringe benefits as a percent of
wages were $16.77/$32.38, or approximately 51.8 percent.

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 economic analyses for two major
rulemakings: Wage Rates for Economic Analyses of the Toxics Release
Inventory Program, June 10, 2002 (Rice, 2002), and the Revised Economic
Analysis for the Amended Inventory Update Rule: Final Report, August
2002 (EPAB, 2002).  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 2006 fully
loaded wage for professional/technical labor is $32.38 × (1+0.5179 +
0.17) = $54.65. 

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

A.1.2	Derivation of Unit Labor Rates for EPA Staff

Unit labor rates for EPA staff are calculated based on annual Federal
salaries for the Washington-Baltimore area published by the Office of
Personnel Management and effective January 2007 (OPM, 2007).  The
average salary for one Full Time Equivalent (FTE) staff is estimated as
the salary for a GS-13 Step 1 employee, which is $79,397 annually
without fringe benefits and overhead costs.  In order to derive the
fully loaded salary, EPA multiplied the annual salary by an assumed
loading factor of 1.6 to reflect Federal fringe benefits and overhead,
which results in a fully loaded annual salary of $127,035.  

The Agency loading factor of 1.6 is from an EPA guide entitled
Instructions for Preparing Information Collection Requests (ICRs) (OPPE,
1992, page 30, footnote 9).  The 60 percent assumption was labeled
“the benefits multiplication factor” in the EPA Guide, but has been
used in many EPA Office of Pollution Prevention and Toxics ICRs to
reflect both fringe benefits and overhead for Federal staff.  For
example, it was used in an August 2000 document supporting ICR No.
1139.06, with the following explanation:

“The annual costs per FTE are derived by multiplying the annual pay
rate by 1.6 (the benefits multiplication factor). The multiplication
factor used is recommended in EPA's Office of Policy, Planning, and
Evaluation's Instructions for Preparing Information Collection Requests
(ICRs) (June 1, 1992). An EPA internal phone call between Carol Rawie
(OPPT/EETD/RIB) and Carl Koch (OPPE/RMD/IMB) on May 3, 1994, indicated
that the 1.6 factor included not only benefits but also overhead.” 
(ICR No.1139.06)



Table A.2  

 (e)	(g)	(h)=(f)  (g)

Managerial	BLS ECEC, Private Manufacturing industries, “Mgt, Business,
and Financial”4	Dec-06	$39.77	$18.83	47.35%	17%	1.64	$65.36	1	$65.36

Professional/

Technical	BLS ECEC, Private Manufacturing industries, “Professional
and related“4	Dec-06	$32.38	$16.77	51.79%	17%	1.69	$54.65	1	$54.65

Clerical	BLS ECEC, Private Manufacturing industries, “Office and
Administrative Support”4	Dec-06	$16.07	$8.20	51.03%	17%	1.68	$27.00	1
$27.00

EPA staff FTE	Annual Federal staff cost: OPM
Washington-Baltimore-Northern Virginia, DC-MD-PA-VA-WV, area, GS-13 Step
1 pay rates, with 60% overhead.5	Jan-07	$ 79,397

 (annual)	--	[Included in 60% overhead]	60%	1.60	$127,035

(annual)	1	$127,035    (annual)

	38.17

(hourly)	--

$61.07

(hourly)

$60.86

(hourly)

Notes:

1Wage data are rounded to the closest dollar figure in this table.

2An overhead rate of 17% was used based on assumptions in Wage Rates for
Economic Analyses of the Toxics Release Inventory Program  (Rice, 2002),
and the Revised Economic Analysis for the Amended Inventory Update Rule:
Final Report  (EPAB, 2002).

3An inflation factor of “1” means wage data was not escalated to
reflect inflation. 

4 BLS, 2006b.

5The Federal salary is the unloaded Federal GS-13 Step 1 salary ($79,397
for 2007), from the Office of Personnel Management salary table for
Washington-Baltimore-Northern Virginia (OPM, 2007).  The 60%
fringes-and-overhead rate is from an EPA guide, Instructions for
Preparing Information Collection Requests (ICRs) (OPPE, 1992, page 30,
footnote 9).  Hourly rates are based on annual salary divided by 2080
hours.



APPENDIX B

COST DETAILSTable B-1

Industry Compliance and Government Costs, Least Cost Scenario	

CASRN	CHEMICAL NAME	Testing

Cost	Analytical Methodology Validation Cost	Total

Administrative

Cost1	Export Notification Cost	Total

Industry Compliance 

Cost2	Government 

Cost	Total 

Social 

Cost3

75-07-0	Acetaldehyde 	$89,960	$9,500	$31,459	$639	$131,558	$1,054
$132,612

78-11-5	Pentaerythritol tetranitrate	$25,877	$6,000	$13,331	$639	$45,847
$750	$46,597

84-65-1	9,10-Anthracenedione	$9,845	$6,000	$9,323	$639	$25,807	$750
$26,556

89-32-7	1H,3H-Benzo[1,2-c:4,5-c']difuran-1,3,5,7-tetrone 	$194,187
$16,500	$77,900	$639	$289,226	$2,880	$292,106

110-44-1	Sorbic acid	$9,845	$6,000	$9,323	$639	$25,807	$750	$26,556

118-82-1	Phenol, 4,4'-methylenebis[2,6-bis(1,1-dimethylethyl)-	$30,799
$6,000	$14,562	$639	$52,000	$750	$52,750

119-61-9	Methanone, diphenyl- 	$37,489	$6,000	$19,708	$639	$63,836
$1,054	$64,890

144-62-7	Ethanedioic acid 	$74,656	$9,500	$44,999	$639	$129,794	$2,575
$132,370

149-44-0	Methanesulfinic acid, hydroxy-, monosodium salt	$7,932	$3,500
$8,845	$639	$20,916	$750	$21,665

2524-04-1	Phosphorochloridothioic acid, O,O-diethyl ester 	$146,194
$16,500	$74,670	$639	$238,003	$3,488	$241,491

4719-04-4	1,3,5-Triazine-1,3,5(2H,4H,6H)-triethanol	$9,845	$6,000	$9,323
$639	$25,807	$750	$26,556

6381-77-7	Sodium erythorbate	$41,935	$6,000	$22,470	$639	$71,044	$1,358
$72,402

31138-65-5	D-gluco-Heptonic acid, monosodium salt, (2.xi.)- 	$205,359
$20,000	$87,640	$639	$313,638	$3,488	$317,126

66241-11-0	C.I. Leuco Sulphur Black 1 	$214,793	$20,000	$95,293	$639
$330,725	$3,793	$334,517

68187-76-8	Castor oil, sulfated, sodium salt 	$187,629	$20,000	$73,242
$639	$281,511	$2,575	$284,086

68187-84-8	Castor oil, oxidized 	$161,621	$16,500	$63,267	$639	$242,028
$2,271	$244,299

68479-98-1	Benzenediamine, ar,ar-diethyl-ar-methyl- 	$203,558	$16,500
$82,065	$639	$302,762	$2,880	$305,641

68527-02-6	Alkenes, C12-24, chloro 	$152,732	$15,500	$72,831	$639
$241,702	$3,793	$244,886

68647-60-9	Hydrocarbons, C>4 	$209,333	$20,000	$86,982	$639	$316,954
$3,184	$320,138

Total	$2,013,589	$226,000	$897,234	$12,141	$3,148,964	$38,281	$3,187,245

Notes:

1Total administrative cost included both reporting and non-reporting
administrative costs.

2Total industry compliance cost includes testing cost, analytical
methodology validation cost, administrative cost, and export
notification cost.

3Total social cost includes total industry compliance cost and
government cost.

Table B-1

Industry Compliance and Government Costs, Average Cost Scenario	

CASRN	CHEMICAL NAME	Testing

Cost	Analytical Methodology Validation Cost	Total

Administrative

Cost1	Export Notification Cost	Total

Industry Compliance 

Cost2	Government 

Cost	Total 

Social 

Cost3

75-07-0	Acetaldehyde 	$89,960	$9,500	$31,459	$1,322	$132,242	$1,054
$133,295

78-11-5	Pentaerythritol tetranitrate	$25,877	$6,000	$13,331	$1,322
$46,531	$750	$47,280

84-65-1	9,10-Anthracenedione	$9,845	$6,000	$9,323	$1,322	$26,490	$750
$27,239

89-32-7	1H,3H-Benzo[1,2-c:4,5-c']difuran-1,3,5,7-tetrone 	$264,096
$16,500	$95,377	$1,322	$377,295	$2,880	$380,175

110-44-1	Sorbic acid	$9,845	$6,000	$9,323	$1,322	$26,490	$750	$27,239

118-82-1	Phenol, 4,4'-methylenebis[2,6-bis(1,1-dimethylethyl)-	$30,799
$6,000	$14,562	$1,322	$52,683	$750	$53,433

119-61-9	Methanone, diphenyl- 	$41,538	$6,000	$20,720	$1,322	$69,580
$1,054	$70,634

144-62-7	Ethanedioic acid 	$90,186	$9,500	$48,882	$1,322	$149,890	$2,575
$152,465

149-44-0	Methanesulfinic acid, hydroxy-, monosodium salt	$7,932	$3,500
$8,845	$1,322	$21,599	$750	$22,348

2524-04-1	Phosphorochloridothioic acid, O,O-diethyl ester 	$161,724
$16,500	$78,553	$1,322	$258,099	$3,488	$261,587

4719-04-4	1,3,5-Triazine-1,3,5(2H,4H,6H)-triethanol	$9,845	$6,000	$9,323
$1,322	$26,490	$750	$27,239

6381-77-7	Sodium erythorbate	$45,983	$6,000	$23,483	$1,322	$76,788
$1,358	$78,146

31138-65-5	D-gluco-Heptonic acid, monosodium salt, (2.xi.)- 	$286,749
$20,000	$107,987	$1,322	$416,059	$3,488	$419,547

66241-11-0	C.I. Leuco Sulphur Black 1 	$296,183	$20,000	$115,641	$1,322
$433,146	$3,793	$436,939

68187-76-8	Castor oil, sulfated, sodium salt 	$264,971	$20,000	$92,578
$1,322	$378,872	$2,575	$381,447

68187-84-8	Castor oil, oxidized 	$235,767	$16,500	$81,804	$1,322
$335,393	$2,271	$337,664

68479-98-1	Benzenediamine, ar,ar-diethyl-ar-methyl- 	$273,655	$16,500
$99,589	$1,322	$391,067	$2,880	$393,946

68527-02-6	Alkenes, C12-24, chloro 	$168,262	$15,500	$76,714	$1,322
$261,798	$3,184	$264,982

68647-60-9	Hydrocarbons, C>4 	$290,724	$20,000	$107,329	$1,322	$419,376
$3,184	$422,560

Total	$2,603,941	$226,000	$1,044,823	$25,123	$3,899,886	$38,281
$3,938,167

Notes:

1Total administrative cost included both reporting and non-reporting
administrative costs.

2Total industry compliance cost includes testing cost, analytical
methodology validation cost, administrative cost, and export
notification cost.

3Total social cost includes total industry compliance cost and
government cost.

 

Table B-3

Annualized Social Costs1

CASRN	CHEMICAL NAME	Least Cost Scenario	Average Cost Scenario

3 years, 3%	3 years, 7%	3 years, 3%	3 years, 7%

75-07-0	Acetaldehyde 	$46,882	$50,532	$47,124	$50,792

78-11-5	Pentaerythritol tetranitrate	$16,473	$17,756	$16,715	$18,016

84-65-1	9,10-Anthracenedione	$9,388	$10,119	$9,630	$10,380

89-32-7	1H,3H-Benzo[1,2-c:4,5-c']difuran-1,3,5,7-tetrone 	$103,268
$111,307	$134,403	$144,866

110-44-1	Sorbic acid	$9,388	$10,119	$9,630	$10,380

118-82-1	Phenol, 4,4'-methylenebis[2,6-bis(1,1-dimethylethyl)-	$18,649
$20,100	$18,890	$20,361

119-61-9	Methanone, diphenyl- 	$22,941	$24,726	$24,971	$26,915

144-62-7	Ethanedioic acid 	$46,797	$50,440	$53,901	$58,097

149-44-0	Methanesulfinic acid, hydroxy-, monosodium salt	$7,659	$8,256
$7,901	$8,516

2524-04-1	Phosphorochloridothioic acid, O,O-diethyl ester 	$85,375
$92,021	$92,479	$99,678

4719-04-4	1,3,5-Triazine-1,3,5(2H,4H,6H)-triethanol	$9,388	$10,119
$9,630	$10,380

6381-77-7	Sodium erythorbate	$25,596	$27,589	$27,627	$29,778

31138-65-5	D-gluco-Heptonic acid, monosodium salt, (2.xi.)- 	$112,114
$120,841	$148,323	$159,869

66241-11-0	C.I. Leuco Sulphur Black 1 	$118,262	$127,468	$154,471
$166,496

68187-76-8	Castor oil, sulfated, sodium salt 	$100,433	$108,252	$134,853
$145,351

68187-84-8	Castor oil, oxidized 	$86,367	$93,090	$119,375	$128,667

68479-98-1	Benzenediamine, ar,ar-diethyl-ar-methyl- 	$108,053	$116,465
$139,272	$150,113

68527-02-6	Alkenes, C12-24, chloro 	$86,575	$93,314	$93,679	$100,972

68647-60-9	Hydrocarbons, C>4 	$113,179	$121,989	$149,388	$161,017

Total	$1,126,788	$1,214,505	$1,392,262	$1,500,645

Note:

1Total social cost includes total industry compliance cost and
government cost.  Total social costs are discounted over three years
because these costs are expected to occur over the few years during
which the actual testing occurs and EPA reviews studies.  Discount rates
of both three and seven percent are presented following OMB Guidance
contained in Circular A-4

Table B-4

Annualized Industry Compliance Costs1

CASRN	CHEMICAL NAME	Least Cost Scenario	Average Cost Scenario

15 years, 7%	7 years, 7%	15 years, 7%	7 years, 7%

75-07-0	Acetaldehyde 	$14,444	$24,411	$14,519	$24,538

78-11-5	Pentaerythritol tetranitrate	$5,034	$8,507	$5,109	$8,634

84-65-1	9,10-Anthracenedione	$2,833	$4,788	$2,908	$4,915

89-32-7	1H,3H-Benzo[1,2-c:4,5-c']difuran-1,3,5,7-tetrone 	$31,755
$53,667	$41,425	$70,008

110-44-1	Sorbic acid	$2,880	$4,788	$2,908	$4,915

118-82-1	Phenol, 4,4'-methylenebis[2,6-bis(1,1-dimethylethyl)-	$5,709
$9,649	$5,784	$9,776

119-61-9	Methanone, diphenyl- 	$7,009	$11,845	$7,639	$12,911

144-62-7	Ethanedioic acid 	$14,251	$24,084	$16,457	$27,813

149-44-0	Methanesulfinic acid, hydroxy-, monosodium salt	$2,296	$3,881
$2,371	$4,008

2524-04-1	Phosphorochloridothioic acid, O,O-diethyl ester 	$26,131
$44,162	$28,338	$47,891

4719-04-4	1,3,5-Triazine-1,3,5(2H,4H,6H)-triethanol	$2,833	$4,788	$2,908
$4,915

6381-77-7	Sodium erythorbate	$7,800	$13,183	$8,431	$14,248

31138-65-5	D-gluco-Heptonic acid, monosodium salt, (2.xi.)- 	$34,436
$58,196	$45,681	$77,201

66241-11-0	C.I. Leuco Sulphur Black 1 	$36,312	$61,367	$47,557	$80,372

68187-76-8	Castor oil, sulfated, sodium salt 	$30,908	$52,235	$41,598
$70,301

68187-84-8	Castor oil, oxidized 	$26,573	$44,909	$36,824	$62,233

68479-98-1	Benzenediamine, ar,ar-diethyl-ar-methyl- 	$33,242	$56,178
$42,937	$72,564

68527-02-6	Alkenes, C12-24, chloro 	$26,538	$44,849	$28,744	$48,577

68647-60-9	Hydrocarbons, C>4 	$34,800	$58,812	$46,045	$77,816

Total	$345,739	$584,300	$428,187	$723,636

Note:

1Total industry compliance cost includes testing cost, analytical
methodology validation cost, administrative cost, and export
notification cost.  Total industry compliance costs are annualized at a
seven percent discount rate, which reflects the opportunity cost of
capital, and over fifteen years, which represents the life of the
chemical.  Results are also presented using a discounting timeline of
seven years to test the sensitivity of results to a shorter chemical
lifetime as some chemicals included in the final rule may have a
lifetime that is less than fifteen years.

  The CAS is a division of the American Chemical Society, and assigns
unique CASRNs to chemical substances.  All CASRNs are compiled in the
CAS Registry, the largest and most current database of its kind.  Each
CASRN designates only one chemical substance, and is a link to
significant information about the chemical.  For more information, see
the American Chemical Society’s Chemical Abstracts Service at  
HYPERLINK "http://www.cas.org"  http://www.cas.org .  

  EPA identified synonyms for each chemical by searching the National
Institute of Standards and Technology (NIST) WebBook and the National
Institutes of Health ChemIDplus Lite by CAS number.

  Since 1986, reporting under the IUR has taken place at four-year
intervals; the data presented in this chapter were from reporting in
2002 and 2006, and represent the most recent data available.

  According to the IUR rule, for the 2006 reporting cycle, entities that
produced or imported chemicals listed in the TSCA Chemical Inventory
with a site-specific production volume of 10,000 pounds or more were
required to submit reports of their production or importation volumes to
EPA.

 EPA could not locate the global ultimate parent company for two
companies that submitted production data for the 2006 IUR rule.

  Dun and Bradstreet is a New York-based company that provides business
information through a global commercial database.  It assigns DUNS
numbers to identify businesses around the world.  These numbers are
required for many US federal government transactions and therefore are
widely used and assigned.  DUNS numbers are also frequently used in
corporate research.  Database entries provide legal and trade names,
physical and mailing addresses, geographical descriptions, product and
industry descriptors, sales and number of employees for three years and
associated growth rates, as well as up to forty vital statistics about
each organization. 

  The reporting year for the most current data in the Dun and Bradstreet
database varied across companies.

Individual chemical prices were not available from the USITC report for
the chemical prices derived using the report.

 These six endpoints are: (1) acute toxicity; (2) repeat dose toxicity;
(3) developmental and reproductive toxicity; (4) genetic toxicity (gene
mutations and chromosomal aberrations); (5) ecotoxicity (studies in
fish, Daphnia, and algae); and (6) environmental fate (including
physical/chemical properties).

  Section 12(d) of the National Technology Transfer and Advancement Act
of 1995 (NTTAA), Public Law 104-113, section 12(d) 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, and business
practices) that are developed or adopted by voluntary consensus
standards bodies, such as ASTM International, formerly the American
Society for Testing and Materials (ASTM).  Another voluntary consensus
standard body is the International Organization for Standardization
(ISO).

  EPA recommends, but does not require, that log KOW be quantitatively
estimated prior to initiating the n-Octanol/Water Partition Coefficient
(log 10 basis) or log KOW test requirement.  One method, among many
similar methods, for estimating log KOW is described in the article
entitled Atom/Fragment Contribution Method for Estimating Octanol-Water
Partition Coefficients) by W.M. Meylan and P.H. Howard in the Journal of
Pharmaceutical Sciences. 84(1): 83-92. January 1992.  In addition, EPA
recommends, but does not require, that water solubility be
quantitatively estimated prior to initiating the water solubility test
requirement.  One method, among many similar methods, for estimating
water solubility is described in the article entitled Improved Method
for Estimating Water Solubility From Octanol/Water Partition Coefficient
by W.M. Meylan, P.H. Howard, and R.S. Boethling in Environmental
Toxicology and Chemistry. 15(2): 100-106. 1996.  

 While some of the chemicals may require longer term aquatic testing
based on chemical characteristics, EPA could not be certain of the
number.  Therefore, EPA did not include an estimate for progress
reports.

 As noted above, one final report is assumed to be required for each
test conducted for each chemical. Table 3-1 summarizes testing
requirements for each chemical included in the final rule.

 EPA, 2007.  Administrative Costs Associated with TSCA Test Rules and
Voluntary Chemical Testing; Industry Response to Interview Questions,
January 2007.

  The unloaded Federal GS-13 Step 1 salary ($79,397 for 2007), from the
Office of Personnel Management salary table for
Washington-Baltimore-Northern Virginia (OPM, 2007).  The 60%
fringes-and-overhead rate is from an EPA guide, Instructions for
Preparing Information Collection Requests (ICRs) (OPPE, 1992, page 30,
footnote 9).  

  The use of net present value calculations to evaluate the
profitability of an investment or a business is discussed in many
financial management texts, including R. Brealey and S. Myers (1996), L.
Schall and C. Haley (1991), and J. Van Horne and J.M. Wachowicz (1997).

   EPA uses a one percent threshold based on an EPA study entitled
“Review of Economic Impact Methodology Applied to TSCA Section 4 Test
Rules”.  This study found that chemical-specific cost-to-sales ratios
for voluntary testing initiatives were less than one percent.  While the
study did not conclude that a cost-to-sales ratio greater than one
percent would lead to adverse financial impacts, EPA uses this estimate
as a reasonable threshold to determine whether there is a need to
further evaluate impacts on a firm.  Charles D’Ruiz and Barrett J.
Riordan, “Review of Economic Impact Methodology Applied to TSCA
Section 4 Test Rules” Economics & Technology Division, Office of Toxic
Substances, U.S. Environmental Protection Agency, September 23, 1998.

 In comparison, the specialty chemicals market was worth $116 billion,
the agricultural chemical market was worth $27 billion, the
pharmaceuticals market was worth $160 billion, and the consumer products
market was worth $56 billion. American Chemistry Council, Guide to the
Business of Chemistry, 2006.

 American Chemistry Council, Guide to the Business of Chemistry, 2006.

 Information in Table 4-5 is presented at the global parent company
level.

 Dun and Bradstreet is a New York-based company that provides business
information through a global commercial database.  It assigns DUNS
numbers to identify businesses around the world.  These numbers are
required for many US federal government transactions and therefore are
widely used and assigned.  DUNS numbers are also frequently used in
corporate research.  Database entries provide legal and trade names,
physical and mailing addresses, geographical descriptions, product and
industry descriptors, sales and number of employees for three years and
associated growth rates, as well as up to forty vital statistics about
each organization.  While the reporting year varied by company, company
sales and employment data were primarily retrieved from the database in
December 2007.

 Annualized over 15 years using a 7 percent discount rate.  Note that
these figures include only the industry compliance cost and not the cost
to the government.

  See Section 1.1 of this report for a discussion on market failure and
the rationale for government regulation in this context.

 As described in Section 4.1.1, compliance costs are annualized using a
seven percent discount rate to reflect the opportunity cost of capital,
and over a fifteen-year period to reflect the life of the chemical. 

 The per panel cost assumes that the export notification burden is
distributed evenly across all panels.

  While hourly labor rates in this analysis may be lower than hourly
rates for the same labor categories in earlier economic analyses, EPA
does not mean to suggest that actual hourly rates have declined. 
Rather, the apparent decline is due to three changes in the methodology
employed to calculate hourly costs for the same labor categories.  These
three changes are: (1) the 17 percent overhead loading factor is applied
only to wages where previously it was applied to wages-plus-fringe
benefits, which reduces calculated overhead; (2) wage rates presented in
this economic analysis are based on the most recent data available where
previously analyses inflated older data to current dollars; and (3)
private industry fringe benefits in the current analysis are based on
actual fringe benefits as reported in the most recent BLS data where
previously fringe benefits were based on an assumed percent of wages. 

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,n, unpublished BLS data (BLS, 2006a).  Past economic analyses used ECEC
data for “All Goods Producing” sectors (manufacturing, mining, and
construction).  However, the manufacturing sector data seems more
relevant because the final rule will primarily affect the chemical
industry.

		 Past economic analyses have used the term “technical” labor. Here
the category is called “professional/technical” labor, to make clear
how it relates to BLS categories.  In 2004, BLS changed from the
Occupational Classification System, OCS, to the Standard Occupational
Classification system, SOC.  In the process, the “Professional
specialty and technical” category became the “Professional and
related” category.  However, the coverage of the old and new
occupational groups is approximately the same. See the BLS article,
Comparing Current and Former Industry and Occupation ECEC Series
(Weinstein, 2004).

 The change was used in the 2003 PMN SNUR economic analysis (EPAB,
2003).  In some earlier reports, the 17% had been applied to
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䅐䕇ᐠⴲᔱ഍卅ㄭ഍卅㌭഍഍഍倓䝁⁅ᔠ䔍⁓-഍ግ倠
䝁⁅ㄔ㌭ക഍഍ግ䅐䕇†ക卅ⴠഀ഍഍഍倓䝁⁅ᔠ䔍⁓
-഍ግ䅐䕇†㈔ക഍഍഍഍–䅐䕇ᐠⴲᔸ഍഍഍഍഍–
䅐䕇ᐠⴲᔹ഍഍഍–䅐䕇ᐠⴲ〱കግ倠䝁⁅㐔ㄭᔲ഍഍
഍倓䝁⁅ᔠ䔍⁓-

  PAGE  6-7 

  PAGE  6-5 

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