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ECONOMIC IMPACT ANALYSIS AND SMALL ENTITY IMPACT ANALYSIS OF THE TSCA SECTION 4( a) TEST RULE FOR 34 CHEMICALS TARGETED FOR IN VITRO DERMAL ABSORPTION RATE TESTING C 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 Ave., N. W. ( 7406) Washington, D. C. 20460 February 3, 2004 CONTRIBUTORS The analyst responsible for completion of this report was Wendy Hoffman. Analytical and draft preparation support was provided by Eastern Research Group, Inc. of Lexington, Massachusetts and Abt Associates Inc. of Cambridge, Massachusetts under EPA Contract Nos. 68 D2 0175, 68 W6 0022, and 68 W 99B85. i TABLE OF CONTENTS Page 1.0 INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2.0 DESCRIPTION OF THE RULE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2.1 Identification of Chemicals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2.2 Relationship of the Rule to Export Notification Requirements . . . . . . . . . 3 2.3 Identification and Characteristics of Entities Covered by This Analysis . . 3 2.3.1 Number of Manufacturers/ Importers Identified and Covered By This Analysis, and Their Revenues . . . . . . . . . . . . . . . . . . . . . 4 3.0 ECONOMIC IMPACT ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 3.1 Analytical Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 3.1.1 Identify Testing Procedures and Estimate Costs . . . . . . . . . . . . . . 5 3.1.2 Determine Chemical Prices and Calculate Economic Impacts . . . . 7 3.1.3 Assess the Magnitude of the Economic Impacts . . . . . . . . . . . . . 10 3.2 Estimate the Burden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 3.2.1 Export Notification Burden and Cost . . . . . . . . . . . . . . . . . . . . . 11 4.0 SMALL ENTITY ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 4.1 Analytical Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 4.1.1 Determine the Appropriate Small Entity Definition . . . . . . . . . . 15 4.1.2 Determine the Number of Small Businesses Affected . . . . . . . . . 15 4.1.3 Calculate the Magnitude of the Economic Impact . . . . . . . . . . . 18 4.1.4 Evaluate the Economic Impacts on Small Entities at the Level of 1.0 Percent or Greater . . . . . . . . . . . . . . . . . . . . . . . . . 21 4.2 Summary of Small Entity Impact Analysis . . . . . . . . . . . . . . . . . . . . . . . 22 4.3 Impacts on Small Exporters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 5.0 UNFUNDED MANDATES REFORM ACT AND EXECUTIVE ORDERS 12875 AND 13084. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 6.0 ENVIRONMENTAL JUSTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 7.0 CHILDREN'S HEALTH AND EXECUTIVE ORDER 13045 . . . . . . . . . . . . . 25 8.0 CONCLUSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 9.0 REFERENCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 ii List of Tables Page Table 1 Chemicals Designated for In Vitro Dermal Absorption Rate Testing by TSCA § 4( a) Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Table 2 Laboratory Costs for In Vitro Dermal Absorption Rate Testing . . . . . . . . . . . . . . . 6 Table 3 Economic Impacts of Testing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Table 4 Calculation of Average Hourly Administrative Cost . . . . . . . . . . . . . . . . . . . . . . . 12 Table 5 Export Notification Costs under TSCA Section 12( b) . . . . . . . . . . . . . . . . . . . . . 13 Table 6 Estimated Number of Small Businesses Based on SIC and NAICS Size Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Table 7 Testing and Administrative Cost Share Assumptions . . . . . . . . . . . . . . . . . . . . . . 21 Table 8 Summary of Results from Small Entity Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . 23 1 1.0 INTRODUCTION This document presents EPA's analysis of the economic impacts ( including small entity impacts) of the final test rule for 34 chemicals targeted for in vitro dermal absorption rate testing. The analysis was undertaken to address the requirements of Executive Order 12866, and the Regulatory Flexibility Act ( RFA), as amended by the Small Business Regulatory Enforcement Fairness Act ( SBREFA). E. O. 12866 generally requires regulatory agencies to prepare an analysis of the economic impacts of proposed and final regulations, while the RFA requires agencies to consider the economic impacts of their actions on small entities including small businesses, small organizations, and small governmental units. The analysis also considers the impacts of the rule on unfunded mandates and environmental justice.

This report does not contain TSCA ( Toxic Substances Control Act) Confidential Business Information ( CBI), although TSCA CBI information sources were used in its preparation.

2.0 DESCRIPTION OF THE RULE In its 31st, 32nd, and 35th reports, the Interagency Testing Committee ( ITC) designated 83 chemicals of interest to the Occupational Safety and Health Administration ( OSHA) for in vitro dermal absorption rate testing under TSCA section 4( e) ( 59 FR 67596; December 29, 1994), out of 658 chemicals nominated by OSHA. The ITC subsequently withdrew its nomination of 3 chemicals in its 36th report upon finding that sufficient data had been obtained under TSCA sections 8( a) and 8( d) rules that had been promulgated for the 83 chemicals. A Federal Register notice was issued on April 3, 1996 inviting interested parties to submit written proposals for enforceable consent agreements ( ECAs) to conduct the testing ( 61 FR 14773). EPA received a proposal for one chemical which resulted in the development of an ECA, and an acceptable study was submitted for another. After reviewing additional information on production and worker exposure, EPA proceeded to develop a TSCA section 4( a) test rule for 38 chemicals for which data showing substantial production volumes and substantial worker exposure have been gathered. In the process of finalizing the rule, EPA reviewed the most recent production data available from the 2002 Inventory Update Rule ( USEPA 202a). The Agency determined that four of the chemicals are no longer produced in substantial volume and dropped those four chemicals from the rule. Thus, the final rule covers a total of 34 chemicals.

Under TSCA section 4( a), EPA is authorized to require by rule that manufacturers and processors of chemical substances conduct testing to determine the effect of these substances on human health and the environment. A test rule must be promulgated for any chemical substance that the Administrator finds: ( a) may present an unreasonable risk of injury to health or the environment; or ( b) is or will be produced in substantial quantities and may either enter the environment in substantial quantities or result in significant or substantial human exposure to the chemical. Once a finding under ( a) or ( b) above is made, EPA may then require health effects or environmental testing that is deemed necessary to address unanswered questions about the effects of the chemical substance that pertain to the issue of unreasonable risk of injury to health or the environment. 2 As detailed below in Section 2.3, this rule would apply to manufacturers ( including importers) of each subject chemical. The final rule would trigger notification requirements under TSCA section 12( b) applicable to exporters, as explained in Section 2.2.

2.1 Identification of Chemicals The specific chemicals addressed by this rule are shown in Table 1 along with their Chemical Abstracts Service ( CAS) numbers. All chemicals listed in Table 1 have production volumes equaling or exceeding one million pounds per year based on 2002 data submitted by producers to the TSCA Chemical Update System ( CUS).

Table 1. Chemicals Designated for In Vitro Dermal Absorption Rate Testing by TSCA § 4( a) Rule No. CAS No. Chemical Name 1 75 05 8 ACETONITRILE 2 75 15 0 CARBON DISULFIDE 3 75 35 4 VINYLIDENE CHLORIDE 4 77 73 6 DICYCLOPENTADIENE 5 77 78 1 DIMETHYL SULFATE 6 78 59 1 ISOPHORONE 7 78 87 5 PROPYLENE DICHLORIDE 8 79 20 9 METHYL ACETATE 9 79 46 9 2 NITROPROPANE 10 91 20 3 NAPHTHALENE 11 92 52 4 BIPHENYL 12 98 29 3 TERT BUTYLCATECHOL 13 100 00 5 P NITROCHLOROBENZENE 14 100 01 6 P NITROANILINE,

15 100 44 7 BENZYL CHLORIDE 16 106 42 3 P XYLENE 17 106 46 7 P DICHLOROBENZENE 18 107 06 2 ETHYLENE DICHLORIDE 19 107 31 3 METHYL FORMATE 20 108 03 2 1 NITROPROPANE 21 108 90 7 CHLOROBENZENE 22 108 93 0 CYCLOHEXANOL 23 109 66 0 PENTANE ( cont.) 3 Table 1. ( cont.) Chemicals Designated for In Vitro Dermal Absorption Rate Testing by TSCA § 4( a) Rule No. CAS No. Chemical Name 24 109 99 9 TETRAHYDROFURAN 25 110 12 3 METHYL ISOAMYL KETONE 26 111 84 2 NONANE 27 120 80 9 CATECHOL 28 122 39 4 DIPHENYLAMINE 29 123 42 2 DIACETONE ALCOHOL 30 127 19 5 DIMETHYL ACETAMIDE 31 142 82 5 N HEPTANE 32 150 76 5 P METHOXYPHENOL 33 25013 15 4 VINYL TOLUENE 34 34590 94 8 DIPROPYLENE GLYCOL METHYL ETHER 2.2 Relationship of the Rule to Export Notification Requirements According to TSCA section 12( b) and 40 CFR part 707, subpart D, all exporters of chemicals for which the submission of data is required under TSCA section 4( a) must give EPA a one time notification for each country to which a subject chemical is shipped. Thus, in addition to analyzing the potential impacts of the rule on small manufacturers and importers, the small entity portion of this analysis ( Section 4) also considers the potential impact on small exporters.

2.3 Identification and Characteristics of Entities Covered by This Analysis This analysis attempts to reflect as closely as possible the entities covered by the rule. The analysis generally includes manufacturers initially covered by the rule, which are called " covered entities" in this analysis. The analysis excludes processors of the subject chemicals, manufacturers/ importers of less than 500 kg of a subject chemical, entities that manufacture or import only small quantities for R& D purposes, and in general, other manufacturers not initially covered by the rule. For a complete description of who is a covered entity, see Unit V. E., " Would I Be Required to Test Under This Rule," and subsections b through e of the regulatory text.

To identify producers of the 34 chemicals, EPA performed a search of the most recent EPA CUS database. Manufacturers or importers of chemicals listed in the TSCA CUS database are required to provide quadrennial reports to EPA on their production or import volumes. EPA considers the CUS records to be the best available source of production and import data for most of the chemicals because the data are required to be submitted by statute. The 2002 data are the most recent data currently available ( USEPA 2002a). 1 Excludes six UCEs for which revenue data were not available.

4 2.3.1 Number of Manufacturers/ Importers Identified and Covered By This Analysis, and Their Revenues Beginning with the initial list of manufacturers/ importers, a screen was first performed to eliminate manufacturers or importers which have been identified, but will not be covered by the rule or this analysis. This screen eliminated only one facility that will not be covered by the rule on the basis of its manufacture/ import volume ( i. e., it manufactures or imports less than 500 kg).

The remaining facilities were linked to their parent company, or ultimate corporate entity ( UCE), by matching facility names and/ or Dun & Bradstreet ( D& B) identification numbers ( DUNs number) as reported by the facilities to D& B. A total of 84 UCEs responsible for producing the subject chemicals were identified and are included in this analysis. Companies that manufactured/ imported less than 10,000 pounds of a subject chemical in 2002 are not reflected in the CUS database, and thus are not included in this analysis. For a small number of manufacturers/ importers for which the UCEs could not be found, the production facility itself was treated as the UCE for purposes of the analysis.

Based on revenue data available through the D& B search, the UCEs responsible for production of the 34 chemicals have average annual revenues of $ 12.8 billion per year, and range from $ 380,000 to $ 213.5 billion. 1 Total revenues for all UCEs associated with production of the 34 subject chemicals are $ 996.3 billion per year.

3.0 ECONOMIC IMPACT ANALYSIS This section presents the results from the economic impact analysis of the section 4 test rule for 34 chemicals targeted for in vitro dermal absorption rate testing. This analysis does not purport to contain an exhaustive listing of all manufacturers or importers of these 34 chemicals. Nor does it purport to present an accounting of all production of the chemicals. Rather, it is an assessment, drawn from available data, of whether each subject chemical generates a sufficient revenue stream to support the testing.

To the extent that there are additional manufacturers or additional production of a particular chemical, resulting in a greater production volume than is accounted for by this analysis, the unit test costs as a function of domestic production and imports would be reduced, as would the price impact as a percentage of the sales price ( see Section 4). Therefore, additional production not accounted for in this analysis would imply additional manufacturers that could share the cost of conducting required testing under this rule. This would potentially further reduce the burden of the testing requirements. 2 See http:// www. epa. gov/ opptintr/ itc/ mbrorgs. htm for a list of ITC member Agencies.

5 3.1 Analytical Procedure The economic impact methodology involves a comparison of the per pound costs of testing to the sales price per pound for each chemical. The testing costs were evaluated using EPA's standard assumption that the test costs associated with such rules are amortized over 15 years using a 7 percent discount rate.

3.1.1 Identify Testing Procedures and Estimate Costs The rule will require that manufacturers complete testing of all 34 chemicals subject to the rule using the analytical testing standard in this rule. The standard was refined by a group of scientists from the agencies represented on the Interagency ITC based on the methods described in Bronaugh and Collier ( 1991). 2 The standard outlines procedures for measuring three parameters: ( 1) a 10 minute short term absorption rate, ( 2) a 60 minute short term absorption rate, and ( 3) a permeability constant ( Kp) for chemicals in liquid form.

EPA has estimated the laboratory costs of determining the short term absorption rates and permeability constant, and these costs are summarized in Table 2. The cost estimates for the shortterm rates include costs of measuring both the 10 and 60 minute absorption rates. The test standard requires the use of either static diffusion or flow through cell apparatus, and the tests have been costed using both types of apparatus. The average of the test costs for the two methods has been used in the economic analysis. For each test standard, EPA also estimates a cost range. The cost range is calculated by substituting the lowest and highest expected overhead rates into the total cost calculation. Overhead, including rent, utilities, insurance, equipment, and fringe benefits, is used as the main variable because it is the most significant cost component in the overall test cost and can vary greatly from company to company and within specific departments within a company. EPA's " best" estimate is then made based on professional judgement and is usually the midpoint of the cost estimate range.

With the requirement that the short term absorption rates and permeability constant be determined for each chemical, EPA's best estimate of the testing costs is $ 25,787 per chemical using the static cell method ( with a range of $ 20,953 to $ 30,903) and $ 28,592 per chemical using the flowthrough method ( with a range of $ 23,277 to $ 34,245). Taking the average of these costs for the static cell and flow through methods, EPA's best estimate of the testing costs are $ 27,190 per chemical ( with a range of $ 22,115 to $ 32,574). All costs are in 2003 dollars.

In addition to laboratory costs, expenses associated with the administration of the testing program will be incurred by the companies subject to the test rule. These activities include preparing letters of intent to conduct testing, soliciting laboratory bids, selecting laboratories to conduct the testing, preparing laboratory samples that meet the test standard, monitoring tests in progress, developing cost sharing agreements, submitting reports to EPA on the testing progress and test 6 results, and auditing the laboratories for compliance with EPA's Good Laboratory Practice ( GLP) standards ( 40 CFR part 792). These administrative costs are estimated to be 25 percent of the 2003 laboratory costs ( i. e., $ 6,797 based on the best estimate laboratory cost of $ 27,190). The 25 percent estimate is based on a survey which examined the actual laboratory and administrative costs incurred in response to several previous test rules ( USEPA 1989). Combining the administrative costs and the laboratory costs, the total testing cost per chemical is $ 33,987 ($ 6,797 + $ 27,190).

Table 2. Laboratory Costs for In Vitro Dermal Absorption Rate Testing ($ 2003)

Description Low High Best Short term absorption rates Static diffusion cells $ 7,670 $ 11,810 $ 9,690 Flow through cells $ 8,890 $ 13,560 $ 11,160 Average $ 8,280 $ 12,685 $ 10,425 Permeability constant ( Kp)

Static diffusion cells $ 13,283 $ 19,093 $ 16,097 Flow through cells $ 14,387 $ 20,685 $ 17,432 Average $ 13,835 $ 19,889 $ 16,765 Total testing costs Static diffusion cells $ 20,953 $ 30,903 $ 25,787 Flow through cells $ 23,277 $ 34,245 $ 28,592 Average $ 22,115 $ 32,574 $ 27,190 Source: USEPA 2003a and 2003b.

The estimated testing cost of $ 33,987 per chemical may overstate the actual testing burden on an individual firm if companies form consortia to share the costs of testing a single chemical, or if consortia or individual companies test chemicals in batches. Under these circumstances, the perchemical costs for a batch of chemicals, or the cost to an individual firm for testing an individual chemical, would decline accordingly.

The costs shown in Table 2 are one time costs associated with performing the in vitro dermal absorption rate testing. To annualize these costs, EPA assumes that industry amortizes testing costs over a 15 year period using a 7 percent discount rate. Under these assumptions, the annualized cost per chemical, assuming one time costs of $ 33,987, is $ 3,732 per year.

Assuming that each of the 34 chemicals targeted for in vitro dermal absorption rate testing is tested, that the Kp and short term absorption rate tests are required, that the laboratory costs per chemical are as shown in Table 2, and that an additional 25 percent is added for administration of the testing, the total costs of testing are $ 1.16 million ( 34 x $ 33,987) and the total annualized cost is $ 126,888 ( 34 x $ 3,732). 3 The five chemicals are: carbon disulfide ( CAS No. 75 15 0); dicylcopentadiene ( CAS No. 77 73 6); naphthalene ( CAS No. 91 20 3); p xylene ( CAS No. 106 42 3); and ethylene dichloride ( CAS No. 107 06 2).

7 3.1.2 Determine Chemical Prices and Calculate Economic Impacts Price data for the subject chemicals were obtained from chemical industry publications ( e. g., Chemical Marketing Reporter, Chemical Engineering News, Chemical Week) and are presented in Table 3. Price data were obtained for 26 of the 34 chemicals subject to the rule ( 76.5 percent of the chemicals representing 88.3 percent of the combined production volume). These prices range from a low of $ 0.10 per pound to a high of $ 2.50 per pound, and average $ 0.88 per pound.

The economic impact of the testing requirement is calculated by dividing the testing cost per pound of annual production by the price per pound for each chemical. The testing cost per pound is obtained by dividing the annualized testing cost, $ 3,732, by 1 million pounds, which is a minimum production volume assumption used for all chemicals subject to this test rule. For 21 of 26 chemicals with price data ( 80.8 percent) the testing cost per pound, as shown in Table 3, is less than 1.0 percent of the price. For the remaining five of the 26 chemicals ( 19.2%), the testing cost per pound exceeds 1.0 percent. 3 The average test cost impact for the 26 chemicals with price data is 0.68 percent, and the maximum is 3.7 percent. Thus, using very conservative assumptions regarding production volumes ( i. e., that production volumes for each chemical are only one million pounds), the price impact exceeds 1.0 percent for only five chemicals. For those five chemicals, the price impacts range from 1.33 percent to 3.70 percent, with an average of 1.96 percent.

In fact, EPA has verified production for these five chemicals in the TSCA CUS database and found that the actual production volume in 2002 exceeds 10 million pounds in each case ( USEPA 2002a). Thus, the impact for these chemicals can be reduced by a factor of 10, making the impact below 1.0 percent for those five chemicals.

For the eight remaining chemicals without price data, the Agency calculated the price below which there would be an impact of 1.0 percent or greater ( i. e., the " critical" price). Assuming annualized testing costs of $ 3,732 per chemical and production volume of one million pounds for all chemicals, the " critical" price for all chemicals is $ 0.3732 per pound. This means that the economic impact of the testing requirement can exceed 1.0 percent for these chemicals only if their actual price is below $ 0.37 per pound. As indicated above, for the 26 chemicals for which price data were available, the mean price was $ 0.88 per pound. Only five chemicals had prices below the " critical" price of $ 0.37 per pound, and the average price among these was $ 0.22 per pound. 8 Table 3. Economic Impacts of Testing No. CAS No. Chemical Name Price/ lb ($) Annualized Test Cost ($) Test Cost/ lb ($) Impact   Test Cost as Percent of Price Price Below Which There is a 1% Impact 1 75 05 8 ACETONITRILE $ 0.70 $ 3,732 $ 0.003732 0.5331% $ 0.3732 2 75 15 0 CARBON DISULFIDE $ 0.22 $ 3,732 $ 0.003732 1.6964% $ 0.3732 3 75 35 4 VINYLIDENE CHLORIDE $ 0.43 $ 3,732 $ 0.003732 0.8679% $ 0.3732 4 77 73 6 DICYCLOPENTADIENE $ 0.28 $ 3,732 $ 0.003732 1.3329% $ 0.3732 5 77 78 1 DIMETHYL SULFATE $ 0.70 $ 3,732 $ 0.003732 0.5331% $ 0.3732 6 78 59 1 ISOPHORONE $ 0.85 $ 3,732 $ 0.003732 0.4391% $ 0.3732 7 78 87 5 PROPYLENE DICHLORIDE n/ a $ 3,732 $ 0.003732  $ 0.3732 8 79 20 9 METHYL ACETATE n/ a $ 3,732 $ 0.003732  $ 0.3732 9 79 46 9 2 NITROPROPANE n/ a $ 3,732 $ 0.003732  $ 0.3732 10 91 20 3 NAPHTHALENE $ 0.28 $ 3,732 $ 0.003732 1.3329% $ 0.3732 11 92 52 4 BIPHENYL $ 0.69 $ 3,732 $ 0.003732 0.5409% $ 0.3732 12 98 29 3 TERT BUTYLCATECHOL n/ a $ 3,732 $ 0.003732  $ 0.3732 13 100 00 5 P NITROCHLOROBENZENE n/ a $ 3,732 $ 0.003732  $ 0.3732 14 100 01 6 P NITROANILINE, $ 2.50 $ 3,732 $ 0.003732 0.1493% $ 0.3732 15 100 44 7 BENZYL CHLORIDE $ 0.68 $ 3,732 $ 0.003732 0.5488% $ 0.3732 16 106 42 3 P XYLENE $ 0.22 $ 3,732 $ 0.003732 1.6964% $ 0.3732 9 Table 3 ( cont). Economic Impacts of Testing No. CAS No. Chemical Name Price/ lb ($) Annualized Test Cost ($) Test Cost/ lb ($) Impact   Test Cost as Percent of Price Price Below Which There is a 1% Impact 17 106 46 7 P DICHLOROBENZENE, $ 0.58 $ 3,723 $ 0.003723 0.6419% $ 0.3723 18 107 06 2 ETHYLENE DICHLORIDE $ 0.10 $ 3,723 $ 0.003723 3.7230% $ 0.3723 19 107 31 3 METHYL FORMATE $ 0.50 $ 3,723 $ 0.003723 0.7446% $ 0.3723 20 108 03 2 1 NITROPROPANE $ 2.00 $ 3,723 $ 0.003723 0.1862% $ 0.3723 21 108 90 7 CHLOROBENZENE $ 0.55 $ 3,723 $ 0.003723 0.6769% $ 0.3723 22 108 93 0 CYCLOHEXANOL $ 0.83 $ 3,723 $ 0.003723 0.4486% $ 0.3723 23 109 66 0 PENTANE n/ a $ 3,723 $ 0.003723  $ 0.3723 24 109 99 9 TETRAHYDROFURAN $ 1.55 $ 3,723 $ 0.003723 0.2402% $ 0.3723 25 110 12 3 METHYL ISOAMYL KETONE $ 0.65 $ 3,723 $ 0.003723 0.5728% $ 0.3723 26 111 84 2 NONANE n/ a $ 3,723 $ 0.003723  $ 0.3723 27 120 80 9 CATECHOL n/ a $ 3,723 $ 0.003723  $ 0.3723 28 122 39 4 DIPHENYLAMINE $ 1.80 $ 3,723 $ 0.003723 0.2068% $ 0.3723 29 123 42 2 DIACETONE ALCOHOL $ 0.60 $ 3,723 $ 0.003723 0.6205% $ 0.3723 30 127 19 5 DIMETHYL ACETAMIDE $ 1.10 $ 3,723 $ 0.003723 0.3385% $ 0.3723 31 142 82 5 N HEPTANE $ 1.43 $ 3,723 $ 0.003723 0.2604% $ 0.3723 32 150 76 5 P METHOXYPHENOL $ 2.38 $ 3,723 $ 0.003723 0.1564% $ 0.3723 33 25013 15 4 VINYL TOLUENE $ 0.50 $ 3,723 $ 0.003723 0.7446% $ 0.3723 34 34590 94 8 DIPROPYLENE GLYCOL METHYL ETHER $ 0.68 $ 3,723 $ 0.003723 0.5475% $ 0.3723 n / a = n o t av a i l ab l e .

S o u r c e s : C W , C E N , C M R ( p r i c e d a t a ) ; U S E P A , 2 0 0 3 a an d 2 0 0 3 b ( t e s t co s t s ) . 10 3.1.3 Assess the Magnitude of the Economic Impacts Without complete price data for all of the chemicals subject to the rule, it is difficult to assess definitively the potential significance of the economic impacts of the testing requirements for all 34 chemicals. For the 26 chemicals for which prices are available, potential impacts of 1.0 percent or greater occur for five chemicals. However, these results are based on the worst case assumption that the production volume for each chemical subject to the test rule is only 1 million pounds. In fact, this represents a minimum production level for all chemicals subject to the rule, thus increasing the likelihood that actual impacts are smaller. Furthermore, EPA has verified that the five impacted chemicals are actually produced in volumes greater than 10 million pounds, thus reducing the adverse impact shown at the one million pound production level by a factor of at least 10.

While prices for at least one chemical are as low as $ 0.10 per pound, the average price of those chemicals for which price data are available is $ 0.88 per pound. The eight chemicals for which no price data were available could be impacted at the 1.0 percent level or greater if their actual prices are below the threshold of $ 0.37 per pound. At prices above $ 0.37 per pound, no adverse impacts occur. Again, the threshold is based on the worst case assumption of a one million pound production volume, which represents the minimum level for all chemicals subject to the rule. Higher actual production volumes would lower the annualized unit testing cost, and further reduce any impacts.

3.2 Estimate the Burden Under the Paperwork Reduction Act ( 44 U. S. C. 3501 et seq.), Federal agencies are required to estimate the reporting burden that would be imposed by a rule. In this context, the term " burden" means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information.

In this analysis, the administrative burden is represented by the administrative hours spent by the manufacturers of the chemicals to arrange for, monitor, and report the test results. Several assumptions were made in estimating the administrative burden. First, as described in this report, it is assumed that the costs associated with administrative tasks are equivalent to 25 percent of the laboratory costs. Given the estimate of laboratory costs of $ 27,190 ( from Table 2), the administrative cost is $ 6,797 per chemical. Next, all administrative costs are assumed to be labor. This assumption results in an overestimate of the number of burden hours because some administrative costs would cover non labor items like travel costs to visit the laboratories, printing and reproduction, and mailing. Since it is not known how large this non labor portion is ( it is likely to be relatively small), the conservative assumption is made that all costs are labor. 3 For example, in September 2002 total hourly compensation in the " Professional specialty and technical" labor category was $ 38.65. This was composed of $ 27.01 in wages and salaries ( 69.9 percent) and $ 11.65 in benefits ( 30.1 percent). The " loading factor" for this labor category is 43.1 percent ( 0.301 ÷ 0.699 = 0.431).

11 Administrative hours are composed of managerial, clerical and technical labor. Based on the types of activities covered ( e. g., submitting letters of intent to conduct studies, soliciting bids, selecting laboratories, preparing test protocols, monitoring tests in progress, developing cost sharing agreements, preparing reports to EPA on the progress and results of the testing, and auditing the laboratories), the analysis assumes that the hours are composed of 20 percent managerial labor, 60 percent technical labor, and 20 percent clerical labor ( USEPA 1997b). Based on these assumptions, the number of administrative burden hours was calculated by dividing the total administrative costs by the weighted hourly administrative wage rate.

The weighted average hourly administrative wage rate was calculated using the methodology described in USEPA ( 2002b), based on September 2002 data on average hourly wages and salaries for all private, goods producing industries available from the Bureau of Labor Statistics ( BLS 2003). The representative managerial, technical, and clerical wage rates are based on the BLS " Executive, administrative, and managerial," " Professional specialty and technical," and " Administrative support, including clerical" labor categories, respectively.

The additional employer costs of benefits, such as paid leave and insurance, are calculated from the same BLS source. Loading factors for benefits are obtained by dividing the benefit share of total compensation by the wage and salary share of total compensation. 3 EPA adds to the benefits loading factor an additional 17 percent to reflect general overhead costs, based on prior industry estimates provided to EPA ( Heiden 1989; cited in USEPA 2002b). Table 4 shows the derivation of the final, weighted average hourly wage rate of $ 41.26 used to convert administrative costs into burden hours.

The estimated burden hours for each chemical are thus equal to the administrative cost divided by the administrative cost per hour, i. e., $ 6,797 ÷ $ 41.26 = 165 hours. Multiplying this by the number of chemicals, the total administrative burden associated with the rule is estimated to be 5,610 hours ( 165 hours x 34 chemicals), or a per respondent burden of 66.8 hours.

3.2.1 Export Notification Burden and Cost The TSCA section 4 rule would trigger additional reporting requirements under TSCA section 12( b). Under TSCA section 12( b), all exporters of chemicals for which the submission of data is required under TSCA section 4( a) must notify EPA of each country to which a subject chemical is shipped. For chemicals subject to TSCA section 4( a), this is a one time notification requirement, i. e., the exporter only submits the notification when it is exporting a particular chemical for the first time to a country for which it has not previously submitted a notification. 12 Table 4. Calculation of Average Hourly Administrative Cost ($ 2003)

Labor Category BLS Labor Category Hourly Wage and Salary Benefits Loading Factora Overhead Loading Factor Total Employer Costb Relative Weight Managerial Executive, administrative, and managerial $ 33.11 0.431 0.170 $ 53.01 20%

Technical Professional specialty and technical $ 27.01 0.431 $ 43.24 60%

Clerical Administrative support, including clerical $ 14.65 0.440 $ 23.59 20%

Weighted Hourly Administrative Cost $ 41.26 a Calculated as total benefits divided by wages and salaries. b Calculated as hourly wage and salary times the sum of the benefits loading factor and the overhead loading factor. Source: BLS 2003; USEPA 2002b.

The rule would therefore impact chemical exporters because the testing requirement would trigger TSCA section 12( b) reporting requirements. Data on export shipments of the 34 chemicals are limited. While some data sources do present aggregate export volumes for recent years, they do not indicate the number of exporters, number of export shipments, or number of countries to which each chemical is exported. For purposes of this analysis, it would be necessary to know both the number of exporters and the number of countries to which they export each chemical. More specifically, because regulations promulgated pursuant to TSCA section 12( b) ( 40 CFR part 707) require only a one time notification per country, data are needed for each chemical on the number of new countries that receive exports of these chemicals in each year following promulgation of the rule. These data, however, are not available.

Given the data limitations, the burden hours for export notification for this rule were estimated using an alternative estimation procedure. EPA received an estimated 7,651 export notifications in the 1997 calendar year that were triggered by TSCA section 4. These notifications were associated with 118 unique chemicals. This analysis, therefore, assumes that there will also be 65 export notifications per chemical subject to the rule ( 7,651 ÷ 118).

EPA used estimates of labor requirements for preparing and submitting export notifications presented in the economic analysis prepared in support of the TSCA section 12( b) Information Collection Request ( USEPA 1998). For initial notices, labor requirements include 1.0 hours of 4 Applying the assumption of 65 export notifications per chemical, the total number of notifications associated with the rule is 2,210 ( 65 x 34 chemicals). The burden hour estimate ranges from 1,105 hours ( 2,210 x 0.5 hours) under the assumption that all notices are subsequent notices, to 3,315 hours ( 2,210 x 1.5 hours) under the assumption that all notices are initial notices. The assumption that all notices are initial notices is not realistic, so the actual burden is likely to be closer to the 1,105 hours estimate. These hours are not included in the total burden estimate for the section 4 rule because they are already covered by the Information Collection Request ( ICR) for section 12( b).

13 technical labor to prepare a notification letter and 0.5 hours of clerical labor to print, mail, and file a copy of the letter. Subsequent notices would require only 0.5 hours of clerical labor. 4 To estimate the cost of the 12( b) reporting requirements, EPA used the methodology for calculating reporting burden under the Toxic Release Inventory ( EPA 2002b). The 2003 weighted average labor costs, including wages, benefits, and overhead, are derived in Table 4 above. Thus, EPA used a cost of $ 23.59 per hour for clerical labor and $ 43.24 per hour for technical labor in calculating export notification costs. Mailing costs per notice ( using registered mail) were also estimated, and these average $ 6.27 per notice. These factors combine to produce a range of costs for preparing and submitting TSCA section 12( b) notices. As shown in Table 5, these costs will range from $ 61.31 per notice for an initial notice to $ 18.07 for a subsequent notice.

Table 5. Export Notification Costs under TSCA Section 12( b) ($ 2003)

Activity Requirements Initial Notice Subsequent Notice Write letter 1.0 hours technical labor @ $ 43.24/ hr $ 43.24

Check order and send notice 0.5 clerical hours @ $ 23.59/ hr $ 11.80 $ 11.80 Mailing cost $ 6.27 $ 6.27 $ 6.27 TOTAL $ 61.31 $ 18.07 Source: USEPA 1998; USEPA 2002b. 5Exceptions to the RFA requirement include Agency actions that are not rules, and rules that the Agency is not required to propose before promulgating. EPA Interim Guidance for Implementing the Small Business Regulatory Enforcement Fairness Act and Related Provisions of the Regulatory Flexibility Act, Feb. 5, 1997, prepared by the SBREFA Task Force, pp. 1 4.

14 4.0 SMALL ENTITY ANALYSIS The Regulatory Flexibility Act, as amended by SBREFA in 1996, requires every federal agency to prepare a regulatory flexibility analysis for all proposed and final notice and comment rules it issues, unless the agency certifies that the rule:

" will not, if promulgated, have a significant economic impact on a substantial number of small entities."

( Section 605 ( b) of the RFA). 5 Three factors are examined in order to characterize the small entity impacts of a rule: ( 1) the size of the adverse impact ( measured as the ratio of the cost to sales or revenues), ( 2) the total number of small entities that experience the adverse impact, and ( 3) the percentage of the total number of small entities that experience the adverse impact.

In the RFA, the term " small entities" includes small businesses, small governments, and small nonprofit organizations. This analysis, however, examines only the impacts on small businesses because EPA does not believe that other types of small entities will be burdened by the requirements contained in the rule. This report considers two classes of affected small businesses: ( 1) small manufacturers ( including importers) and small processors who would be subject to the rule, and ( 2) small exporters, who would become subject to TSCA section 12( b) notification requirements. The treatment of exporters is explained in Section 4.3 below.

4.1 Analytical Procedure This analysis provides further information about the potential for the TSCA section 4 rulemaking for the 34 chemicals targeted for in vitro dermal absorption rate testing to have a significant impact on a substantial number of small entities.

The major steps in the analysis are as follows:

# Define small entities for the purposes of the analysis.

# Determine the number of covered manufacturers/ importers that are small entities.

# Calculate each small manufacturer's or importer's share of testing costs for each chemical.

# Determine the level of the test cost impact.

# Determine the number of small entities that are impacted. 6 These standards are reviewed and revised each year. The most current size standards are available on the SBA internet site http:// www. sba. gov/ size/ indextableofsize. html, accessed March 2003.

7 The definition also includes a provision that allows EPA to adjust the total annual sales values for inflation whenever EPA deems it necessary to do so. However, at this time EPA has not made any adjustments to the size criteria to account for inflation.

15 Each of these steps in the small entity analysis are described in the sections below.

4.1.1 Determine the Appropriate Small Entity Definition As indicated in Section 2.3.2, an initial screening was performed to identify manufacturers or importers that are covered under the rule. This screen identified a total of 84 ultimate corporate entities ( UCEs) that manufacture or import the 34 chemicals subject to the rule.

A second screen must then be used to identify manufacturers or importers who qualify as small businesses. Under the RFA, businesses are classified as " small" based on the definition of " small business concern" provided in section 3 of the Small Business Act. The Small Business Act authorizes the Small Business Administration ( SBA) to establish " detailed definitions or standards by which a business concern may be determined to be a small business concern for the purposes of this [ Act] or any other Act." SBA has established these standards, which vary according to the North American Industry Classification System ( NAICS) code of the manufacturer or importer, at 13 CFR 121.201.6 The RFA also authorizes agencies to adopt alternative definitions, which could include alternative size standards, where appropriate in accordance with specified procedures.

For this rulemaking, EPA analyzed small business impacts using the standards developed by the SBA. Secondarily, the Agency also examined potential impacts using the small manufacturer definitions found in TSCA ( 40 CFR 704.3). Under the TSCA regulatory definition, a manufacturer or importer is small 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 pounds; or ( 2) total annual sales of the company, combined with those of any parent company, are below $ 4 million. 7 4.1.2 Determine the Number of Small Businesses Affected <IP_ADDRESS> Affected Small Businesses Under the SBA Definition Under section 632 ( a)( 1) of the Small Business Act, a small business concern is defined as " one which is independently owned and operated and which is not dominant in its field of operation." Thus, for purposes of this analysis, EPA has considered the employment, revenue, or other industryspecific SBA defined indicator of size for the business entity that has ultimate ownership and control over a manufacturing or importing establishment affected by the testing rule. For each manufacturer/ importer identified by a search of the EPA's CUS database, therefore, EPA attempted 8 This applies in the case of an industry with an SBA defined employment based size standard. As noted below, while size standards for most industries are defined in terms of employment, they may also be defined in terms of receipts, assets, or other appropriate criteria.

9 According to Dun & Bradstreet's website, the company is " currently conducting research to determine customer needs related to NAICS". See http:// www. dnb. com/ us/ communities/ marketing/ resource_ center/ naics. asp, accessed 4/ 21/ 03.

10 Effective October 1, 2000, the SBA converted its size standards from an SIC based to a NAICS based system. Since the D& B database has not yet been converted to a NAICS basis, and the D& B revenue and employment data generally reflect data for 2000 or 2001, EPA began the analysis using the SIC based industry classification for each affected entity, from its D& B record.

16 to identify the parent company, or " ultimate corporate entity" ( UCE), and obtain data on its employment size.

The UCEs were identified through a search of the Dun & Bradstreet ( D& B) facility file ( D& B 2003). The facilities were linked to their parent company, or UCE, by matching facility names and/ or D& B identification number ( DUNs number) as reported by the facilities. Among other information, the D& B record indicates whether a manufacturer or importer itself is a UCE ( i. e., a headquarters or single location). If not, the record includes the DUNs number for the UCE. The DUNs number for the UCE would then be used to locate the D& B record for the top most firm in a family of companies. Depending on whether the manufacturer/ importer was itself a UCE, then either its employment or the employment size of the UCE was extracted for use in this analysis. 8 The D& B data available for this analysis assigns an industry code to each business using the older Standard Industrial Classification ( SIC) code system. 9 To present its analysis in terms of the current NAICS size standards, EPA had to first conduct an SIC NAICS crosswalk exercise. Table 6 shows the results of this exercise. On the left is the distribution of affected businesses according to SIC code. For each SIC, Table 6 shows the size standard using the SIC based standards in place in 2000,10 and the number of affected entities that fail to meet the size threshold ( and hence considered small entities). Under the SIC based standards, from a total of 84 businesses all but 23 are confirmed to exceed the small business size threshold, and thus are not classified as small. For an additional seven businesses EPA lacked data on either the SIC, employment, or other size indicator, and therefore was unable to conclude that these businesses are not small. The maximum estimated number of small businesses is therefore 30 ( 23 confirmed small plus seven that could not be verified).

The right hand side of Table 6 shows an attempt to map each SIC to the corresponding NAICS code, and to determine the number of small entities using the NAICS based size standards. To do this, EPA used the Bureau of the Census's SIC NAICS " bridge" at http:// www. census. gov/ epcd/ ec97brdg ( accessed 4/ 4/ 03). For each SIC, the bridge indicates the number of establishments from the 1997 Economic Census that have been classified into each NAICS industry. As seen in Table 6, for 18 of 34 SICs ( SICs 1311 through 5051) there is a one to one SIC to NAICS correspondence. For the 16 other SICs, however, establishments in the SIC were assigned to more than one NAICS code. 17 With some exceptions, the SIC NAICS bridge provides the number of establishments from a particular SIC assigned to each NAICS industry. For those SICs corresponding to a single NAICS industry, Table 6 shows the corresponding NAICS size standard. In all of these cases the NAICSbased size standard is equal to or larger than the SIC based size standard. For SICs 2077 through 7363, more than one NAICS code corresponds to each SIC, but the size standard for each NAICS code is at least equal to or larger than the corresponding SIC based size standard. Therefore, all businesses in these SICs that are considered small under the SIC based standards are also considered small under the NAICS based standard.

For one SIC ( 2819), there is more than one corresponding NAICS but not all NAICS based size standards equal or exceed the SIC based size standard of 1,000 employees. However, because the vast majority of establishments ( 95.6 percent) are assigned to NAICS 325131, which has the same size standard as the corresponding SIC, EPA believes it is reasonable to conclude that the same number of businesses that are small under the SIC based standard are likely to be small under the NAICS based standard.

Finally, for three SICs ( 3728, 5122, and 5191) there is more than one corresponding NAICS code, no distribution of establishments by NAICS industry is available, and the NAICS based size standards do not fully match the SIC based standards. For example, businesses in SIC 3728 ( with an SIC based size standard of 1,000 employees) are assigned to one of four different NAICS codes. These NAICS codes, however, have size standards that range from 500 to 1,500 employees. Thus, depending on which NAICS a particular business is assigned to, it may or may not be classified as small under the NAICS based system. Because of this, for these four industries EPA could not rule out the possibility that some or all affected businesses are small under the NAICS based system. Accordingly, there are two additional businesses classified as small ( or potentially small) under the NAICS based system ( i. e., 32 businesses as opposed to 30 businesses under the SIC based size standards).

The final column of Table 6 indicates the number of small entities that would be impacted by testing costs that represent more than 1.0 percent of annual revenues. EPA assessed these impacts by calculating the annualized testing costs as a percent of business revenues ( regardless of whether the size standard was in terms of receipts, employment, or some other size indicator). As seen, none of the 25 confirmed small businesses under the NAICS system ( 30 percent of the84 UCEs) would be impacted by testing costs that exceed 1.0 percent of revenues. For the seven businesses whose size could not be verified, however, EPA could not rule out the possibility these would be impacted by costs in excess of 1.0 percent of revenues. These impacts are discussed in Section 4.1.3 below.

<IP_ADDRESS> Affected Small Businesses Under the TSCA Definition As with the SBA small business definitions, under the TSCA small manufacturer/ importer definition it is the size of the ultimate parent company that is relevant in determining the size of each affected entity. Thus, for each manufacturer/ importer, EPA began by identifying the UCEs that own or control facilities that manufacture or import chemicals subject to the rulemaking. 18 Of the 84 businesses subject to the rule, a total of nine meet one or both of the TSCA criteria for a small manufacturer/ importer. Three of these are small based on meeting the first criteria alone, i. e., total annual sales below $ 40 million and annual production or importation volume less than or equal to 100,000 pounds, while two are small based on meeting the second criteria alone, i. e. total annual sales below $ 4 million. Four are small based on both the first and second criteria.

4.1.3 Calculate the Magnitude of the Economic Impact Historically, cost sharing arrangements for chemical specific testing have generally been worked out independently by industry groups based on production/ import volume shares. For purposes of this analysis, EPA assumes that the costs of performing chemical specific testing will be borne by manufacturers/ importers in proportion to their production/ import volume. The costs for each parent company are obtained by aggregating cost shares across all chemicals and all manufacturers and importers over which each particular parent company has control.

Table 7 illustrates the cost sharing assumptions using a simplified example. Parent Company A controls two sites that manufacture Chemical X. The combined share of total production of Chemical X for these two sites is 30 percent. Parent Company A thus bears 30 percent of the $ 1,000 testing and administrative cost for Chemical X. Likewise, Parent Company A controls one site that manufactures Chemical Y, and this site accounts for 10 percent of the total production of Chemical Y. This site, and Parent Company A, would thus bear 10 percent of the $ 1,000 testing and administrative cost for Chemical Y. In total, Parent Company A would be responsible for $ 400 in annual testing and administrative costs, $ 300 attributable to Chemical X and $ 100 attributable to Chemical Y. 19 Table 6. Estimated Number of Small Businesses Based on SIC and NAICS Size Standards SIC Industry No. of Affected Businesses Size Std. a Estimated No. of Small Businesses NAICS Industry Size Std. a Estimated No. of Small Businesses No. of Small Businesses Impacted at 1.0%

Single NAICS corresponding to each SIC; NAICS has same or larger size standard 1311 Crude Petroleum and Natural Gas 4 500 2 211111 Crude Petroleum and Natural Gas Extraction 500 2 0 2672 Coated and Laminated Paper, NEC 1 500 0 322222 Coated and Laminated Paper Manufacturing 500 0 0 2812 Alkalies and Chlorine 5 1,000 0 325181 Alkalis and Chlorine Manufacturing 1,000 0 0 2813 Industrial Gases 1 1,000 0 325120 Industrial Gas Manufacturing 1000 0 0 2821 Plastics Materials, Synthetic Resins, and Nonvulcanizable Elastomers 9 750 3 325211 Plastics Material and Resin Manufacturing 750 3 0 2823 Cellulosic Manmade Fibers 1 1,000 0 325221 Cellulosic Organic Fiber Manufacturing 1000 0 0 2834 Pharmaceutical Preparations 4 750 2 325412 Pharmaceutical Preparation Manufacturing 750 2 0 2851 Paints, Varnishes, Lacquers,

Enamels, and Allied Products 2 500 0 325510 Paint and Coating Manufacturing 500 0 0 2873 Nitrogenous Fertilizers 1 1,000 1 325311 Nitrogenous Fertilizer Manufacturing 1,000 1 0 2879 Pesticides and Agricultural Chemicals, NEC 2 500 0 325320 Pesticide and Other Agricultural Chemical Manufacturing 500 0 0 2911 Petroleum Refining 8 1,500 1 324110 Petroleum Refineries 1,500 1 0 3669 Communications Equipment, NEC 1 750 0 334290 Other Communications Equipment Manufacturing 750 0 0 3674 Semiconductors and Related Devices 1 500 1 334413 Semiconductor and Related Device Manufacturing 500 1 0 3724 Aircraft Engines and Engine Parts 1 1,000 0 336412 Aircraft Engine and Engine Parts Manufacturing 1,000 0 0 3841 Surgical and Medical Instruments and Apparatus 1 500 0 339112 Surgical and Medical Instrument Manufacturing 500 0 0 4922 Natural Gas Transmission 1 $ 5.0b 0 486210 Pipeline Transportation of Natural Gas $ 6.0b 0 0 4924 Natural Gas Distribution 1 500 0 221210 Natural Gas Distribution 500 0 0 5051 Metals Service Centers and Offices 3 100 0 423510 Metal Service Centers and Other Metal Merchant Wholesalers 100 0 0 Table 6. Estimated Number of Small Businesses Based on SIC and NAICS Size Standards SIC Industry No. of Affected Businesses Size Std. a Estimated No. of Small Businesses NAICS Industry Size Std. a Estimated No. of Small Businesses No. of Small Businesses Impacted at 1.0%

20 Multiple NAICS corresponding to single SIC; all NAICS have same or larger size standard 2077 Animal and Marine Fats and Oils 1 500 1 All corresponding NAICS

500 1 0 2865 Cyclic Organic Crudes and Intermediates, and Organic Dyes and Pigments 3 750 1

750 1 0 2869 Industrial Organic Chemicals, NEC 7 1,000 3

1,000 3 0 2899 Chemicals and Chemical Preparations, NEC 2 500 0

500 0 0 3272 Concrete Products, Except Block and Brick 1 500 0

500 0 0 3861 Photographic Equipment and Supplies 1 500 0

500 0 0 4911 Electric Services 1 4c 0

4c 0 0 5169 Chemical and Allied Products, NEC 5 100 4

100 4 0 5198 Paints, Varnishes, and Supplies 1 100 1

100 1 0 6021 National Commercial Banks 1 $ 100d 0

$ 100d 0 0 6141 Personal Credit Institutions 1 $ 5.0b 0

$ 5.0b 0 0 7363 Help Supply Services 1 $ 5.0b 1

$ 5.0b 1 0 Multiple NAICS corresponding to single SIC; high percentage of establishments fall in NAICS with same or larger size standard 2819 Industrial Organic Chemicals, NEC 2 1,000 1 325131 Inorganic Dye and Pigment Manufacturing ( 95.6% of estabs) 1,000 1 0 Multiple NAICS corresponding to single SIC; no distribution of establishments available, more than one possible NAICS size standard 3728 Aircraft Parts and Auxiliary Equipment, NEC 1 1,000 0 4 corresponding NAICS 500 1,500 1 0 5122 Drugs, Drug Proprietaries, and Druggists' Sundries 1 100 1 6 corresponding NAICS 100 or $ 6.0b 1 0 5191 Farm Supplies 1 100 0 4 corresponding NAICS 100 or $ 6.0b 1 0 Subtotal 77 23 25 0 SIC not available 7 7 7 7 TOTAL 84 30 32 7 a Size standards are in terms of number of employees, unless otherwise noted.

b Millions of dollars in receipts.

c Millions of megawatt hours of electric power generation. Table 6. Estimated Number of Small Businesses Based on SIC and NAICS Size Standards SIC Industry No. of Affected Businesses Size Std. a Estimated No. of Small Businesses NAICS Industry 21 d Millions of dollars of assets owned.

Table 7. Testing and Administrative Cost Share Assumptions Chemical X Chemical Y Testing and Administrative Cost, by Chemical ( Annualized) $ 1,000 $ 1,000 Manufacturing Sites Controlled by Parent Company A Site 1 25% of production Site 1 10% of production Site 2 5% of production Share of Costs Borne by Parent Company A, by Chemical 30% 10%

Costs Borne by Parent Company A By Chemical $ 300 $ 100 All Chemicals $ 400 Following this approach, EPA calculated the size of the impact for each affected UCE by comparing the annualized testing costs ($ 3,732 per chemical, from Table 2) to the annual revenues of each UCE. The magnitude of these impacts on small businesses, expressed in terms of the percent of annual revenues represented by the annualized testing costs, is discussed in the section below.

4.1.4 Evaluate the Economic Impacts on Small Entities at the Level of 1.0 Percent or Greater EPA next compared each small UCE's share of testing costs, on a chemical by chemical basis, to its revenues. For this report, the revenue measure used is the total revenues for the UCE as reported in its D& B report. The number of UCEs impacted, and the level of impact, are discussed below. The economic impact measure is calculated by dividing the annualized testing costs by the annual revenues of the UCE, and is expressed as a percentage.

The next step involves an assessment of the number of small entities impacted at the level of 1.0 percent or greater. The results are summarized as follows: 22 # Using the SBA NAICS based size standards, the maximum number of small entities affected by the rule is 32 ( 38.1 percent of the total). For the 25 entities that are confirmed to be small, the number affected at the 1.0 percent or greater level is 0 ( 0.0 percent of the total). This excludes seven businesses for which revenue or employment data ( or both) were not available. For these, EPA could not determine whether they are a small business and therefore could not determine whether they are impacted at the level of 1.0 percent or greater.

# Using the TSCA definition, the maximum number of small entities covered by the rule is 16 ( 19.0 percent of the total). For the nine entities known to be small, the maximum number affected at the level of 1.0 percent or greater is 0 ( 0 percent of the total). This excludes seven businesses for which revenue or employment data ( or both) were not available. For these, EPA could not determine whether they are a small business and therefore could not determine whether they are impacted at the level of 1.0 percent or greater.

4.2 Summary of Small Entity Impact Analysis Table 8 summarizes the analysis presented above for manufacturers, including importers, affected by the TSCA section 4( a) test rule. Step 1 shows the number of businesses affected. These represent all of the ultimate corporate entities that control facilities that manufacture or import chemicals subject to the rule. Step 2 shows the number of small businesses affected, and this number as a percent of the total number of businesses affected. As shown, using the SBA's NAICS based small business size standards there are 32 small businesses affected ( or potentially affected), and these represent 38.0 percent of the total number of businesses affected. Under the TSCA small business definition 16 small businesses are affected ( or potentially affected) and these represent 19.0 percent of the total number of businesses affected.

Step 3 indicates the number of small businesses affected by annualized testing costs that represent 1.0 percent or more of their annual revenues. As shown, under both the SBA and TSCA small business definitions, there are no small businesses conclusively determined to be affected at the level of 1.0 percent or greater.

As noted in the table, EPA was unable to ascertain the small business status of seven additional entities due to a lack of data on either their SIC or NAICS code, employment, or revenue. EPA was unable, therefore, to estimate the magnitude of the impact on these entities. 23 Table 8. Summary of Results from Small Entity Analysis Step in Small Entity Analysis Number of Entities and Number of Small Entities SBA Definition TSCA Definition 1 Number of businesses affected 84 2 Number of small businesses affecteda 25 9 Percent of all businesses affecteda 29.8% 10.7%

3 Number of small businesses affected at

1% b 0 0 a Excludes seven businesses for which EPA was unable to obtain either SIC code, employment, revenues or other indicator upon which to base a small business determination. When those seven businesses are assumed to be small, the totals change to: SBA definition, 32 businesses, or 38.1% affected, and TSCA definition, 16 businesses, or 19.0% affected. b Annualized testing costs that exceed 1.0 percent of annual revenues.

4.3 Impacts on Small Exporters As discussed in Section 3.2.1, the rule would trigger additional reporting requirements under TSCA section 12( b). All exporters of chemicals for which the submission of data is required under TSCA section 4( a) must notify EPA of each country to which a subject chemical is shipped. For chemicals subject to TSCA section 4( a), this is a one time notification requirement, i. e., the exporter only submits the notification when it is exporting a particular chemical for the first time to a country for which it has not previously submitted a notification.

Assuming for the moment that all notices for a small exporter would be initial notices ( costing manufacturers $ 61.31 to prepare), a small exporter would have to have annual revenues below $ 6,131 per chemical/ country combination in order to be impacted at a 1.0 percent or greater level. For example, a small exporter filing three notifications per year would have to have annual revenues below $ 18,393 ( 3 x $ 6,131) in order to be classified as impacted at the 1.0 percent or greater level. EPA believes that, based on the modest costs associated with export notification it is reasonable to assume that few, if any, small exporters would file sufficient export notifications to be impacted at or above the 1.0 percent level.

5.0 UNFUNDED MANDATES REFORM ACT AND EXECUTIVE ORDERS 12875 AND 13084 Title II of the Unfunded Mandates Reform Act of 1995 ( UMRA), P. L. 104 4, establishes requirements for Federal agencies to assess the effects of certain regulatory actions on State, local, or tribal governments or the private sector. Under section 202 of UMRA, EPA must generally 24 prepare a written statement that includes a cost benefit analysis for proposed and final rules with " Federal mandates" that may result in expenditures to State, local, and tribal governments, in the aggregate, or to the private sector, of $ 100 million or more in any one year. EPA has determined that no State, local, or tribal governments would be affected by this rule. In addition, costs to the private sector ( those companies subject to the rule) are estimated to be well below $ 100 million in any one year.

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 rule is based on a search conducted in March 1999 on 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.

6.0 ENVIRONMENTAL JUSTICE EPA is concerned about environmental equity and in the case of regulatory actions, the potential for regulations to impose an undue burden on low income or minority households, business operators, workers, or other socioeconomic groups. As directed in Executive Order 12898 and EPA's own draft implementation strategy, the Agency is directed to address and identify " disproportionately high and adverse human health or environmental effects of its programs, policies, and activities on minority and low income populations" ( Section 1.1). This section reviews the TSCA section 4 test rule in an effort to identify any environmental equity implications.

The primary impact of the rule would be to require manufacturers and importers to perform further testing of chemicals, and to make information about the results of such a testing program readily available to the public. The costs associated with the rule would be borne by chemical manufacturers and importers. The benefits associated with the rule would accrue to broad groups within society, but especially to: employers and employees; members of the health and scientific community; and State, local and tribal governments.

The precise nature of the benefits of the rule will be known only after the required testing is completed and information from the testing program is made available to the public. Benefits will begin to accrue as individuals and firms process the information from the testing program, and modify their behavior and decisions in such a way as to reduce exposures to harmful chemicals. The types of exposures mitigated will thus depend on the information that is produced by the testing program, whether and how that information is acted upon, and by whom. EPA has no reason to believe, however, that the benefits of the rule would be distributed unevenly across different geographic 25 regions, or among different socioeconomic groups within society. Therefore, EPA concludes that there are no particular environmental equity implications associated with this rule.

7.0 CHILDREN'S HEALTH AND EXECUTIVE ORDER 13045 Executive Order 13045, entitled Protection of Children from Environmental Health Risks and Safety Risks ( 62 FR 19885, April 23, 1997), does not apply to this final rule, because it is not designated as an " economically significant" regulatory action as defined under E. O 12866, and it does not establish an environmental standard that is intended to mitigate environmental health or safety risks that EPA has reason to believe may have a disproportionate effect on children. EPA interprets E. O. 13045 as applying only to those regulatory actions that establish an environmental standard intended to mitigate health or safety risks, such that the analysis required under section 5 501 of the Order has the potential to influence the regulation Although this final rule is not subject to this Executive Order, information obtained by the testing required under 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.

8.0 CONCLUSIONS The economic analysis calculated the economic impact of the in vitro dermal absorption rate testing rule by comparing the testing cost per pound of production to each chemical's sales price per pound. On this basis, for 26 of the 34 chemicals for which prices were available, the potential impact of the testing costs was confirmed to be well below 1.0 percent for all but five chemicals, assuming the minimum production of 1.0 million pounds per year. For the five chemicals impacted at the level of 1.0 percent or greater, EPA confirmed their actual production exceeds 10 million pounds, making it possible to conclude that the price impact for these chemicals is also below 1.0 percent. Thus, for all 26 chemicals for which prices were available, EPA concluded the impact of the testing requirements is below 1.0 percent.

For the remaining eight chemicals without price data, the 1.0 percent impact threshold would be met only if the price were below $ 0.37 per pound. Because the average price for chemicals with price data is $ 0.88 per pound, the potential for any chemicals to be impacted at the 1.0 percent or greater level appears unlikely, unless their value is very low. Furthermore, this " critical" price was calculated by assuming that the annual production volume for each chemical is one million pounds, when in fact this represents the minimum for all chemicals subject to this test rule. When calculated using actual production, any impacts over 1.0 percent would be further reduced. 26 The small business impact analysis analyzed the potential for the rule to impose annualized costs that exceed 1.0 percent of any small entity's annual revenues. Using the SBA's industry specific small business size standards ( for both NAICS and SIC), the analysis shows that no small entities would be affected by impacts that exceed 1.0 percent of their revenues. Analysis based on the TSCA regulatory definition produced the same result. There are seven firms whose size could not be determined because data on their SIC code ( and therefore, NAICS code), employment, or other size indicator, could not be located. For those firms, it can not be shown conclusively that no impacts would occur.

A further conclusion of the small entity analysis is that the export notification requirements triggered by the rule would be unlikely to burden small exporters by a cost that exceeds 1.0 percent of their annual sales revenue.

In accordance with the requirements of the Unfunded Mandates Reform Act, EPA has also concluded that no non federal governmental entities will be burdened by the testing requirements in this rule. In addition, because costs to the private sector are estimated to be well below $ 100 million in any one year, EPA finds no significant impacts on the private sector. EPA also finds no impacts on state, local, or tribal governments under E. O.' s 12875 and 13084, and concludes that there are no particular environmental equity or children's health implications associated with this rule. 27 9.0 REFERENCES BLS 2003. U. S. Department of Labor, Bureau of Labor Statistics. Employer Costs for Employee Compensation, available from http:// www. bls. gov/ ncs/ ect/ home. htm. Accessed March 2003.

BLS 1999. Employment Cost Index, Historical Listing. Table 6. U. S. Department of Labor, Bureau of Labor Statistics, Washington, D. C. April 29, 1999. p. 85.

Bureau of the Census 1997. 1997 Economic Census: Bridge Between NAICS and SIC. Available at http:// www. census. gov/ epcd/ ec97brdg. Accessed April 4, 2003.

Bronaugh, R. L. and S. W. Collier, 1991. " Protocol for In Vitro Percutaneous Absorption Studies," in In Vitro Percutaneous Absorption Principles, Fundamentals, and Applications. ( R. L. Bronaugh and H. I. Maibach, Eds.), CRC Press, Boca Raton. 1991. pp. 237 241.

CMR. Chemical Marketing Reporter. Various issues. 1995 2003.

CEN. Chemical & Engineering News. Various issues. 1995 2003.

CW. Chemical Week. Various issues. 1995 2003.

D& B 2003. Dun & Bradstreet. Dun's Marketing Information Services, March 2003 version, accessed through the DIALOG online system. Dun & Bradstreet, Parsippany, N. J. 2003.

Heiden 1989. Heiden Associates, Final Report: A Study of Industry Compliance Costs under the Final Comprehensive Assessment Information Rule, prepared for the Chemical Manufacturers Association, December 14, 1989. Cited in USEPA 2002b.

SBA 2003. Small Business Administration. Tables of Size Standards. Available at Internet site address: http:// www. sba. gov/ size/ indextableofsize. html. Accessed March 2003.

USEPA 1989. " Administrative costs and burden hours for test rule." Note from Dan Axelrad to Bob Lee and Libby Parker, Regulatory Impacts Branch, Office of Pollution Prevention and Toxics, U. S. EPA. October 26, 1989.

USEPA 1992. Economic Analysis in Support of the Final Rule to Amend TSCA Section 12( b). William Silagi, Regulatory Impacts Branch, Office of Pollution Prevention and Toxics, U. S. EPA. June 1992.

USEPA 1997a. EPA Interim Guidance for Implementing the Small Business Regulatory Enforcement Fairness Act and Related Provisions of the Regulatory Flexibility Act. U. S. EPA SBREFA Task Force, U. S. EPA. February 5, 1997. pp. 1 14. 28 USEPA 1997b. Additional Information on Small Entity Impacts of Proposed TSCA Section 4( a) Test Rule For 21 Hazardous Air Pollutants, Appendix C. Cody Rice, Economic and Policy Analysis Branch, Office of Pollution Prevention and Toxics, U. S. EPA. November 14, 1997.

USEPA 1998. Economic Analysis in Support of the TSCA Section 12( b) Information Collection Request. Joe Callahan, Economic and Policy Analysis Branch, Office of Pollution Prevention and Toxics, U. S. EPA. October 20, 1998.

USEPA 2002a. Chemical Update System Database. Office of Pollution Prevention and Toxics, U. S. EPA.

USEPA 2002b. " Wage Rates for Economic Analysis of the Toxics Release Inventory Program." Memorandum from Cody Rice, Analytical Support Branch, Environmental Analysis Division, Office of Environmental Information, U. S. EPA. April 11, 2002.

USEPA 2003a. " Laboratory Cost Estimate for In Vitro Dermal Absorption Rate TestingCShort Term Absorption Rate" Economic and Policy Analysis Branch, Office of Pollution Prevention and Toxics, U. S. EPA. February 20, 2003.

USEPA 2003b. " Laboratory Cost Estimate for In Vitro Dermal Absorption Rate Testing CPermeability Constant ( Kp)" Economic and Policy Analysis Branch, Office of Pollution Prevention and Toxics, U. S. EPA. March 26, 2003.


[Federal Register Volume 83, Number 9 (Friday, January 12, 2018)]
[Notices]
[Pages 1639-1641]
[FR Doc No: 2018-00410]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82459; File No. SR-CBOE-2017-084]

Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Rule 6.13, CBOE Hybrid System Automatic Execution Feature

January 8, 2018.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on December 27, 2017, Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe
Options'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. The
Exchange filed the proposal as a ``non-controversial'' proposed rule
change pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and Rule
19b-4(f)(6) thereunder.\4\ The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The ``Exchange proposes to amend its rules related to stop orders.
(Additions are in Italics; Deletions are [Bracketed])
* * * * *

Cboe Exchange, Inc.

Rules

* * * * *

Rule 6.13. [CBOE]Cboe Options Hybrid System Automatic Execution Feature

    (a) No change.
    (b) Automatic Execution: Orders eligible for automatic execution
through the Cboe Options Hybrid System may be automatically executed in
accordance

with the provisions of this Rule, Rule 6.13A or 6.14A, as applicable.
This section governs automatic executions and split-price automatic
executions. The allocation of orders or quotes that automatically
execute through the Cboe Options Hybrid System is governed by Rule
6.45.
    (i)-(vi) No change.
    (vii) Stop and Stop-Limit Orders. The System cancels a buy (sell)
stop or stop-limit order if the Exchange best bid (offer) at the time
the System receives the order is equal to or above (below) the stop
price.
    (c) No change.
* * * * *
    The text of the proposed rule change is also available on the
Exchange's website (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the
Secretary, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The proposed rule change amends Rule 6.13 to modify the automatic
handling of stop and stop-limit orders. As defined in Rule 6.53(c), a
stop order is a contingency order to buy or sell when the market for a
particular option contract reaches a specified price on the Cboe
Options floor. A stop order to buy becomes a market order when the
option contract trades or is bid at or above the stop price on the Cboe
Options floor. A stop order to sell becomes a market order when the
option contract trades or is offered at or below the stop-limit price
on the Cboe Options floor. A stop-limit order is a contingency order to
buy or sell when the market for a particular option contract reaches a
specified price. A stop order to buy becomes a limit order when the
option contract trades or is bid at or above the stop-limit price. A
stop-limit order to sell becomes a limit order when the option contract
trades or is offered at or below the stop-limit price.
    The proposed rule change adds Rule 6.13(b)(vii), which states the
System cancels a buy (sell) stop or stop-limit order if the Exchange
best bid (offer) (``BBO'') at the time the System receives the order is
equal to or above (below) the stop price. The purpose of a stop or
stop-limit order is for it to become a market or limit order,
respectively, after the price in a series reaches the stop price.
Therefore, there is an implication the submitting Trading Permit Holder
intends for the order to not become a market or limit order,
respectively, until after an amount of time passes and the series price
changes. If the BBO is above or below, as applicable, the stop price
when the System receives a stop or stop-limit order, the order converts
immediately to a market or limit order, respectively. This is
inconsistent with the purpose of the order and the intentions of the
submitting Trading Permit Holder. The Exchange believes if a Trading
Permit Holder submitted an order at such a price, there is a strong
possibility the order was submitted at that price as an error by the
Trading Permit Holder. Pursuant to the proposed rule change, the System
will reject a stop or stop-limit order that would otherwise immediately
convert to a market or limit order, respectively, based on the BBO,
which is consistent with the definitions and purposes of these orders.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations thereunder applicable to the
Exchange and, in particular, the requirements of Section 6(b) of the
Act.\5\ Specifically, the Exchange believes the proposed rule change is
consistent with the Section 6(b)(5) \6\ requirements that the rules of
an exchange be designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest.
Additionally, the Exchange believes the proposed rule change is
consistent with the Section 6(b)(5) \7\ requirement that the rules of
an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
    \7\ Id.
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    In particular, the proposed rule change will protect investors and
the public interest and maintain fair and orderly markets by mitigating
potential risks associated with market participants entering stop and
stop-limit orders at unintended prices, and risks associated with
orders trading at prices that are potentially erroneous, which may
likely have resulted from human or operational error. The proposed rule
change is consistent with the definitions and purposes of stop and
stop-limit orders.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposed rule change
will apply in the same manner to all stop and stop-limit orders Trading
Permit Holders submit to the Exchange and will help prevent potentially
erroneous executions, which benefits all market participants. Because
pursuant to the proposed rule change the System will reject stop and
stop-limit orders it receives under certain conditions, the proposed
rule change will only impact stop and stop-limit orders Trading Permit
Holders submit to the Exchange, based on quotes on the Exchange, and
thus will have no impact on intermarket competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    The Exchange neither solicited nor received comments on the
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    The Exchange has designated this rule filing as non-controversial
under Section 19(b)(3)(A) \8\ of the Act and Rule 19b-4(f)(6) \9\
thereunder. Because the proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the

Commission may designate, it has become effective pursuant to Section
19(b)(3)(A) of the Act and Rule 19b-4(f)(6) thereunder.
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6).
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    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File Number SR-CBOE-2017-084 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE,
Washington, DC 20549-1090.

All submissions should refer to File Number SR-CBOE-2017-084. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-CBOE-2017-084 and should be submitted on
or before February 2, 2018.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-00410 Filed 1-11-18; 8:45 am]
 BILLING CODE 8011-01-P