Document ID: EPA-HQ-TRI-2005-0073-4991
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2006-12-22T05:00Z

SEQ CHAPTER \h \r 1 CHAPTER TWO

METHODOLOGY

	

	For the Phase 2 burden reduction rule, EPA must estimate the burden and
cost savings, as well as other impacts associated with the options
adopted.  This chapter presents the methodologies used to estimate: 1)
the unit time and cost savings experienced by TRI reporters as a result
of the rule, and 2) the number of facilities and forms that would be
able to take advantage of each option separately and combined.  

	As explained in more detail in Chapter One, EPA is adopting two options
that it believes may reduce reporting burden for TRI facilities.  The
New Eligibility for Form A: PBT Chemicals Option allows a facility
reporting on PBT chemicals (except for dioxin and dioxin-like compounds)
with no on- or off-site disposal or other releases (as reportable in
Sections 5 and 6, Section 8.1 and Section 8.8) to use Form A, provided
they meet the 1,000,000 pound alternate reporting threshold and have no
more than 500 pounds in Sections 8.2 through 8.8.  The Expanded
Eligibility for Form A: Non-PBT Chemicals Option extends the existing
Form A eligibility criteria and allows a facility reporting on Non-PBT
chemicals with less than or equal to 2,000 pounds of on- and off-site
disposal or other releases (as reportable in Sections 5 and 6, Section
8.1 and Section 8.8) and with an annual reportable amount (Sections 8.1
– 8.8) of 5,000 lbs or less to use Form A, provided the facility meets
the 1,000,000 pound alternate reporting threshold.

	

	Some facilities may qualify for both options, however, for different
chemicals.  Although these options could be promulgated separately, EPA
is combining the options in this rule.   

	Industry burden and cost savings were calculated using the following
four-step procedure:

	Step 1:	Estimate the typical total number of hours of managerial,
technical, and clerical labor needed to complete each task for each type
of form.

	Step 2:	Calculate the hours saved by each labor category for each task
due to filing a less burdensome form.  Based on typical labor rates,
calculate the average unit savings in the first and subsequent years of
compliance.

	Step 3:	Estimate the universe of affected forms and facilities that
would qualify for each of the burden reduction options.

	Step 4:	For each task, multiply the unit savings by the number of
facilities and/or forms, and then sum the results to calculate the total
industry savings.

			

2.1	 UNIT BURDEN SAVINGS ESTIMATES

	

	The rule will result in burden savings by reducing reporting
requirements for forms that meet certain criteria.  The tasks associated
with TRI reporting under the rule include:

	Report Completion: Facilities must gather data and perform
calculations to provide the information required on Form R or Form A.

	Mailing and Recordkeeping: Facilities must maintain recordkeeping
systems and mail their reports to EPA and the State.

	To estimate the total burden and cost savings, EPA first calculated the
unit burden savings as the difference between the facility’s current
activity (i.e., filing a Form R) and the post-regulation activity (i.e.,
filing a Form A).  Unit burden and cost savings are then multiplied by
the estimated number of forms newly eligible for Form A reporting under
each option to obtain total burden and cost savings.  Total burden and
cost savings are presented in Chapter Three.

Form R and Form A Unit Burden Estimates 

	The current burden estimates for form completion estimates, which are
approved by the Office of Management and Budget (OMB), reflect the total
time required by facilities to complete either a Form R or a Form A. 
The OMB-approved reporting burden estimates are presented in Table 2-1. 
The estimate of total burden savings due to the rule is developed by
combining the estimated unit burden savings under each option with the
number of potentially affected forms under each option. Unit burden
savings are calculated by subtracting the unit reporting burden
associated with filling out a Form A from the unit reporting burden
associated with filing a Form R.  The unit reporting burden estimates
used in this analysis have been adjusted to reflect burden savings
associated with Phase 1.  In the analysis, Form A calculations and
report completion burden is assumed to be 17.5 hours for non-PBT
chemicals and 32.9 hours for PBT chemicals.  The 17.5 hours is based on
the current OMB approved burden estimate.  Since there is no approved
estimate for using Form A for PBT chemicals, the 17.5 hours was adjusted
proportionately to the difference between the OMB approved burden
estimates for Form R calculations and report completion for non-PBT
chemicals and PBT chemicals (i.e., 24.6 hours and 46.3 hours,
respectively).  This resulted in an adjustment of the current 17.5 hours
for Form A for non-PBT chemicals to 32.9 hours for Form A for PBT
chemicals.  

2.1.2	Hourly Labor Rate Estimate 

	Each cost savings estimate has two components: the unit time savings
estimates (i.e., number of labor hours saved by each type of personnel),
and the hourly wage rate of each level of personnel.  There are three
categories of hourly wage rates: managerial, technical, and clerical. 
EPA developed updated 2006 hourly wage rates, including fringe benefits
and overhead, for each of these categories.  Average wage data for these
categories were taken from the Employer Costs for Employee Compensation
(ECEC) report by the Bureau of Labor Statistics (BLS) for all
goods-producing, private industries.3 The managerial labor rate is
defined as the average hourly wages and salaries for the “Management,
business, and financial” occupational category.  The technical labor
rate is defined as the average hourly wages and salaries for the
“Professional and related” occupational category.  The clerical
labor rate is defined as the average hourly wages and salaries for the
“Office and administrative support” occupational category.

The additional cost of benefits, such as paid leave and insurance, is
also derived from the ECEC data.  Loading factors for benefits are
calculated separately for managerial, technical, and clerical labor by
dividing the benefits percentage of total compensation by the wage
percentage of total compensation (e.g., 0.29/0.71 = 0.4085).

An additional loading factor of 17 percent is applied for general
overhead.  This loading factor is added to the benefits loading factor,
then applied to the base wage (e.g., $33.61/hr x [1 + (0.4085 + 0.17)] =
$53.05/hr).  The total loading for indirect costs is within the range of
50 to 70 percent suggested in EPA guidance.4  The results of this method
are shown in Table 2-2.

TABLE 2-1

 OMB-APPROVED FORM R AND FORM A UNIT BURDEN ESTIMATES

Activity	Unit Time Estimates (hours)

(per form)	Total Time

	Managerial	Technical	Clerical

	Form R

Subsequent Years 

Calculations and Report Completion - PBT Chemicals	14.1	30.4	1.9	46.3

Calculations and Report Completion - Non-PBT Chemicals	7.5	16.1	1.0	24.6

Recordkeeping/Submission	0.0	4.0	1.0	5.0

Form A

Subsequent Years

Calculations and Report Completion -PBT Chemicals	11.3	20.2	1.4	32.9

Calculations and Report Completion – Non-PBT Chemicals	6.0	10.7	0.8
17.5

Recordkeeping/Submission 	0.0	2.4	0.6	3.0

Note: Due to rounding, the total may not equal the sum of the row.

Sources: 2006 TRI ICR - "Toxic Chemical Release Reporting"; October,
2005

2006 TRI ICR - "Toxic Chemical Release Inventory Alternate Threshold for
Low Annual Reportable Amounts"; August, 2005

	

TABLE 2-2

DERIVATION OF LOADED HOURLY RATES FOR TRI FORM COMPLETION

Labor Category	2006

Average Wages	2006

Benefits and Overhead

Loading Factor	2006

Loaded 

Hourly Rate

Managerial	$35.15 	1.61 	$56.48 

Technical	$30.37 	1.58 	$48.12 

Clerical	$15.17 	1.62 	$24.50 

Source: Employer Costs for Employee Compensation (ECEC) report by the
Bureau of Labor Statistics (BLS).

	

	Total cost savings are presented in Chapter Three.

2.1.3	Summary of Unit Burden Savings 

	As discussed in Section 2.1, the unit burden savings are calculated as
the difference between the facility’s current activity (i.e., filing a
Form R) and the post-regulation activity (i.e., filing a Form A). 
Because facilities are already familiar with Form A, there will be
little difference between the average burden they incur in the first
year of the rule and all subsequent years of the rule. Furthermore,
since these facilities are already reporting to TRI, they are not
expected to incur any significant rule familiarization burden. The unit
burden savings in the two options differs because the Form R and Form A
form completion estimates are higher for PBT chemicals than Non-PBT
chemicals. Table 2-3 summarizes the unit burden savings associated with
the two options. 

TABLE 2-3

UNIT BURDEN AND COST SAVINGS FOR ACTIVITIES PERFORMED BY INDUSTRY

Activity	Unit Time Estimates (hours)

(per form)	Unit Cost

(2006 Dollars)

	Managerial	Technical	Clerical	Total

	Average Annual Burden and Cost Savings in the First and Subsequent
Years

Form Completion –PBT Chemicals	2.8	10.2	0.4	13.5	$661.08 

Form Completion – Non-PBT Chemicals	1.5	5.4	0.2	7.1	$351.08 

Recordkeeping/Mailing 	0.0	1.6	0.4	2.0	$86.79 

Note:  Because facilities are already familiar with Form A, there is no
rule familiarization cost.  

Due to rounding, the total may not equal the sum of the row.

2.2	ESTIMATES OF FORMS AND FACILITIES BY OPTION

	Because the rule primarily affects facilities that are already
reporting to TRI, it was possible to query the most current frozen TRI
data (RY2004 at the time of this analysis) to determine the number of
forms and facilities meeting the eligibility criteria for the two
options.   For the New Eligibility for Form A: PBT Chemicals Option, EPA
estimated that 2,360 forms filed by 1,796 facilities would qualify for
this option.  For the Expanded Eligibility for Form A: Non- PBT
Chemicals Option, EPA estimated that 9,501 forms filed by 5,317
facilities would qualify for this option. 

	Table 2-4 summarizes the number of affected facilities and forms when
the options are analyzed separately and combined.  

TABLE 2-4: UNIVERSE OF AFFECTED FACILITIES AND FORMS 

BY OPTION

	New Eligibility for Form A: PBT Chemicals Option	Expanded Eligibility
for Form A: Non-PBT Chemicals Optiona	Combined PBT and Non-PBT Options

Total Number of Affected Facilities	1,796	5,317	6,670

Total Number of Affected Forms	2,360	9,501	11,861

a The number of affected non-PBT forms in this analysis does not include
the non-PBT Form Rs that are currently likely eligible for Form A based
on an ARA (previously defined as the sum of Sections 8.1-8.7) of less
than or equal to 500 pounds.

Note: In this analysis, all TRI data are summed at the facility-chemical
level. 

Source: Frozen RY2004 TRI data.

Total burden savings are presented in Chapter Three.

2.3	ESTIMATION OF IMPACTS OF THE RULE ON REPORTING

	To evaluate the impacts of the rule on reporting, EPA looked at the
total release pounds, total production related waste pounds, total
non-production related waste pounds and total combined production and
non-production related waste pounds on a chemical by chemical basis that
would not be reported if Form As were substituted for Form Rs for
chemical submissions.  The EPA also conducted an analysis of zip codes
affected by new and expanded Form A eligibility. 

3  Employer Costs for Employee Compensation, Private industry workers,
Goods-producing industries, white-collar occupations, as published by
the U.S. Department of Labor, Bureau of Labor Statistics. The March 2006
values for these series are listed in Table 11 of the Employer Costs for
Employee Compensation Summary, released June 21, 2006.

4  U.S. Environmental Protection Agency, EPA Air Pollution Control Cost
Manual, Sixth Edition, EPA-452-02-001, January 2002, pg. 2-34.

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