TSCA Section 8(d):Economic Impact Analysis for the Addition of Manufacturers and Importers of Consumer Products Containing Cadmium and Cadmium Compounds from the Sixty-Ninth Report of the TSCA Interagency Testing Committee to the Health and Safety Data Reporting Rule

                                  June 28, 2012

                         -- Does not contain TSCA CBI --

                                   Prepared by:

Economic and Policy Analysis Branch
Economics, Exposure and Technology Division
Office of Pollution Prevention and Toxics
U.S. Environmental Protection Agency
1200 Pennsylvania Avenue, N.W.
Washington, DC 20460

                                 Contributors
The EPA analyst responsible for this report is Joseph Callahan of the Economic and Policy Analysis Branch; Economics, Exposure and Technology Division; Office of Pollution Prevention and Toxics. Analytical and draft preparation support was provided by Abt Associates, Inc. under EPA Contract No. EP-W-08-010.
Table of Contents
Chapter 1  -  Introduction	1-1
1.1	Statutory Authority	1-1
1.2	Regulatory Background	1-1
1.3	Statement of Need	1-1
1.3.1	Inadequate Information	1-2
1.3.2	Externalities	1-2
1.3.3	Effect of the Final Rule	1-3
1.4	Summary of Methodology	1-3
1.5	Organization of This Report	1-3
Chapter 2  -  Affected Entities	2-1
2.1	Cadmium and Cadmium Compounds Subject to the Final Rule	2-1
2.2	The Regulated Community	2-1
Chapter 3  -  Industry Compliance Costs	3-1
3.1	Introduction	3-1
3.2	Wage Rates	3-1
3.3	Industry Compliance Costs	3-1
3.3.1	Initial Review of the Rule	3-2
3.3.2	Site Identification	3-3
3.3.3	File Searches at Identified Sites	3-4
3.3.4	Preparing Study Title Lists	3-5
3.3.5	Photocopying Studies	3-6
3.3.6	Review of Studies for Confidential Business Information	3-7
3.3.7	Post-Reporting Submission of Ongoing or Newly Initiated Studies	3-8
3.4	Summary Total Industry Compliance Costs	3-9
Chapter 4  -  Agency Costs	4-1
4.1	Introduction	4-1
4.2	Derivation of Agency Wage Rates	4-1
4.3	Agency Costs	4-2
Chapter 5  -  Total Social Costs	5-1
Chapter 6  -  Benefits	6-1
Chapter 7  -  Small Entity Impact Analysis	7-1
Chapter 8  -  Other Impact Analyses	8-1
8.1	Paperwork Reduction Act (PRA)	8-1
8.1.1	Industry Burden	8-1
8.1.2	Government Burden	8-2
8.2	Unfunded Mandates Reform Act (UMRA)	8-2
8.3	Executive Order 12866  -  Regulatory Planning and Review	8-2
8.4	Executive Order 13132  -  Federalism	8-3
8.5	Executive Order 13175  -  Consultation and Coordination with Indian Tribal Governments	8-3
8.6	Executive Order 13045  -  Children's Health	8-3
8.7	Executive Order 12898  -  Environmental Justice	8-3
8.8	Executive Order 13211  -  Energy Supply, Distribution, or Use	8-4
8.9	National Technology Transfer and Advancement Act	8-4
Chapter 9  -  References	9-1
List of Tables
Table 2-1: Number of Firms and Sites per NAICS	2-1
Table 3-1: Derivation of Loaded Industry Wage Rates (2011$)	3-1
Table 3-2: Unit Industry Burden for Initial Review of the Rule	3-2
Table 3-3: Total Industry Burden for Initial Review of the Rule	3-3
Table 3-4: Unit Industry Burden for Site Identification	3-3
Table 3-5: Total Industry Burden for Site Identification	3-4
Table 3-6: Unit Industry Burden for File Searches at Identified Sites	3-4
Table 3-7: Total Industry Burden for File Searches at Identified Sites	3-5
Table 3-8: Unit Industry Burden for Preparing Study Title Lists	3-5
Table 3-9: Total Industry Burden for Preparing Study Title Lists	3-6
Table 3-10: Unit Industry Burden for Photocopying Studies	3-6
Table 3-11: Total Industry Burden for Photocopying Studies	3-7
Table 3-12: Unit Industry Burden for CBI Review	3-7
Table 3-13: Total Industry Burden for CBI Review	3-8
Table 3-14: Unit Industry Costs for Post-Reporting Submissions	3-8
Table 3-15: Total Industry Costs for Post-Reporting Submissions	3-9
Table 3-16: Summary of Total Industry Costs for the TSCA Section 8(d) Information Collection	3-9
Table 4-1: Derivation of Loaded Agency Wage Rates	4-1
Table 4-2: Total Agency Burden for the TSCA Section 8(d) Information Collection	4-2
Table 5-1: Total Social Cost and Burden of the Final Rule	5-1
Table 7-1: Calculations of Average and High Cost per Company	7-2
Table 8-1: Total Hourly Industry Burden	8-2
Table 8-2: Total Hourly Industry Burden	8-2

Executive Summary
This economic analysis estimates and evaluates the costs and benefits of collecting information for cadmium and cadmium compounds that are reasonably likely to be, or have been incorporated into consumer products by the U.S. Environmental Protection Agency (EPA), under the authority granted by Section 8(d) of the Toxic Substances Control Act (TSCA). Manufacturers and importers of cadmium and cadmium compounds will be required to submit lists and/or copies of ongoing and completed, unpublished health and safety studies. EPA's TSCA Section 8(d) "Health & Safety Data Reporting Rule" was developed to gather the health and safety information on chemical substances and mixtures needed by EPA to carry out its TSCA mandates (e.g., to support OPPT's Existing Chemicals Program and Chemical Testing Program and to set priorities for TSCA risk assessment/management activities).
EPA conservatively estimates that there are approximately 1,384 U.S. cadmium and cadmium compound manufacturers and importers (see Chapter 2). However, only 28 firms are expected to submit relevant studies under the rule (see Chapter 3).
Under the final rule, industry is conservatively estimated to incur a burden and cost of approximately 7,000 hours and $480,500 (see Chapter 3), while the Agency is expected to incur a burden and cost of approximately 300 hours and $23,000 (see Chapter 4), for a total burden and cost of approximately 7,300 hours and $503,000.
As required by the Regulatory Flexibility Act of 1980 and the Small Business Regulatory Enforcement Fairness Act of 1996, the small entity impact analysis conducted in Chapter 7 is based on small business definitions provided by the U.S. Small Business Administration (SBA). EPA expects that compliance with the rule will not have a significant economic impact on a substantial number of small entities.
The benefits resulting from the final rule are discussed qualitatively in Chapter 6 of this report. By enhancing the data supplied to Agency risk-screening programs, EPA expects to more effectively and expeditiously reduce the potential risks posed by consumer exposure to cadmium The U.S. Consumer Product Safety Commission (CPSC) and EPA are concerned with the content of cadmium and cadmium compounds in certain children's toys, jewelry, and other consumer products due to known toxicity and health concerns from exposure to cadmium and cadmium compounds (FR Notice, Volume 76, No. 147, p. 46176). However, neither CPSC nor EPA currently has complete information for assessing the safety of consumer products that may contain cadmium or cadmium compounds. Information obtained through the rule may assist both EPA and CPSC in taking further action as appropriate to protect consumers and children from exposure to cadmium and cadmium compounds in consumer products

 -  Introduction
This report estimates and evaluates the costs and benefits expected to result from an information collection rule for cadmium and cadmium compound manufacturers and importers proposed by the U.S. Environmental Protection Agency (EPA) under the authority granted by Section 8(d) of the Toxic Substances Control Act (TSCA). The rule will require manufacturers (including importers) of cadmium and cadmium compounds that are reasonably likely to be, or have been incorporated into consumer products to provide copies of unpublished health and safety studies to EPA. Section 1.1 provides background information on EPA's statutory authority for the proposed rule; Section 1.2 reviews the regulatory background; Section 1.3 discusses the need for the regulation; Section 1.4 presents a brief summary of the methodology used in the analysis; and Section 1.5 describes the organization of the remainder of this report.
Statutory Authority
Under TSCA Section 8(d), EPA has the authority to promulgate rules to require manufacturers, importers, processors and distributors to submit lists and/or copies of ongoing and completed, unpublished health and safety studies. EPA's TSCA Section 8(d) "Health & Safety Data Reporting Rule" was developed to gather health and safety information on chemical substances and mixtures needed by EPA to carry out its TSCA mandates (e.g., to support OPPT's Existing Chemicals Program and Chemical Testing Program and to set priorities for TSCA risk assessment/management activities). EPA has also used its TSCA Section 8(d) authority to gather information needed by other EPA Program Offices and other federal agencies. Chemicals that are designated or recommended for testing by the TSCA Interagency Testing Committee (ITC) http://www.epa.gov/opptintr/chemtest/pubs/whatitc.html are added to the rule via immediate final rulemaking (up to 50 substances/year) unless EPA finds exception under 40 CFR 716.105(c). Non-ITC chemicals can be added to the Section 8(d) rule via notice and comment rulemaking.
Regulatory Background
On September 2, 1982, EPA issued the Health and Safety Data Reporting Rule (HSDRR) under Section 8(d) of the Toxic Substances Control Act (TSCA). The rule was modified in 1986 (51 FR 32720, September 15, 1986) and then again in 1998 (63 FR 15765, April 1, 1998). The rule, as modified, establishes a set of requirements and procedures for the submission of lists and copies of unpublished health and safety studies by manufacturers (including importers) and (if specified) processors of specified chemical substances and mixtures. These specified chemical substances and mixtures become subject to the requirements of the HSDRR when the Agency adds them to the HSDRR by amendment. The amendment process can be triggered by a listing of the substance or mixture by the Interagency Testing Committee (ITC). This final rule adds cadmium and cadmium compounds to the list of chemical substances at 40 CFR 716.120 resulting from action by the Interagency Testing Committee (ITC) adding such chemical substances to the Priority Testing List through its 68th ITC Report.

Statement of Need
Executive Order 12866 requires regulatory Agencies to identify the specific market failure that a significant rule addresses. The major causes of market failure identified in the Office of Management and Budget (OMB) guidance (OMB, 2003) on Executive Order 12866 are externality, natural monopoly, market power, and inadequate or asymmetric information. The final rule is designed to address the issue of inadequate information about the health and safety effects of cadmium exposure and, to the extent that new information indicates the presence of negative externalities, inform future rulemaking governing the manufacture and import, of cadmium and cadmium compounds.
     1..1 Inadequate Information
Economic theory requires that buyers and sellers have complete information about the costs and benefits of their economic choices to produce an efficient allocation of resources. When buyers or sellers do not have perfect information, rational decision making cannot occur and a market failure exists. As an example, a manufacturer may not consider substituting a less hazardous chemical for a hazardous chemical if knowledge about either chemical's hazard is unknown or uncertain. More complete information on the hazards associated with the chemical will allow a manufacturer to make more socially efficient decisions.
There are many reasons why information regarding the hazards associated with a chemical substance may not be widely known. Two of these reasons are:
* Manufactures may know this information but have no incentive to act on it or reveal it to their customers (because the costs are not borne by, and are therefore external to, the producer).
* This information may be unknown to both the producers and their customers.

The first of these reasons is known as asymmetric information; that is, a case in which consumers and producers do not have the same level of information regarding the aggregate production, uses, and hazards of by a chemical substance. Typically, the manufacturer's level of information regarding these items, particularly hazards, exceeds the consumers' level of information.
In the second case, chemical production, use, and hazard information is inadequate and/or unavailable (i.e., unknown to both consumers and producers).  Manufacturers may have little incentive to acquire such information due to the potential costs associated with its acquisition. Information is by nature a public good; that is, non-rival (one person's use of information does not diminish the amount remaining for other users) and non-excludable (once made available, information cannot be easily withheld from others). Thus, where information is provided by one person, others are free to use and benefit from that information without having made a contribution to its development. This situation reduces the incentive to provide the information, resulting in a failure of the market to efficiently provide the information. In addition, individual consumers are unlikely to be willing to pay the cost of collecting and reporting information if they can use information developed and paid for by others.
     2..2 Externalities
Externalities are another cause of market failure. An externality occurs when the actions of one economic agent impose costs (or benefits) on parties that are "external" to the market transaction; that is, these costs (or benefits) are not borne by the producers or consumers directly involved. Such is the case where manufacturing or other business activities harm human health or the environment in excess of the costs borne by the parties to this activity, resulting in negative externalities. When information is missing about the human health and environmental costs to society, or when these costs are external to producers' decision making, the costs are not incorporated into business decisions. The result can be the overuse and/or overproduction of certain harmful products.
EPA often intervenes when negative externalities pose risks to human health and the environment. For example, risks may arise as a result of chemical exposure to the general population from the manufacture, processing, and use of chemicals. As a first step in mitigating externalities, the EPA Office of Pollution Prevention and Toxics (OPPT) routinely screens chemicals for the potential risks they may pose. This screening is used to determine if risks from the manufacture, processing, or use of chemicals are of sufficient concern to warrant risk management. Given that EPA's TSCA Inventory recognizes more than 75,000 chemicals in commerce, chemical risk screening represents a significant effort. Risk is a function of hazard and exposure and when information on either is lacking, EPA's ability to effectively identify significant risks arising from externalities is compromised.
     3..3 Effect of the Final Rule
The final rule may address market failure due to inadequate information by ensuring that basic information about the health and safety effects of manufactured or imported cadmium and cadmium compounds that have been or are reasonably likely to be incorporated into consumer products is available to the Agency. This information can be used by EPA to make more informed decisions regarding the production, sale, and use of cadmium and cadmium compounds.
Summary of Methodology
This analysis seeks to quantify, to the extent possible, the costs to society of the final rule by identifying the costs to industry (and to small entities, in particular) associated with performing the required reporting and recordkeeping, and the costs to EPA of administering the rule. Industry costs consist of the collection, compilation, and submission of required information by each reporting firm. Agency costs include reviewing and processing the data received as a result of the rule. Small entity impact is defined as a small business' estimated cost of compliance with the final rule as a percent of sales. Data sources for this analysis include burden estimates derived from information collection requests for similar regulations, compensation data acquired from government publications, and supplementary market research to produce an estimate of the universe of affected entities. EPA believes the inputs for this analysis (e.g., estimated size of universe) are conservative and that the final burden and cost estimates are therefore conservative (i.e., the total cost of the final rule may be overestimated).
This report qualitatively discusses the benefits of the final rule based on the value of the information it will provide. The benefits analysis was undertaken to address the implicit call for cost-benefit balancing contained in TSCA, as well as the requirements of Executive Order 12866.
Organization of This Report
The remainder of this report provides EPA's economic analysis in support of the final rule. The affected chemical substances and companies are characterized in Chapter 2. Chapter 3 estimates industry cost of complying with the final rule, and Chapter 4 estimates government costs associated with the administration of the final rule. Chapter 5 presents the total social costs. Chapter 6 addresses the benefits of the final rule using a "value of information" framework. Chapter 7 provides the small entity impact analysis for the final rule. Several additional impact analyses are presented in Chapter 8, including: a burden hour analysis, which responds to the requirements of the Paperwork Reduction Act (PRA); an unfunded mandates statement, which is required by the Unfunded Mandates Reform Act (UMRA); an environmental justice statement, which addresses the requirements of Executive Order 12898; and a children's health statement, which is mandated by Executive Order 13045. Note that all dollar amounts in this analysis are reported in Q4 2011 dollars.
  -  Affected Entities
This chapter presents information about the chemicals, manufacturers, and importers subject to the final rule. Section 2.1 provides the chemicals subject to the rule; and Section 2 describes and estimates the population of affected organizations.
Cadmium and Cadmium Compounds Subject to the Final Rule
This rule applies to all cadmium and cadmium compounds being manufactured in or imported into the United States that have been, or are reasonably likely to be, incorporated into consumer products. This rule is not intended to be restricted to specific chemicals. All manufacturers and importers of products containing cadmium and cadmium compounds are subject to this final rule.
The Regulated Community
The number of firms that will be subject to this rule cannot be estimated directly, because of the large number of chemicals and products that use cadmium and cadmium compounds. To estimate the number of firms EPA has followed the approach used for identifying firms outlined in the TSCA Section 8(d): Economic Impact Analysis for Adding Lead and Lead Compounds from the 60th Report of the TSCA Interagency Testing Committee to the Health and Safety Data Reporting Rule (EPA, 2007). The Agency has chosen to estimate the number of affected firms listed in Table 2-1 by using U.S. Census data of the number of firms included in certain NAICS categories. The categories are selected with the expectation that they include firms which may be engaged in manufacturing or importing cadmium and cadmium compounds. All figures in Table 2-1 were taken directly from the 2009 Statistics of U.S. Businesses data (U.S. Census Bureau, 2009). EPA expects that about 1,384 firms and 1,865 sites will be subject to the final rule.
Table 2-1: Number of Firms and Sites per NAICS
                                     NAICS
                                   Industry
                                 Description
                           Number of Firms in NAICS
                           Number of Sites in NAICS
                                    325188
               All other basic inorganic chemical manufacturing
This U.S. industry comprises establishments primarily engaged in manufacturing basic inorganic chemicals (except industrial gases, inorganic dyes and pigments, alkalies and chlorine, and carbon black).
                                      390
                                      637
                                    325131
                    Inorganic dye and pigment manufacturing
This U.S. industry comprises establishments primarily engaged in manufacturing inorganic dyes and pigments.
                                      66
                                      87
                                    325199
                All other basic organic chemical manufacturing
This U.S. industry comprises establishments primarily engaged in manufacturing basic organic chemical products (except aromatic petrochemicals, industrial gases, synthetic organic dyes and pigments, gum and wood chemicals, cyclic crudes and intermediates, and ethyl alcohol).
                                      569
                                      729
                                    331419
Primary smelting and refining of nonferrous metal (except copper and aluminum)
This U.S. industry comprises establishments primarily engaged in (1) making (i.e., the primary production) nonferrous metals by smelting ore and/or (2) the primary refining of nonferrous metals by electrolytic methods or other processes.
                                      143
                                      166
                                    331492
Secondary smelting, refining, and alloying of nonferrous metal (except copper and aluminum)
This U.S. industry comprises establishments primarily engaged in (1) alloying purchased nonferrous metals and/or (2) recovering nonferrous metals from scrap. Establishments in this industry make primary forms (e.g., bar, billet, bloom, cake, ingot, slab, slug, wire) using smelting or refining processes.
                                      216
                                      246
                                                                        Total
                                     1,384
                                     1,865
Source:
U.S. Census Bureau, 2009. United States Census Bureau. "2009 Statistics of U.S. Businesses". Available at  http://www.census.gov/econ/susb/ (Accessed March, 2012).

.

  -  Industry Compliance Costs
Introduction
This chapter presents estimates of the total costs that cadmium and cadmium compound manufacturers and importers may incur due to the requirements included in the final rule and discusses the method used to measure each. The final rule requires that firms incur a one-time cost related to the reporting pertaining to gathering health and safety studies for cadmium and cadmium compounds.
Wage Rates
Wages and fringe benefit data for managerial, professional/technical, and clerical labor are from the BLS Employer Costs for Employee Compensation (ECEC) historical data for December 2011 (BLS, 2012).
The costs of fringe benefits such as paid leave and insurance, specific to each labor category, are taken from the same BLS report (BLS, 2012). Fringe benefits as a percentage of wages are calculated separately for each labor category. For example, for December 2011, the average wage rate for professional/ technical labor was $38.48, and the average fringe benefit was $19.64. Therefore, fringe benefits as a percentage of wages were $19.64/$38.48, or approximately 51 percent (See Table 3-1).
An additional loading factor of 17 percent is applied to wages to account for overhead. This approach is used for consistency with Office of Pollution Prevention and Toxics (OPPT) economic analyses for two major rulemakings: Wage Rates for Economic Analyses of the Toxics Release Inventory Program, June 2002 (EPA, 2002b), and the Revised Economic Analysis for the Amended Inventory Update Rule: Final Report, August 2002 (EPA, 2002a). This overhead loading factor is added to the benefits loading factor, and the total is then applied to the base wage to derive the fully loaded wage. For example, the December 2011 fully loaded wage for professional/technical labor is $38.48 x (1+ 0.51 + 0.17) = $64.66 (See Table 3-1).
Table 3-1: Derivation of Loaded Industry Wage Rates (2011$)

                                     Wage1
                               Fringe Benefits1
                               Fringes as % Wage
                               Overhead % Wage2
                           Fringe + Overhead Factor
                                 Loaded Wages

                                      (a)
                                      (b)
                                 (c) = (b)/(a)
                                      (d)
                                (e)=(1)+(c)+(d)
                                (f) = (a) x (e)
                                  Managerial
                                    $43.01
                                    $20.40
                                    47.43%
                                      17%
                                     1.644
                                    $70.72
                                   Technical
                                    $38.48
                                    $19.64
                                    51.04%
                                      17%
                                     1.680
                                    $64.66
                                   Clerical
                                    $17.69
                                     $8.93
                                    50.48%
                                      17%
                                     1.675
                                    $29.63
Notes:

1 Employer Costs for Employee Compensation Supplementary Tables: December 2011, US Bureau of Labor Statistics, March 14, 2012 (BLS, 2012).
2 An overhead rate of 17% was estimated based on industry data gathered for the Revised Economic Analysis for the Amended Inventory Update Rule: Final Report (EPA, 2002a)
Loaded wage rates may not calculate due to rounding of the Fringe & Overhead Factor

Industry Compliance Costs
EPA expects that firms subject to the rule will undertake the following actions in response to a TSCA section 8(d) listing:
   1. Rule Review: Determine whether the firm may be required to report, and if so, review the rule in more detail;
   2. Site Identification: Conduct a corporate review to identify which firm sites must be searched to locate the appropriate health and safety studies;
   3. File Searches at Identified Sites: Search the files at appropriate sites to locate relevant studies;
   4. Preparing Study Title Lists: Compile and transcribe lists of studies being submitted, ongoing studies, newly initiated studies, studies known to exist but not known to be in the respondent's possession, and studies previously submitted to other federal agencies without confidentiality claims;
   5. Photocopying Studies: Photocopy the studies being submitted;
   6. Review Studies for CBI: Review the responses for possible confidential business information; and
   7. Post-Reporting Submissions: Submit studies completed after the reporting period.

This section describes the unit and total industry burdens associated with each of the above tasks.

     .7.1 Initial Review of the Rule
Firms are expected to use management level personnel to perform an initial review of the rule to determine whether they are subject to the reporting requirements and to understand the specific requirements. This review is expected to take a total of two hours per firm and cost approximately $141, as show in Table 3-2 (EPA, 2008).

Table 3-2: Unit Industry Burden for Initial Review of the Rule
                              Collection Activity
                               Burden per Firm1
                            Cost per Firm (2011$)2

                                  Managerial
                                   Technical
                                   Clerical
                                     Total
                                  Managerial
                                  ($70.72/hr)
                                   Technical
                                  ($64.66/hr)
                                   Clerical
                                  ($29.63/hr)
                                     Total
                                  Rule Review
                                     2.00
                                     0.00
                                     0.00
                                     2.00
                                    $141.44
                                     $0.00
                                     $0.00
                                     $141
Sources:

1 Burden estimates are from 2008 ICR for Health and Safety Data Reporting, Submission of Lists and Copies of Health and Safety Studies, EPA ICR No: 0575.12 (EPA, 2008 page 10).
2 Loaded wage rates are derived in Table 3-1 of this report

The number of manufacturers was estimated using assumptions made in previous TSCA Section 8(d) Economic Analyses (TSCA Section 8(d): Economic Impact Analysis for Adding Lead and Lead Compounds from the 60th Report of the TSCA Interagency Testing Committee to the Health and Safety Data Reporting Rule (EPA, 2007) and  Economic Analysis of the Addition of Chemicals from the 55[th], 56[th], and 58[th] ITC Report to the 8(d) Health and Safety Data Reporting Rule (EPA, 2006) EPA believes that all 1,384 firms identified as potential manufacturers or importers of cadmium or cadmium compounds in Table 2-1 will complete this step. Therefore, as shown in Table 3-3 the total industry burden associated with initial review of the rule is approximately 2,768 hours and $195,800.

Table 3-3: Total Industry Burden for Initial Review of the Rule
                              Collection Activity
                             Unit Burden (hours)1
                              Unit Cost (2011$)1
                  Total Number of Firms Subject to the Rule2
                  Total Number of Firms Performing Activity3
                             Total Burden (hours)
                              Total Cost (2011$)

                                      (a)
                                      (b)
                                      (c)
                                   (d)=(c)*1
                                (e) = (a) * (d)
                                (f) = (b) * (d)
                                Review of Rule
                                     2.00
                                    $141.44
                                     1,384
                                     1,384
                                     2,768
                                   $195,753
Sources:
1 Unit burden and cost estimates are derived in Table 3-2 of this report.
2 The total number of firms is calculated in Table 2-1 of this report
3 The percentage of firms conducting this activity is taken from TSCA Section 8(d): Economic Impact Analysis for Adding Lead and Lead Compounds from the 60th Report of the TSCA Interagency Testing Committee to the Health and Safety Data Reporting Rule (EPA, 2007, page 6).

     .7.2 Site Identification
Once a firm has determined that it is subject to the rule, it must conduct a corporate review to identify all the company sites that need to be searched for relevant health and safety studies. EPA estimates this review will take approximately 3 hours of management time and cost approximately $212 per firm (EPA, 2008).

Table 3-4: Unit Industry Burden for Site Identification
                              Collection Activity
                               Burden per Firm1
                                Cost per Firm2

                                  Managerial
                                   Technical
                                   Clerical
                                     Total
                                  Managerial
                                  ($70.72/hr)
                                   Technical
                                  ($64.66/hr)
                                   Clerical
                                  ($29.63/hr)
                                     Total
                              Site Identification
                                     3.00
                                     0.00
                                     0.00
                                     3.00
                                    $212.17
                                     $0.00
                                     $0.00
                                     $212
Sources:
1 Burden estimates are from 2008 ICR for Health and Safety Data Reporting, Submission of Lists and Copies of Health and Safety Studies, EPA ICR No: 0575.12 (EPA, 2008 page 10).
2 Loaded wage rates are derived in Table 3-1 of this report.

Based on the assumptions used in the TSCA Section 8(d): Economic Impact Analysis for Adding Lead and Lead Compounds from the 60th Report of the TSCA Interagency Testing Committee to the Health and Safety Data Reporting Rule (EPA, 2007), EPA estimates that 43 percent of the 1,384 firms (595 firms) manufacture (or import) cadmium or cadmium compounds and will conduct an additional review to identify which corporate sites must be searched to locate any appropriate data. Table 3-5 contains the total industry burden and costs associated with site identification for the TSCA Section 8(d) collection; 1,785 hours and $126,200.

Table 3-5: Total Industry Burden for Site Identification
                              Collection Activity
                             Unit Burden (hours)1
                              Unit Cost (2011$)1
                  Total Number of Firms Subject to the Rule2
                  Total Number of Firms Performing Activity3
                             Total Burden (hours)
                              Total Cost (2011$)

                                      (a)
                                      (b)
                                      (c)
                                 (d)=(c)*0.43
                                (e) = (a) * (d)
                                (f) = (b) * (d)
                              Site Identification
                                     3.00
                                    $212.17
                                     1,384
                                      595
                                     1,785
                                   $126,241
Sources:
1 Unit burden and cost estimates are derived in Table 3-4 of this report.
2 The total number of firms is calculated in Table 2-1 of this report
3 The percentage of firms conducting this activity is taken from TSCA Section 8(d): Economic Impact Analysis for Adding Lead and Lead Compounds from the 60th Report of the TSCA Interagency Testing Committee to the Health and Safety Data Reporting Rule  (EPA, 2007, page 6).

     .7.3 File Searches at Identified Sites
Sites that have been identified as possibly having the relevant health and safety data must search their files for the appropriate studies. EPA estimates this activity will take approximately 3 hours of technical time and cost approximately $194 per site (EPA, 2008).

Table 3-6: Unit Industry Burden for File Searches at Identified Sites
                              Collection Activity
                               Burden per Firm1
                                 Cost per Firm2

                                  Managerial
                                   Technical
                                   Clerical
                                     Total
                                  Managerial
                                  ($70.72/hr)
                                   Technical
                                  ($64.66/hr)
                                   Clerical
                                  ($29.63/hr)
                                     Total
                                 File Searches
                                     0.00
                                     3.00
                                     0.00
                                     3.00
                                     $0.00
                                    $193.98
                                     $0.00
                                     $194
Sources:
1 Burden estimates are from 2008 ICR for Health and Safety Data Reporting, Submission of Lists and Copies of Health and Safety Studies, EPA ICR No: 0575.12 (EPA, 2008 page 10).
2 Loaded wage rates are derived in Table 3-1 of this report

Given that 43 percent of firms have determined that they are subject to the rule, EPA assumes that subsequently 43 percent of sites will also be subject to the rule and conduct file searches (EPA, 2007). A total of 1,865 sites were identified as potential cadmium or cadmium compound manufacturers (including importers) (See Table 2-1). Therefore, as shown in Table 3-7, a total 802 sites (1,865 * 0.43) will perform file searches. The total industry burden associated with site identification is 2,406 hours and approximately $155,600.

Table 3-7: Total Industry Burden for File Searches at Identified Sites
                              Collection Activity
                             Unit Burden (hours)1
                              Unit Cost (2011$)1
                  Total Number of Sites Subject to the Rule2
                   Total Number of Sites Performing Activity
                             Total Burden (hours)
                              Total Cost (2011$)

                                      (a)
                                      (b)
                                      (c)
                                 (d)=(c)*0.43
                                (e) = (a) * (d)
                                (f) = (b) * (d)
                                 File Searches
                                     3.00
                                    $193.98
                                     1,865
                                      802
                                     2,406
                                   $155,572
Sources:
1 Unit burden and cost estimates are derived in Table 3-6 of this report.
2 The total number of sites is calculated in Table 2-1 of this report
3 The percentage of firms conducting this activity is taken from TSCA Section 8(d): Economic Impact Analysis for Adding Lead and Lead Compounds from the 60th Report of the TSCA Interagency Testing Committee to the Health and Safety Data Reporting Rule (EPA, 2007, page 6).

     .7.4 Preparing Study Title Lists
Each firm that has identified relevant studies for submission to EPA will be required to submit copies of the studies along with a list of both their own on-going studies and identified studies that exist but which are not in their possession. The company cost of compiling the list is included in the file search cost described above. Following the 2008 ICR for Health and Safety Data Reporting, Submission of Lists and Copies of Health and Safety Studies , EPA ICR No: 0575.12 (EPA, 2008), this process is assumed to require one hour of clerical time per firm for the transcription of a required study title list. The total cost per firm is approximately $30 (See Table 3-8 ).

Table 3-8: Unit Industry Burden for Preparing Study Title Lists
                              Collection Activity
                               Burden per Firm1
                                Cost per Firm2

                                  Managerial
                                   Technical
                                   Clerical
                                     Total
                                  Managerial
                                  ($70.72/hr)
                                   Technical
                                  ($64.66/hr)
                                   Clerical
                                  ($29.63/hr)
                                     Total
                               Study Title Lists
                                     0.00
                                     0.00
                                     1.00
                                     1.00
                                     $0.00
                                     $0.00
                                    $29.63
                                    $29.63
Sources:
1 Burden estimates are from the 2008 ICR for Health and Safety Data Reporting, Submission of Lists and Copies of Health and Safety Studies, EPA ICR No: 0575.12 (EPA, 2008 page 10).
2 Loaded wage rates are derived in Table 3-1 of this report.

Based on best professional judgment of the Agency staff, EPA estimates that 2 percent of the 1,384 firms (28 firms) will have any relevant studies to submit to EPA. As shown in Table 3-9 the total burden for these 28 firms to prepare study title lists is approximately 28 hours and $830.

Table 3-9: Total Industry Burden for Preparing Study Title Lists
                              Collection Activity
                             Unit Burden (hours)1
                              Unit Cost (2011$)1
                  Total Number of Firms Subject to the Rule2
                  Total Number of Firms Performing Activity3
                             Total Burden (hours)
                              Total Cost (2011$)

                                      (a)
                                      (b)
                                      (c)
                                 (d)=(c)*0.02
                                (e) = (a) * (d)
                                (f) = (b) * (d)
                               Study Title Lists
                                     1.00
                                    $29.63
                                     1,384
                                      28
                                      28
                                     $830
Sources:
1 Unit burden and cost estimates are derived in Table 3-8 of this report.
2 The total number of firms is calculated in Table 2-1 of this report.
3 The percentage of firms conducting this activity is taken from the 2008 ICR for Health and Safety Data Reporting, Submission of Lists and Copies of Health and Safety Studies, EPA ICR No: 0575.12 (EPA, 2008 page 14).
     .7.5 Photocopying Studies
All relevant studies identified by a firm will need to be photocopied and submitted to EPA. For the purposes of this analysis, EPA assumes each of the 28 firms that have identified relevant health and safety studies will submit on average one study to the Agency. This estimate is based on the professional judgment of Agency personnel responsible for the 8(d) program. The 2008 TSCA Section 8(d) ICR (EPA, 2008) estimates it will take one hour of clerical time to photocopy 9 studies with an average page length of 20 pages. Therefore, the total burden associated with photocopying one study is 0.11 hours. The total cost is estimated to be $3.29 per firm, as shown in Table 3-10.
Table 3-10: Unit Industry Burden for Photocopying Studies
                              Collection Activity
                               Burden per Firm1
                                Cost per Firm2

                                  Managerial
                                   Technical
                                   Clerical
                                     Total
                                  Managerial
                                  ($70.72/hr)
                                   Technical
                                  ($64.66/hr)
                                   Clerical
                                  ($29.63/hr)
                                     Total
                               Photocopy Studies
                                     0.00
                                     0.00
                                     0.11
                                     0.11
                                     $0.00
                                     $0.00
                                     $3.29
                                     $3.26
Notes:
Total cost may not exactly equal hourly wage times hourly burden, due to rounding of unit burden and wage estimates.
Sources:
1 Burden estimates are from the 2008 ICR for Health and Safety Data Reporting, Submission of Lists and Copies of Health and Safety Studies , EPA ICR No: 0575.12 (EPA, 2008 page 10).
2 Loaded wage rates are derived in Table 3-1 of this report.

Because EPA is assuming each of the 28 firms with relevant data will submit one study on average, a total of 28 studies are expected to be submitted from cadmium and cadmium compound manufacturers and importers. The total burden associated with photocopying 28 studies is 3.08 hours and approximately $91 (see Table 3-11).

Table 3-11: Total Industry Burden for Photocopying Studies
                              Collection Activity
                             Unit Burden (hours)1
                              Unit Cost (2011$)1
                  Total Number of Firms Subject to the Rule2
                  Total Number of Firms Performing Activity3
                             Total Burden (hours)
                              Total Cost (2011$)

                                      (a)
                                      (b)
                                      (c)
                                 (d)=(c)*0.02
                                (e) = (a) * (d)
                                (f) = (b) * (d)
                               Photocopy Studies
                                     0.11
                                     $3.26
                                     1,384
                                      28
                                     3.08
                                    $91.28
Sources:
1 Unit burden and cost estimates are derived in Table 3-10 of this report.
2 The total number of firms is calculated in Table 2-1 of this report.
3 The percentage of firms conducting this activity is taken from the 2008 ICR for Health and Safety Data Reporting, Submission of Lists and Copies of Health and Safety Studies , EPA ICR No: 0575.12 (EPA, 2008 page 14).
     .7.6 Review of Studies for Confidential Business Information
Firms submitting health and safety studies will need to review responses for possible confidential business information (CBI). For each study with CBI claims two versions must be provided to EPA; one containing bracketed and underlined CBI information and one without the CBI information (see 716.55(a)(4)(b)(1)). CBI review is estimated to take an average of one hour of managerial time for each study (EPA, 2008) and the total cost is estimated to be $70.72 per study (See Table 3-12).

Table 3-12: Unit Industry Burden for CBI Review
                              Collection Activity
                               Burden per Firm1
                                Cost per Firm2

                                  Managerial
                                   Technical
                                   Clerical
                                     Total
                                  Managerial
                                  ($70.72/hr)
                                   Technical
                                  ($64.66/hr)
                                   Clerical
                                  ($29.63/hr)
                                     Total
                                  CBI Review
                                     1.00
                                     0.00
                                     0.00
                                     1.00
                                    $70.72
                                     $0.00
                                     $0.00
                                    $70.72
Sources:
1 Burden estimates are from the 2008 ICR for Health and Safety Data Reporting, Submission of Lists and Copies of Health and Safety Studies , EPA ICR No: 0575.12 (EPA, 2008 page 11).
2 Loaded wage rates are derived in Table 3-1 of this report.

EPA believes all studies will need to be reviewed for CBI (EPA, 2008). Table 3-13 contains the total industry burden associated with CBI review to be 28 hours and $1,980.

Table 3-13: Total Industry Burden for CBI Review
                              Collection Activity
                             Unit Burden (hours)1
                              Unit Cost (2011$)1
                      Total Number of Studies Submitted2
                       Total Number of Studies Reviewed3
                             Total Burden (hours)
                              Total Cost (2011$)

                                      (a)
                                      (b)
                                      (c)
                                  (d)=(c)*.02
                                (e) = (a) * (d)
                                (f) = (b) * (d)
                                  CBI Review
                                     1.00
                                    $70.72
                                     1,384
                                      28
                                     28.00
                                    $1,980
Sources:
1 Unit burden and cost estimates are derived in Section 3.3.6 of this report.
2 The total number of studies is calculated in Section 3.3.6 of this report.
3 The percentage of studies reviewed is taken from the 2008 ICR for Health and Safety Data Reporting, Submission of Lists and Copies of Health and Safety Studies , EPA ICR No: 0575.12 (EPA, 2008 page 14).
     .7.7 Post-Reporting Submission of Ongoing or Newly Initiated Studies
Firms that have an ongoing or newly initiated study during the reporting period are required to provide EPA with a copy of the study once it is completed. Photocopying is estimated to require an average of 0.11 hours per firm of clerical labor and CBI review will require an average of one hour of managerial time (EPA, 2008) (see Table 3-14).

Table 3-14: Unit Industry Costs for Post-Reporting Submissions
                              Collection Activity
                               Burden per Firm1
                                Cost per Firm2

                                  Managerial
                                   Technical
                                   Clerical
                                     Total
                                  Managerial
                                  ($70.72/hr)
                                   Technical
                                  ($64.66/hr)
                                   Clerical
                                  ($29.63/hr)
                                     Total
                                  CBI Review
                                     1.00
                                     0.00
                                     0.11
                                     1.11
                                    $70.72
                                     $0.00
                                     $3.26
                                    $73.98
Sources:
1 Burden estimates are from the 2008 ICR for Health and Safety Data Reporting, Submission of Lists and Copies of Health and Safety Studies, EPA ICR No: 0575.12 (EPA, 2008 page 11).
2 Loaded wage rates are derived in Table 3-1 of this report.

EPA believes a total of 5 percent of the responding firms (28 companies) will complete post reporting submissions (EPA, 2008). Therefore, EPA expects a total of 1 firm (28 x 0.05) to complete one post-reporting submission apiece. As shown in Table 3-15 the total industry burden associated with post-submission reporting is approximately 1.1 hours and $74.

Table 3-15: Total Industry Costs for Post-Reporting Submissions
                              Collection Activity
                             Unit Burden (hours)1
                              Unit Cost (2011$)1
                        Total Number Responding Firms2
                  Total Number of Post-Reporting Submissions3
                             Total Burden (hours)
                              Total Cost (2011$)

                                      (a)
                                      (b)
                                      (c)
                                 (d)=(c)*0.05
                                (e) = (a) * (d)
                                (f) = (b) * (d)
                                  CBI Review
                                     1.11
                                    $73.98
                                      28
                                       1
                                     1.11
                                    $73.98
Note:
Totals may not exactly equal unit burdens times number of submissions due to rounding of unit burden estimates and the number expected submissions.
Sources:
1 Unit burden and cost estimates are derived in Table 3-14 of this report.
2 The total number firms is calculated Table 3-9 of this report.
3 The percentage of firms conducting this activity is taken from the 2008 ICR for Health and Safety Data Reporting, Submission of Lists and Copies of Health and Safety Studies , EPA ICR No: 0575.12 (EPA, 2008 page 14).
Summary Total Industry Compliance Costs
Table 3-16 contains the total industry burden to manufacturers and importers of cadmium and cadmium for compounds for the TSCA Section 8(d) Health and Safety Data collection. The total industry burden is expected to be approximately 7,019 hours and $480,535.

Table 3-16: Summary of Total Industry Costs for the TSCA Section 8(d) Information Collection
                              Collection Activity
                              Unit Burden (hours)
                               Unit Cost (2011$)
                   Total Number of Firm, Sites, or Studies
                             Total Burden (hours)
                              Total Cost (2011$)

                                      (a)
                                      (b)
                                      (c)
                                (d) = (a) * (c)
                                (e) = (b) * (c)
                                Review of Rule
                                     2.00
                                    $141.44
                                  1384 Firms
                                     2,768
                                   $195,753
                              Site Identification
                                     3.00
                                    $212.16
                                   595 Firms
                                     1,785
                                   $126,235
                               Site File Search
                                     3.00
                                    $193.98
                                   802 Sites
                                     2,406
                                   $155,572
                               Study Title Lists
                                     1.00
                                    $29.63
                                   28 Firms
                                      28
                                     $830
                               Photocopy Studies
                                     0.11
                                     $3.26
                                  28 Studies
                                     3.08
                                    $91.28
                                  CBI Review
                                     1.00
                                    $70.72
                                   28 Firms
                                      28
                                    $1,980
                       Post-Reporting Period Submission
                                     1.11
                                    $73.98
                                    1 Firms
                                     1.11
                                    $73.98
                                                                          TOTAL
                                     7,019
                                   $480,535
               Note: Not all respondents perform all activities.
Sources:
1 All costs and burdens are derived in Section 3.3 of this report.

  -  Agency Costs
Introduction
EPA will also incur costs in administering the final rule. Specifically, EPA will be required to provide industry and public assistance to facilitate compliance and process submissions. These costs are discussed in Section 4.3.
Derivation of Agency Wage Rates
A General Schedule (GS)-13 Step 5 employee is expected to perform all activities associated with the rule (EPA, 2008). Unit wage rates for EPA staff are calculated based on annual federal salaries for the Washington-Baltimore area published by the Office of Personnel Management (OPM) and effective January 2011 (OPM, 2011). The average salary for one full-time equivalent (FTE) staff member is estimated as the salary for a GS-13 Step 5 employee, which is $100,904 annually without fringe benefits and overhead costs. In order to derive the fully loaded salary, EPA multiplied the annual salary by an assumed loading factor of 1.6 to reflect federal fringe benefits and overhead, which results in a fully loaded annual salary of $161,446.40

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

The annual costs per FTE are derived by multiplying the annual pay rate by 1.6 (the benefits multiplication factor). The multiplication factor used is recommended in EPA's Office of Policy, Planning, and Evaluation's Instructions for Preparing Information Collection Requests (ICRs) (June 1, 1992). An EPA internal phone call between Carol Rawie (OPPT/EETD/RIB) and Carl Koch (OPPE/RMD/IMB) on May 3, 1994, indicated that the 1.6 factor included not only benefits but also overhead.

Table 4-1: Derivation of Loaded Agency Wage Rates
Labor Category
Data Source for Wage Information
Date
Wage
Fringe Benefit
Fringes as % wage
Overhead as % wage
Fringe + overhead factor
Loaded Wages

(a)
(b)
(c)=(b)/(a)
(d)
(e)=(c)+(d)+1
(f)=(a) x (e)
                                 EPA staff FTE
Annual federal staff cost: OPM Washington-Baltimore-Northern Virginia, DC-MD-PA-VA-WV, area, GS-13 Step 5 pay rates [1]
                                    Jan-11
                               $100,904 (annual)
                                      --
                          [Included in 60% overhead]
                                    60% [2]
                                     1.60
                               $161,446 (annual)

                                $48.51 (hourly)

                                $77.62 (hourly)
Sources:
[1] The Agency salary is the unloaded federal GS-13 Step 5 salary ($100,904 for 2011), from the OPM salary table for the Washington-Baltimore-Northern Virginia Locality Pay Area (OPM, 2010). Hourly rates are based on annual salary divided by 2,080 hours. Government wage rates are currently frozen at 2010 levels.
[2] The 60% fringes-and-overhead rate is from an EPA guide, Instructions for Preparing Information Collection Requests (ICRs) (EPA, 1992, page 30, footnote 9).
Agency Costs
The estimated annual burden and cost to the government of adding cadmium and cadmium compounds to the TSCA Health and Safety Data Reporting Rule is based on the estimates in the 2008 TSCA Section 8(d) Information Collection Renewal (EPA 2008). The activities routinely conducted by EPA related to the rule development, processing, analysis and storage of the information collected under this rule include the following:

   1. Answer respondents' questions;
   2. Process and analyze rule submissions, including requests for confidentiality; and,
   3. Maintain and distribute the data.

The activities associated with Agency responses to TSCA section 8(d) listings are assumed to be accomplished by a GS 13, Step 5 federal employee, with a loaded annual wage rate of $77.62 per hour. The 2008 ICR estimates that the Agency will have a total burden of 0.035 FTEs to process and store information from manufacturers, and importers for 7 reports, of which 6 are submitted during the reporting period and 1 is submitted after the reporting period (EPA, 2008). For the final rule, 28 firms will submit a report during the reporting period and 1 firm will make submissions in the post-reporting period, for a total of approximately 29 reports (see Table 3-16). To estimate the burden associated with adding cadmium and cadmium compounds to the TSCA Section 8(d) list, EPA multiplied the burdens by a factor of 4.152 (29/7), following an approach outlined in Economic Analysis of the Addition of Chemicals from the 55[th], 56[th], and 58[th] ITC Report to the 8(d) Health and Safety Data Reporting Rule (EPA, 2006); this results in an Agency burden of 0.145 FTEs (301.6 hours) and $23,410.

Table 4-2: Total Agency Burden for the TSCA Section 8(d) Information Collection
                                   Activity
                              FTEs from 2008 ICR1
                             FTE for Current Rule2
                                 Annual Hours
                                 Annual Cost3

                                      (a)
                                 (b)=(a)*4.152
                                 (c)=(b)*2,080
                                (d)=(c)*$77.62
                      Data Processing and System Support
                                     0.025
                                     0.104
                                    216.32
                                    $16,791
                           Storage and Distribution
                                     0.010
                                     0.041
                                     85.28
                                    $6,619
                                     Total
                                     0.035
                                     0.145
                                    301.60
                                    $23,410
Sources:
1 FTE Burden is taken from 2008 ICR for Health and Safety Data Reporting, Submission of Lists and Copies of Health and Safety Studies, EPA ICR No: 0575.12 (EPA, 2008 page 17).
2 The burden factor is the total number of submitted reports (during the reporting period and post-reporting period) for the final rule divided by the number of annual reports from the 2008 ICR  for Health and Safety Data Reporting, Submission of Lists and Copies of Health and Safety Studies, EPA ICR No: 0575.12 (EPA, 2008 page 15).
3Loaded Agency wages are derived in Table 4-1 of this report.

  -  Total Social Costs
The total social cost of the final rule is estimated to be 7,321 hours and $503,945, the sum of industry compliance costs estimated in Chapter 3 (7,019 hours and $480,535) and EPA administrative costs estimated in Chapter 4 (302 hours and $23,410). Total social cost is summarized Table 5-1.
Table 5-1: Total Social Cost and Burden of the Final Rule
Social Cost Component
Burden
(hours)
Estimated Cost
(2011$)
                         Industry Compliance Burden[1]
                                     7,019
                                   $480,535
                               Agency Burden[2]
                                      302
                                    $23,410
                                  Total Cost
                                     7,321
                                   $503,945
Sources:
1 Table 3-15.
2 Table 4-2.

  -  Benefits
The benefits resulting from the final rule are discussed qualitatively in this section. By enhancing the data supplied to Agency risk-screening programs, EPA expects to more effectively and expeditiously reduce the potential risks posed by consumer exposure to cadmium. The more EPA can base its decisions on actual data rather than on assumptions, the better EPA is able to tailor its risk management decisions to the level of actual risk whether higher or lower than it would be if based on assumptions alone. Ultimately, enhancing the risk screening process will have positive consequences for human health and will enable a more efficient allocation of EPA's and society's resources.
Cadmium is a probable carcinogen and high exposure levels may lead to kidney dysfunction, lung disease, bone disease, infertility, central nervous system damage, damage to the immune system, and liver damage (Kirk-Othmer, 2004 and US DHHS, 2008). Cadmium has been shown to be a developmental toxicant in animals, resulting in fetal malformations and other effects, but no conclusive evidence exists in humans (FR Notice, Volume 76, No. 147, p. 46176)). The majority of cadmium that enters a person's body will stay in the liver or kidneys for many years (US DHHS, 2008).

The U.S. Consumer Product Safety Commission (CPSC) is concerned with the content of cadmium and cadmium compounds in certain children's toys, jewelry, and other consumer products due to known toxicity and health concerns from exposure to cadmium and cadmium compounds. For example, in 2010 CPSC found the amount of cadmium in samples of children's metal jewelry ranged from about 0.03 to 99 percent by weight. CPSC has also assessed potential exposures to cadmium by extraction testing, and found that potential exposure to cadmium would exceed the acceptable daily intake levels for acute exposure to a child (CPSC, 2010). EPA and CPSC are concerned about the possible presence and bioavailability of cadmium and cadmium compounds in consumer products generally. However, neither CPSC nor EPA currently has complete information for assessing the safety of any other consumer products that may contain cadmium or cadmium compounds (FR Notice, Volume 76, No. 147, p. 46176).

The TSCA Section 8(d) information collection would address EPA and CPSC needs for health and safety studies for assessing the extent and degree of exposure and potential hazard associated with these substances including: epidemiological or clinical studies, occupational exposure and health effects studies, ecological effects studies, and environmental fate studies (including relevant physical chemical properties). Information obtained through the rule may assist both EPA and CPSC in taking further action as appropriate to protect consumers and children from exposure to cadmium and cadmium compounds in consumer products (FR Notice, Volume 76, No. 147, p. 46176).

  -  Small Entity Impact Analysis
This chapter estimates the impact that the final rule may have on small entities by examining the relationship between the compliance costs and company sales for small companies.

This rule is not subject to the Regulatory Flexibility Act (RFA) which generally requires an agency to prepare a regulatory flexibility analysis for any rule that will have a significant economic impact on a substantial number of small entities. The RFA applies only to rules subject to notice and comment rulemaking requirements under the Administrative Procedure Act (APA) or any other statute. Nonetheless, EPA has conducted an analysis on potential impacts to small entities as detailed below.

The Regulatory Flexibility Act (RFA) of 1980, as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996, requires regulators to assess the effects of regulations on small entities, including businesses, nonprofit organizations, and governments. In some instances, agencies also are required to examine regulatory alternatives that may reduce adverse economic effects on significantly impacted small entities. The RFA requires agencies to prepare an initial and final regulatory flexibility analysis for each rule unless the Agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. The RFA, however, does not specifically define "a significant economic impact on a substantial number" of small entities. Sections 603 and 604 of the RFA require that regulatory flexibility analyses identify the types, and estimate the numbers, of small entities to which the rule will apply; and describe the rule requirements to which small entities will be subject and any regulatory alternatives, including exemptions and deferral, that would lessen the rule's burden on small entities.

To estimate the impact of the rule on a business, the preferred method is the "sales test," wherein costs for any individual firm are measured as a percent of annual sales. However, because of the uncertainty regarding the identity of the firms that will be required to respond to this data collection, it is not possible to directly compare the estimated cost to the actual sales volume of those firms.

Because EPA was unable to use the "sales test" method, EPA followed the approach used TSCA Section 8(d): Economic Impact Analysis for Adding Lead and Lead Compounds from the 60th Report of the TSCA Interagency Testing Committee to the Health and Safety Data Reporting Rule (EPA, 2007), and estimated the average cost per company and what a company's revenue would need to be for costs to exceed one percent of sales. EPA also estimated the highest possible cost a company could incur under the rule, assuming a firm completed all possible collection activities, and what the revenue would need to be for costs to exceed one percent of sales.

Table 7-1: Calculations of Average and High Cost per Company
                              Collection Activity
                               Unit Cost (2011$)
                             Average Cost Scenario
                              High Cost Scenario

              Percentage of Cost Incurred by Firm Under Scenario
                             Cost per Firm (2011$)
              Percentage of Cost Incurred by Firm Under Scenario
                             Cost per Firm (2011$)
                                Review of Rule
                                    $141.44
                                    100.00%
                                    $141.44
                                     100%
                                    $141.44
                              Site Identification
                                    $212.16
                                    43.00%
                                    $91.23
                                     100%
                                    $212.16
                               Site File Search1
                                    $193.98
                                    58.00%
                                    $112.51
                                     135%
                                    $261.87
                               Study Title Lists
                                    $29.63
                                     2.00%
                                     $0.59
                                     100%
                                    $29.63
                               Photocopy Studies
                                     $3.26
                                     2.00%
                                     $0.07
                                     100%
                                     $3.26
                                  CBI Review
                                    $70.72
                                     2.00%
                                     $1.41
                                     100%
                                    $70.72
                       Post-Reporting Period Submission
                                    $73.98
                                     0.00%
                                     $0.00
                                     100%
                                    $73.98
                                                                          Total
                                    $347.25
                                       -
                                    $793.06
Notes:
The average firm is estimated to have 1.35 sites (1,865 sites/1,384 firms).

EPA estimates that the average cost per firm is $347, meaning a firm would have total annual sales less than $34,725 for rule costs to be more than one percent of revenue. Under the more stringent high cost scenario firms have a cost of $793 and would have to have annual sales less than $79,306 for costs to be more than one percent of revenue. Due to the low level of the impact, EPA does not expect that this action will have a significant impact on a substantial number of small entities. Additionally, EPA believes that small firms are unlikely to have unpublished health and safety data studies due to the cost of developing the information and would only expend resources to review the rule at a cost of $141 per firm.

  -  Other Impact Analyses
Several statutes and executive orders (EOs) pertain to the final rule. This chapter presents statements discussing paperwork reduction, unfunded mandates, regulatory planning and review, tribal governments, children's health, and environmental justice, among others.
Paperwork Reduction Act (PRA)
According to the Paperwork Reduction Act, 44 USC 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 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.

     .3.1 Industry Burden
Those subject to the rule are expected to undertake the following paperwork related activities to provide the required reports:
   1. Review the rule to determine if the company must report;
   2. Conduct a corporate review to identify which company sites must be searched to locate any appropriate health and safety studies;
   3. Search the files at each site to locate any relevant studies;
   4. Compile and transcribe lists of: studies being submitted, ongoing studies, newly initiated studies, studies known to exist but not known to be in the respondent's possession, and studies previously submitted to other Federal agencies without confidentiality claims;
   5. Review the studies for possible CBI;
   6. Photocopy the studies being submitted; and
   7. Submit studies completed after the reporting period.

The rule does not require the creation of robust summaries, however, they can be provided on a voluntary basis. Because they are not required, EPA does not believe that many companies will choose to submit these summaries. However, an estimate of burden hours for this activity is included to illustrate the possible burden associated with the activity.

The activities are listed in Table 8-1 along with the estimated burden hours associated with each activity.

Total industry burden is estimated to be 7,019 hours as a result of the rule. An estimated 28 firms are expected to provide studies in response to the rule. These respondents require an estimated 10.5 hours (2 hours to review the rule, 3 hours for site identification, 3 hours for file searches, 1 hour for study title lists, 1 hour for CBI review, and 0.11 hours for photocopy of studies). There are an additional 1.1 hours if a company has post-period reporting.
Table 8-1: Total Hourly Industry Burden
                              Collection Activity
                              Unit Burden (hours)
                   Total Number of Firms, Sites, or Studies
                             Total Burden (hours)

                                      (a)
                                      (b)
                                (c) = (a) * (b)
                                Review of Rule
                                     2.00
                                  1,384 Firms
                                     2,768
                              Site Identification
                                     3.00
                                   595 Firms
                                     1,785
                               Site File Search
                                     3.00
                                   802 Sites
                                     2,406
                               Study Title Lists
                                     1.00
                                   28 Firms
                                      28
                               Photocopy Studies
                                     0.11
                                  28 Studies
                                     3.08
                                  CBI Review
                                     1.00
                                   28 Firms
                                      28
                       Post-Reporting Period Submission
                                     1.11
                                    1 Firm
                                     1.11
                                                                          Total
                                     7,019
Source:
1 Table 3-16.
     .7.1 Government Burden
The government will spend time processing, analyzing and storing of the information collected under this rule. It is estimated that the government will spend a total of 301.6 labor hours as a result of this data collection.
Table 8-2: Total Hourly Government Burden
                                   Activity
                              FTEs from 2008 ICR
                             FTE for Current Rule
                                     Hours

                                      (a)
                                (b)=(a)* 4.152
                                 (c)=(b)*2080
                      Data Processing and System Support
                                     0.025
                                               0.104
                                    216.32
                           Storage and Distribution
                                     0.010
                                               0.041
                                     85.28
                                     Total
                                     0.035
                                     0.145
                                    301.60
Source:
Table 4-2.
Unfunded Mandates Reform Act (UMRA)
This action contains no federal mandates under the provisions of Title II of the Unfunded Mandates Reform Act of 1995 (UMRA, Public Law 104-4), 2 U.S.C. 1531-1538 for state, local, or tribal governments or the private sector. Based on EPA's experience with similar information collection rules, state, local, and tribal governments have not been affected by this reporting requirement, and EPA does not have any reason to believe that any state, local, or tribal government will be affected by this rulemaking. As such, EPA has determined that this regulatory action does not impose any enforceable duty, contain any unfunded mandate, or otherwise have any effect on small governments subject to the requirements of Sections 202 or 205 of the UMRA.
Executive Order 12866  -  Regulatory Planning and Review
This action is not a "significant regulatory action", as defined under section 3(f) of Executive Order 12866, entitled Regulatory Planning and Review (58 FR 51735, October 4, 1993), because the final rule does not: (1) have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in EO 12866. Therefore, the final rule is not subject to OMB review under EO 12866.
Executive Order 13132  -  Federalism
Under Executive Order 13132, "Federalism" (64 FR 43255, August 10, 1999), EPA has determined that the final rule does not have "federalism implications" because it will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in the executive order. The final rule establishes reporting requirements that apply to manufacturers (including importers) of certain chemicals. Because EPA has no information to indicate that any state or local government manufacturers the chemical substances covered by this action, the final rule does not apply directly to states and localities and will not affect state and local governments. Thus, EO 13132 does not apply to the final rule.
Executive Order 13175  -  Consultation and Coordination with Indian Tribal Governments
As required by Executive Order 13175, entitled Consultation and Coordination with Indian Tribal Governments (65 FR 67249, November 9, 2000), EPA has determined that this final rule does not have tribal implications because it will not have any effect on tribal governments, on the relationship between the federal government and the Indian tribes, or on the distribution of power and responsibilities between the federal government and Indian tribes, as specified in the Order. Thus, EO 13175 does not apply to the final rule.
Executive Order 13045  -  Children's Health
Executive Order 13045, "Protection of Children from Environmental Health Risks and Safety Risks" (62 FR 19885, April 23, 1997), requires that federal agencies examine the impacts of each regulatory action on children for any economically significant regulation (as defined by Executive Order 12866) that the Agency has reason to believe may disproportionately affect children.
EPA interprets EO 13045 as applying only to those regulatory actions that concern health or safety risks, such that the analysis required under section 5-501 of the EO has the potential to influence the regulation. The final rule is not subject to EO 13045, because it does not establish an environmental standard intended to mitigate health or safety risks and will not have an annual effect on the economy of $100 million or more, nor does it otherwise have a disproportionate effect on children. Nevertheless, the information obtained from the reporting required by 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 determining whether the chemicals in this final rule present potential risks, allowing the Agency and others to take appropriate action to investigate and mitigate those risks.
Executive Order 12898  -  Environmental Justice
Executive Order 12898, "Federal Actions to Address Environmental Justice in Minority Populations and Low Income Populations" (59 FR 7629, February 16, 1994), establishes federal executive policy on environmental justice. Its main provision directs federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations and low-income populations in the United States.
EPA has determined that the final rule will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations because it does not affect the level of protection provided to human health or the environment. The Agency believes that the information collected under this final rule, if finalized, will assist EPA and others in determining the potential hazards and risks associated with cadmium and cadmium compounds. Although not directly impacting environmental justice-related concerns, this information will enable the Agency to better protect human health and the environment, including in low-income and minority communities.
The rule is directed to gather health and safety data for cadmium and cadmium compounds used in consumer products. All consumers of products made from these chemicals could benefit from data regarding the chemicals' health and environmental effects. Therefore, it does not appear that the costs and the benefits of the final rule will be disproportionately distributed across different geographic regions or among different categories of individuals.
Executive Order 13211  -  Energy Supply, Distribution, or Use
This final rule is not subject to Executive Order 13211, "Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use" (66 FR 28355, May 22, 2001), because it is not a significant regulatory action under Executive Order 12866.
National Technology Transfer and Advancement Act
Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law No. 104-113, 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards.
The final rule does not involve technical standards. Therefore, EPA is not considering the use of any voluntary consensus standards.

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