8.2 Estimates under the Proposed AAI Regulation Due to uncertainties surrounding the number of abandoned properties subject to the AAI requirements, we estimated the distribution of abandoned and non abandoned properties as a range. As a result, the estimated weighted average cost of a Phase I ESA under the proposed rule also is presented as a range. To derive an upper bound estimate of the weighted average cost of a Phase I ESA, we assumed that 15 percent of all commercial properties subject to the AAI requirements are abandoned. For a lower bound estimate, we assumed that 28 percent of all commercial properties subject to the AAI requirements are abandoned. EIA for the AAI Regulation 8 5 8.2.1 Hour Burden for Conducting Interviews at Abandoned Sites As explained in Section 5.6, the proposed rule modifies the interview requirement for abandoned properties by requiring that only neighboring property owners/ occupants be interviewed. We estimated that the AAI interview requirement would lead to a decrease in the total hour burden for conducting interviews at abandoned properties relative to the base case. The interview requirement for the rest of the properties would not change under the proposed rule. For the ease of understanding how a decrease in the hour burden for conducting interviews at abandoned properties was modeled, we present the calculations of the average incremental hour burden for conducting interviews at small undeveloped properties.

As presented in Exhibit 7 3, we estimated that, under the current ASTM standard, the hour burden for conducting interviews with the subject property owner, occupants, and/ or operators is two hours for all small undeveloped properties. Under the proposed rule, the hour burden for conducting interviews at non abandoned small undeveloped properties would not change. For abandoned properties, however, the estimated hour burden for conducting interviews with owner/ occupants of neighboring properties would be one hour per interview. As presented in Section <IP_ADDRESS>, we assumed that more than one interview would be required for 40 percent of abandoned properties. Specifically, one interview would be required for 60 percent of abandoned properties, two interviews would be required for 30 percent of abandoned properties, and three interviews for the remaining ten percent of abandoned properties. The calculation of the weighted average hour burden for small abandoned undeveloped properties is presented in the following equation:

( 1 hour * 60%) + ( 1 hour * 2 interviews * 30%) + ( 1 hour * 3 interviews* 10%) = = 1.5 hours.

Under the current ASTM standard, the average hour burden for small abandoned undeveloped properties is two hours. Thus, the estimated reduction in the hour burden under the proposed AAI rule for small abandoned undeveloped properties would be, on average, 0.5 hours per Phase I ESA ( 2 hours   1.5 hours = 0.5 hours). The estimated reduction in the hour burden for small non abandoned undeveloped properties would be zero since the proposed AAI rule imposes the same interview requirement as the current ASTM standard.

It is important to note that the EIA estimates the hour burden per Phase I ESA as a weighted average hour burden ( i. e., average of the estimated hour burden for conducting a Phase I ESA at abandoned properties and the estimated hour burden for conducting a Phase I ESA at nonabandoned properties weighted by the assumed distribution of these two types of properties). Assuming 15 percent of small undeveloped properties are abandoned, we can calculate a weighted average decrease in the hour burden for conducting interviews at small undeveloped properties under the AAI rule, relative to the base case, as follows:

( 0 hours * 85%) + ( 0.5 hours * 15%)   0.08 hours EIA for the AAI Regulation 8 6 Assuming 28 percent of small undeveloped properties are abandoned, the weighted average decrease in the hour burden for conducting interviews at small undeveloped properties is calculated as follows:

( 0 hours * 72%) + ( 0.5 hours * 28%) = 0.14 hours The results from the above two equations show how the distribution of abandoned and nonabandoned properties impacts the estimated incremental labor hour burden. Since a Phase I ESA cost is mainly driven by labor hour burden, we can then conclude that the lower the fraction of abandoned properties relative to non abandoned properties, when modeling Phase I ESA costs under the proposed rule, the higher the estimated weighted average cost of a Phase I ESA.

8.2.2 Phase I ESA Cost Based on our analysis, the cost of a Phase I ESA under the AAI regulation would increase, on average, between $ 41 and $ 47. The estimated average cost for a Phase I ESA thus ranges between $ 2,174 and $ 2,179.

The parameters used in calculating the average incremental cost under the AAI regulation are presented in Exhibits 8 4 and 8 5.

Exhibit 8 4: AAI Regulation  Estimated Unit Cost ( Upper Bound)

Size Type Assumed Distribution Average Incremental Hours1 Average Incremental Labor Cost Average Incremental Direct Cost Average Total Incremental Cost2 Small Undeveloped/ Agricultural 12.8% 0.57 $ 29.4 $ 0 $ 29.4 Residential 9.2% 0.57 $ 29.4 $ 0 $ 29.4 Commercial 37.6% 1.08 $ 55.0 $ 0 $ 55.0 Industrial 11.4% 1.08 $ 55.0 $ 0 $ 55.0 Medium Undeveloped/ Agricultural 5% 0.57 $ 29.4 $ 0 $ 29.4 Residential 3.6% 0.57 $ 29.4 $ 0 $ 29.4 Commercial 14.8% 1.08 $ 55.0 $ 0 $ 55.0 Industrial 4.5% 1.08 $ 55.0 $ 0 $ 55.0 Large Undeveloped/ Agricultural 0.2% 0.57 $ 29.4 $ 0 $ 29.4 Residential 0.1% 0.58 $ 29.4 $ 0 $ 29.4 Commercial 0.5% 1.08 $ 55.0 $ 0 $ 55.0 Industrial 0.2% 1.00 $ 51.2 $ 0 $ 51.2 Average Incremental Cost $ 47 Average ASTM E1527 2000 Phase I ESA Cost $ 2,132 Average AAI Phase I ESA Cost $ 2,179 EIA for the AAI Regulation 8 7 1) The incremental hour burden and distribution of affected properties by Phase I ESA activity are discussed in Section 5.6.5 and presented in Exhibit 7 7. For the ease of understanding how the average incremental hour burden was calculated, we present here the calculations of the average incremental hour burden for small undeveloped properties. In Section 8.2.1, we calculated savings of 0.08 hours per Phase I ESA under the proposed rule. The proposed rule, however, would impose the following hour burden: ( 1) 100 percent of properties would incur a one half hour burden for documenting the results of the search for environmental liens and institutional controls; ( 2) 15 percent of properties would incur a one half hour burden to document the relationship of the purchase price to the value of the property; and ( 3) 15 percent of properties would incur a one half hour burden to document the degree of obviousness of the presence or likely presence of contamination. Incremental hour burden under the proposed rule is then calculated as: (( 0.5 hours * 100%) + ( 0.5 hours * 15%) + ( 0.5 hours * 15%))   0.08 hours ( savings) = 0.57 hours. 2) Assuming 15 percent of all commercial properties subject to the AAI requirements are abandoned. Note: Totals do not add due to rounding. Source: ICF Analysis.

Exhibit 8 5: AAI Regulation  Estimated Unit Cost ( Lower Bound)

Size Type Assumed Distribution Average Incremental Hours Average Incremental Labor Cost Average Incremental Direct Cost Average Total Incremental Cost1 Small Undeveloped/ Agricultural 12.8% 0.51 $ 26.1 $ 0 $ 26.1 Residential 9.2% 0.51 $ 26.1 $ 0 $ 26.1 Commercial 37.6% 0.95 $ 48.4 $ 0 $ 48.4 Industrial 11.4% 0.95 $ 48.4 $ 0 $ 48.4 Medium Undeveloped/ Agricultural 5% 0.51 $ 26.1 $ 0 $ 26.1 Residential 3.6% 0.51 $ 26.1 $ 0 $ 26.1 Commercial 14.8% 0.95 $ 48.4 $ 0 $ 48.4 Industrial 4.5% 0.95 $ 48.4 $ 0 $ 48.4 Large Undeveloped/ Agricultural 0.2% 0.51 $ 26.1 $ 0 $ 26.1 Residential 0.1% 0.51 $ 26.1 $ 0 $ 26.1 Commercial 0.5% 0.95 $ 48.4 $ 0 $ 48.4 Industrial 0.2% 0.80 $ 41.2 $ 0 $ 41.2 Average Incremental Cost $ 41 Average ASTM E1527 2000 Phase I ESA Cost $ 2,132 Average AAI Phase I ESA Cost $ 2,174 1) Assuming 28 percent of all commercial properties subject to the AAI requirements are abandoned. Note: Totals do not add due to rounding. Source: ICF Analysis.

Under the AAI regulation, the average incremental costs for the users transitioning from transaction screens to Phase I ESAs would range between $ 1,448 and $ 1,454 ($ 2,174  $ 726 = $ 1,448, and $ 2,179  $ 726   $ 1,454; where $ 726 is the estimated average cost of a transaction screen). Although this is a relatively high incremental cost, only a small percent of the users would be affected annually. EIA for the AAI Regulation 8 8 We estimated that about 97 percent of property transactions would bear only the incremental cost of the proposed rule relative to the ASTM E1527 2000 standard. Therefore, under the AAI regulation, the weighted average incremental cost per ESA per property transaction is estimated to be between $ 84 and $ 89 ( 97% * $ 41 + 3% * $ 1,448   $ 84 and 97% * $ 47 + 3% * $ 1,454

$ 89).

8.2.3 Total Cost The upper and lower bound of the total 10 year cost and the total annual cost for conducting Phase I ESAs and transaction screens under the AAI regulation are presented in Exhibits 8 6 and 8 7, respectively. As under the base case, we assumed that the volume of Phase I ESAs, presented in the second column of both exhibits, would grow at an annual rate of three percent. Multiplying the annual volume of Phase I ESAs by the average cost of $ 2,179 ( in Exhibit 8 6) and $ 2,174 ( in Exhibit 8 7), we derived the range estimate of the annual total cost of conducting Phase I ESAs. To estimate the total annual cost of transaction screens, we multiplied the annual volume of transaction screens by the estimated average cost of a transaction screen of $ 726. It should be noted that the annual total cost of Phase I ESAs are overestimated since the EPA's Brownfields Grant recipients were included in the total volume of Phase I ESAs. The discounted total annual cost for Phase I ESAs and transaction screens are presented in the last two columns of Exhibits 8 6 and 8 7. The costs are estimated using a three and seven percent discount rate.

Based on our analysis, the present value of the total 10 year cost would range between $ 5.89 billion and $ 5.90 billion, assuming a three percent annual growth rate in Phase I ESAs and a three percent discount rate. The total annual cost, amortized over 10 years at a three percent discount rate, would range between $ 690 million and $ 692 million. Using a discount rate of seven percent, we estimated the total 10 year cost would range between $ 4.99 billion and $ 5.0 billion and the total annual cost would range from $ 710.5 million to over $ 712 million.

Exhibit 8 6: AAI Regulation  Estimated Total Cost ( Upper Bound)

Annual Volume Total Annual Cost ( in millions) 1 Year Phase I ESAs Transaction Screens Phase I ESAs Transaction Screens Sum of Phase I ESAs and Transaction Screens Total Cost Discounted at 3% Total Cost Discounted at 7%

2004 263,680 24,320 $ 574.7 $ 17.6 $ 592.3 $ 592.3 $ 592.3 2005 271,590 24,320 $ 591.9 $ 17.6 $ 609.5 $ 591.8 $ 569.7 2006 279,738 24,320 $ 609.7 $ 17.6 $ 627.3 $ 591.3 $ 547.9 2007 288,130 24,320 $ 628.0 $ 17.6 $ 645.6 $ 590.8 $ 527.0 2008 296,774 24,320 $ 646.8 $ 17.6 $ 664.4 $ 590.3 $ 506.9 2009 305,677 24,320 $ 666.2 $ 17.6 $ 683.8 $ 589.9 $ 487.6 2010 314,848 24,320 $ 686.2 $ 17.6 $ 703.8 $ 589.4 $ 469.0 2011 324,293 24,320 $ 706.8 $ 17.6 $ 724.4 $ 589.0 $ 451.1 2012 334,022 24,320 $ 728.0 $ 17.6 $ 745.6 $ 588.6 $ 434.0 2013 344,043 24,320 $ 749.8 $ 17.6 $ 767.5 $ 588.2 $ 417.4 Present Value of Total 10 year Cost $ 5,901.7 $ 5,002.9 EIA for the AAI Regulation 8 9 Annual Volume Total Annual Cost ( in millions) 1 Year Phase I ESAs Transaction Screens Phase I ESAs Transaction Screens Sum of Phase I ESAs and Transaction Screens Total Cost Discounted at 3% Total Cost Discounted at 7%

Annual Cost $ 691.9 $ 712.3 1) Assuming 15 percent of all commercial properties subject to the AAI requirements are abandoned. 2) Calculated as the sum of the annual number of Phase I ESAs absent the AAI regulation and the annual number of users switching to a Phase I ESA under the AAI regulation. In 2004, the annual volume of Phase I ESAs was calculated as: 256,000 + 7,680= 263,680. 3) We assumed that three percent of annual Phase I ESA volume under the AAI regulation would be attributable to the users switching from transaction screens to the AAI Phase I ESA standard. The annual volume of transaction screens in 2004 was derived by first calculating the number of users who are expected to switch to the AAI Phase I ESA standard in 2004, and then subtracting that number from the annual volume of transaction screens under the base case. The number of users switching to the AAI Phase I ESA was calculated as 256,000 * 0.03 = 7,680. The annual volume of transaction screens under the AAI regulation was calculated as 32,000   7,680 = 24,320. For simplicity, we assumed that the annual volume of transaction screens would stay constant over the modeling period. Source: ICF Analysis.

Exhibit 8 7: AAI Regulation  Estimated Total Cost ( Lower Bound)

Annual Volume Total Annual Cost ( in millions) 1 Year Phase I ESAs Transaction Screens Phase I ESAs Transaction Screens Sum of Phase I ESAs and Transaction Screens Total Cost Discounted at 3% Total Cost Discounted at 7%

2004 263,680 24,320 $ 573.2 $ 17.6 $ 590.8 $ 590.8 $ 590.8 2005 271,590 24,320 $ 590.4 $ 17.6 $ 608.0 $ 590.3 $ 568.2 2006 279,738 24,320 $ 608.1 $ 17.6 $ 625.7 $ 589.8 $ 546.5 2007 288,130 24,320 $ 626.3 $ 17.6 $ 644.0 $ 589.3 $ 525.7 2008 296,774 24,320 $ 645.1 $ 17.6 $ 662.8 $ 588.9 $ 505.6 2009 305,677 24,320 $ 664.5 $ 17.6 $ 682.1 $ 588.4 $ 486.3 2010 314,848 24,320 $ 684.4 $ 17.6 $ 702.1 $ 588.0 $ 467.8 2011 324,293 24,320 $ 704.9 $ 17.6 $ 722.6 $ 587.5 $ 450.0 2012 334,022 24,320 $ 726.1 $ 17.6 $ 743.7 $ 587.1 $ 432.9 2013 344,043 24,320 $ 747.9 $ 17.6 $ 765.5 $ 586.7 $ 416.4 Present Value of Total 10 year Cost $ 5,886.8 $ 4,990.3 Annual Cost $ 690.1 $ 710.5 1) Assuming 28 percent of all commercial properties subject to the AAI requirements are abandoned. Source: ICF Analysis.

8.3 Estimates under Considered Option 1   Environmental Professional Under this AAI regulatory option, all major activities would be performed by an environmental professional, as defined by the AAI regulation under § 312.10. This option was modeled by changing the distribution of labor. As a result of the change in the distribution of labor, the weighted average rate increased from $ 51.2 to $ 65 ( see Section 7.3). EIA for the AAI Regulation 8 10 Under this AAI regulatory option, the average incremental cost would be $ 539. The average cost of a Phase I ESA would then increase to $ 2,671.

Exhibit 8 8: Considered Option 1  Estimated Unit Cost Size Type Assumed Distribution Average Incremental Hours Average Incremental Wage Rate Average Incremental Labor Cost Average Incremental Direct Cost Average Total Incremental Cost1 Small Undeveloped/ Agricultural 12.8% 0.57 $ 13.8 $ 341.8 $ 0 $ 341.8 Residential 9.2% 0.57 $ 13.8 $ 369.4 $ 0 $ 369.4 Commercial 37.6% 1.08 $ 13.8 $ 568.0 $ 0 $ 568.0 Industrial 11.4% 1.08 $ 13.8 $ 706.3 $ 0 $ 706.3 Medium Undeveloped/ Agricultural 5% 0.57 $ 13.8 $ 341.8 $ 0 $ 341.8 Residential 3.6% 0.57 $ 13.8 $ 424.8 $ 0 $ 424.8 Commercial 14.8% 1.08 $ 13.8 $ 623.3 $ 0 $ 623.3 Industrial 4.5% 1.08 $ 13.8 $ 789.3 $ 0 $ 789.3 Undeveloped/ Agricultural 0.2% 0.57 $ 13.8 $ 369.4 $ 0 $ 369.4 Residential 0.1% 0.58 $ 13.8 $ 480.1 $ 0 $ 480.1 Commercial 0.5% 1.08 $ 13.8 $ 789.3 $ 0 $ 789.3 Large Industrial 0.2% 1.00 $ 13.8 $ 978.1 $ 0 $ 978.1 Average Incremental Cost $ 539 Average ASTM E1527 2000 Phase I ESA Cost $ 2,132 Average Phase I ESA Cost for AAI Option 1 $ 2,671 1) Assuming 15 percent of all commercial properties subject to the AAI requirements are abandoned. Note: Totals do not add due to rounding. Source: ICF Analysis.

Under this regulatory option, the average incremental costs for the users transitioning from transaction screens to Phase I ESAs would be $ 1,946 ($ 2,671  $ 726   $ 1,946, where $ 726 is the estimated average cost of a transaction screen).

Based on our analysis, the present value of the total 10 year cost would be approximately $ 7.2 billion, assuming a three percent annual growth rate in Phase I ESAs and a three percent discount rate. The total annual cost, amortized over 10 years at a three percent discount rate, was estimated at $ 844 million. Using a discount rate of seven percent, we estimated the total 10 year cost at $ 6.1 billion and the total annual cost at $ 869 million. EIA for the AAI Regulation 8 11 Exhibit 8 9: Considered Option 1  Estimated Total Cost Annual Volume Total Annual Cost ( in millions) 1 Year Phase I ESAs Transaction Screens Phase I ESAs Transaction Screens Sum of Phase I ESAs and Transaction Screens Total Cost Discounted at 3% Total Cost Discounted at 7%

2004 263,680 24,320 $ 704.5 $ 17.6 $ 722.1 $ 722.1 $ 722.1 2005 271,590 24,320 $ 725.6 $ 17.6 $ 743.2 $ 721.6 $ 694.6 2006 279,738 24,320 $ 747.4 $ 17.6 $ 765.0 $ 721.1 $ 668.2 2007 288,130 24,320 $ 769.8 $ 17.6 $ 787.4 $ 720.6 $ 642.8 2008 296,774 24,320 $ 792.9 $ 17.6 $ 810.5 $ 720.1 $ 618.3 2009 305,677 24,320 $ 816.7 $ 17.6 $ 834.3 $ 719.7 $ 594.8 2010 314,848 24,320 $ 841.2 $ 17.6 $ 858.8 $ 719.2 $ 572.3 2011 324,293 24,320 $ 866.4 $ 17.6 $ 884.0 $ 718.8 $ 550.5 2012 334,022 24,320 $ 892.4 $ 17.6 $ 910.0 $ 718.4 $ 529.6 2013 344,043 24,320 $ 919.2 $ 17.6 $ 936.8 $ 718.0 $ 509.6 Present Value of Total 10 year Cost $ 7,199.6 $ 6,102.8 Annual Cost $ 844.0 $ 868.9 1) Assuming 15 percent of all commercial properties subject to the AAI requirements are abandoned. Source: ICF Analysis.

8.4 Estimates under Considered Option 2   Interview Requirement Under this AAI option, the interview requirements would be the same as under the current ASTM standard. The proposed all appropriate inquiries would include interviews with current owners and occupants. Under the AAI option 2, in the cases where the current owners cannot be identified, the environmental scientist/ specialist would interview past owners, occupants, and/ or operators. Locating past owners, occupants, and/ or operators would be more time consuming than locating owner/ occupants of neighboring properties, as required under the proposed AAI regulation. As a result, the incremental labor hour burden under this AAI option would be higher than under the proposed AAI regulation.

The average incremental cost for a Phase I ESA would be $ 54 under this AAI regulatory option. This AAI option is more labor intensive than the proposed regulation and therefore would result in a higher average incremental cost. With the average incremental cost of $ 54, the cost of a Phase I ESA would increase, on average, to $ 2,186. The incremental costs by property type and size are presented in Exhibit 8 10. EIA for the AAI Regulation 8 12 Exhibit 8 10: Considered Option 2  Estimated Unit Cost Size Type Assumed Distribution Average Incremental Hours Average Incremental Labor Cost Average Incremental Direct Cost Average Total Incremental Cost1 Small Undeveloped/ Agricultural 12.8% 0.6 $ 33.3 $ 0 $ 33.3 Residential 9.2% 0.6 $ 33.3 $ 0 $ 33.3 Commercial 37.6% 1.2 $ 62.7 $ 0 $ 62.7 Industrial 11.4% 1.2 $ 62.7 $ 0 $ 62.7 Medium Undeveloped/ Agricultural 5% 0.6 $ 33.3 $ 0 $ 33.3 Residential 3.6% 0.6 $ 33.3 $ 0 $ 33.3 Commercial 14.8% 1.2 $ 62.7 $ 0 $ 62.7 Industrial 4.5% 1.2 $ 62.7 $ 0 $ 62.7 Large Undeveloped/ Agricultural 0.2% 0.6 $ 33.3 $ 0 $ 33.3 Residential 0.1% 0.6 $ 33.3 $ 0 $ 33.3 Commercial 0.5% 1.2 $ 62.7 $ 0 $ 62.7 Industrial 0.2% 1.2 $ 62.7 $ 0 $ 62.7 Average Incremental Cost $ 54 Average ASTM E1527 2000 Phase I ESA Cost $ 2,132 Average Phase I ESA Cost for AAI Option 2 $ 2,186 1) Assuming 15 percent of all commercial properties subject to the AAI requirements are abandoned. Note: Totals do not add due to rounding. Source: ICF Analysis.

Under this regulatory option, the average incremental costs for the users transitioning from transaction screens to Phase I ESAs would be $ 1,460 ($ 2,186  $ 726 = $ 1,460, where $ 726 is the estimated average cost of a transaction screen).

Based on our analysis, the present value of the total 10 year cost would be approximately $ 5.9 billion, assuming a three percent annual growth rate in Phase I ESAs and a three percent discount rate. The total annual cost, amortized over 10 years at a three percent discount rate, was estimated at $ 694 million. Using a discount rate of seven percent, we estimated the total 10 year cost at $ 5.0 billion and the total annual cost at $ 714 million. EIA for the AAI Regulation 8 13 Exhibit 8 11: Considered Option 2  Estimated Total Cost Annual Volume Total Annual Cost ( in millions) 1 Year Phase I ESAs Transaction Screens Phase I ESAs Transaction Screens Sum of Phase I ESAs and Transaction Screens Total Cost Discounted at 3% Total Cost Discounted at 7%

2004 263,680 24,320 $ 576.4 $ 17.6 $ 594.0 $ 594.0 $ 594.0 2005 271,590 24,320 $ 593.7 $ 17.6 $ 611.3 $ 593.5 $ 571.3 2006 279,738 24,320 $ 611.5 $ 17.6 $ 629.1 $ 593.0 $ 549.5 2007 288,130 24,320 $ 629.8 $ 17.6 $ 647.5 $ 592.5 $ 528.5 2008 296,774 24,320 $ 648.7 $ 17.6 $ 666.4 $ 592.1 $ 508.4 2009 305,677 24,320 $ 668.2 $ 17.6 $ 685.8 $ 591.6 $ 489.0 2010 314,848 24,320 $ 688.2 $ 17.6 $ 705.9 $ 591.2 $ 470.4 2011 324,293 24,320 $ 708.9 $ 17.6 $ 726.5 $ 590.7 $ 452.4 2012 334,022 24,320 $ 730.1 $ 17.6 $ 747.8 $ 590.3 $ 435.2 2013 344,043 24,320 $ 752.0 $ 17.6 $ 769.7 $ 589.9 $ 418.7 Present Value of Total 10 year Cost $ 5,918.8 $ 5,017.4 Annual Cost $ 693.9 $ 714.4 1) Assuming 15 percent of all commercial properties subject to the AAI requirements are abandoned. Source: ICF Analysis.

8.5 Estimates under Considered Option 3   Limited Sampling Under this AAI option, limited sampling would be required for properties with perceived risk of contamination. The average incremental costs were calculated using the estimated incremental hour burden and the distribution of affected properties presented in Exhibit 7 7 and the estimated incremental costs and the distribution of affected properties presented in Exhibit 7 9.

With the limited sampling requirement, the cost of a Phase I ESA would increase, on average, by $ 1,439. Thus, the average cost of a Phase I ESA would be $ 3,571. The incremental costs by property type and size are presented in Exhibit 8 12.

Exhibit 8 12: Considered Option 3  Estimated Unit Cost Size Type Assumed Distribution Average Incremental Hours1 Average Incremental Labor Cost Average Incremental Direct Cost Average Total Incremental Cost2 Small Undeveloped/ Agricultural 12.8% 4.1 $ 207.4 $ 440.6 $ 648.0 Residential 9.2% 4.1 $ 207.4 $ 440.6 $ 648.0 Commercial 37.6% 7.4 $ 368.3 $ 1,554.4 $ 1,922.7 Industrial 11.4% 5.4 $ 270.9 $ 924.1 $ 1,195.0 Medium Undeveloped/ Agricultural 5% 4.1 $ 207.4 $ 440.6 $ 648.0 EIA for the AAI Regulation 8 14 Size Type Assumed Distribution Average Incremental Hours1 Average Incremental Labor Cost Average Incremental Direct Cost Average Total Incremental Cost2 Residential 3.6% 4.1 $ 207.4 $ 440.6 $ 648.0 Commercial 14.8% 7.4 $ 368.3 $ 1,554.4 $ 1,922.7 Industrial 4.5% 9.2 $ 461.1 $ 1,233.9 $ 1,695.0 Large Undeveloped/ Agricultural 0.2% 7.6 $ 385.5 $ 881.2 $ 1,266.7 Residential 0.1% 7.6 $ 385.5 $ 881.2 $ 1,266.7 Commercial 0.5% 9.7 $ 487.0 $ 1,848.1 $ 2,335.1 Industrial 0.2% 9.2 $ 457.1 $ 1,233.9 $ 1,691.0 Average Incremental Cost $ 1,439 Average ASTM E1527 2000 Phase I ESA Cost $ 2,132 Average Phase I ESA Cost for AAI Option 3 $ 3,571 1) Average incremental hours are calculated using the assumed distribution of affected properties presented in Exhibits 7 7 and 7 9. 2) Assuming 15 percent of all commercial properties subject to the AAI requirements are abandoned. Note: Totals do not add due to rounding. Source: ICF Analysis.

Under this regulatory option, the average incremental cost for the users transitioning from transaction screens to Phase I ESAs would be $ 2,845 ($ 3,571  $ 726 = $ 2,845, where $ 726 is the estimated average cost of a transaction screen).

Based on our analysis, the present value of the total 10 year cost would be approximately $ 9.6 billion, assuming a three percent annual growth rate in Phase I ESAs and a three percent discount rate. The total annual cost, amortized over 10 years at a three percent discount rate, was estimated at $ 1.12 billion. Using a discount rate of seven percent, we estimated the total 10 year cost at $ 8.1 billion and the total annual cost at $ 1.16 billion. The total annual cost estimates are presented in Exhibit 8 13.

Exhibit 8 13: Considered Option 3  Estimated Total Cost Annual Volume Total Annual Cost ( in millions) 1 Year Phase I ESAs Transaction Screens1 Phase I ESAs Transaction Screens Sum of Phase I ESAs and Transaction Screens Total Cost Discounted at 3% Total Cost Discounted at 7%

2004 263,680 24,320 $ 941.6 $ 17.6 $ 959.2 $ 959.2 $ 959.2 2005 271,590 24,320 $ 969.8 $ 17.6 $ 987.5 $ 958.7 $ 922.9 2006 279,738 24,320 $ 998.9 $ 17.6 $ 1,016.6 $ 958.2 $ 887.9 2007 288,130 24,320 $ 1,028.9 $ 17.6 $ 1,046.5 $ 957.7 $ 854.3 2008 296,774 24,320 $ 1,059.7 $ 17.6 $ 1,077.4 $ 957.2 $ 821.9 2009 305,677 24,320 $ 1,091.5 $ 17.6 $ 1,109.2 $ 956.8 $ 790.8 2010 314,848 24,320 $ 1,124.3 $ 17.6 $ 1,141.9 $ 956.3 $ 760.9 EIA for the AAI Regulation 8 15 Annual Volume Total Annual Cost ( in millions) 1 Year Phase I ESAs Transaction Screens1 Phase I ESAs Transaction Screens Sum of Phase I ESAs and Transaction Screens Total Cost Discounted at 3% Total Cost Discounted at 7%

2011 324,293 24,320 $ 1,158.0 $ 17.6 $ 1,175.7 $ 955.9 $ 732.1 2012 334,022 24,320 $ 1,192.8 $ 17.6 $ 1,210.4 $ 955.5 $ 704.5 2013 344,043 24,320 $ 1,228.5 $ 17.6 $ 1,246.2 $ 955.1 $ 677.8 Present Value of Total 10 year Cost $ 9,570.7 $ 8,112.4 Annual Cost $ 1,122.0 $ 1,155.0 1) Assuming 15 percent of all commercial properties subject to the AAI requirements are abandoned. Source: ICF Analysis.

8.6 Estimates associated with the use of the ASTM E1527 2000 standard Per OMB's Circular A 4 guidance ( as discussed in Section 4.2), EPA must, in this EIA, consider a less stringent option than the Agency's preferred option. Therefore, EPA is presenting the costs associated with the alternative of using the current ASTM E1527 2000 standard as a regulatory option ( even though it is the Agency's finding that this option is not compliant with statutory requirements). Under this option, the average cost of a Phase I ESA and transaction screen would be the same as under the base case ($ 2,132 and $ 726, respectively). The average cost of a Phase I ESA and transaction screen are presented in Exhibits 8 1 and 8 2, respectively.

The property owners who, absent the AAI regulation, would opt for the ASTM E1527 2000 Phase I ESA would incur $ 0 incremental cost under this option. The same is true for users who would opt for a transaction screen under the base case and under the AAI regulation. It is, however, expected that a fraction of the property owners who, absent the AAI regulation, would opt for a transaction screen would find the incremental cost of the ASTM E1527 2000 Phase I ESA worth the liability protection. Those users would incur the incremental cost of, on average, $ 1,407 ($ 2,132  $ 726   $ 1,407).

Based on our analysis, the present value of the total 10 year cost would be approximately $ 5.8 billion under the option of using the ASTM E1527 2000 standard, assuming a three percent annual growth rate in Phase I ESAs and a three percent discount rate. The total annual cost, amortized over 10 years at a three percent discount rate, was estimated at $ 677 million. Using a discount rate of seven percent, we estimated the total 10 year cost at $ 4.9 billion and the total annual cost at $ 697 million. The total annual cost estimates are presented in Exhibit 8 14. EIA for the AAI Regulation 8 16 Exhibit 8 14: Option Using ASTM E1527 2000 Estimated Total Cost Annual Volume Total Annual Cost ( in millions) 1 Year Phase I ESAs Transaction Screens Phase I ESAs Transaction Screens Sum of Phase I ESAs and Transaction Screens Total Cost Discounted at 3% Total Cost Discounted at 7%

2004 263,680 24,320 $ 562.2 $ 17.6 $ 579.9 $ 579.9 $ 579.9 2005 271,590 24,320 $ 579.1 $ 17.6 $ 596.8 $ 579.4 $ 557.7 2006 279,738 24,320 $ 596.5 $ 17.6 $ 614.1 $ 578.9 $ 536.4 2007 288,130 24,320 $ 614.4 $ 17.6 $ 632.0 $ 578.4 $ 515.9 2008 296,774 24,320 $ 632.8 $ 17.6 $ 650.5 $ 577.9 $ 496.2 2009 305,677 24,320 $ 651.8 $ 17.6 $ 669.4 $ 577.5 $ 477.3 2010 314,848 24,320 $ 671.4 $ 17.6 $ 689.0 $ 577.0 $ 459.1 2011 324,293 24,320 $ 691.5 $ 17.6 $ 709.1 $ 576.6 $ 441.6 2012 334,022 24,320 $ 712.2 $ 17.6 $ 729.9 $ 576.2 $ 424.8 2013 344,043 24,320 $ 733.6 $ 17.6 $ 751.2 $ 575.8 $ 408.6 Present Value of Total 10 year Cost $ 5,777.5 $ 4,897.6 Annual Cost $ 677.3 $ 697.3 1) Assuming 15 percent of all commercial properties subject to the AAI requirements are abandoned. Source: ICF Analysis.

8.7 Summary of Annual Cost Estimates Exhibits 8 15 and 8 16 summarize the total annual costs for the base case, the proposed AAI regulation, and the AAI regulatory options calculated using a discount rate of three and seven percent, respectively. The Exhibits also present the total annual incremental costs relative to the base case.

Exhibit 8 15: Summary of Annual Cost Estimates ( in millions), Discounted at Three Percent Base Case Proposed AAI AAI Option 1 AAI Option 2 AAI Option 3 ASTM E1527 2000 Total Annual Cost1 $ 663.8 $ 690.1  $ 691.9 $ 844.0 $ 693.9 $ 1,122.0 $ 677.3 Incremental Total Annual Cost Relative to the Base Case $ 0 $ 26.3  $ 28 $ 180.2 $ 30.0 $ 458.1 $ 13.5 1) Total annual cost from Exhibits 8 3, 8 6, 8 7, 8 9, 8 11, 8 13, and 8 14. EIA for the AAI Regulation 8 17 Exhibit 8 16: Summary of Annual Cost Estimates ( in millions), Discounted at Seven Percent Base Case Proposed AAI AAI Option 1 AAI Option 2 AAI Option 3 ASTM E1527 2000 Total Annual Cost1 $ 683.5 $ 710.5  $ 712.3 $ 868.9 $ 714.4 $ 1,155.0 $ 697.3 Incremental Total Annual Cost Relative to the Base Case $ 0 $ 27  $ 28.8 $ 185.4 $ 30.8 $ 471.5 $ 13.8 1) Total annual cost from Exhibits 8 3, 8 6, 8 7, 8 9, 8 11, 8 13, and 8 14.

Based on our analysis, the incremental total annual cost of the proposed regulation is expected to be below the major rule threshold of $ 100 million. The cost estimates presented in Exhibits 8 15 and 8 16 suggest that the estimated incremental total annual cost is not very sensitive to the discount rate used.

The assumptions that most affect variability in the estimated total and incremental costs are the growth rate in real estate transactions and the fraction of properties transitioning from transaction screens to Phase I ESAs. To test the robustness of the cost estimates to these model assumptions, we conducted three sensitivity analyses. Our results indicate that the total annual and incremental cost estimates are not very sensitive to changes in the volume of Phase I ESAs. We estimated that a five percent increase in the volume of Phase I ESAs in 2004 would cause an approximately five percent increase in the incremental total annual cost under the proposed AAI regulation, relative to the base case. A complete transition from transaction screens to Phase I ESAs, however, would have a significant impact on the estimated cost of the proposed AAI regulation by increasing the incremental total annual cost from $ 29 million to $ 74 million. Additionally, we conducted an analysis of the sensitivity of our cost estimates to changes in the total number of property transactions and the annual growth rate in the number of property transactions to account for uncertainties in our estimates for these assumptions. The results of accounting for these uncertainties is that the " true" values of the total annual and incremental costs under the proposed AAI regulation are within +/ 35 percent of our cost estimates. The sensitivity analyses are presented in the next chapter. EIA for the AAI Regulation 9 1 CHAPTER 9: Sensitivity Analyses The two main parameters used in this EIA for estimating the total costs of conducting ESAs are the costs per ESA and number of ESAs per year. The costs per ESA were derived based on the experience of ICF professionals who have been involved in large numbers of ESAs. The cost estimates developed by ICF were compared to industry wide estimates of the average cost of the ASTM Phase I ESA, including cost estimates provided by a national trade association whose member firms conduct site assessments, and found to agree quite well. Because the cost estimates from two independent sources are relatively the same, we believe our cost estimates are reliability and the quality of data is high.

The total number of ESAs performed annually was estimated using data collected and compiled by EDR for recent years. 39 As of the writing of this analysis, EDR was identified as the only firm that compiles and publishes historical data on the number of ESAs conducted annually in the U. S. Therefore, we cannot compare the EDR historical estimates of the number of ESAs to any other source of information to test the validity of the data or assess the overall quality of the data. Although we do not have other data sources to help us to assess the quality of EDR's data on the total number of ESAs performed, we did ask EDR to provide us with an explanation of how it collects the data. A detailed explanation of EDR's data collection methodology is provided in Appendix IV. We believe that EDR's data collection methodology is sound, particularly given that EDR checks its data with trends data from outside sources and has found that its data tracks the behavior of the commercial real estate markets ( see Appendix IV). Therefore, we believe that EDR's data collection methodology is reliable and the quality of the data is relatively high.

In addition to being the only data available, EDR data cover a relatively short period of time, from 1997 through 2002. As a result, we made a simplifying assumption that the recent growth rates in transactions would continue over the 10 year period covered by the EIA.

Because the total 10 year costs are proportional to the number of ESAs performed, estimating the total number of ESAs over the modeling period with a reasonable level of precision is important. We, however, recognize that using a single data source for estimating the number of ESAs over time represents a shortcoming of the overall approach taken in this EIA. We addressed this shortcoming by conducting three sensitivity analyses.

39 The EDR's methodology for estimating the annual number of ESAs is presented in Appendix IV. EIA for the AAI Regulation 9 2 9.1 Sensitivity Analysis 1  Volume of Phase I ESAs To project the annual volume of Phase I ESAs over the modeling period, we used the EDR data on the volume of Phase I ESA. 40 The EDR data cover the period 1997 2002. Assuming that the volume of Phase I ESAs would continue to grow at an annual rate of three percent, we estimated that the volume of Phase I ESAs in 2004 would be 256,000. EDR estimates the volume of Phase I ESAs with a five percent margin of error. It is thus possible that our analysis underestimated the annual volume of Phase I ESAs, and consequently the total annual cost under the base case and the proposed AAI regulation and regulatory options.

With a five percent margin of error, the estimated number of Phase I ESAs would be in the range of 243,200 to 268,800. We thus re estimated the annual costs presented in Chapter 8 assuming 268,800 Phase I ESAs under the base case in 2004. Changing the volume of Phase I ESAs under the base case also affected the projected volume of Phase I ESAs under the AAI regulation and the regulatory options. As explained in Chapter 5, we estimated that three percent of the users who would conduct a Phase I ESAs under the AAI regulation would have opted for a transaction screen under the base case. Based on this estimate, we projected that there would be 276,864 Phase I ESAs conducted under the AAI regulation in 2004 ( 268,800 * 1.03 = 276,864).

The results of the sensitivity analysis are presented in Exhibit 9 1.

Exhibit 9 1: Annual Cost Estimates ( in millions)   Volume of Phase I ESAs in 2004 Volume of Phase I ESAs in 2004 under the Base Case Cost Estimates Base Case Proposed AAI AAI Option 1 AAI Option 2 AAI Option 3 ASTM E1527 2000 Total Annual Cost1 $ 683.5 $ 712.3 $ 868.9 $ 714.4 $ 1,155.0 $ 697.3 256,000 Incremental Total Annual Cost Relative to the Base Case1 $ 0 $ 28.8 $ 185.4 $ 30.8 $ 471.5 $ 13.8 Total Annual Cost $ 716.4 $ 746.7 $ 911.1 $ 748.8 $ 1,211.5 $ 730.9 268,800 Incremental Total Annual Cost Relative to the Base Case $ 0 $ 30.2 $ 194.7 $ 32.4 $ 495.1 $ 14.5 Source: ICF Analysis 1) The cost estimates are presented in Exhibit 8 16. Notes: 1. We assumed that Phase I ESAs grow at an annual rate of three percent. 2. We assumed that 15 percent of all commercial properties subject to AAI requirements are abandoned. 3. Costs are discounted at seven percent.

40 See Appendix IV for a discussion of EDR's methodology for estimating the annual volume of Phase I ESAs performed. EIA for the AAI Regulation 9 3 The results of the sensitivity analysis indicate that a five percent increase in the annual volume of Phase I ESAs in 2004 would cause a five percent increase in the incremental total annual cost under the proposed AAI regulation, relative to the base case. Similarly, a five percent decrease in the annual volume of Phase I ESAs in 2004 would cause a five percent decrease in the incremental total annual cost under the proposed AAI regulation, relative to the base case. Thus, a five percent margin of error in our estimates of the incremental total annual cost can be attributed to the data quality.

9.2 Sensitivity Analysis 2  Volume of Transaction Screens Transitioning to Phase I ESAs Using the EDR data on the ESA industry, we have estimated that one to three percent of the users who would conduct a Phase I ESA under the AAI regulation would opt for a transaction screen under the base case. We have used the upper bound of the range to estimate the total 10 year costs presented in Chapter 8.

A FACA committee member suggested that the AAI regulation would result in every transaction screen transitioning to a Phase I ESA to qualify for the CERCLA liability protections. It was thus suggested that the ICF estimate of the annual volume of properties transitioning to Phase I ESAs is too low, and consequently, the ICF estimate of the total annual incremental cost under the AAI regulation is too low.

The EDR data indicate that 32,000 transaction screens were performed in 2002. For simplicity, we assumed that the number of transaction screens under the base case would stay constant over the modeling period ( i. e., the volume of transaction screens in 2004 would be 32,000 under the base case). Assuming that all 32,000 users would transition to Phase I ESAs in 2004 to qualify for the CERCLA liability defense, the estimated volume of Phase I ESAs under the AAI regulation would then increase to 288,000 ( 256,000 + 32,000 = 288,000).

The results of the sensitivity analysis are presented in Exhibit 9 2.

Exhibit 9 2: Annual Cost Estimates ( in millions)   Volume of Transaction Screens Transitioning to Phase I ESAs Volume of Phase I ESAs in 2004 under the AAI Regulation Cost Estimates Base Case Proposed AAI AAI Option 1 AAI Option 2 AAI Option 3 ASTM E1527 2000 Total Annual Cost1 $ 683.5 $ 712.3 $ 868.9 $ 714.4 $ 1,155.0 $ 697.3 263,680 Incremental Total Annual Cost Relative to the Base Case1 $ 0 $ 28.8 $ 185.4 $ 30.8 $ 471.5 $ 13.8 EIA for the AAI Regulation 9 4 Volume of Phase I ESAs in 2004 under the AAI Regulation Cost Estimates Base Case Proposed AAI AAI Option 1 AAI Option 2 AAI Option 3 ASTM E1527 2000 Total Annual Cost $ 683.5 $ 757.4 $ 928.4 $ 759.6 $ 1,240.9 $ 741.0 288,000 Incremental Total Annual Cost Relative to the Base Case $ 0 $ 73.9 $ 244.9 $ 76.1 $ 557.4 $ 57.5 1) The cost estimates presented in Exhibit 8 16. Notes: 1. We assumed that Phase I ESAs grow at an annual rate of three percent. 2. We assumed that 15 percent of all commercial properties subject to AAI requirements are abandoned. 3. Costs are discounted at seven percent. Source: ICF Analysis.

The sensitivity analysis results indicate that a complete transition from transaction screens to Phase I ESAs could increase the incremental total annual cost of the AAI regulation to $ 74 million. It should be noted, however, that this is an unlikely scenario. The CERCLA liability protections were available to the transaction screen users during the past two years. The relatively high volume of transaction screens in 2002 indicates that the users did not find the cost of a Phase I ESA worth the liability protection during the interim period. Further, our estimates of the incremental total annual cost are overstated as we have assumed that the volume of transaction screens would stay constant, over the modeling period, rather than continue its downward trend.

9.3 Sensitivity Analysis 3   Variability in Property Transactions Based on the historical data on Phase I ESAs, we assumed that the volume of Phase I ESAs would grow annually at an average rate of three percent over the next 10 years. The annual growth rate in Phase I ESAs is driven by the growth rate in real estate transactions, which to a large extent is driven by economic conditions. Due to uncertainty surrounding economic condition in the near future and their impact on the real estate market, the annual growth rate of Phase I ESAs could be higher or lower than the assumed growth rate of three percent over the next 10 years.

Because forecasting the annual growth rates in Phase I ESAs and/ or real estate transactions is beyond the scope of this analysis, we used the available data on real estate sales to construct a 95 percent confidence interval for the total cost estimates.

In their 2004 study " An Analysis of the Determinants of Transaction Frequency of Institutional Commercial Real Estate Investment Property," Fisher et al., estimated the percent of properties EIA for the AAI Regulation 9 5 sold each year from 1982 through 2001.41 The annual percentage of properties sold varied from 4.5 in 1992 to 17.5 in 1997.42 We used these annual real estate sales data as a proxy for real estate transactions. Because the time series data cover a relatively long time period, encompassing both upturns and downturns in the economy, these data are appropriate to use for constructing a confidence interval.

To construct a confidence interval, we first calculated a 10 year moving average of real estate sales ( in percentage terms). We then calculated the mean and standard deviation of properties sold over a 10 year period. Our results show that the average rate of properties sold over a given 10 year period has a mean of nine percent and a standard deviation of approximately 1.6 percent. This means that, within the 95 percent confidence interval, the average rate of properties sold over any given 10 year period would be +/ 35 percent of the estimated mean ( or between 5.9 and 12.2 percent).

Applying this margin of error of +/ 35 percent to the total 10 year costs, we then calculated the upper and lower bound of the cost estimates. The results are presented in Exhibit 9 3.

Exhibit 9 3: Annual Cost Estimates ( in millions)   Lower and Upper Bound Estimates Cost Estimates Base Case Proposed AAI AAI Option 1 AAI Option 2 AAI Option 3 ASTM E1527 2000 Total Annual Cost1 $ 683.5 $ 712.3 $ 868.9 $ 714.4 $ 1,155.0 $ 697.3 Point Estimates Incremental Total Annual Cost Relative to the Base Case1 $ 0 $ 28.8 $ 185.4 $ 30.8 $ 471.5 $ 13.8 Total Annual Cost $ 444.3 to $ 922.7 $ 463.0 to $ 961.6 $ 564.8 to $ 1,173.0 $ 464.4 to $ 964.4 $ 750.8 to $ 1,559.3 $ 453.2 to $ 941.4 Lower and Upper Bound Estimates Incremental Total Annual Cost Relative to the Base Case $ 0 $ 18.7 to $ 38.9 $ 120.5 to $ 250.3 $ 20.0 to $ 41.6 $ 306.5 to $ 636.5 $ 9.0 to $ 18.6 Our results show that, although there is possibly a relatively wide margin of error, the incremental total annual costs of the proposed AAI rule would not exceed $ 100 million.

41 Jeffrey Fisher, Dean Gatzlaff, David Geltner, and Donald Haurin, " An Analysis of the Determinants of Transaction Frequency of Institutional Commercial Real Estate Investment Property," Real Estate Economics, vol. 32 ( 2), Summer 2004, pp. 239 264. 42 The real estate sales data are presented in Appendix V. EIA for the AAI Regulation 10 1 CHAPTER 10: Small Entity Analysis The Regulatory Flexibility Act of 1980, as amended by the Small Business Regulatory Enforcement Fairness Act ( SBREFA), ( 5 U. S. C. 601 612) requires Federal agencies to determine whether proposed regulations will have a significant economic impact on a substantial number of small entities, and if so, to examine effective alternatives that could reduce the impacts. This chapter discusses the number of small entities potentially affected by the AAI regulation and the potential impacts. Our analysis concludes that, although substantial numbers of small entities are likely to be affected, the cost impacts on them are very unlikely to be significant.

We started the analysis by defining the universe of entities that could be affected by the AAI regulation. Using the employee size definition of a small firm, we then estimated the number of small entities potentially affected by the regulation. Finally, we estimated the potential cost impacts on small entities in terms of their total annual revenues.

10.1 Affected Industries As stated previously in this EIA, the AAI regulation does not apply only to brownfields properties. The AAI regulation requirements are applicable to any public or private party, who purchase property and intend to claim protection from CERCLA liability, as an innocent landowner, bona fide prospective purchaser, or contiguous property owner, in conjunction with the property purchase. Therefore, any firm, regardless of the nature of its operations, involved in a real estate transaction and wanting to avail itself of protection from CERCLA liability will be affected by the regulation. As a result, we assumed that firms across all industries, as defined by NAICS, could potentially be affected.

10.2 Definition of Small Firms The Small Business Administration ( SBA) defines a small business in terms of annual revenues or employment size. The threshold tends to be at least at the level of 100 employees or, where the threshold is not defined in terms of employment, in the range of $ 6 to $ 30 million in annual revenues. SBA size thresholds by industry are presented in Exhibit 10 1.

Exhibit 10 1: Small Business Administration's Size Standard for Small Businesses by NAICS Industry NAICS Size Standard in millions of dollars Size Standard in Number of Employees Forestry, fishing, hunting, and agriculture support 11 $ 0.75  $ 6 Mining 21 $ 6 500 Utilities 22 $ 6  $ 10.5 500 Construction 23 $ 6  $ 28.5 Manufacturing 31 500 1,000 EIA for the AAI Regulation 10 2 Industry NAICS Size Standard in millions of dollars Size Standard in Number of Employees Wholesale trade 42 100 Retail trade 44 $ 6  $ 24.5 Transportation and warehousing 48 $ 6  $ 23.5 500 1,500 Information 51 $ 6  $ 25 500 750 Finance and insurance 52 $ 6 ($ 150 in assets) 1,500 Real estate, rental, and leasing 53 $ 1.5  $ 21.5 Professional, scientific and technical services 54 $ 6  $ 23 500 1,500 Management of companies and enterprises 55 $ 6 Administrative and support, waste management and remediation services 56 $ 3  $ 23 500 Educational services 61 $ 6  $ 30 Health care and social assistance 62 $ 6  $ 29 Arts, entertainment, and recreation 71 $ 6 Accommodation and food services 72 $ 6  $ 17.5 Other services 81 $ 6  $ 21 1) SBA does not define the threshold for auxiliaries ( NAICS 95) and unclassified establishments ( NAICS 99). Source: SBA.

When a proposed regulation has a potential of affecting all industries, a common practice is to refer to those industries with less than 500 employees as " small". 43 As stated in the previous section, the AAI regulation could affect all non residential property transactions to some degree. It would thus be reasonable to apply the 500 employee threshold when estimating the number of small firms potentially affected by the AAI regulation. Our methodology is presented in the next section.

10.3 Size Distribution and Number of Small Firms As of the writing of this EIA, we were not able to identify a dataset that indicates the number of Phase I ESAs currently conducted on an annual basis by small businesses. Given this data deficiency, we employed the following methodology to estimate the number of potentially affected small entities. We first estimated the distribution of establishments owned by small firms and showed how the distribution varies depending on the definition of a small firm. Using the derived distribution and the estimated annual volume of Phase I ESAs, we then derived the number of potentially affected small firms.

43 Communications with the Office of Policy, Economics, and Innovations ( OPEI) and the National Center for Environmental Economics ( NCEE), March 4, 2004. EIA for the AAI Regulation 10 3 The RFA and SBREFA require Federal agencies to measure the regulatory impacts of the rule to determine whether there will be a significant impact on a substantial number of small firms. Firms, however, may operate at multiple physical locations. For example, most family owned restaurants operate at a single location, while chain restaurants have multiple locations. Thus, the annual number of transactions per firm, and therefore the demand for Phase I ESAs, is a function of the number of establishments a firm owns. 44 Using the US Census Bureau data on employment size of firms, we first examined the distribution of firms by employee size. 45 The distribution of firms is presented in Exhibit 10 2, second column. The exhibit shows that over 99 percent of firms have less than 500 employees. The last column of the exhibit shows the average number of establishments per firm. Firms with less than 100 employees, approximately 98 percent of all firms, have, on average, one establishment.

Exhibit 10 2: Distribution of Firms by Size, in Year 2001 Employment Size Number of Firms Number of Establishments Average Number of Establishments per Firm Less than 100 employees 5,555,103 5,764,137 1 100 to 499 employees 85,304 315,856 4 500 to 1,499 employees 11,426 161,680 14 1,500 employees or more 5,941 853,629 144 Total 5,657,774 7,095,302 Source: US Census Bureau.

Using the Census data, we then derived the distribution of establishments by firm size where size is defined in terms of the number of employees. The distribution of establishments by parent company employee size is presented in Exhibit 10 3.

Exhibit 10 3: Disribution of Establishments by Firm Size, in Year 2001 Employment Size Number of Establishments Owned Percent of Establishments Owned Less than 100 employees 5,764,137 81% 100 to 499 employees 315,856 5% 500 to 1,499 employees 161,680 2% 1,500 employees or more 853,629 12% Total 7,095,302 100% Source: US Census Bureau.

To estimate the number of potentially affected small firms, we first had to calculate the percent of establishments owned by small firms. It is clear, however, that the distribution of establishments between small and large firms depends on the definition of a small firm. As 44 The US Census Bureau defines establishment as a single physical location at which business is conducted or services or industrial operations are performed. Establishment is not necessarily identical with a company or enterprise, which may consist of one or more establishments. Source: County Business Patterns, 2001; US Census Bureau, available at http:// www. census. gov/ epcd/ cbp/ view/ cbpview. html. 45 The US Census Bureau, available at http:// www. census. gov/ epcd/ www/ smallbus. html. EIA for the AAI Regulation 10 4 stated previously, it is a common practice, when a proposed regulation has a potential of affecting all industries, to consider all firms with less than 500 employees as small. We have shown, however, in Exhibit 10 1 that the SBA defined employee size definition of a small firm is not unique across industries. It ranges from 100 employees for Wholesale industry to 1,500 employees for Transportation and Warehousing industry. We therefore estimated the distribution of establishments by firm size for different definitions of a small firm using the data presented in Exhibit 10 3. When small firms are defined as firms with less than 100 employees, small firms own 81 percent of all establishments. Similarly, when small firms are defined to include firms with less than 500 or 1,500 employees, small firms own 86 or 88 percent of all establishments, respectively. We have thus shown that, depending on the definition of a small firm, the distribution of establishments owned by small firms ranges from 81 to 88 percent.

For the purpose of this analysis, we have assumed that small entities are equally likely to engage in commercial property transactions as large ones. 46 Based on this assumption and the distribution of establishments by firm size presented in Exhibit 10 3, we estimated that between 81 and 88 percent of all commercial property transactions completed annually involve small firms. To estimate the number of potentially affected small entities, we then applied the percentage of the estimated transactions that involve small entities to the estimated number of Phase I ESAs performed annually. For the purpose of this analysis, we adopted a conservative approach and assumed that 88 percent of all commercial property transactions involve small firms. As a result, the estimated number of affected small firms is likely an overestimate.

Using this methodology, we estimated that the AAI regulation would have an impact on approximately 232,000 small establishments in 2004 ( 263,680 Phase I ESAs * 0.88   232,038). 47 Based on the projected annual growth rate of the number of Phase I ESAs, the number of potentially affected small firms is expected to grow annually, on average, by three percent. Therefore, the AAI regulation could potentially impact, on average, 266,000 small firms annually over the modeling period. The number of affected small firms, however, is an overestimate. In addition to the argument stated in the preceding section, the estimated number of affected small firms is not adjusted downward to account for small firms operating at more than one physical location and therefore likely to be involved in more than one commercial property transaction. As presented in Exhibit 10 2, small firms with over 100 employees have, on average, more than one establishment. In addition, not all transactions are conducted by firms   governments and other organizations also purchase properties ( as discussed in sections 10.5 and 10.6, below). It is thus clear that we have overstated the impacts.

46 This is a simplifying assumption. Large firms probably engage in relatively more property transactions than small firms. Commercial real estate data, however, are not readily available to support this claim. In addition, small firms may have a higher likelihood of failing, as they are more vulnerable to unfavorable economic conditions. As a result, the turnover rate among small firms, and consequently the number of transactions involving small firms, may be larger than the turnover rate among large firms. Given data limitations, we were not able to refine the assumption. It should be noted, however, that our approach may have resulted in an overestimation of the number of potentially affected small firms. 47 We estimated the volume of Phase I ESAs in 2004 to be 263,680. Refer to Section 4.4 for the methodology on estimating the annual volume of Phase I ESAs. Refer to Exhibit 8 6 for the estimated number of Phase I ESAs by year. EIA for the AAI Regulation 10 5 10.4 Cost Impact on Small Firms Since all non residential property transactions could be affected by the AAI regulation, large numbers of small entities could be affected to some degree. We estimated, however, that the effects, on the whole, would be insignificant for small entities. Based on our analysis, for the majority of small businesses, the cost of conducting a Phase I ESA would increase, on average, between $ 41 and $ 47. For the small percentage of cases for which a transaction screen would have been preferred to the ASTM E1527 2000 in the baseline, but which now would require an assessment in compliance with the proposed regulation, the cost of conducting an ESA would increase, on average, between $ 1,448 and $ 1,454. Annualizing the incremental cost per ESA over 10 years  the average life of a firm  at a seven percent discount rate, we estimated that for the majority of small entities the average annual cost increase per establishment per property transaction would be approximately $ 7.48 For the small percentage of entities transitioning from transaction screens to Phase I ESAs, the average annual cost increase per establishment per property transaction would be $ 207. Total cost impacts per firm are likely to be roughly proportional to the number of establishments per firm.

The increase in annual costs per firm is likely overestimated given that a substantial number of firms lease business space. This is especially the case in urban areas where real estate prices tend to be higher. Depending on the market conditions, some of the Phase I ESA costs could be transferred by the firm that owns the property onto the firms that are leasing the property. The more lessees per property, all other things equal, the lower would be the average cost per lessee passed through by the property owner.

We also estimated the cost impacts in terms of annual revenues. Based on the Census Bureau data, the smallest annual revenue per employee for a firm is approximately $ 24,000.49 Therefore, even for a firm with annual revenues of $ 24,000, the average annual cost impact of $ 7 would represent less than a tenth of one percent of annual revenues. 50 The maximum average annual impact of $ 207 would be on a small fraction of entities transitioning from a transaction screen to a Phase I ESA. Even an impact of that magnitude on firms with annual revenues of 48 SBA estimates that in 2001 and 2002, of all the businesses with employees, about 10 percent were new and 10 percent closed ( See The Regulatory Flexibility Act, An Implementation Guide for Federal Agencies, SBA, 2002 and A Guide for Government Agencies   How to Comply with the Regulatory Flexibility Act, SBA, 2003). Our estimates of firm birth and death rates in 2000, derived using the 1999 and 2000 SBA data, are very close to SBA's 2001 estimates. Thus, using the birth/ death rate of firms, it can be calculated that the average turnover rate for firms across all industries is 10 years. 49 The estimated average annual revenue per employee of $ 24,000 was derived using the Census Bureau's 1997 Economic Census and the SBA's 2000 data on private employer firms, establishments, employment, and annual payroll by firm size. The annual revenue per employee is in 2003 dollars. The SBA data are available at http:// www. sba. gov/ advo/ stats/ us_ tot_ mi. pdf. 50 The estimated annual revenue per employee represents an average. Thus, some small firms may have annual revenues lower than the estimated average. Firms with such low revenues, however, are likely to lease office space rather than purchase it. This does not mean that such firms could not be affected to some extent. Depending on the market conditions, some of the Phase I ESA costs could be transferred by the firm that owns the property onto the firms that are leasing the property. Considering data deficiency, it would be hard to estimate the impacts on small firms that have very low annual revenues and are leasing office space. EIA for the AAI Regulation 10 6 $ 24,000 would be less than one percent of annual revenues. 51 Thus, the cost impact on small entities would be insignificant. 52 As a sensitivity analysis, we compared the estimated incremental cost to annual revenues without annualizing the costs. Using this method for presenting cost impacts, we estimated that an annual cost of $ 47 for a firm with annual revenues of $ 24,000 would represent one fifth of one percent of annual revenues. For a small firm with the same annual revenues, an annual cost of $ 1,454 would represent approximately six percent of annual revenues. The impact of such magnitude is clearly significant. Because these costs would be very unlikely to recur in succeeding years, however, most very small firms would be able to recoup these costs later.

10.5 Cost Impact on Small Governmental Jurisdictions 10.5.1 Number of Small Governmental Jurisdictions The RFA, as amended by SBREFA, requires agencies to consider the impact of their regulatory proposals on small governmental jurisdictions. Small governmental jurisdictions are defined as governments of cities, counties, towns, school districts, or special districts with populations of less than 50,000.53 To estimate the number of potentially affected small governmental jurisdictions, we used the distribution of municipal and township governments by population size from the US Census Bureau 1997 Census of Government, Finance of Municipal and Township Governments. Census Bureau defines eight population size groups where the smallest group includes municipal and township governments with less than 10,000 inhabitants. Approximately 18,800 municipalities ( i. e., 97 percent) have less than 50,000 inhabitants.

51 Small firms with annual revenues of $ 24,000 are very unlikely to own office space and thus incur an annual cost of $ 207. Owning office space would tie up their capital and require some resources to be allocated to managing the property. It is also not certain if they would be considered too risky by the lending community to qualify for a loan to buy a property. Nevertheless, our analysis shows that even for a small firm that has very low annual revenues and owns its office space the estimated maximum annual impact of $ 207 would be insignificant. 52 It should be noted that for some small firms the transfer of properties would be more frequent than every ten years, and for some small entities there might even be more than one property transfer in a year. In the usual case ( a Phase I ESA being changed so as to comply with the AAI rule) even multiple transactions would be an insignificant percentage of revenues. For example, a $ 47 cost amortized over five years would be less than one tenth of one percent of annual revenues for a small firm with annual revenues of $ 24,000. For a firm with the same annual revenues, the cost of two Phase I ESAs amortized over a ten year period would still be less than one tenth of one percent of annual revenues. Furthermore, because the more costly shifts from transaction screens to Phase I ESAs are rare, the chances that any single small firm would need two in a single year are extremely small. 53 RFA Section 601. EIA for the AAI Regulation 10 7 Exhibit 10 4: Distribution of Governmental Jurisdictions, by Population Size Group ( 1996)

Population Size Group ( Number of Inhabitants) Number of Governmental Jurisdictions Population In 1996 Population Distribution ( percent)

300,000 or more 56 44,264,096 27.2 200,000 to 299,999 24 5,844,541 3.6 100,000 to 199,999 140 19,298,114 11.8 75,000 to 99,999 103 8,804,252 5.4 50,000 to 74,999 246 14,743,531 9 25,000 to 49,999 597 20,696,708 12.7 10,000 to 24,999 1,368 21,437,244 13.1 Less than 10,000 16,838 28,518,430 17.4 All Municipalities 19,372 163,606,916 100 Notes: Totals do not add do to rounding. Source: US Census Bureau.

The distribution of small governmental jurisdictions by population size is not available for jurisdictions with less than 10,000 inhabitants. The data, however, indicate that governmental jurisdictions in this population size group have, on average, 1,700 inhabitants.

10.5.2 Number of Potentially Affected Small Governmental Jurisdictions The AAI requirements will be applicable to any small governmental jurisdiction that may potentially claim protection from CERCLA liability or that receives a Federal brownfields grant. The number of potentially affected small governmental jurisdictions will be a function of the annual volume of real estate transactions conducted by small governments. Information related to small governments real estate transactions, however, are not easily available. 54 As a result, the total number of small governments real estate transactions was approximated using the available data on the transactions of brownfields properties.

The Environmental Land Use Report, published annually by XL Insurance, contains data on brownfields redevelopment activities across the US. 55 The data are obtained through a review of newspaper and journal articles. The report indicates that eight percent of brownfields sites redeveloped in 2000 and 2001 were designated for public use. In 2002, however, only three percent of redeveloped brownfields properties were designated for public use.

54 The US Census Bureau compiles the data on small governmental jurisdictions expenditures by various public service and activity categories. The categories, however, are too general to reasonably approximate real estate expenditures. 55 XL Insurance, The XL Environmental Land Use Report, 2002. EIA for the AAI Regulation 10 8 Based on our estimate of the volume of Phase I ESAs under the AAI regulation, 56 we estimated that the annual number of real estate transactions involving municipal and township governments could range from 8,000 to 21,000 in 2004 ( 263,680 * 3%   8,000 and 263,680 * 8%   21,000). It is reasonable to assume, however, that the annual volume of real estate transactions is a function of the population size and economic activity in a jurisdiction. Therefore, using the Census Bureau data, we derived total annual revenues distribution for municipal and township governments by population size groups. The derived revenues distribution is presented in Exhibit 10 5, fourth column.

Exhibit 10 5: Distribution of Municipal and Township Annual Revenues by Population Size Group ( 1996)

Population Size Group ( Number of Inhabitants) Number of Governmental Jurisdictions Total Annual Revenues ( in Millions) Total Revenues Distribution ( Percentage) 300,000 or more 56 $ 137,608.7 48.0 200,000 to 299,999 24 $ 9,353.7 3.3 100,000 to 199,999 140 $ 29,283.5 10.2 75,000 to 99,999 103 $ 12,227.2 4.3 50,000 to 74,999 246 $ 18,703.7 6.5 25,000 to 49,999 597 $ 25,139.4 8.8 10,000 to 24,999 1,368 $ 24,994.6 8.7 Less than 10,000 16,838 $ 29,332.0 10.2 All Municipalities 19,372 $ 186,642.7 100 Notes: Totals do not add do to rounding. Source: US Census Bureau.

The revenues distribution data presented in Exhibit 10 5 indicate that approximately 28 percent of total annual revenues collected by municipal and township governments are collected by governmental jurisdictions with less than 50,000 inhabitants. Assuming that the volume of real estate transactions involving small governmental jurisdictions is a function of their annual revenues, the annual number of potentially affected small governmental jurisdictions would not exceed 6,000 ( 21,000 * 28%   6,000).

10.5.3 Cost Impact on Small Governmental Jurisdictions As presented in section 8.2, we estimated that the cost of conducting a Phase I ESA would increase, on average, between $ 41 and $ 47 per transaction for cases in which a Phase I ESA would have been selected in the base case, and between $ 1,448 and $ 1,454 where a transaction screen would have been used. Annualizing the estimated incremental cost of $ 47 over 10 years at a seven percent discount rate, we estimated that the annual cost increase per Phase I ESA, on average, would be approximately $ 7. Since $ 47 represents an upper bound of the estimated 56 The estimated volume of Phase I ESAs in 2004 under the AAI regulation is presented in Exhibit 8 6. We assumed that the annual number of applicable property transactions approximates the annual number of ESAs performed. EIA for the AAI Regulation 10 9 average annual cost range, some governmental jurisdictions would have lower annual cost increase per Phase I ESA than $ 7. Annualizing the average incremental cost of $ 1,454 over 10 years at a seven percent discount rate, we estimated that the maximum annual cost increase per ESA would be approximately $ 207.

Based on the Census Bureau data on small governmental jurisdictions finances, the average annual revenue per inhabitant for small governmental jurisdictions is $ 1,250.57 As stated previously, we estimated that the governmental jurisdictions classified by Census Bureau as having less than 10,000 people have, on average, 1,700 inhabitants. Thus, even such small governmental jurisdictions are likely to have annual revenues of over $ 2 million. Therefore, the maximum cost impact of $ 207 on small governmental jurisdictions would be insignificant. 58 10.6 Cost Impact on Small Not for Profit Organizations The RFA, as amended by SBREFA, requires agencies to consider the impact of their regulatory proposals on small not for profit organizations. Small not for profit organizations are non profit enterprises independently owned and operated that are " not dominant" in their fields. 59 The National Center for Charitable Statistics ( NCCS) estimates that there are approximately 370,000 not for profit organizations that include: ( 1) public charities; ( 2) private foundations; and ( 3) other exempt organizations. 60 The NCCS data are not readily available at the level that would enable us to estimate the number of small not for profit organizations. It is likely, however, that a substantial number of such entities exists and could be affected to some degree by the AAI regulation. The impact, however, is not expected to be significant. NCCS estimates that approximately two thirds of not for profit organizations do not file a Form 990 with the Internal Revenue Service ( IRS) in any given year. With the exception of congregations and other religious institutions, not for profit organizations with annual gross receipts of less than $ 25,000 are exempt from filing with the IRS.

Small not for profit organizations with annual revenues of $ 25,000 or less are likely to rent office space rather than purchase it. As explained in Section 10.4, impact on entities that lease their office space, although hard to estimate, is expected to be minimal. The impact on small not for profit organizations with annual revenues of $ 25,000 or more would be insignificant as well. The maximum annual impact of $ 207 would be on a small fraction of not for profit organizations transitioning from a transaction screen to a Phase I ESA. Even an impact of that 57 Revenues per inhabitant are calculated in 2003 dollars. 58 Some governmental jurisdictions may have annual revenues lower than the estimated average annual revenues. For example, in Pennsylvania, the average annual revenues for townships with a population of less than 2,500 is about $ 250,000 ( See Finances of Municipal and Township Governments, US Census Bureau, 1997). Nevertheless, even for a township with annual revenues of $ 250,000, the maximum annual cost impact of $ 207 would represent less than one tenth of one percent of annual revenues. There is a possibility, however, that a township of that size conducts more than one Phase I ESA per year. Although the possibility of that happening is likely very small, townships that want to conduct brownfields cleanup and redevelopment have the option of applying for the EPA Brownfields Grant. 59 RFA Section 601. 60 The National Center for Charitable Statistics, available at http:// nccsdataweb. urban. org/ FAQ/ index. php? category= 90. EIA for the AAI Regulation 10 10 magnitude on small not for profit organizations with annual revenues of $ 25,000 would be less than one percent of their annual revenues. EIA for the AAI Regulation i BIBLIOGRAPHY American Society for Testing and Materials. Standard Practice for Environmental Site Assessments: Phase 1 Environmental Site Assessment Process. 2000.

Deason, Jonathon P., George William Sherk, and Gary A. Caroll, The George Washington University. Public Policies and Private Decisions Affecting the Redevelopment of Brownfields: An Analysis of Critical Factors, Relative Weights and Areal Differentials. Submitted to US EPA Office of Solid Waste and Emergency Response, Washington, DC. September 2001.

Environmental Data Resources, Inc. Benchmarking Survey of Environmental Professionals: Nuts and Bolts of the Phase I Process. 2002.

Environmental Data Resources, Inc. Environmental Site Assessment Report, various issues.

Schroeer, William. The Transportation and Environmental Impacts of Infill vs. Greenfield Development: A Comparative Case Study Analysis. Prepared for US EPA Urban and Economic Development Division. October 1, 1999.

Schroeer, William. The Water Quality Impacts of Density," paper at the Congress for the New Urbanism X, Miami, FL, June 14, 2002.

The Brookings Institution, Center on Urban and Metropolitan Policy. Vacant Land in Cities: An Urban Resource. 2000.

The Office of Advocacy, US Small Business Administration. The Regulatory Flexibility Act: An Implementation Guide for Federal Agencies. November 2002.

The Office of Advocacy, US Small Business Administration. A Guide for Government Agencies   How to Comply with the Regulatory Flexibility Act. May 2003.

US Conference of Mayors. Recycling America's Land: A National Report on Brownfields Redevelopment, Volume IV. 2003.

US Department of Labor, Bureau of Labor Statistics. 2002 National Industry Specific Occupational Employment and Wage Estimates. 2003.

US Department of Labor, Bureau of Labor Statistics. Employer Costs for Employee Compensation. 2003.

US Environmental Protection Agency. All Appropriate Inquiries Regulation ( Draft). 2003.

US Environmental Protection Agency. Reusing Land Restoring Hope: A Report to Stakeholders from the US EPA Brownfields Program. September 2003.

XL Insurance. The XL Environmental Land Use Report. 2002. EIA for the AAI Regulation Appendix I: Proposed AAI Regulation EIA for the AAI Regulation Appendix II: Summary of the Main Differences between the All Appropriate Inquiries Standard and the ASTM E1527 2000 EIA for the AAI Regulation II 1 Appendix II: Summary of Main Differences between the AAI Standard and ASTM E1527 2000 Major Activities1 Proposed AAI Standard ASTM E1527 2000 Definition of Environmental Professional ( § 312.21)   Specific certification/ license, education, and experience requirements   Applies only to individuals overseeing and signing AAI   Broad description; no specific education and experience requirements; self " qualify"   Applies to all individuals involved in conducting AAI Interview with the Subject Property Current Owner and Occupants ( § 312.23) Mandatory The environmental professional ( EP) must make a reasonable attempt to conduct interview( s) Interview with Past Owner and Occupants ( § 312.23) Includes provisions for interviewing past owners/ occupants, but at the discretion of the EP   The EP must inquire about past uses of the subject property when interviewing current property owner;   Interviews w/ past owners a source of information for historical uses Interview with Neighboring or Nearby Property Owners or Occupants ( § 312.23) Mandatory at abandoned properties At the discretion of the EP Review of Historical Sources: period to be covered ( § 312.24) From the property's obvious first developed use From the property's obvious first developed use, or 1940, whichever is earlier Records of Activity and Use Limitations ( e. g., Engineering and Institutional Controls) and Environmental Cleanup Liens ( § 312.25 and § 312.26)   The search results must be documented in the written report   No requirement as to who is responsible for the search   The search results must be reported to the EP   User's responsibility Government Records Review ( § 312.26) Federal, state, tribal, and local records   Federal and state records   Local records/ sources at the discretion of the EP Site Visit ( § 312.27)   Required.   Limited exemption if the subject property cannot be visually inspected   inspect from nearest vantage point   Required.   No specific requirements if the subject property cannot be visually inspected. Contaminants of Concern ( § 312.20)   Parties seeking CERCLA defense  CERCLA hazardous substance   EPA Brownfields Grant recipients  CERCLA hazardous substance  petroleum/ petroleum products  controlled substances CERCLA hazardous substance and petroleum products Data Gaps ( § 312.20) Must identify and document Must identify data " failures" and document Shelf Life of the Written Report ( § 312.20) One year, with some updates required after 180 days for certain information Not specified, some updates required after 180 days 1) Relevant sections of the proposed AAI rule identified in parenthesis. EIA for the AAI Regulation Appendix III: Unit Cost Estimates for the AAI Regulatory Option 3 EIA for the AAI Regulation III 1 Appendix III: Unit Cost Estimates for the AAI Regulatory Option 3 This section presents unit costs associated with sampling under the AAI regulatory option 3.

Exhibit III 1: Groundwater Monitoring Well Installation Cost Estimate Notes: The following cost assumptions are made: ( 1) Well depth of 20 ft at $ 13/ ft ( 2) Installation of two wells/ day and development of three wells/ day ( 3) One drum/ well solids and one drum/ well water. Source: ICF Analysis. Item Units Unit Cost Number of Total Costs Source ( 2003 $) Units Direct Capital Costs Mobilization/ Demobilization each 500 $ 1 500 $ Vendor Quote 2" Monitoring Well ( 1) well 260 $ 3 780 $ Vendor Quote Well Box & Materials well 600 $ 3 1,800 $ Vendor Quote Drill Rig & Crew ( 2) day 1,000 $ 2.50 2,500 $ Vendor Quote Disposal of cuttings and drums 400 $ 6 2,400 $ ICF Estimate development water ( 3) Supervision/ Environmental Scientist day 520 $ 2.50 1,300 $ ICF Estimate Direct Capital Cost Subtotal 9,280 $

Indirect Capital Costs External Transaction Cost 5% of Capital Cost Subtotal 464 $ ICF Estimate Engineering 10% of Capital Cost Subtotal 928 $ ICF Estimate Indirect Capital Cost Subtotal 1,392 $

Capital Cost Subtotal 10,672 $

Contingency 20% of Capital Cost Subtotal 2,134 $ ICF Estimate Total Capital Cost Well Installation 12,806 $ EIA for the AAI Regulation III 2 Exhibit III 2: Groundwater Monitoring Well Sampling Cost Estimate Notes: The following cost assumptions are made: ( 1) Two environmental technicians, three hrs/ well ( 2) Supervision ( environmental engineer) is ten percent of environmental technicians' labor hours ( 3) Assumes no quality control ( QC) samples ( 4) One environmental scientist, ten hrs/ well. Source: ICF Analysis.

Exhibit III 3: Surface Soil Sampling Cost Estimate Notes: The following cost assumptions are made: ( 1) Two environmental technicians, one hr/ sample ( 2) Supervision ( environmental engineer) is ten percent of environmental technicians' labor hours ( 3) Assumes no quality control ( QC) samples ( 4) One environmental scientist, five hrs/ soil sample. Source: ICF Analysis. Item Units Unit Cost Number of Total Costs Source ( 2003 $) Units Number of Surface Soil Samples 3 Sample Collection ( 1) hours 40 $ 6 240 $ ICF Estimate Supervision ( 2) hours 67 $ 1 67 $ ICF Estimate Sample Analysis ( 3) sample 750 $ 3 2,250 $ Laboratory Estimate for VOC, SVOC, metals, PCB/ pesticide analyses Data Review and Reporting ( 4) hours 52 $ 15 780 $ ICF Estimate Supervision for Data Rev/ Reporting hours 67 $ 2 101 $ ICF Estimate Surface Soil Sampling Costs 3,438 $

Surface Soil Sampling Costs Contingency 20% of Operating Costs 688 $ Total Surface Soil Sampling Cost 4,125 $ Item Units Unit Cost Number of Total Costs Source ( 2003 $) Units Number of Monitoring Wells 3 Sample Collection ( 1) hours 40 $ 18 724 $ ICF Estimate Supervision ( 2) hours 67 $ 2 134 $ ICF Estimate Sample Analysis ( 3) sample 750 $ 3 2,250 $ Laboratory Estimate for VOC, SVOC, metals, PCB/ pesticide analyses Data Review and Reporting ( 4) hours 52 $ 30 1,557 $ ICF Estimate Supervision for Data Rev/ Reporting hours 67 $ 3 201 $ ICF Estimate Monitoring Well Sampling Costs 4,866 $

Contingency 20% of Operating Costs 1,010 $ Total Monitoring Well Sampling Cost 5,875 $ EIA for the AAI Regulation Appendix IV: EDR's Methodology for Estimating the Volume of ESAs EIA for the AAI Regulation IV 1 Appendix IV: EDR's Methodology for Estimating the Volume of ESAs EDR's methodology for estimating the number of Phase I environmental site assessments ( ESAs) conducted annually and distribution of Phase I ESAs by property type is documented below. 61 1. Distribution of Phase I ESAs by Property Type EDR has been tracking the distribution of Phase I ESAs by the following property types since March 2002:

  Commercial/ Office   Undeveloped   Retail   Industrial   Multi family   Telecommunications   Hotel ( added December 2002)   Other.

The data are reflective of all orders for EDR's Government Record Check reports placed using the company's online system. In general, EDR's property type data correlate with trends data from outside sources that track the behavior of commercial real estate markets ( see below).

2. Annual Phase I Production Estimates   Data Inputs EDR's data on the number of Phase I ESAs conducted annually is based on a series of data inputs, including the number of Government Record Check reports sold by EDR for use in Phase I ESAs. Quarterly sales data are extrapolated to the industry level using market intelligence from internal and external sources, including:

  Annual EDR surveys of environmental professionals conducting Phase I ESAs  Production and forecast data from Phase I providers   Annual EDR surveys of banks that loan on commercial real estate  Demand and forecast data from major user sector   Property & Portfolio Research ( PPR)   Boston, MA 61 Communications with Dianne Crocker, editor of EDR ESA Report, July 2, 2004. EIA for the AAI Regulation IV 2  PPR, a highly respected provider of independent real estate research and portfolio strategy services, tracks commercial real estate trends in 54 US areas and five property types ( office, retail, warehouse, apartment, and hotel)   Trepp, LLC  New York, NY  A leading provider of CMBS information and analytics to the investment management community   Feedback from market to EDR's national sales force  EDR's clients include: national, regional, and local environmental consulting firms; commercial banks; pension funds; Wall Street firms; insurance companies; law firms; and government agencies   EDR's affiliation with the following industry associations also provides information on market trends that feeds into the company's predictions about the Phase I marketplace:

A& WMA Air and Waste Management Association ABA American Banker's Association AUDITING ROUNDTABLE ( formerly Environmental Auditing Roundtable) CORENET Corporate Real Estate Network EBA Environmental Bankers Association ICBA Independent Community Bankers Association MBA Mortgage Bankers Association RMA Risk Management Association NAGGL National Association of Government Guaranteed Lenders NAEP National Association of Environmental Professionals   2003 Phase I Production Estimates At the beginning of each calendar year, EDR releases its forecast of annual Phase I activity. EDR's early 2003 forecast predicted that 245,000 250,000 Phase Is would be conducted in 2003, and by year end, actual production data was in line with these projections: approximately 249,000 Phase I ESAs were conducted. EDR's forecast was based on a series of assumptions about continued low interest rates and tight lending standards coupled with a gradual easing of investors' caution in 2003, all of which held true. In fact, as predicted, economic recovery began to take hold in earnest by the second half of the year when capital from the sidelines began moving back into play.

  2004 Forecast, Model Assumptions EDR's forecast for 2004 activity is based on a combination of the company's in house data, market feedback from our clients, and a series of other broad based outside data sources documented above. The current forecast for the number of Phase I ESAs conducted in 2004 is 253,000 255,000, with a 4 to 5% percent margin of error, based on the accuracy of last year's forecast and confidence in the assumptions built into the model. EDR's latest market projection is sensitive to the series of assumptions identified below: EIA for the AAI Regulation IV 3   Growing stream of funding flowing into commercial real estate, particularly from new sources of equity capital ( e. g., pension funds, endowments and foundations) that have earmarked record high allocations for CRE investment in 2004   Growing confidence on the part of businesses, which will drive more demand for new office space and apartments, and an increase in dollars spent assessing candidate properties for acquisition   Moderate to strong commercial loan demand   Recovery in three year downturn in merger/ acquisition activity due to improved economic forecasts, higher business confidence, increased availability of financing, a healthy stock market and a renewed focus on growth   Gradual increase in interest rates that could affect developers' and property owners' ready access to capital   Beginning of recovery in commercial real estate markets, boosting investment in the four core property types ( i. e., office, retail, apartment and industrial)   Transition to Phase Is over Transaction Screens that no longer provide property owner with CERCLA liability protection under the 2002 Small Business Liability Relief and Revitalization Act ( Public Law 107 118)   Increased activity in telecom sector as recovering tower companies seek to expand networks   Passage of federal transportation law that will release funding for new highway and railway projects   Continued strong capital flows into real estate investment trusts ( REITs) from broadening array of institutions and individuals, despite recovering stock market   Increase in commercial mortgage backed securities ( CMBS) after record year in 2003 due largely to continued healthy volume coupled with the trend toward now maturing early 1990 bonds being repackaged and reinvested through the CMBS market   Greater interest in brownfields redevelopment given new EPA funding, new state programs and additional CERCLA defenses   Much stronger optimism on part of Phase I providers based on EDR survey data ( early 2004), which showed that 25% of consultants predict a " significant increase" in Phase I work in 2004 compared to only 16% at the start of 2003   Trend in banking sector toward greater environmental scrutiny of low cap loans. EIA for the AAI Regulation Appendix V: Volatility in Property Transactions EIA for the AAI Regulation V 1 Appendix V: Volatility in Property Transactions We used the data presented in Exhibits V 1 and V 2 as a proxy for volatility in real estate transactions.

Exhibit V 1: Percent of Properties Sold, by Year 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 7.5 8.5 8.0 7.0 8.0 10.0 6.0 6.0 4.5 6.5 8.5 8.5 15.0 17.5 16.5 13.0 11.5 10.5 Exhibit V 2: Percent of Properties Sold, 10 Year Moving Average 10 Year Period Percent Properties Sold 1984 1993 7.2 1985 1994 7.3 1986 1995 7.3 1987 1996 8 1988 1997 9.05 1989 1998 9.9 1990 1999 10.2 1991 2000 10.75 1992 2001 11.2 Mean 8.99 Standard Deviation ( SD) 1.59


[Federal Register Volume 82, Number 236 (Monday, December 11, 2017)]
[Notices]
[Pages 58250-58251]
[FR Doc No: 2017-26585]

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

[Docket No. FMCSA-2017-0237]

Qualification of Drivers; Exemption Applications; Diabetes

AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.

ACTION: Notice of denials.

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SUMMARY: FMCSA announces its decision to deny applications from 81
individuals who requested an exemption from the Federal Motor Carrier
Safety Regulations (FMCSRs) prohibiting persons with insulin-treated
diabetes mellitus (ITDM) from operating a commercial motor vehicle
(CMV) in interstate commerce.

FOR FURTHER INFORMATION CONTACT: Ms. Christine A. Hydock, Chief,
Medical Programs Division,<PHONE_NUMBER>, [email protected], FMCSA,
Department of Transportation, 1200 New Jersey Avenue SE., Room W64-224,
Washington, DC 20590-0001. Office hours are from 8:30 a.m. to 5 p.m.,
ET, Monday through Friday, except Federal holidays. If you have
questions regarding viewing or submitting material to the docket,
contact Docket Services, telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

I. Electronic Access

    You may see all the comments online through the Federal Document
Management System (FDMS) at: http://www.regulations.gov.
    Docket: For access to the docket to read background documents or
comments, go to http://www.regulations.gov and/or Room W12-140 on the
ground level of the West Building, 1200 New Jersey Avenue SE.,
Washington, DC, between 9 a.m. and 5 p.m., ET, Monday through Friday,
except Federal holidays.
    Privacy Act: In accordance with 5 U.S.C. 553(c), DOT solicits
comments from the public to better inform its rulemaking process. DOT
posts these comments, without edit, including any personal information
the commenter provides, to http://www.regulations.gov, as described in
the system of records notice (DOT/ALL-14 FDMS), which can be reviewed
at http://www.dot.gov/privacy.

II. Background

    FMCSA received applications from 81 individuals who requested an
exemption from the FMCSRs prohibiting persons with ITDM from operating
a CMV in interstate commerce. FMCSA has evaluated the eligibility of
these applicants and concluded that granting these exemptions would not
provide a level of safety that would be equivalent to or greater than,
the level of safety that would be obtained by complying with the
regulation 49 CFR 391.41(b)(3).

III. Basis for Exemption Determination

    Under 49 U.S.C. 31136(e) and 31315, FMCSA may grant an exemption
for two years if it finds ``such an exemption would likely achieve a
level of safety that is equivalent to, or greater than, the level that
would be achieved absent such an exemption.''
    The Agency's decision regarding these exemption applications is
based on the eligibility criteria, the terms and conditions for Federal
exemptions, and an individualized assessment of each applicant's
medical information provided by the applicant.

IV. Conclusion

    The Agency has determined that these applicants do not satisfy the
criteria eligibility or meet the terms and conditions of the Federal
exemption and granting these exemptions would not provide a level of
safety that would be equivalent to or greater than, the level of safety
that would be obtained by complying with the regulation 49 CFR
391.41(b)(3). Therefore, the 81 applicants in this notice have been
denied exemptions from the physical qualification standards in 49 CFR
391.41(b)(3).
    Each applicant has, prior to this notice, received a letter of
final disposition regarding his/her exemption request. Those decision
letters fully outlined the basis for the denial and constitutes final
action by the Agency. This notice summarizes the Agency's recent
denials as required under 49 U.S.C. 31315(b)(4) by periodically
publishing names and reasons for denial.
    The following eight applicants met the diabetes requirements of 49
CFR 391.41(b)(3) and do not need an exemption:

Melchor A. Corral (CO)
Timothy J. Furman (NY)
Alex A. Jackson (TX)
Gregory M. Johnson (TX)
William S. Langeluttig (ME)
Maria C. Mariquez (TX)
Sergio P. Raymundo (KS)
Maurice R. Williams (MN)

    The following 42 applicants were not operating CMVs in interstate
commerce:

Jason A. Applegate (AR)
Christopher J. Barreira (MA)
Zamorano Benito (CA)
Mingle Blake (FL)
Joshua J.J. Blouin (VT)
Marcial C. Cardenas (FL)
Billy B. Carnes (NE)
Roy L. Christopherson (WI)
Marvin B. Collins (IN)
James P. Demby (MD)
Walter Dudiak (PA)
Beth-Lynne Durant (MA)
Nicholas B. Durkin (NJ)
Martin N. Escalante (NC)
William F. Gelinas (MA)
Darren K. Green (CT)
Robert J. Grewette (MI)
Randy S. Huckins (AZ)
Anthony E. Jackson (TX)
Kevin T. Lively (TN)
Rendell E. Norrington (IL)
Ryan A. Oglesby (IN)
Latasha M. Oliver (OH)
Donte S. Parker (MD)
Steven J. Pipa (FL)
Ricardo C. Ray (CA)
Larry J. Rogers (MA)
George Sanchez (TX)
Carlos Sanchez (MA)
Richard K. Schaefer (TX)
Galen L. Sears (KS)
Michael W. Stockton (WI)
Milton L. Terrell (VA)
Jerry L. Thomas (GA)
Erasmo Torres (TX)
Ralph VanZandt, Jr. (NY)
Susie M. Vazquez (CA)
Kenneth Walker (MN)
Kenneth C. Waterhouse (CT)
Raymond L. Williamson (IL)
Terry L. Wood (NC)
Billy E. York (NC)

    The following six applicants have had more than one hypoglycemic
episode requiring hospitalization or the assistance of others, or has
had one such episode but has not had one year of stability following
the episode:

David J. Couch (OR)

Delmar W. Daoust (FL)
Cameron D. Ferguson (TX)
George W. Huwe (PA)
Kevin R. Kerrigan (MI)
William E. Naeve (CO)

    Kenneth E. Gilreath (OH) had other medical conditions making the
applicant otherwise unqualified under the FMCSRs.
    The following two applicants did not have endocrinologists willing
to make statements that they are able to operate CMVs from a diabetes
standpoint:

David A. Martin (IL)
Amy L. Purvis (WI)

    Michael L. Hawkins (GA) had other miscellaneous reasons making the
applicant otherwise unqualified under the FMCSRs.
    Glenn A. Bauer (SK) currently resides in Canada. He is not eligible
because the Federal exemption is for drivers operating only in the
United States.
    Patrick L. Beasley (AR) has peripheral neuropathy or circulatory
insufficiency of the extremities likely to interfere with his ability
to operate a CMV.
    The following four applicants did not meet the minimum age criteria
outlined in 49 CFR 391.41(b)(1) which states that an individual must be
at least 21 years old to operate a CMV in interstate commerce:

Drake C. Comer (VA)
Melissa A. Laskowski (NY)
Matthew T.S. Odell (OH)
Cameron M. Simpson (CA)

    The following 15 applicants were exempt from the diabetes standard:

David L. Balcom (MO)
Michael G. Brown (MD)
Perry C. Browning (OR)
Jeffery A. Cooper (IN)
Steven T. Dolar (CA)
Marsha S. Dunn (NC)
Melody F. Levi (IL)
Jason R. Maunz (OH)
Cindy L. Murphy (OK)
Blake A. Nylund (WA)
Thomas F. Rinn (CO)
Joshua J. Rodman (CT)
Mary A. Satterfield (TN)
Earl T. Smith (MT)
Tesfaye Tekle (TX)

     Issued on: December 4, 2017.
Larry W. Minor,
Associate Administrator for Policy.
[FR Doc. 2017-26585 Filed 12-8-17; 8:45 am]
 BILLING CODE 4910-EX-P