\h \r 1 The Regulatory Flexibility Act (RFA) of 1980, amended by the
Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996,
requires regulators to assess the effects of regulations on small
entities including businesses, nonprofit organizations, and governments.
 In some instances, agencies are also required to examine regulatory
alternatives that may reduce adverse economic effects on significantly
impacted small entities.  The RFA requires agencies to prepare an
initial and final regulatory flexibility analysis for each rule unless
the Agency certifies that the rule will not have a significant economic
impact on a substantial number of small entities.  The RFA, however,
does not specifically define “a significant economic impact on a
substantial number” of small entities.  Sections 603 and 604 of the
RFA require that regulatory flexibility analyses identify the types, and
estimate the numbers, of small entities to which the rule will apply;
and describe the rule requirements to which small entities will be
subject and any regulatory alternatives, including exemptions and
deferral, which would lessen the rule’s burden on small entities.

This rule establishes the updated accreditation and certification fees
for lead-based paint activities under the Abatement rule and renovation
activities under the LRRP rule.  For the Abatement rule, which was
promulgated on June 9, 1999, the 2009 fee rule reduces the fees, which
implies that there will be no adverse impact on small entities and in
fact, the small entities will incur cost savings. For the LRRP rule,
which does not become fully effective until April 2010, this rule
establishes fees; therefore, the impact on the small entities will be
the full amount of the fees. To fulfill the requirement of RFA, this
analysis addresses two basic questions for the LRRP rule: (1) the number
and type of small entities potentially affected and (2) the extent of
the rule’s potential economic impact on those entities as measured by
the fee-revenue ratio.

The next section discusses the small entity impact under the Abatement
rule followed by the section that presents the impact for the LRRP rule.

Abatement Rule

The 1999 lead-based paint activities  accreditation and certification
fee rule established lead fees for entities involved in lead-based paint
activities that include: 1) for-profit training providers seeking
accreditation, and 2) firms (and other organizations) performing
abatement or risk assessment and inspection services seeking
certification. The 2009 fee rule updates the fees established on June 9,
1999.  The impact on the small entities will be the change in the
accreditation and certification fees.  EPA is reducing the fees for all
training providers and individual initial certification fees excluding
workers and inspectors (  REF _Ref198024935 \h  \* MERGEFORMAT  Table
4-1 ). Consequently, EPA estimates that there will be no adverse impact
of the rule on training providers; in fact they will incur cost savings.

EPA also estimates that there will not be a significant impact from the
increase in fees for firms and individuals. In the 1999 small entity
impact analysis, EPA included the individual certification fee in
assessing the impact of the rule on small firms.  EPA had estimated that
the cost-revenue ratio for the full amount of the certification fee,
which is less than the re-certification fee, is not more than 0.87
percent for all firms across all revenue categories.  Firms incur a 3
percent to 30 percent cost increase in the direct fee, and indirectly
via fee increases for individuals (3 to 31 percent).  With an overall
cost-revenue ratio of well under 1 percent for the current fees, the
impact of the increase in fees will have a very small affect on small
entities.  Likewise, the resulting new fees will have a small impact on
entities, especially when inflation is taken into account.

Table   STYLEREF 1 \s  4 -  SEQ Table \* ARABIC \s 1  1 :  Preferred
Option Fee Schedule

Program	Current Fee Schedule \1	Preferred Option Fee Schedule	Percentage
Change

Training Providers

Initial Accreditation	$2,259 	$870 	-61%

Initial Refresher Course	$1,005 	$688 	-32%

Reaccreditation	$1,426 	$621 	-56%

Reaccreditation Refresher Course	$691 	$576 	-17%

Firms

Firm Certification	$540 	$555 	3%

Firm Recertification	$430 	$557 	30%

Individuals

Initial Certification (Excluding workers)	$464 	$414 	-11%

Initial Certification - Workers Only	$280 	$312 	11%

Recertification (Excluding workers)	$404 	$416 	3%

Recertification - Workers Only	$240 	$314 	31%

Tribal Firms and Individuals

Firms, Initial and Recertification	 	$20

All Individuals, Initial and Recertification	 	$10

\1 Reflects weighted average based on current fees and annual number of
applications between FY2003 to FY2006.  The tribes are only charged a
special nominal fee of $20 per firm and $10 per individual
certification.

LRRP Rule

The LRRP rule requires that all entities that perform renovation
activities for compensation in target housing or public and commercial
buildings with Child Occupied Facilities (COFs) be certified by EPA. The
rule requires that all training providers be accredited by EPA.  The
2009 fee rule establishes the accreditation and certification fees that
will be applicable when training providers seek accreditation and
reaccreditation and firms seek certification and recertification.  The
rule effects training providers, small entities that provide childcare
for compensation, including private sector firms (e.g. daycare centers
and family daycare), small governments (particularly school districts)
and non-profit organizations; small construction-related contracting
firms that provide RRP services to residences or public and commercial
buildings containing COFs; and property managers and lessors who lease
residential space or space to COFs and use their own staff to conduct
RRP work in their buildings.  This analysis looks at the impact of this
fee on these small entities.

Definition of a Small Facility

The Regulatory Flexibility Act (RFA) defines a small government as a
government of a city, county, town, school district or special district
with a population of less than 50,000.  A small non-profit organization
is defined as any not-for-profit enterprise which is independently owned
and operated and is not dominant in its field.    SEQ CHAPTER \h \r 1
The RFA relies on the definition of a “small business” found in the
Small Business Act, which authorizes the Small Business Administration
(SBA) to develop definitions for “small business.”  For this
analysis, EPA uses SBA’s definition of a small business for each
industry.

For many industry sectors, the SBA definition of a small business is
based on revenues, with the revenue standards varying by industry.  In
establishing revenue standards, SBA considers a number of economic and
market characteristics that may allow a firm to exercise dominance in an
industry.  These standards represent the maximum revenue that a
for-profit enterprise may have, and still qualify as a small business.

As described in the economic analysis of the LRRP rule, the following
twelve NAICS codes are the general and specialty contractors this rule
will likely impact, and their respective SBA threshold.  These are
followed with two NAICS codes for residential real estate industries,
two NAICS codes for nonresidential real estate industries, and one NAICS
code for child day care services that are also likely to be affected by
the rule.  The last entry on the table is the NAICS code for training
providers.

Table   STYLEREF 1 \s  4 -  SEQ Table \* ARABIC \s 1  2 . SBA Revenue
Thresholds for Small Business by NAICS Code

NAICS	Industry Description	SBA Revenue Threshold (Millions $)

Small LRRP Firms

General and Specialty Contractor Industries

236118	Residential remodelers	$28.5

236220	Commercial Building Construction	$31

238170	Siding contractors	$12

238350	Finish carpentry contractors	$12

238290	Other building equipment contractors	$12

238390	Other building finishing contractors	$12

238340	Tile and terrazzo contractors	$12

238220	Plumbing and HVAC contractors	$12

238150	Glass and glazing contractors	$12

238320	Painting and wall covering contractors	$12

238210	Electrical contractors	$12

238310	Drywall and insulation contractors	$12

Property Owners and Managers

531120	Lessors of nonresidential buildings (except mini warehouses)	$6.5

531312	Nonresidential property managers	$2.0

531311	Residential Property Managers	$1.5

531110	Lessors of Residential Buildings and Dwellings	$6.0

Providers of Day Care Services, Pre-Kindergarten and Kindergarten

624410	Child day care services	$6.5

Training Providers

611519	Other Technical and Trade Schools	$6.5

Source: U.S. Small Business Administration 2004; U.S. Small Business
Administration 2006.

The RFA classifies small entities as small businesses, small non-profit
organizations, or small governments.  For purposes of this analysis,
training providers, property managers and lessors, and
construction-related contractors, are all assumed to be for profit
operations.  All daycare providers operating in individual homes
(frequently referred to as family daycare) are assumed to be for-profit
operations.  Daycare centers can be operated by for-profit or non-profit
organizations.  Kindergartens and pre-kindergartens refer to facilities
in either public schools (governmental) or in private schools (assumed
to be non-profits).  These classifications are summarized in   REF
_Ref197930862 \h  \* MERGEFORMAT  Table 4-3 .

Table   STYLEREF 1 \s  4 -  SEQ Table \* ARABIC \s 1  3 . Small Entity
Classifications

Type of Entity	Business	Non-Profit	Governmental

Day Care Centers	X	X	--

Kindergartens and Pre-Kindergartens in Public Schools	--	--	X

Kindergartens and Pre-Kindergartens in Private Schools	-- 	X	--

Property Managers and Lessors	X	--	--

Construction-Related Contractors	X	--	--

Training Providers	X	--	--

General Approach and Assumptions

  SEQ CHAPTER \h \r 1 This analysis measures the potential impacts of
the accreditation and certification fees on small entities in terms of
annualized fees (compliance cost for this rule) as a percentage of
annual revenues, or the cost-impact ratio.  This approach is based on
the premise that the cost impact percentage is an appropriate measure of
an entity’s ability to afford the costs attributable to a regulatory
change.  For purposes of determining small entity impacts, comparing
annual compliance costs to annual revenues provides a reasonable
indication of the magnitude of the regulatory burden relative to a
commonly available and objective measure of a company’s business
volume.  Where regulatory costs represent a very small fraction of a
typical establishment’s revenue, the impacts of a regulation are
likely to be minimal.

This analysis considers nine different groups of entities: training
providers for certification and refresher courses, public school
districts, private schools, daycare centers, family daycare,
construction contractors (residential and non-residential), and property
lessors and managers (residential and non-residential).  The goal of
this analysis is to evaluate the impacts of the LRRP rule on small
entities in a typical year. Therefore, when presenting the number of
businesses affected, the analysis presents the annual average values,
rather than first or second year numbers.  Furthermore, rather than
considering the first-year cost of initial certification or
accreditation, the fee is annualized given that firms are required to
re-certify every five years and training providers are required to seek
re-accreditation every four years.  The annualized fee depends on the
life of the entity: a firm and or training provider that is in business
for only the first year would incur the highest cost of the fee on an
annual basis while a firm (training provider) that is in business for
five years (four years) would incur the lowest fee on an annual basis.
Therefore, this analysis presents a range of fee-revenue ratio, from the
lowest annualized cost where a firm (training provider) is in business
for five years (four years) to the highest annualized cost where a firm
or training provider is in business for only one year.   The analysis
considers the impact of re-accreditation and re-certification also for
two scenarios from the highest annualized cost, where a firm or training
provider is in business for the first year of re-certification or
re-accreditation and the life of firm (training provider) is six (five)
years to the lowest annualized cost where a firm (training provider) is
in business for five (four) years from the year of re-certification and
re-accreditation and the life of the firm (training provider) is ten
(eight) years.

The SBA size standards are measured at the firm or parent company level,
and conceptually the small entity analysis would also be conducted at
that level.  Due to data limitations, this small entity analysis is
conducted at the establishment level rather than at the firm or parent
organization level for most sectors.  Census information was available
primarily at the establishment level, making an organization-level
analysis unfeasible.  The only sectors where organization-level data are
used are non-residential managers and lessors, and public schools.
Because establishments, and not organizations, are analyzed, an
assumption is made that none of the small establishments are
subsidiaries of larger organizations.  This assumption leads to an
overestimate of the number of small independent entities affected by the
rule.  Furthermore, since organization-level revenues of
multi-establishment businesses are higher than establishment revenues,
the use of establishment data may result in a higher cost-impact ratio
than actually exists.

The cost-impact ratios estimated for the residential and non-residential
real estate industries (NAICS 531110, 531311, 531120, 531312) in this
small entity analysis are based on employment and revenue data for
employer establishments only.  EPA assumed that the majority of
non-residential property lessors and managers are businesses with
employees.  Further, EPA assumed that a self-employed lessor or manager
is likely to hire a contractor to perform work on his property,
particularly in a non-residential building.

Unit Cost of the Rule

Firms incur an initial certification fee for the first five years and
then incur a re-certification fee in the sixth year. Training providers,
on the other hand, incur either an initial accreditation fee for the
first four years and then incur a re-accreditation fee in the fifth
year. The analysis examines a 5-year period because the certification
and the recertification is valid for 5 years and it covers the time
period for which the accreditation and reaccreditation is valid.
However, some firms (training providers) may not stay in business for
the full 5-year period (4-year period).  Since the annualized cost of
the fee depends on the life of the firm, as mentioned above, EPA
analyzed two ends of the range – firms and training providers that are
in business for only one year and firms (training providers) that are in
business for the entire five-year (4-year) period.    The annualized
cost of the initial fee would be the highest for a firm or training
provider that is in business only for one year after paying the initial
fee and the annualized cost of the fee would be the lowest for a firm
(training provider) that is in business for five years (four years)
after paying the initial fee.

Thus, to estimate the impacts of the costs of the rule on small entities
in the affected industries, the following calculations were performed
for each NAICS industry:

Classify certified establishments as either small or large businesses,
depending on their revenues.  EPA combined self-employed contractors
with small employer establishments to form one small business category.
The Agency completed this step in the economic analysis of the LRRP
rule.

Characterize a “typical” small establishment (including revenues and
number of employees) in each of the affected industry sectors using
Census data. EPA completed this step for the economic analysis of the
LRRP rule.

Calculate annualized certification and accreditation fee for an entity
that is in business only in the first year (high estimate) and for a
firm that is in business for five years and  training provider that is
in business for four years (low estimate).  EPA first calculated the
present value of the fee that would be incurred in 2010 in 2007 dollars
and then annualized the fee using a 3 percent discount rate and a time
period equal to one, four and five.

Calculate annualized re-accreditation and re-certification fee for an
entity that is in business only in the first year (high estimate) after
re-accreditation or re-certification, that is for a firm that is in
business for six years and training provider that is in business for
five years, respectively, and for a firm (training provider) that is in
business for five (four) years (low estimate) after re-accreditation and
re-certification, that is for a firm that is in business for ten years
and a training provider that is in business for eight years. EPA first
calculated the present value of the fee that would be incurred in 2015
(for firms) and 2014 (for training providers) in 2007 dollars and then
annualized the fee using a 3 percent discount rate and the appropriate
time period for each type of firm and training provider.

Calculate annualized cost per entity for four types of small firms
(training providers) small in each industry sector: a) firms and
training providers that are in business for the first year b) firms
(training providers) that are in business for five years (four years)
c)firms (training providers) that stay in business for five years (four
years) and one year after incurring re-certification or re-accreditation
fee  d) firms (training providers) that are in business for the first
five years (four years) after incurring initial fee and stay in business
for five years (four years) after incurring re-certification and
re-accreditation fee.

Calculate cost-impact ratios for the four types of typical small
establishment in each industry sector by dividing the appropriate
annualized fees incurred by the establishment (Step 5) by the
establishment’s revenues (Step 2).

As mentioned above, EPA completed steps 1 and 2 in the recent economic
analysis for the LRRP rule.   REF _Ref197931019 \h  \* MERGEFORMAT
Table 4-4  below presents the preferred option fees; the low and high
estimates for the annualized cost of the fee as described in steps 3 and
4 are presented in   REF _Ref220734427 \h  Table 4-7 .

Table   STYLEREF 1 \s  4 -  SEQ Table \* ARABIC \s 1  4 :  Preferred
Option Fee Schedule

Type of Entity	Preferred Option Lead Fees1

	Certification	Re-Certification	Accreditation	Re-Accreditation

Small Firms

Renovation Firm 	$301	$302	--	--

Small Training Providers

   Initial Training	--	--	$558	$340

  Refresher Training	--	--	$398	$306

1.  The tribes are only charged a special nominal fee of $20 per firm
and $10 per individual certification.

Small Entities Potentially Affected by the Rule

The economic analysis for the LRRP rule estimated the number of small
entities affected in all industry categories except the training
providers for the 50-year analysis period. Using the third year
estimates developed in that analysis, EPA calculated the 5-year average
number of small entities affected by the lead fees rule.    In each year
of the rule, EPA expects that the number of affected entities will
decline proportionally to the demolition of older households in the
United States.  Consistent with the LRRP analysis, this analysis
estimates that the total stock of affected small entities will decline
by 0.41 percent in each year after 2010.  The 5-year average number of
affected small entities was thus calculated using the following formula:

		Annual Average =

	where:

		A1 = First year number of firms

		r = (1 – 0.41% demolition rate), or 0.9959

		n = 5 years covered by the analysis

EPA had also estimated the average revenue for the small entities using
the U.S. Economic Census data for 2002.    REF _Ref197931277 \h  \*
MERGEFORMAT

Table 4-5  presents the number of small entities by NAICS group and the
average revenue of these estimates adjusted to 2007 dollars.  EPA
estimates that an average of 204,801 small firms and 155 small training
providers will be impacted by the rule. Although a large number of small
entities are impacted by this rule, as we discuss in the next section,
EPA estimates that the cost impact on these entities will be very small.

Table   STYLEREF 1 \s  4 -  SEQ Table \* ARABIC \s 1  5 : Average Number
of Small Entities and Average Small Entity Revenue

NAICS	Industry Description	5-Year Avg. Small Entities Affected \1
Estimated Avg. Small Entity Revenue \2

General and Specialty Contractor Industries

236118	Residential remodelers	44,915	$196,322

236220	Commercial Building Construction	101	$2,017,329

238170	Siding contractors	3,267	$216,324

238350	Finish carpentry contractors	31,894	$108,086

238290	Other building equipment contractors	1,482	$628,648

238390	Other building finishing contractors	2,029	$248,383

238340	Tile and terrazzo contractors	4,556	$139,620

238220	Plumbing and HVAC contractors	16,758	 $464,348 - $980,675

238150	Glass and glazing contractors	1,351	$361,576

238320	Painting and wall covering contractors	17,852	$93,196 - $438,155

238210	Electrical contractors	12,329	$377,438 - $933,202

238310	Drywall and insulation contractors	7,454	$258,092

Property Owners and Managers

531120	Lessors of nonresidential buildings (except mini-warehouses)
9,141	$117,925

531312	Nonresidential property managers	2,866	$162,616

531311	Residential Property Managers	6,325	$367,546

531110	Lessors of Residential Buildings and Dwellings	17,343	$881,472

Providers of Daycare Services, Pre-Kindergarten, and Kindergarten

624410	Child daycare services	11,383	$292,629

611110	Private Schools	6,705	$1,015,686

611110	Public Schools	7,050	$16,997,060

Training Providers

611519	Other Technical and Trade Schools	155	$859,547 \3

Total	 	204,956

\1 EA LRRP rule

\2 From EA, LRRP rule Updated to 2007 dollars using U.S. BLS CPI data.

\3 U.S. Census Bureau. 2006. "Establishment and Firm Size: 2002
(Including Legal Form of Organization)."  2002 Economic Census.  Updated
to 2007 dollars using U.S. BLS CPI data.

EPA also estimated the total number of small businesses, small
non-profits and small governments affected by the rule and their average
revenues (  REF _Ref197959717 \h  \* MERGEFORMAT  Table 4-6 ).  EPA
estimates that of the 204,956 small entities that would be affected by
this rule, 179,820 are small businesses, 18,088 are small non-profits
and 7,050 are small governments.

Table   STYLEREF 1 \s  4 -  SEQ Table \* ARABIC \s 1  6 : Aggregate
Small Entity Numbers and Revenues

Small Entities	Number of Small Entities Affected	Average Revenue

Small Governments	7,050	$16,997,060

Non-Profit Organizations	18,088	$292,629 - $1,015,686

Small For-Profit Businesses	179,818	$93,196 -  $2,017,329

Total	204,956	$93,196 - $16,997,060

Impacts on Small Entities Affected by the Rule

EPA estimated the impacts of the rule on each of the small entities by
comparing the costs of the rule incurred by an establishment to the
establishment’s revenues for four types of entities ranging from low
to high cost impact:  a) firms and training providers that are in
business for the first year  b) firms (training providers) that are in
business for five years (four years) c) firms (training providers) that
stay in business for the first five years (four years) after incurring
initial fee and one year after incurring re-certification or
re-accreditation fee – a total of six (five) years in business  d)
firms (training providers) that stay in business for first five years
(four years) after incurring initial fee and stay in business for
another five (four) years) after incurring re-certification and
re-accreditation fee – a total of ten (eight) years in business).  To
measure the cost impact for each of these types of entities, EPA
calculated the appropriate annualized fee to estimate the cost-revenue
ratio using the average revenues from   REF _Ref197931277 \h  \*
MERGEFORMAT

Table 4-5  above.

  REF _Ref220734427 \h  Table 4-7  presents the annualized cost of the
fee for each of these typical entities below.  EPA notes that the
entities that are in business only for one year incur the highest fee on
an annual basis followed by entities who stay in business for five years
(four years) after paying initial fee and for one year after the
re-certification or re-accreditation fee.  Since the fee is highest for
training providers, the small training providers that stay in business
for only one year have the highest annualized fee ($526.

Table   STYLEREF 1 \s  4 -  SEQ Table \* ARABIC \s 1  7 . Average
Annualized Cost per Entity (Steps 3, 4 and 5)

 Entities	Certification	Re-Certification	Accreditation	Re-Accreditation
Total Annualized Cost

Small LRRP Firms, Small Governments and Non-Profit Organizations

Firms in business for 1 year	$284	$0	--	--	$284

Firms in business for 5 years	$62	$0	--	--	$62

Firms in business for 6 years	$52	$45	--	--	$98

Firms in business for 10 years	$33	$29	--	--	$62

Training Providers –Initial Training

Training Providers in business for 1 year	--	--	$526	$0	$526

Training Providers in business for 4 years	--	--	$142	$0	$142

Training Providers in business for 5 years	--	--	$115	$62	$177

Training Providers in business for 8 years	--	--	$75	$41	$116

Training Providers –Refresher Training

Training Providers in business for 1 year	--	--	$375	$0	$375

Training Providers in business for 4 years	--	--	$101	$0	$101

Training Providers in business for 5 years	--	--	$82	$56	$138

Training Providers in business for 8 years	--	--	$53	$37	$90

EPA calculated separate cost-revenue ratios for residential,
non-residential contractors and training providers, and within
non-residential contractors EPA estimated separate cost-revenue
estimates for non-residential contractors because of the difference in
the average estimated revenues across these categories (  REF
_Ref220734452 \h  Table 4-5 )

Among the non-residential contractors, the public schools had the
highest average revenue and Public and Commercial Building (PCB)
landlords have the lowest average revenue.  In fact, the revenue of PCB
landlords was the smallest across all firms and training providers.
Accordingly, the impact of the rule is the smallest for the public
schools (ranging from low estimate of 0.0004 percent to high estimate of
0.002 percent) and highest for PCB landlords (ranging from 0.05 percent
to 0.22 percent). Within each category, EPA examined the impact on four
different types of firms and training providers ranging from low to high
estimate.  EPA estimates that PCB landlords that stayed in business for
only one year after initial certification have a cost-revenue ratio of
0.22 percent.  This is the highest cost-revenue ratio impact for any
entity across all types of industries. Thus, EPA does not expect any
significant impact of this rule on small firms.  The detailed
cost-revenue ratio across all categories is provided in detail in   REF
_Ref220734464 \h  Table 4-8  and   REF _Ref197963087 \h  \* MERGEFORMAT
Table 4-9 .

Table   STYLEREF 1 \s  4 -  SEQ Table \* ARABIC \s 1  8 . Cost to
Revenue Ratio for Small Firms by types of Entities (2007$)

Entity Type	Total Annualized Cost	Average Small Entity Revenue
Cost-to-Revenue Ratio

Small Residential Contractors and Real Estate Industries

Firms in business for 1 year	$284	$309,483	0.09%

Firms in business for 5 years	$62	$309,483	0.02%

Firms in business for  6 years	$98	$309,483	0.03%

Firms in business for 10 years	$62	$309,483	0.02%

Total  Regulated Small Entities 	164,545

Public and Commercial Building Contractors

Firms in business for 1 year	$284	$875,957	0.03%

Firms in business for 5 years	$62	$875,957	0.01%

Firms in business for  6 years	$98	$875,957	0.01%

Firms in business for 10 years	$62	$875,957	0.01%

Total  Regulated Small Entities 	3,111

Public and Commercial Building Landlords

Firms in business for 1 year	$284	$128,462	0.22%

Firms in business for 5 years	$62	$128,462	0.05%

Firms in business for  6 years	$98	$128,462	0.08%

Firms in business for 10 years	$62	$128,462	0.05%

Total  Regulated Small Entities 	12,007

Center Daycare

Firms in business for 1 year	$284	$292,629	0.10%

Firms in business for 5 years	$62	$292,629	0.02%

Firms in business for  6 years	$98	$292,629	0.03%

Firms in business for 10 years	$62	$292,629	0.02%

Total  Regulated Small Entities 	11,383

Private School

Firms in business for 1 year	$284	$1,015,686	0.03%

Firms in business for 5 years	$62	$1,015,686	0.01%

Firms in business for  6 years	$98	$1,015,686	0.01%

Firms in business for 10 years	$62	$1,015,686	0.01%

Total  Regulated Small Entities 	6,705

Public School

Firms in business for 1 year	$284	$16,997,060	0.002%

Firms in business for 5 years	$62	$16,997,060	0.0004%

Firms in business for  6 years	$98	$16,997,060	0.001%

Firms in business for 10 years	$62	$16,997,060	0.000%

Total  Regulated Small Entities 	7,050

All Small Firms

Firms in business for 1 year	$284	$904,147	0.031%

Firms in business for 5 years	$62	$904,147	0.007%

Firms in business for  6 years	$98	$904,147	0.011%

Firms in business for 10 years	$62	$904,147	0.007%

Total  Regulated Small Entities 	204,801

Table   STYLEREF 1 \s  4 -  SEQ Table \* ARABIC \s 1  9 .
Cost-to-Revenue Ratio for Training Providers

	Total Annualized Cost	Average Small Entity Revenue	Cost-to-Revenue
Ratio

Training Providers –Initial Training

Training Providers in business for 1 year	$526	$859,547	0.061%

Training Providers  in business for 4 years	$142	$859,547	0.016%

Training Providers  in business for 5 years	$177	$859,547	0.021%

Training Providers  in business for 8 years	$116	$859,547	0.013%

Training Providers –Refresher Training

Training Providers in business for 1 year	$375	$859,547	0.044%

Training Providers  in business for 4 years	$101	$859,547	0.012%

Training Providers  in business for 5 years	$138	$859,547	0.016%

Training Providers  in business for 8 years	$90	$859,547	0.010%

Total  Regulated Small Entities 	155

EPA also estimated the aggregate small entity impact for small
governments, non-profit organizations and small for-profit businesses (
REF _Ref220734474 \h  \* MERGEFORMAT  Table 4-10 ).  EPA estimates that
small for-profit businesses would have an average impact ranging from
0.007% to 0.221%, small non-profits would have an average impact ranging
from 0.006% to 0.097% and 7,050 and small governments would have an
average impact ranging from 0.0004% to 0.002%.

Table   STYLEREF 1 \s  4 -  SEQ Table \* ARABIC \s 1  10 . Aggregate
Small Entity Impacts

Number of Small Entities Affected

Average Revenue

Annualized Fee	Cost Impact

Minimum	Maximum

Small Governments	7,050	$16,997,060	$62 - $284	0.000%	0.002%

Non-Profit Organizations	18,088	$292,629 - $1,015,686	$62 - $284	0.006%
0.097%

Small For-Profit Businesses	179,818	$93,196 -  $2,017,329	$62 - $526
0.007%	0.221%

Total	204,956	$93,196 - $16,997,060	$62 - $526	0.000%	0.221%

Conclusion

EPA estimates that small entities will not be adversely affected by the
change in accreditation and certification fees for the Abatement rule
because the rule is reducing in the fees for training providers,
resulting in cost savings to the small entities.  EPA estimates that
firms will also not be adversely impacted:  firms incur a 3 percent to
30 percent cost increase in the direct fee, and indirectly via fee
increases for individuals (3 to 31 percent).  In 1999 EPA had estimated
that the highest cost-revenue ratio for firms was 0.87 percent. This
implies that the cost-revenue impact of any increase in the fees less
than the full amount of the original fees will be no more than 0.87
percent and will not be significant.

For the LRRP rule, EPA estimates that the small entities that are
potentially directly regulated by this rule include: small for-profit
businesses (including abatement and renovation contractors,
environmental testing firms, and property owners and managers); small
nonprofits (including day care centers, private schools, and advocacy
groups); and small governments (local governments, school districts).
EPA estimates that there are an average of 204,956 small entities that
would be affected by this rule.  Of these, there are an estimated
179,818 small businesses with an average impact ranging from 0.007% to
0.221%, 18,088 small non-profits with an average impact ranging from
0.006% to 0.097%, and 7,050 small governments with an average impact
ranging from 0.0004% to 0.002%.

Sensitivity Analysis

The accuracy of the Abatement and LRRP fee level estimates presented in
the previous chapters depends largely on the following factors:

Cost inputs; and

Key assumptions.

The data limitations related to cost inputs and key assumptions are
described in Sections 2.4 and 3.4 for the Abatement Rule and LRRP Rule,
respectively. This chapter examines the limitations to better understand
their impact on the fee calculations for the Abatement Rule and the LRRP
Rule. The findings of the sensitivity analysis indicate that the
estimated fee levels are fairly robust with respect to the underlying
methodology and most assumptions.

  SEQ CHAPTER \h \r 1 Abatement Rule

EPA conducted four sensitivity analyses for the Abatement Rule fee
estimates based upon the limitations described in Section 2.4.  These
analyses are described in more detail below and include an assessment
of:

Number of applications received and processed

Changes in regional and headquarters’ enforcement costs

Changes in regional processing cost and time-motion study

Changes to assumption for “All Other Regions” in region
administrative cost

Number of Applications Received and Processed

In estimating the fixed cost per application as described in Section
2.3, EPA used the number of applications that were "Sent to the
Regions," according to the FLPP Database.  While this estimate is
applicable to the regional costs, it does not include all applications
that are received by headquarters each year.  A number of disapproved,
returned and withdrawn applications are received by headquarters and not
forwarded to the regions and this alternative estimates includes them in
the estimates of the fixed cost per application for headquarters
administrative and enforcement costs.  Therefore, EPA estimated the
sensitivity of the analysis to using a more inclusive estimate for the
number of applications used in the calculation of fixed cost per
application.

Table   STYLEREF 1 \s  5 -  SEQ Table \* ARABIC \s 1  1 . Primary and
Alternative Average Number of Applications and Fixed Cost per
Application

 	Primary Estimate	Alternative Estimate	Percent Change

Average Number of Annual Applications Processed by HQ (FY 2003-FY2006)
2,772	3,135	13%

Fixed Cost Per Application	$396 	$351 	-12%

  REF _Ref220734529 \h  Table 5-1  shows the increase in the average
number of applications from 2,772 to 3,135 when including all the
disapproved, returned and withdrawn applications processed by
headquarters.  By dividing the fixed cost separately according to the
differing headquarters and regional estimated number of applications,
the fixed cost per application is reduced from $396 to $351 (-12%).  As
shown in   REF _Ref220733329 \h  Table 2-10 , the regional and
headquarters Administrative costs are 13 percent and 69 percent of the
Total Cost to EPA, respectively, which indicates a potential to
significantly impact the fee.  Using the Option 2 method for estimating
fees described in the economic analysis, this reduces the estimated fees
by 12 to 15 percent for individual applicants and by 6 to 8 for training
providers and firms.    REF _Ref220734565 \h  Table 5-2  summarizes the
primary and alternative abatement fee estimates after adjusting the
number of applications processed by headquarters, assuming fees are paid
for all applications.  The fees are generally lower under the
alternative estimate compared with the primary estimate because both
fixed and variable total costs to EPA are assumed to be unchanged, but
the fixed costs are recouped from a larger pool of applicants under the
alternative estimate.  Note that some applications that were counted in
this alternative estimate may receive returned fees, but this potential
difference in cost is not reflected here.

Table   STYLEREF 1 \s  5 -  SEQ Table \* ARABIC \s 1  2 . Primary and
Alternative Abatement Fee Estimates after Adjusting Number of
Applications Processed by Headquarters

 Program	Primary Abatement Fee Estimate	Alternative Abatement Fee
Estimate (Sensitivity Analysis)	Percent Change (Reduced Worker/ Tribe
Fee)

	Estimated Fee

[A]	Revised Fee (Reduced Worker/ Tribe)

[B]	Difference [C]=[B]-[A]	Estimated Fee

[A]	Revised Fee (Reduced Worker/ Tribe)

[B]	Difference [C]=[B]-[A]

	Training Program Accreditation

	 Initial 	$727 	$870 	$143 	$681 	$801 	$121 	-8%

 Refresher 	$545 	$688 	$143 	$499 	$635 	$136 	-8%

 Training Program Reaccreditation

	 Initial 	$478 	$621 	$143 	$432 	$582 	$150 	-6%

 Refresher 	$433 	$576 	$143 	$387 	$537 	$150 	-7%

 Firm Certification

	 Initial 	$409 	$555 	$145 	$363 	$515 	$152 	-7%

 Recertification 	$412 	$557 	$145 	$366 	$517 	$152 	-7%

 Individual

	Individual Certification (Excluding workers)	$412 	$414 	$2 	$366 	$366
	$0 	-12%

Individual Certification - Workers Only	$412 	$312 	($100)	$366 	$265
($101)	-15%

Individual Recertification (Excluding workers)	$414 	$416 	$2 	$368
$365 	($3)	-12%

Individual Recertification - Workers Only	$414 	$314 	($100)	$368 	$265
($102)	-15%

Regional and Headquarters Enforcement Costs

In estimating the regional and headquarters enforcement costs, EPA
assumes that regional enforcement costs would vary depending upon the
number of applications received in that region.  However, discussions
with regions suggested the enforcement costs may actually decrease if a
region processes a larger number of applications, given funding
limitations.  The regions indicated that regional and headquarters
enforcement is not based on number of applications or certifications,
but on the time available after other processing activities are
completed.  Accordingly, EPA assumes the estimate for enforcement costs
may understate the enforcement cost per application processed.

To test the sensitivity of the fees, EPA increased the regional and
headquarter enforcement costs by 20 percent.    REF _Ref220734583 \h
Table 5-3  indicates the 20 percent increase on Regional and headquarter
enforcement costs, as well as the impact on the fixed cost, which
increased 3 percent ($396 to $408).

Table   STYLEREF 1 \s  5 -  SEQ Table \* ARABIC \s 1  3 . Primary and
Alternative Regional and Headquarters Enforcement Costs and Cost per
Application

 	Primary Estimate	Alternative Estimate	Percent Change

Headquarters Enforcement Cost	$9,508	$11,410	20%

Regional Enforcement Cost	$152,761 	$183,313	20%

Fixed Cost	$396 	$408	3%

Increasing the regional and headquarters enforcement costs by 20 percent
has a relatively moderate impact on the fixed cost and the fee
estimates, as shown in   REF _Ref220734635 \h  Table 5-4 .  The increase
in the fees under the alternative estimate ranged from 1 to 4 percent.
The moderate impact on the fixed cost and fee estimates can be explained
by reviewing the percentage spread of all the regional and headquarters
costs included in the total cost.  As shown in   REF _Ref220733329 \h
Table 2-10  under the Abatement analysis (Section 2.2), the headquarters
administrative cost accounts for 69 percent of the total cost, whereas
regional and headquarters enforcement account for 13 percent and 1
percent, respectively.

Table   STYLEREF 1 \s  5 -  SEQ Table \* ARABIC \s 1  4 . Primary and
Alternative Abatement Fee Estimates – 20% Increase in Regional and
Headquarters Enforcement Costs

Program	Primary Abatement Fee Estimate	Alternative Abatement Fee
Estimate	Percent Change (Reduced Worker Fee)

	Estimated Fee

[A]	Revised Fee (Reduced Worker/ Tribe)

[B]	Difference [C]=[B]-[A]	Estimated Fee

[A]	Revised Fee (Reduced Worker/ Tribe)

[B]	Difference [C]=[B]-[A]

Training Program Accreditation

 Initial 	$727 	$870 	$143 	$738 	$882 	$143 	1%

 Refresher 	$545 	$688 	$143 	$556 	$700 	$143 	2%

 Training Program Reaccreditation

 Initial 	$478 	$621 	$143 	$490 	$633 	$143 	2%

 Refresher 	$433 	$576 	$143 	$445 	$588 	$143 	2%

 Firm Certification

 Initial 	$409 	$555 	$145 	$421 	$566 	$146 	2%

 Recertification 	$412 	$557 	$145 	$423 	$569 	$146 	2%

 Individual

Individual Certification (Excluding workers)	$412 	$414 	$2 	$424 	$426
$2 	3%

Individual Certification - Workers Only	$412 	$312 	($100)	$424 	$324
($100)	4%

Individual Recertification (Excluding workers)	$414 	$416 	$2 	$425
$427 	$2 	3%

Individual Recertification - Workers Only	$414 	$314 	($100)	$425 	$325
($100)	4%

Regional Processing Cost and Time-Motion Study

The primary analysis uses a hybrid of two methods to estimate EPA’s
costs, one to estimate the level of effort for regional processing
(Time-Motion Study) and the other to estimate all other regional and
headquarter costs (Regional Interviews/Questionnaire).  Originally, in
estimating all processing, administration and enforcement costs, EPA
included cost estimates from Regions 2, 4, and 9 based on interviews and
a questionnaire.  In the regional interviews, Regions 2, 4, and 9
estimated the amount of full-time equivalents (FTE) for employees that
worked on processing, administering and enforcing the Abatement rule in
2006.  Accordingly, this was considered a "top-down" approach. However,
the “top-down” approach resulted in a significant overestimation for
the processing time (number of hours spent) per application.  EPA then
conducted a Time-Motion study where regional staff tracked the amount of
time spent processing each application for a month-long period.  This
method is considered a “bottom-up” approach.  The Abatement analysis
described in Section 2 utilizes the FTE estimates ("top-down" approach)
for the regional and headquarters administration and enforcement costs,
and utilizes the Time-Motion Study estimates ("bottom-up" approach) for
the regional processing costs.  As shown in   REF _Ref220734715 \h
Table 5-5 , the regional processing cost differs significantly depending
upon the method (FTE or Time-Motion Study).

Table   STYLEREF 1 \s  5 -  SEQ Table \* ARABIC \s 1  5 . Time-Motion
Study and FTE Method Estimates for Average Annual Regional Processing
Costs

Program (All Disciplines)	Average Annual Processing Cost	% Difference

	Primary Estimate:

Hybrid – FTE and

Time-Motion Study Method

(“Bottom up”)	Alternative Estimate:

FTE Estimate Method

(“Top-down”)

	Training Providers

Initial Accreditation	$5,778	$41,228	614%

Initial Refresher Course	$2,670	$16,482	517%

Reaccreditation	$5,390	$102,405	1800%

Reaccreditation Refresher Course	$2,129	$34,734	1531%

Firms

Firm Certification	$3,530	$75,654	2043%

Firm Recertification	$2,691	$50,476	1776%

Individuals

Initial Certification	$24,078	$263,849	996%

Recertification 	$10,809	$104,264	865%

TOTAL	$57,074	$689,090	1107%

Given the significant variance between the “bottom-up” and the
“top-down” approaches, EPA assumed the Time-Motion Study would more
likely underestimate the regional processing cost. As described in
Section 2.2.1, the Time-Motion study included a sample size of only 386,
of which 342 were processed by Region 2.  Additionally, given the small
number of training provider accreditations and re-accreditations
completed during the study period, and the small number of
accreditations and re-accreditations processed nationally each year,
there is some uncertainty in the Time-Motion Study processing times used
to estimate the these costs.

To test the sensitivity of the fees to the regional processing cost, EPA
increased the average processing time across all application types by 20
percent.  As shown in   REF _Ref220734737 \h  Table 5-6 , an increase of
20 percent in the regional processing costs, results in fee increases
from less than 1 percent to 8 percent. The fee increase is larger for
training providers where the regional processing costs account for a
larger share of the overall fee (relative to portion of the fee
attributable to the fixed costs). Similar to the sensitivity analysis
for regional and headquarter enforcement costs, the small impact on the
fee estimates can be explained by reviewing the percentage spread of
costs included in the total cost.  As shown in   REF _Ref220733329 \h
Table 2-10  under the Abatement analysis section, the regional
processing cost accounts for only 5 percent of the total cost to EPA.
Thus an increase in 20 percent to the individual regional processing
costs has a lesser impact on the total cost, and thus a minor impact on
the fee.

Table   STYLEREF 1 \s  5 -  SEQ Table \* ARABIC \s 1  6 . Primary and
Alternative Abatement Fee Estimates – 20% Increase in Regional
Processing Costs

Program	Primary Abatement Fee Estimate	Alternative Abatement Fee
Estimate	Percent Change (Reduced Worker Fee)

	Estimated Fee

[A]	Revised Fee (Reduced Worker/ Tribe)

[B]	Difference [C]=[B]-[A]	Estimated Fee

[A]	Revised Fee (Reduced Worker/ Tribe)

[B]	Difference [C]=[B]-[A]

	Training Program Accreditation

 Initial 	$727 	$870 	$143 	$793 	$936 	$143 	8%

 Refresher 	$545 	$688 	$143 	$574 	$718 	$143 	4%

 Training Program Reaccreditation

 Initial 	$478 	$621 	$143 	$494 	$638 	$143 	3%

 Refresher 	$433 	$576 	$143 	$440 	$584 	$143 	1%

 Firm Certification

 Initial 	$409 	$555 	$145 	$412 	$557 	$146 	0%

 Recertification 	$412 	$557 	$145 	$415 	$560 	$146 	1%

 Individual

Individual Certification (Excluding workers)	$412 	$414 	$2 	$415 	$417
$2 	1%

Individual Certification - Workers Only	$412 	$312 	($100)	$415 	$315
($100)	1%

Individual Recertification (Excluding workers)	$414 	$416 	$2 	$417
$419 	$2 	1%

Individual Recertification - Workers Only	$414 	$314 	($100)	$417 	$317
($100)	1%

Assumption for All Other Regions in Regional Administrative Cost

In the Abatement analysis in Section 2.2, EPA assumed the average
administrative cost per application for Regions 4 and 9 is consistent
with the regional administrative cost per application for all Other
regions (1, 5, 6, 7, 8, 10), and multiplied this average cost per
application by the average number of applications processed in the other
regions.  However, the difference between Region 2 and Regions 4 and 9
indicate that there are economies of scale associated with administering
the program within each region, and thus in averaging cost per
application, this method may underestimate the regional administrative
cost.

To test the sensitivity of the fees, EPA assumed the average regional
administrative cost per application for the “Other Regions” would be
a higher end estimate of $118 per application based on Region 9.  For
the primary estimates in this analysis, per application fees were based
on the average between Regions 4 and 9 ($106 per application), as shown
in   REF _Ref220734783 \h  Table 5-7 .

Table   STYLEREF 1 \s  5 -  SEQ Table \* ARABIC \s 1  7 .  Regional
Administrative Cost per Application and Total Regional Administrative
Cost

	Number of Applications FY 2006	Primary Estimate	Alternative Estimate	%
Change

Cost per Application	Total Cost	Cost per Application	Total Cost

	Region 2	1972	$34	$67,122	$34	$67,122	-

Region 4	210	$95	$19,932	$95	$19,932	-

Region 9	159	$118	$18,702	$118	$18,702	-

All Other Regions	431	$106	$45,776	$118	$50,666	11%

TOTAL ADMINISTRATIVE COST

	2772

$151,532

$156,422	3%

TOTAL FIXED COST PER APPLICATION (Administrative and Enforcement)

$396

$398

0.4%

Setting the regional administrative cost for "All Other Regions" equal
to Region 9 resulted in an increase in the fixed cost from $396 to $398
– a difference of less than one percent.   REF _Ref220734816 \h  Table
5-8  demonstrates the marginal impact on the fee from this revision.  As
determined in the previous sensitivity analyses for the Abatement fee
estimates, the most significant contributor to the total cost to EPA is
the headquarters administrative cost.  The regional administrative cost
accounts for 13 percent of the total cost to EPA, and therefore, this
minor increase in the regional administrative cost has a smaller impact
on the fixed cost and the fee.

Table   STYLEREF 1 \s  5 -  SEQ Table \* ARABIC \s 1  8 . Primary and
Alternative Abatement Fee Estimates – Sensitivity to Regional
Administrative Cost Per Application

Program	Initial Abatement Fee Estimate	Revised Abatement Fee Estimate
Percent Change (Reduced Worker/ Tribe Fee)

	Estimated Fee

[A]	Revised Fee (Reduced Worker/ Tribe)

[B]	Difference [C]=[B]-[A]	Estimated Fee

[A]	Revised Fee (Reduced Worker/ Tribe)

[B]	Difference [C]=[B]-[A]

Training Program Accreditation

 Initial 	$727 	$870 	$143 	$728 	$872	$143 	0.2%

 Refresher 	$545 	$688 	$143 	$547 	$690	$143 	0.3%

 Training Program Reaccreditation

 Initial 	$478 	$621 	$143 	$480 	$623	$143 	0.3%

 Refresher 	$433 	$576 	$143 	$435 	$578	$143 	0.3%

 Firm Certification

 Initial 	$409 	$555 	$145 	$411 	$556	$146 	0.3%

 Recertification 	$412 	$557 	$145 	$413 	$559	$146 	0.3%

 Individual

Individual Certification (Excluding workers)	$412 	$414 	$2 	$414 	$416
$2 	0.4%

Individual Certification - Workers Only	$412 	$312 	($100)	$414 	$314
($100)	0.6%

Individual Recertification (Excluding workers)	$414 	$416 	$2 	$415
$417	$2 	0.4%

Individual Recertification - Workers Only	$414 	$314 	($100)	$415 	$315
($100)	0.6%

  SEQ CHAPTER \h \r 1 LRRP Rule

EPA conducted three sensitivity analyses for the LRRP Rule fee estimates
based upon the limitations described in Section 3.4.  These analyses are
described in more detail below and include an assessment of:

Number of applications received by headquarters

State authorized programs and impact on LRRP universe estimate

LRRP cost per application assumption for region processing cost,
regional administrative cost, and headquarters contractor cost

Number of Applications Received by Headquarters

In estimating the headquarters administrative cost per application for
the LRRP Rule, EPA assumed the average cost per application from the
Abatement Rule would be consistent with the LRRP Rule for the Optimus
Contract support costs.  EPA estimated the Optimus Contract support
costs by calculating the average cost per application for the Abatement
Rule, and multiplying by the number of applications processed under the
LRRP Rule across the first five years.  However, similar to the
sensitivity analysis for the Abatement fee estimates, EPA used the
number of applications that were "Sent to the Regions" to calculate this
value, which does not include a number of disapproved, returned and
withdrawn applications received by headquarters and not forwarded to the
regions.

To test the sensitivity of the LRRP fees, EPA increased the number of
applications from 2,772 to 3,135 in the calculation of the headquarters
administrative cost for the Optimus Contract.  As shown in   REF
_Ref220734832 \h  Table 5-9 , given that the number of applications
"Received by Headquarters" (3,135) is larger than the number of
applications "Sent to the Regions," (2,772) the average cost per
application decreases for the LRRP Rule.

Table   STYLEREF 1 \s  5 -  SEQ Table \* ARABIC \s 1  9 .  Average
Headquarters Administrative Cost for the Optimus Contract

 	Primary Abatement Rule

Estimate	Alternative Abatement Rule

Estimate	% Change

Number of Applications under Abatement Rule	2,772	3,215	13%

HQ Administrative Optimus Contract  Cost per Application	$210	$186	-12%

The decrease in the Optimus Contract cost per application by 12 percent,
in turn reduces the fee from between 4 and 7 percent, as shown in   REF
_Ref220734852 \h  Table 5-10 .  Because 212,057 applications are
estimated in the first year of the LRRP estimates, the Optimus Contract
costs, which are on a per application basis, represent 99.8 percent of
the total headquarters administrative costs.  Similar to the Abatement
rule fee estimates, the headquarters administrative cost represents a
significant proportion of the total cost to EPA (72%).  Therefore, the
change in headquarters administrative cost per application for the
Optimus Contract has a proportional impact on the fee associated with
its percent of total cost.  This change lowered the fixed cost per
application from $282 to $262 for all application types and decreased
the fee by 4 to 7 percent depending on the proportion of the fixed cost
to the total cost per application.

Table   STYLEREF 1 \s  5 -  SEQ Table \* ARABIC \s 1  10 .  Primary and
Alternative LRRP Fee Estimates – Adjusted Number of Headquarters
Applications

Application Type	Primary Fee Estimate (LRRP)	Alternative Fee Estimate
(LRRP)	Percent Change

	Training Program Accreditation

Initial Accreditation	$558	$539	-4%

Initial Refresher	$398	$378	-5%

Training Program RE-accreditation

Re-accreditation	$340	$320	-6%

Re-accreditation Refresher	$306	$286	-6%

Firm Certification

Initial Certification	$301	$282	-7%

Recertification	$302	$282	-7%

State Authorized Programs and Impact on LRRP Universe Estimate

In the current analysis, EPA assumes that the EPA-administered universe
will include all states, Tribes and territories.  Under the Abatement
Rule, however, thirty-nine States are authorized to administer and
enforce their own programs.  EPA does not process, administer or enforce
applications in States, Tribes, or territories that have
State-authorized programs.

To test the sensitivity of the fees to State authorization projections,
EPA assumed that the thirty-nine states authorized under the Abatement
Rule would also seek authorization to implement the LRRP program.  While
the size of the total universe for training providers and firms (the
“stock”) would remain unchanged, this assumption would decrease the
size of the EPA-administered universe.  EPA developed an adjustment
factor to estimate the percentage of the LRRP Universe in the eleven
EPA-administered States based upon U.S. Census Bureau population
estimates for each state.  Using the U.S. Census Bureau data, EPA found
the percent of the population that resides in the eleven
EPA-administered States and multiplied this factor by the primary LRRP
universe estimates to calculate the alternative estimated number of
applications in   REF _Ref220737280 \h  Table 5-11 .  Thus, the LRRP
universe estimates are substantially reduced under this alternative
estimate.

Table   STYLEREF 1 \s  5 -  SEQ Table \* ARABIC \s 1  11 .  Primary and
Alternative Number of Applications per Year – Adjusted for
State-Authorized Programs

Year	1	2	3	4	5	TOTAL

Primary Estimate for Number of Applications	212,057	72,290	71,993	71,698
71,404	499,442

Alternative Estimate for Number of Applications \1
   40,279 	               13,731 	                       13,675
            13,618 	               13,563 	                     94,865

Percent Change (%)	81%	81%	81%	81%	81%	81%

\1  Reduction based on census data of US population in EPA authorized
states versus non-authorized states.

As shown in   REF _Ref220737304 \h  Table 5-12 , adjusting the universe
of applications results in an increase in fees ranging from 13 to 24
percent.  The fixed cost component of fee increases under this
alternative.  Therefore, those applications where the fixed cost
component accounts for a larger share of the total fee see the largest
fee increases.

Table   STYLEREF 1 \s  5 -  SEQ Table \* ARABIC \s 1  12 .  Primary and
Alternative LRRP Fee Estimates – Adjustment to LRRP Universe for
State-Authorized Programs

Application Type	Primary Fee Estimate (LRRP)	Alternative Fee Estimate
(LRRP)	Percent Change

	Training Program Accreditation

 	Initial Accreditation	$558	$630	13%

 	Initial Refresher	$398	$469	18%

Training Program RE-accreditation

 	Re-accreditation	$340	$411	21%

 	Re-accreditation Refresher	$306	$377	23%

Firm Certification

 	Initial Certification	$301	$373	24%

 	Recertification	$302	$374	24%

LRRP Cost Per Application Assumption for Regional Processing Cost,
Regional Administrative Cost, and HQ Contractor Cost

The estimated number of training provider and firm applications for the
LRRP Rule is 212,057, which is significantly higher than the annual
average of 2,772 applications (including individuals) for the Abatement
Rule.  EPA found efficiencies related to economies of scale when
estimating the regional processing cost per application between Region
2, which processes 72 percent of the annual average number of
applications, and Regions 4 and 9.  In the LRRP fees analysis, however,
EPA assumed the costs per application were consistent with the Abatement
Rule estimates for three calculations: (i) Regional Processing, (ii)
Regional Administrative, and (iii) Headquarters Administrative (Optimus
Contract cost).  Therefore, in this sensitivity analysis, EPA assumes
the large number of applications under the LRRP Rule would have an
impact on the processing cost per application and administrative costs
per application due to economies of scale.  Given the larger universe of
applications, the costs per application would be lower under the LRRP
rule than for the Abatement Rule.

To test the sensitivity of the LRRP fee estimates, EPA decreased the
regional processing, regional administrative, and headquarters
administrative (Optimus Contract) costs per application by 20 percent
from the estimates used from the Abatement fee analysis.    REF
_Ref220737332 \h  Table 5-13  shows the adjusted LRRP fee estimates and
percent change for each of the three cost per application changes
(regional processing, regional administrative, headquarters
administrative – Optimus Contract), as well as the adjusted fee
estimates and an estimate of the total reduction in fee for all three
reductions combined.

Table   STYLEREF 1 \s  5 -  SEQ Table \* ARABIC \s 1  13 .  Primary and
Alternative LRRP Fees for Adjustment from Abatement Rule Per Application
Costs

Application Type	Primary Fee Estimate (LRRP)	Adjusted Fee Estimate
(LRRP)	Alternative Fee Estimate (LRRP)

ALL	% Change

Reg. Process Only	% Change	Reg. Admin. Only	% Change	HQ Admin Only	%
Change

Training Program Accreditation

Initial Accreditation	$558	$503	-10%	$548	-2%	$516	-8%	$450	-19%

Initial Refresher	$398	$375	-6%	$387	-3%	$355	-11%	$321	-19%

Training Program RE-accreditation

Re-accreditation	$340	$328	-3%	$329	-3%	$298	-12%	$275	-19%

Re-accreditation Refresher	$306	$301	-2%	$295	-4%	$264	-14%	$248	-19%

Firm Certification

Initial Certification	$301	$298	-1%	$289	-4%	$257	-14%	$246	-19%

Recertification	$302	$298	-1%	$290	-4%	$258	-14%	$246	-19%

As in to previous sensitivity analyses, the headquarters administrative
cost adjustment had the most significant impact overall on the combined
adjusted fee. The regional processing cost adjustment accounted for the
most substantial change in the Initial Accreditation fee (10 percent
reduction), whereas the headquarters administrative cost adjustment
accounted for 8 percent of the total change.  The headquarters
administrative cost adjustment reduced the fixed cost per application by
$42.  Similar to the headquarters administrative cost adjustment, the
regional administrative cost adjustment reduced the fixed cost per
application by $11 and had a minor impact on the reduced fee of 2 to 4
percent.  Therefore, EPA concludes the fee is robust in relation to
changes in the regional administrative cost.

The regional processing cost adjustment resulted in a decrease in fees
ranging from 1 to 10 percent.  Unlike the headquarters costs and
regional administrative and enforcement costs, which are included in the
fixed cost per application, the regional processing cost per application
is dependent upon the number of applications of that type processed each
year, as well as the initial cost per application.  The alternative
regional processing cost had a larger impact on the fees for
applications where the regional processing cost component of the fee
accounts for a larger share of the total fee.  The regional processing
cost share of the total fee is smallest for initial firm applicants (4
percent) and largest for initial training provider applicants (50
percent).

Small Entity Impact

As discussed in Chapter 4, the average revenue estimates used in the
analysis were calculated using the economic census data for the relevant
NAICS code.  Census data provides total revenue and number of
establishments by revenue size bracket for each industry group.  Average
revenues used in this analysis were calculated as the average across
revenue size brackets, weighted by the number of establishments in each
bracket.  Since the SBREFA analysis is primarily concerned with the
entities that have lowest revenues within a category, the average
revenue for a category is the upper bound on the average revenue
estimates for entities within that group that have low revenues.
Consequently, the cost-revenue ratio is a low estimate of the impact on
the smallest entities within each group: the maximum estimated cost
impact of the rule on small businesses is relatively low, at 0.22
percent (see Chapter 4).  To account for this, the sensitivity analysis
estimates the reduction in average revenue from the estimated average
revenue that would imply a cost-revenue impact of one percent.

   REF _Ref220807938 \h  Table 5-14  presents the differences in revenue
between the average revenues used in the main SBREFA analysis and the
revenues at which the cost-revenue ratio would be one percent.  Revenue
differences are only presented for firms and training providers that are
in business for one year since this represents the group with the
highest cost-revenue impact. As shown in   REF _Ref220807938 \h  Table
5-14 , average revenues would need to be significantly smaller to attain
cost impacts of one percent for all entity types; the decrease in
revenue ranges from 78 percent to almost 100 percent.  The extent of
decrease is the smallest for PCB landlords (78 percent). In other words,
PCB landlords with average revenue of $28,415 (=$128, 462-$100,047)
would have a cost-revenue impact of one percent.   It is unlikely that
there are any PCB landlords with such small average annual revenue.

Table   STYLEREF 1 \s  5 -  SEQ Table \* ARABIC \s 1  14 . Revenue
Decrease Required to Attain Cost Impact of One Percent

	Average Revenue, 2007$	Decrease Required to Attain 1% Impact	Decrease,
As Percent of Revenue

LRRP Firms, Small Governments, and Non-Profit Organizations

Residential Contractors/Landlords	$309,483	$281,068	91%

PCB Contractors	$875,957	$847,542	97%

PCB Landlords	$128,462	$100,047	78%

Center Daycare	$292,629	$264,214	90%

Private Schools	$1,015,686	$987,271	97%

Public Schools	$16,997,060	$16,968,646	99.8%

All Small Firms, Weighted Revenue	$904,147	$875,732	97%

Small Training Providers

Initial Training Course	$859,547	$806,906	94%

Refresher Training Course	$859,547	$822,043	96%

References

Joint Center for Housing Studies of Harvard University (JCHS).
Foundations for Future Growth in the Remodeling Industry. 2007. Appendix
A-8, page 34.

National Asian Pacific Center on Aging. Available at:
http://www.napca.org/default.aspx?tabid=79. Downloaded 1/30/2008.

U.S. Bureau of Labor Statistics (BLS). 2008. Consumer Price Index –
U.S. City Average, Not Seasonally Adjusted, All Items. Series
CUUR0000SA0. Downloaded May 2, 2008.

U.S Census Bureau. 2007. 2007 Population Estimates, United States –
States; and Puerto Rico, GCT-T1. (July 1, 2007).  Available at:
http://factfinder.census.gov/servlet/GCTTable?_bm=y&-geo_id=01000US&-_bo
x_head_nbr=GCT-T1&-ds_name=PEP_2007_EST&-_lang=en&-format=US-9&-_sse=on.
Viewed on July 11, 2008.

U.S. Census Bureau. 2006. "Establishment and Firm Size: 2002 (Including
Legal Form of Organization)."  2002 Economic Census.

U.S. EPA. 2008a. Economic Analysis for the TSCA Lead Renovation, Repair,
and Painting Program Final Rule for Target Housing and Child-Occupied
Facilities.

U.S. EPA. 2008b. EPA Lead in Paint, Dust and Soil – Lead Professionals
Website. Available at:   HYPERLINK
"http://www.epa.gov/lead/pubs/traincert.htm"
http://www.epa.gov/lead/pubs/traincert.htm . Viewed on May 5, 2008.

U.S EPA. 2008c. Lead in Paint, Dust and Soil, Training and Certification
Program for Lead-Based Paint Activities in Target Housing and Child
Occupied Facilities. Section 402/404, 64 Fed. Reg. 31,092 (June 9,
1999). Available at:   HYPERLINK
"http://www.epa.gov/lead/pubs/leadcert.htm"
http://www.epa.gov/lead/pubs/leadcert.htm . Viewed on May 9, 2008.

U.S. EPA. 2007. Time-Motion Study.

U.S. EPA. 1999. Economic Analysis of the Final TSCA Section 402(a)(3)
Lead-Based Paint Accreditation and Certification Fee Rule. February, 26,
1999. Page ES-7.

U.S. EPA.  Federal Lead Paint Program (FLPP) Database.  Available at:
http://cfpub.epa.gov/flpp/

U.S. Office of Personal Management. 2008. Office of Personnel Management
Wage Tables. 2008 General Schedules. Available at:
http://www.opm.gov/oca/08tables/pdf/gs_h.pdf

U.S. Small Business Administration. 2006. “Small Business Size
Standards matched to North American Industry Classification System.”
Available at:
http://www.sba.gov/services/contractingopportunities/sizestandardstopics
/tableofsize/SERV_TABLE_HTML.html. Downloaded November 24, 2006.

U.S. Small Business Administration. 2004. “Small Business Size
Standards matched to North American Industry Classification System.”
Available at: http://www.sba.gov/size/sizetable2002.html. Viewed January
21, 2004.Alternative Fee Schedule Options: Lower Government and Lower
Small LRRP Firm Fees:

Alternative Abatement Fee Schedules

Table A-1 presents an additional option, Option A1, which is the same as
the preferred Option 2, except state and local government firm and
individual certification fees are reduced to $200.  To make up for the
lower revenue due to the reduced government fees, the standard fees for
firms and individuals are higher under this option.  Based on the FLPP
data it is estimated that 2.77% and 13.86% of firm and individual
applications, respectively, will be local governments.   State
governments are estimated to account for 0.16% and 0.73% of firm and
individual applications, respectively.   Thus, all government
applications are estimated to account for 2.93% and 14.59% of firm and
individual applications.

Table   STYLEREF  \s "Heading 7" \l  A -  SEQ Table \* ARABIC \s 7\  1 :
Alternative Abatement Fee Schedule with Reduced Fees for Government
Firms and Individuals

Program	Option 1	Option 2

(preferred)	Option A1

(Option 2 plus Government Firms and Individual Fees Reduced to $200)

Training Program Accreditation

 Initial 	$727	$870	$870

 Refresher 	$545	$688	$688

 Training Program Reaccreditation

 Initial 	$478	$621	$621

 Refresher 	$433	$576	$576

 Firm Certification

 Initial 	$409	$555	$594

 Recertification	$412	$557	$596

 Individual

 Initial  (Same fee for Workers and Others)	$412

 Recertification (Same fee for Workers and Others)	$414

Individual Certification (Excluding workers)

$414	$453

Individual Certification - Workers Only

$312	$312

Individual Recertification (Excluding workers)

$416	$455

Individual Recertification - Workers Only

$314	$314

 Tribal Firms and Individuals

Firm Initial and Recertification

$20	$20

Individual Initial and Recertification

$10	$10

 Government Firms and Individuals

Firm Initial and Recertification

	$200

Individual Initial and Recertification

	$200

Alternative LRRP Fee Schedules

Table A-2 presents two additional options: (1) Option A1, which is the
same as the preferred option, except state and local government firm
certification fees are reduced to $150, and (2) Option A2, which is the
same as the preferred option, except certification fees are reduced to
$100 for firms with annual revenues that are less than $25,000.  To make
up for the lower revenue due to the reduced fees under these options,
the standard fees for firms and individuals are higher.

Based on the FLPP data on Abatement certifications it is estimated that
2.77% and 0.16% of firm applications will be from local and state
governments, respectively.  Thus, all government applications are
estimated to account for 2.93% of firm applications.

It was estimated that 27.81% of firms applying for certification have
annual revenues that are less than $25,000.  See Appendix F for a
detailed description of how the number of firms with annual revenues
less than $25,000 was estimated.

Table   STYLEREF  \s "Heading 7" \l  A -  SEQ Table \* ARABIC \s 7\  2 .
 Alternative LRRP Fee Schedules with Reduced Fees for Government Firms
and Individuals and Firms with Annual Revenues less than $25,000

Application

Preferred Option	Option A1

(Preferred Option plus Government Firm Fees Reduced to $150)	Option A2

(Preferred Option plus Reduced Fees for Firms w/ Revenues Below $25,000

Training Program Accreditation

Initial	$558	$558	$558

Refresher	$398	$398	$398

Training Program Reaccreditation

Initial	$340	$340	$340

Refresher	$306	$306	$306

Firm Certification

Initial	$301	$306	$379

Recertification	$302	$307	$380

Tribal Firm Certification

Initial and Recertification	$20	$20	$20

Government Firm Certification

Initial and Recertification

$150

	Firm with Revenue Below $25,000 Certification

Initial and Recertification

	$100

Total Number of Applications by Type of Application and Number of
Regions for FY2003-FY2006

Type of Application

	Number of Regions

	0	1	2	3	4	5	6	7	8	9

Training Program Accreditation	0	69	12	0	0	0	3	0	0	0

 	Inspector	0	11	3	0	0	0	1	0	0	0

 	Risk Assessor	0	11	3	0	0	0	1	0	0	0

 	Supervisor	0	15	3	0	0	0	1	0	0	0

 	Worker	0	32	3	0	0	0	0	0	0	0

 	Project Designer	0	0	0	0	0	0	0	0	0	0

Refresher Training Program Accreditation	0	70	14	0	0	0	6	0	0	0

 	Inspector	0	12	4	0	0	0	4	0	0	0

 	Risk Assessor	0	12	4	0	0	0	1	0	0	0

 	Supervisor	0	17	3	0	0	0	1	0	0	0

 	Worker	0	28	3	0	0	0	0	0	0	0

 	Project Designer	0	1	0	0	0	0	0	0	0	0

Training Program RE-accreditation	2	224	45	7	4	0	4	0	0	0

 	Inspector	0	43	10	2	1	0	1	0	0	0

 	Risk Assessor	0	42	10	2	1	0	1	0	0	0

 	Supervisor	1	62	12	2	1	0	1	0	0	0

 	Worker	1	77	13	1	1	0	1	0	0	0

 	Project Designer	0	0	0	0	0	0	0	0	0	0

Refresher Training Program Re-accreditation	2	231	44	2	4	0	5	0	0	0

 	Inspector	0	42	9	1	1	0	1	0	0	0

 	Risk Assessor	0	41	9	1	1	0	1	0	0	0

 	Supervisor	1	59	12	0	1	0	1	0	0	0

 	Worker	1	72	11	0	1	0	1	0	0	0

 	Project Designer	0	17	3	0	0	0	1	0	0	0

Firm Certification	6	2120	64	14	5	0	0	0	1	0

 	Firm Certification	5	1278	33	2	1	0	0	0	1

 	Firm Certification Extension	1	842	31	12	4	0	0	0	0	0

Individual Certification	41	4887	77	14	0	0	0	0	0	1

 	Inspector	4	1146	13	1	0	0	0	0	0	0

 	Risk Assessor	11	1231	39	7	0	0	0	0	0	0

 	Supervisor	21	1362	12	2	0	0	0	0	0	1

 	Worker	4	1146	13	4	0	0	0	0	0	0

 	Project Designer	1	2	0	0	0	0	0	0	0	0

Individual RE-certification	10	3224	85	24	5	2	0	0	0	0

 	Inspector	1	270	4	0	1	0	0	0	0	0

 	Risk Assessor	4	1391	35	20	4	2	0	0	0	0

 	Supervisor	3	777	22	1	0	0	0	0	0	0

 	Worker	1	754	22	2	0	0	0	0	0	0

 	Project Designer	1	32	2	1	0	0	0	0	0	0

TOTAL FY2003-FY2006

(without Amendments)	61 	10,825 	341 	61 	18 	2	18 	 - 	1	1

Regions 2, 4 and 9 Time-Motion Study - Oct-Nov 2007

	All calculated times below are minutes or hours per application

Application Type	Certification/

Re-certification	Discipline	REGION 2	REGION 4	REGION 9	REGION 2	REGION 4
and 9/2

Worker	Inspector	Project Designer	Risk Assessor	Supervisor	Number of
Applications (Completed)	Processing Time per Application (Minutes)
Processing Time per Application (Hours)	Number of Applications
(Completed)	Processing Time per Application (Minutes)	Processing Time
per Application (Hours)	Number of Applications (Completed)	Processing
Time per Application (Minutes)	Processing Time per Application (Hours)
Processing Time for Applications in Region 2 (Hours/Application)
WEIGHTED AVERAGE Processing Time for Applications in Region 4 and 9
(Hours/Application)

	Firm	Initial	 	 	 	 	 	27	25	0.4	 	 	 	3	88	1.5	0.4	1.5

Firm	Recertification	 	 	 	 	 	22	26	0.4	 	 	 	4	80	1.3	0.4	1.3

Individual	Initial	x	 	 	 	 	 	32	0.5	 	 	 	 	85	1.4	0.5	1.8

Individual	Initial	 	x	 	 	 	 	28	0.5	 	95	1.6	 	 	 	0.5

	Individual	Initial	 	 	 	x	 	 	32	0.5	 	110	1.8	 	120	2	0.5

	Individual	Initial	 	 	 	 	x	 	33	0.6	 	110	1.8	 	120	2	0.6

	Average/1:	131	31	1	6	105	2	8	108	2	0.5

	Individual	Recertification	x	 	 	 	 	 	38	0.5	 	70	1.2	 	86	1.4
0.5	1.4

Individual	Recertification	 	x	 	 	 	 	34	0.5	 	85	1.4	 	85	1.4
0.5

	Individual	Recertification	 	 	 	x	 	 	31	0.5	 	 	 	 	85	1.4
0.5

	Individual	Recertification	 	 	 	 	x	 	36	0.5	 	 	 	 	83	1.4
0.5

	Average/1:	156	35	1	3	78	1	11	85	1	0.5

	Individual	Disapproval	 	x	 	x	x	5	54	0.6	 	 	 	3	105	1.8	0.6	1.8

Individual	Reciprocity	 	 	 	x	 	1	69	0.6	 	 	 	2	88	1.5	0.6	1.5

Training Provider	Accreditation	x	x	 	x	x	 	-	-	 	 	 	3	1566	26.1
8.5	26.1

Training Provider	Reaccreditation	x	x	x	 	x	1	89	1.5	 	 	 	 	0	0.0
1.5	4.5

/1 Individual estimates for processing time per application were
separated by discipline, but no significant difference was found in the
processing time between disciplines. The Lead Fees Analysis, therefore,
uses the averaged values for processing time of individual applications.

/2 Regions 4 and 9 are averaged to estimate the processing time estimate
for all other regions.

EPA Labor Rates

EPA used the following labor rates for SEE and EPA staff to estimate the
cost per application.  EPA assumed an overhead rate of 160 percent when
calculating the loaded rate.

Senior Environmental Employee (SEE) Wage Level

Position Level	Entry Wage	Maximum For Wage Level	Midpoint Wage, Unloaded
Midpoint Wage, Loaded

Level I – Clerical/Non-Typing	$6.92 	$9.23 	$8.08 	$12.92

     Messenger

     Receptionist

     Filing Clerk

    Copy Machine Operator

Level II – Clerical/Typing	$8.36 	$11.53 	$9.95 	$15.91

     Clerk-typist

     Administrative Assistant

     Secretary

Level III – Technical (Non-degree) 	$9.80 	$13.25 	$11.53 	$18.44

      Writer-Editor

      Technical researcher

      Administrative Specialist

Level IV – Professional (Degree) 	$12.11 	$17.29 	$14.70 	$23.52

      Engineer

      Scientist

      Web Master

Source: National Asian Pacific Center on Aging
(http://www.napca.org/default.aspx?tabid=79), downloaded 1/30/2008

EPA Wage Level

Labor Rates	Level	1999 Hourly Rate	2008 Hourly Rate	Loaded Wage	Annual,
Loaded \1

Clerical	GS-6, Step 1	$11.00	$14.03	$22.45	$46,692

Technical	GS-11, Step 1	$18.08	$23.07	$36.91	$76,777

Technical	GS-12, Step 2	$22.40	$28.57	$45.71	$95,081

Managerial	GS-13, Step 1	$25.78	$32.88	$52.61	$109,425

	Average:	19.315	24.6375

Percent Increase in Wage from 1999 to 2008:	27.6%

\1 Assumes 2,080 hours per year for a full-time employee.

Source: Office of Personnel Management Wage Tables, 2008 General
Schedules, (http://www.opm.gov/oca/08tables/pdf/gs_h.pdf)

Regional Responses to Administrative and Enforcement Cost Questions

Administrative and enforcement cost data were gathered for Regions 2, 4,
and 9 for this analysis.  The table below outlines the data as received
from the regions.

Application Types	Employee Level

	SEE Clerical	SEE Technical	EPA Clerical	EPA Technical	EPA Managerial

Region 2:  Number of Hours Spent on Administrative Activities

Number of hours spent in 2006	1.75 FTE (unspecified)

Region 2:  Number of Hours Spent on Enforcement Activities

Number of hours spent in 2006

1 FTE

	Region 4:  Number of Hours Spent on Administrative Activities

Number of hours spent in 2006

0

540

	Number of hours spent in 2005

0

546

	Number of hours spent in 2004

	Region 4:  Number of Hours Spent on Enforcement Activities

Number of hours spent in 2006

48 hours**

0

	Number of hours spent in 2005

96 hours**

0

	Number of hours spent in 2004

	Region 9:  Number of Hours Spent on Administrative Activities

Number of hours spent in 2006	0	800 (2SEEs)	0	50	40

Number of hours spent in 2005	0	400 (2SEEs)	0	100	50

Number of hours spent in 2004	0	400 (2SEEs)	0	20	40

Region 9:  Number of Hours Spent on Enforcement Activities

Number of hours spent in 2006	0	828 (1 SEE)	0	20	40

Number of hours spent in 2005	0	1130 (1SEE)	0	40	60

Number of hours spent in 2004	0	1030 (1 SEE)	0	40	50

Estimation of Number of LRRP Firms with Annual Revenues of less than
$25,000

Data from the 2002 U.S. Census of Construction form the basis for
EPA’s estimates of the number of LRRP firms that will be affected by
the LRRP rule.  For establishments with employees, the Census publishes
data on the number of establishments in various revenue brackets.  For
non-employer establishments (i.e. firms without employees), however, the
Census only publishes their average revenue, by NAICS category.

Periodically, Harvard University’s Joint Center for Housing publishes
a report on the renovation industry.  In their latest report:
Foundations for Future Growth in the Remodeling Industry, they published
estimates of the number of non-employer remodeling firms by revenue
bracket for firms with revenues above $25,000.  They argue that
renovators making less than $25,000/year are only part-time operations
and thus are not included in their analysis.  They do estimate, however,
that in 2002 there were approximately 330,000 non-employer residential
remodeling firms with annual revenues of $25,000 or more, and
approximately 383,000 non-payroll residential remodeling firms with
annual revenues of less than $25,000.

The Joint Center for Housing estimates cannot be used directly for two
reasons:

Some of the contractor categories they include are not included in the
EPA estimates because these categories are not involved in operations
that are likely to disturb lead-based paint, roofers for example.

Even among the contractor categories whose activities are of a nature
that might disturb lead-based paint, if they are working in homes or
COFs that do not have lead-based paint (e.g. are built after 1978), they
do not need to be certified.

Thus EPA made the following adjustments in estimating the number of
regulated non-employer establishments in the above and below $25K
categories:

Remove from the Joint Center list any specialty contractors not included
(e.g. concrete and structural steel).  Adjust their estimate of less
than $25K non-payroll firms in the same proportion.  Calculate a revised
total number of non-payroll firms.

Calculate the ratio of EPA total non-employer firms to the revised
non-payroll firms for general renovation, and for specialty contractors.

Apply this percentage to their estimates of total firms with annual
revenues of $25K or more – treating general building contractor as one
category and summing the specialty firms for a second category.

Subtract the resulting estimates from the EPA totals to get the number
of non-payroll firms with revenues of less than $25K in each of these
two categories.

See following tables for estimates of contracting firms and for various
property owners and managers.  There are no non-payroll firms in the
property owners and mangers categories – so the Census data can be
used directly for them.

Table   STYLEREF  \s "Heading 7" \l  F -  SEQ Table \* ARABIC \s 7\  1
.  Estimation of Non Employers with Revenues of Less Than $25,000

Small Employer and Non-Employer Firms

 	Employer Firms*	Non-Employer Firms**	Total, All Firms

Industry	Total	Less than $25k	Total	Less than $25k	Total	Less than $25k

General Remodelers	13,395	51	31,519	10,727	44,915	10,778

Specialty Remodelers	25,881	444	73,193	40,035	99,074	40,479

Lessors and Property Managers	35,674	1,181	N/A	N/A	35,674	1,181

Training Providers	157	4	N/A	N/A	157	4

*  EA LRRP rule

**  Based on Joint Center data – see following tables.

Table   STYLEREF  \s "Heading 7" \l  F -  SEQ Table \* ARABIC \s 7\  2 .
 Ratio of EPA LRRP Non-Employer Data to Joint Center Non-Employer Data

 	Total Non Employer Remodelers	>25k	<25k

JCHS Data	640,672	296,567	344,105

EPA data on LRRP	104,712

Ratio	16%

Table   STYLEREF  \s "Heading 7" \l  F -  SEQ Table \* ARABIC \s 7\  3 .
  JCHS Data

 	Total	NAICS Match	Included in Estimate

	General Building Contractors	127,216	236118	Yes

	Special Trade Contractors	202,873

	Concrete and Structural Steel	2,874

	Framing	3,895

	Masonry	5,072

	Building Exterior, Glazing and Foundation	2,400	238150	Yes

	Roofing	12,315

	Siding	8,716	238170	Yes

	Plumbing, HVAC and Electrical	38,503	238220	Yes

	Drywall and Insulation	4,875	238310	Yes

	Painting	44,087	238320	Yes

	Flooring, Tile and Other

	Finishing	33,950	238390	Yes

	Finish Carpentry	36,820	238350	Yes

	Site Prep and Other	9,366

	Total	330,089

	Table   STYLEREF  \s "Heading 7" \l  F -  SEQ Table \* ARABIC \s 7\  4
.  Number of Joint Center Non-Employer Establishments Regulated under
the LRRP rule

Adjusted by Ratio

	General Building Contractors	20,792

	Special Trade Contractors	33,158

	Source: Joint Center for Housing Studies of Harvard University.  2007.
Foundations for Future Growth in the Remodeling Industry.  Appendix A-8,
page 34.

  With Title X: The Residential Lead-Based Paint Hazard Reduction Act,
of the Housing and Community Development Act of 1992, Congress amended
several existing housing, worker safety, and environmental statutes, and
added Subchapter IV: Lead Exposure Reduction to the Toxic Substances
Control Act (TSCA).

 See U.S EPA, Lead in Paint, Dust and Soil, Training and Certification
Program for Lead-Based Paint Activities in Target Housing and Child
Occupied Facilities - Section 402/404, 64 Fed. Reg. 31,092 (June 9,
1999)  (  HYPERLINK "http://www.epa.gov/lead/pubs/leadcert.htm"
http://www.epa.gov/lead/pubs/leadcert.htm , viewed on May 9, 2008).

   They receive their certification directly from their training
provider.

 Given the limited data from Region 4 for firms and training providers,
the processing time reported from Region 9 was used for all regions
except Region 2.

 Regions 2 and 4 indicated that administrative costs are not necessarily
proportional to the number of applications

 Region 3 was not included in the estimates because all of their states
have authorized Abatement rule programs and they received no
applications during the 2003-2006 data collection period.

 Discussions with regions suggested the enforcement costs are largely
depended on available funding not on the number of applications
received.

 Certification Exam Fee ($70) multiplied by the annual average number of
individual inspectors, risk assessors, and supervisors who took the exam
from FY2003 to FY2006 (781 applicants), based on the FLPP database.

 The tribes are charged a nominal fee of $20 per firm and $10 per
individual certification, therefore tribes will incur even greater
savings.

 EPA Lead in Paint, Dust and Soil – Lead Professionals Website. <
HYPERLINK "http://www.epa.gov/lead/pubs/traincert.htm"
http://www.epa.gov/lead/pubs/traincert.htm > Viewed on May 5, 2008.

 See U.S EPA, Lead in Paint, Dust and Soil, Training and Certification
Program for Lead-Based Paint Activities in Target Housing and Child
Occupied Facilities - Section 402/404, 64 Fed. Reg. 31,092 (June 9,
1999)  (  HYPERLINK "http://www.epa.gov/lead/pubs/leadcert.htm"
http://www.epa.gov/lead/pubs/leadcert.htm , viewed on May 9, 2008).

 Region 3 is not included in this analysis because all states have
authorized programs and there were no applications processed during the
analysis period from FY 2003 through FY 2006, as reported in the FLPP
Database.  Regions 1, 5 and 7 have only state-authorized programs as
well, but processed applications (e.g. from Tribal Areas) during the
time period as reported in the FLPP database.  Therefore, Regions 1, 5,
and 7 are included in this analysis because they contribute to the total
number of applications processed.

 Regions 2 and 4 indicated that administrative costs are not necessarily
proportional to the number of applications

 The alternate approach analyzed was the fixed ratio method. In this
approach, the Regional administrative costs for each type of
accreditation or certification (e.g., supervisor training program
accreditation, firm certification) would be multiplied by a fixed ratio
to determine the portion of other costs each applicant would pay.

 See Economic Analysis of the Final TSCA Section 402(a)(3) Lead-Based
Paint Accreditation and Certification Fee Rule, February, 26, 1999, page
ES-7.

 See Economic Analysis of the Final TSCA Section 402(a)(3) Lead-Based
Paint Accreditation and Certification Fee Rule, February, 26, 1999, page
ES-7.

 Total costs for each applicant type reflect the contract costs plus the
maintenance cost ($180,000) weighted by the number of applications.

 Economic Analysis of the Final TSCA Section 402(a)(3) Lead-Based Paint
Accreditation and Certification Fee Rule. U.S. EPA, 1999.

 The tribes are charged a nominal fee of $20 per firm and $10 per
individual certification, therefore tribes will incur even greater
savings.

 Economic Analysis of the Lead, Renovation, Repair and Painting Rule,
U.S EPA, 2008.

 For private schools, where adequate revenue data were not available,
costs are compared to annual expenditures.

 Chapter 8, Economic Analysis of the Lead, Renovation, Repair and
Painting Rule, U.S EPA, 2008.

 Chapter 8, Economic Analysis of the Lead, Renovation, Repair and
Painting Rule, U.S EPA, 2008.

 Third year estimates were appropriate because although the LRRP rule
does not become effective until 2010, the LRRP rule analysis period
began in 2008.

 Of the estimated 179,820 small general and specialty contractors,
property owners and managers and training providers, approximately
52,000 have annual revenues of less than $25,000.  See Appendix E for
details.

 The tribes are charged a nominal fee of $20 per firm and $10 per
individual certification, therefore the cost-revenue impact for tribes
will incur even greater savings.

 The eleven EPA-administered states are Alaska, Arizona, Florida, Idaho,
Montana, Nevada, New Mexico, New York, South Carolina, South Dakota,
Wyoming.

 U.S Census Bureau, 2007 Population Estimates, United States – States;
and Puerto Rico, GCT-T1.(July 1, 2007)
<http://factfinder.census.gov/servlet/GCTTable?_bm=y&-geo_id=01000US&-_b
ox_head_nbr=GCT-T1&-ds_name=PEP_2007_EST&-_lang=en&-format=US-9&-_sse=on
> Viewed on July 11, 2008.

 Foundations for Future Growth in the Remodeling Industry, 2007, Joint
Center for Housing Studies of Harvard University, Appendix A-8, page 34.

  DATE  \@ "d MMMM yyyy"  \* MERGEFORMAT  27 January 2009  Lead Fees
Economic Analysis		  PAGE  xi

  DATE  \@ "d MMMM yyyy"  \* MERGEFORMAT  27 January 2009  Lead Fees
Economic Analysis

  DATE  \@ "d MMMM yyyy"  \* MERGEFORMAT  27 January 2009  Lead Fees
Economic Analysis		  PAGE  1-3

  DATE  \@ "d MMMM yyyy"  \* MERGEFORMAT  27 January 2009  Lead Fees
Economic Analysis		  PAGE  2-5

  DATE  \@ "d MMMM yyyy"  \* MERGEFORMAT  27 January 2009  Lead Fees
Economic Analysis	  PAGE  2-16

  DATE  \@ "d MMMM yyyy"  \* MERGEFORMAT  27 January 2009  Lead Fees
Economic Analysis		  PAGE  3-6

 PAGE   3-1

  DATE  \@ "d MMMM yyyy"  \* MERGEFORMAT  27 January 2009  Lead Fees
Economic Analysis		  PAGE  3-12

  DATE  \@ "d MMMM yyyy"  27 January 2009  Lead Fees Economic Analysis
 PAGE  3-18

  DATE  \@ "d MMMM yyyy"  \* MERGEFORMAT  27 January 2009  Lead Fees
Economic Analysis		  PAGE  4-12

  DATE  \@ "d MMMM yyyy"  \* MERGEFORMAT  27 January 2009  Lead Fees
Economic Analysis		  PAGE  5-12

  DATE  \@ "d MMMM yyyy"  \* MERGEFORMAT  27 January 2009  Lead Fees
Economic Analysis		R-  PAGE  1

  DATE  \@ "d MMMM yyyy"  \* MERGEFORMAT  27 January 2009  Lead Fees
Economic Analysis		  PAGE  A-2

  DATE  \@ "d MMMM yyyy"  \* MERGEFORMAT  27 January 2009  Lead Fees
Economic Analysis	  PAGE  B-1

27 January 2009 Lead Fees Economic Analysis	  PAGE  D-1

  DATE  \@ "d MMMM yyyy"  \* MERGEFORMAT  27 January 2009  Lead Fees
Economic Analysis	  PAGE  E-1

  DATE  \@ "d MMMM yyyy"  \* MERGEFORMAT  27 January 2009  Lead Fees
Economic Analysis	  PAGE  F-3

50

  [(A1*(1-rn))/(1-r)]

Page 1-  PAGE  1-1

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Page 1-  PAGE  3-1

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Page 1-  PAGE  3-1

  PAGE  xvi

  DATE  \@ "d MMMM yyyy"  \* MERGEFORMAT  27 January 2009  Lead Fees
Economic Analysis	  PAGE  xi

  DATE  \@ "d MMMM yyyy"  \* MERGEFORMAT  27 January 2009  Lead Fees
Economic Analysis	  PAGE  2-6

  DATE  \@ "d MMMM yyyy"  \* MERGEFORMAT  27 January 2009  Lead Fees
Economic Analysis	  PAGE  3-7

  DATE  \@ "d MMMM yyyy"  \* MERGEFORMAT  18 February 2009  Lead Fees
Economic Analysis	  PAGE  3-14

  DATE  \@ "d MMMM yyyy"  \* MERGEFORMAT  27 January 2009  Lead Fees
Economic Analysis	  PAGE  C-1


[Federal Register Volume 81, Number 34 (Monday, February 22, 2016)]
[Notices]
[Page 8766]
[FR Doc No: 2016-03520]

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SECURITIES AND EXCHANGE COMMISSION

Proposed Collection; Comment Request;

Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of FOIA Services, 100 F Street NE., Washington, DC
20549-2736.

Extension:
    Rule 0-2, SEC File No. 270-572, OMB Control No. 3235-0636.

    Notice is hereby given that, pursuant to the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501-3520), the Securities and Exchange
Commission (the ``Commission'') is soliciting comments on the
collections of information summarized below. The Commission plans to
submit this existing collection of information to the Office of
Management and Budget for extension and approval.
    Several sections of the Investment Company Act of 1940 (``Act'' or
``Investment Company Act'') \1\ give the Commission the authority to
issue orders granting exemptions from the Act's provisions. The section
that grants broadest authority is section 6(c), which provides the
Commission with authority to conditionally or unconditionally exempt
persons, securities or transactions from any provision of the
Investment Company Act, or the rules or regulations thereunder, if and
to the extent that such exemption is necessary or appropriate in the
public interest and consistent with the protection of investors and the
purposes fairly intended by the policy and provisions of the Act.\2\
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 80a-1 et seq.
    \2\ 15 U.S.C. 80a-6(c).
---------------------------------------------------------------------------

    Rule 0-2 under the Investment Company Act,\3\ entitled ``General
Requirements of Papers and Applications,'' prescribes general
instructions for filing an application seeking exemptive relief with
the Commission for which a form is not specifically prescribed. Rule 0-
2 requires that each application filed with the commission have (a) a
statement of authorization to file and sign the application on behalf
of the applicant, (b) a verification of application and statements of
fact, (c) a brief statement of the grounds for application, and (d) the
name and address of each applicant and of any person to whom questions
should be directed. The Commission uses the information required by
rule 0-2 to decide whether the applicant should be deemed to be
entitled to the action requested by the application.
---------------------------------------------------------------------------

    \3\ 17 CFR 270.0-2.
---------------------------------------------------------------------------

    Applicants for orders can include registered investment companies,
affiliated persons of registered investment companies, and issuers
seeking to avoid investment company status, among other entities.
Commission staff estimates that it receives approximately 184
applications per year under the Act. Although each application
typically is submitted on behalf of multiple entities, the entities in
the vast majority of cases are related companies and are treated as a
single respondent for purposes of this analysis.
    The time to prepare an application depends on the complexity and/or
novelty of the issues covered by the application. We estimate that the
Commission receives 25 of the most time-consuming applications
annually, 125 applications of medium difficulty, and 34 of the least
difficult applications. Based on conversations with applicants, we
estimate that in-house counsel would spend from ten to fifty hours
helping to draft and review an application. We estimate a total annual
hour burden to all respondents of 5,340 hours [(50 hours x 25
applications) + (30 hours x 125 applications) + (10 hours x 34
applications)].
    Much of the work of preparing an application is performed by
outside counsel. The cost outside counsel charges applicants depends on
the complexity of the issues covered by the application and the time
required for preparation. Based on conversations with attorneys who
serve as outside counsel, the cost ranges from approximately $10,000
for preparing a well-precedented, routine application to approximately
$150,000 to prepare a complex and/or novel application. This
distribution gives a total estimated annual cost burden to applicants
of filing all applications of $14,090,000 [(25 x $150,000) + (125 x
$80,000) + (34 x $10,000)].
    We request written comment on: (a) Whether the collections of
information are necessary for the proper performance of the functions
of the Commission, including whether the information has practical
utility; (b) the accuracy of the Commission's estimate of the burdens
of the collection of information; (c) ways to enhance the quality,
utility, and clarity of the information collected; and (d) ways to
minimize the burden of the collection of information on respondents,
including through the use of automated collection techniques or other
forms of information technology. Consideration will be given to
comments and suggestions submitted in writing within 60 days of this
publication.
    Please direct your written comments to Pamela Dyson, Director/Chief
Information Officer, Securities and Exchange Commission, C/O Remi
Pavlik-Simon, 100 F Street NE., Washington, DC 20549; or send an email
to<EMAIL_ADDRESS>
    Dated: February 16, 2016.
 Brent J. Fields,
Secretary.
[FR Doc. 2016-03520 Filed 2-19-16; 8:45 am]
 BILLING CODE P