ERG's experts estimated that each facility would need to purchase a single vacuum at a cost of $2,900 (Nilfisk, 2012b) for every five affected employees in order to successfully integrate housekeeping into their daily routine. The per-employee cost would be $580 ($2,900/5), resulting in an annualized cost of $67.99 per worker.  ERG's experts also estimated that all affected workers would require an additional five minutes per work day (.083 hours) to complete vacuuming tasks and to label and dispose of beryllium-contaminated waste. While this allotment is modest, OSHA judged that the steady application of this incremental additional cleaning, when combined with currently conducted cleaning, would be sufficient in average establishments to address dust or surface contamination hazards.  The Agency estimated that the median work wage (including fringe benefits) for workers affected by this provision would be $22.16 an hour (Production Occupations, SOC: 51-0000) and that these workers would be working 250 days per year.  Given these factors, OSHA estimates that the annual per employee labor cost for additional time spent cleaning in order to comply with this provision is $461.69 ($22.16 x 250 x .083).
      The proposed standard requires each disposal bag with contaminated materials to be properly labeled.  ERG estimated a cost of 10 cents per label with one label needed per day for every five workers. With the disposal of one labeled bag each day and 250 working days, $5 would be the per employee cost (($0.10 X 250)/5).  The annualized cost of a HEPA-filtered vacuum, combined with the additional time needed to perform housekeeping and the labeling of disposal bags, results in a total annualized cost of $534.68 ($461.69 + $67.99 + $5.00) per employee.
	The Agency estimates the total annualized cost of this provision to be $12,574,921 for all affected establishments.  The breakdown of these costs by NAICS code is shown in Table V-19 at the end of this program cost section.

Medical Surveillance

      The proposed standard requires the employer to make medical surveillance available at no cost to the employee, and at a reasonable time and place, for the following employees:
         1. Employees who have worked in a regulated area for more than 30 days in the last 12 months
         2. Employees showing signs or symptoms of chronic beryllium disease (CBD)
         3. Employees exposed to beryllium during an emergency; and
         4. Employees exposed to airborne beryllium above 0.2 μg/m3 for more than 30 days in a 12-month period for 5 years or more.
      For the purposes of estimating the program costs of medical surveillance, OSHA has calculated the fees and other medical expenses that employers will incur to comply fully with the medical surveillance requirements in this standard.  These costs do not include costs to comply with the medical removal requirements in this standard, which are addressed as separate program costs under "medical removal." If an employee is confirmed positive, is diagnosed with CBD, or shows signs or symptoms associated with exposure, then the employer has the obligation to update the written exposure control plan, and these costs are fully accounted for in the cost analysis (as discussed in the section on the written exposure control plan earlier in this chapter).. As discussed in the regulated areas section of this analysis of program costs, the Agency estimates that approximately 10 percent of affected employees would have exposure in excess of the PEL after the standard goes into effect and would therefore be placed in regulated areas.  The Agency further estimates that a very small number of employees will be affected by emergencies in a given year, likely less than 0.1 percent of the affected population, representing a small  additional cost.  The number of workers who would suffer signs and symptoms of CBD after the rule takes effect is difficult to estimate, but would likely substantially exceed those with actual cases of CBD.[ ]
      While the symptoms of CBD vary greatly, the first to appear are usually chronic dry cough (generally defined as a nonproductive cough, without phlegm or sputum, lasting two months or more) and shortness of breath during exertion.  Ideally, in developing these costs estimates, OSHA would first estimate the percent of affected workers who might be presenting with a chronic cough and/or experiencing shortness of breath.
      Studies have found the prevalence of a chronic cough ranging from 10 to 38 percent across various community populations, with smoking accounting for up to 18 percent of cough prevalence (Irwin et al., 1990; Barbee et al., 1991).  However, these studies are over twenty years old, and the number of smokers has decreased substantially since then.  It is also not clear whether the various segments of the US population studied are similar enough to the population of workers exposed to beryllium such that results of these studies could be generalized to the affected worker population.
      A more recent study from a plant in Cullman, Alabama that works with beryllium alloy found that about five percent of employees said they were current smokers, with roughly 52 percent saying they were previous smokers and approximately 43 percent stating they had never smoked (Newman et al., 2001). This study does not, however, report on the prevalence of chronic cough in this workplace.
      OSHA was unable to identify any studies on the general prevalence of the other common early symptom of CBD, shortness of breath.  Lacking any better data to base an estimate on, the Agency used the studies cited above (Irwin et al., 1990; Barbee et al., 1991) showing the prevalence of chronic cough in the general population, adjusted to account for the long term decrease in smoking prevalence (and hence, the amount of overall cases of chronic cough), and estimated that 15 percent of the worker population with beryllium exposure covered by the proposed rule would exhibit a chronic cough or other sign or symptom of CBD that would trigger medical surveillance.  The Agency welcomes comment and further data on this question.
      According to the proposed rule, the initial (baseline) medical examination would consist of the following:
         1. A medical and work history, with emphasis on past and present exposure, smoking history and any history of respiratory system dysfunction;
         2.  A physical examination with emphasis on the respiratory tract;
         3. A physical examination for skin breaks and wounds;
         4.  A pulmonary function test;
         5. A standardized beryllium lymphocyte proliferation test (BeLPT) upon the first examination and within every two years from the date of the first examination until the employee is confirmed positive for beryllium sensitization;
         6. A CT scan, offered every two years for the duration of the employee's employment, if the employee was exposed to airborne beryllium at levels above 0.2 ug/m[3] for more than 30 days in a 12-month period for at least 5 years.  This obligation begins on the start-up date of this standard, or on the 15[th] year after the employee's first exposure above for more than 30 days in a 	12-month period, whichever is later; and
         7. Any other test deemed appropriate by the Physician or other Licensed Health Care Professional (PLHCP).

      Table V-17 below lists the direct unit costs for initial medical surveillance activities including: work and medical history, physical examination, pulmonary function test, BeLPT, CT scan, and costs of additional tests.  In OSHA's cost model, all of the activities will take place during an employee's initial visit and on an annual basis thereafter and involve a single set of travel costs, except that: (1) the BeLPT tests will only be performed at two-year intervals after the initial test, but will be conducted in conjunction with the annual general examination (no additional travel costs); and (2) the CT scans will typically involve different specialists and are therefore treated as separate visits not encompassed by the general exams (therefore requiring separate travel costs).  Not all employees would require CT scans, and employers would only be required to offer them every other year.  A discussion of the derivation of the unit costs follows.

Annual examination and testing
      The fees for the initial (and annual) medical examination are estimated to be:  an average fee of $33.33 for gathering or updating work and medical history (estimated to be one-third the cost of a full physical exam), a $100 fee for a full physical exam (encompassing both respiratory and skin requirements), a $54.69 fee for a pulmonary function test, and $200 in fees for all additional tests (collectively) that the PLHCP may recommend (Intellimed International, 2003, National Jewish Medical Center, 2005).  For this last element, the Agency estimates that 10 percent of the standard medical examinations will lead to further tests recommended by the PLCHP. This estimate does not include the cost of the initial BeLPT test, which is grouped with the costs for the subsequent BeLPT tests and addressed in the following paragraphs.
      In addition to the fees for the annual medical exam, employers may also incur costs for lost work time when their employees are unavailable to perform their jobs.  OSHA estimated the examination requires 120 minutes (or 2 hours) away from work for each employee each year (updated from ERG, 2013).  This includes time for traveling, a health history review, the physical exam, and the pulmonary function test.  Each examination would require 15 minutes (or 0.25 hours) of a human resource manager's time for recording the results of the exam and tests and the PLHCP's written opinion for each employee and any necessary post-exam consultation with the employee. The lost work time, based on an average production worker wage of $22.16 (Production Occupations, SOC: 51-0000), is $44.32 (2 x $22.16) per year.  The cost of the lost work time for a human resource manager making $70.44 per hour (Human Resources Managers, SOC: 11-3121), is $17.61 ($70.44 x 0.25).  There is a cost of 15 minutes of supervisor time to provide information to the physician, five minutes of supervisor time to process licensed physician's written medical opinion, and five minutes for a production worker to receive a licensed physician's written medical opinion.   The total unit annual cost for the medical examinations and tests, excluding the BeLPT test, and the time required for both the employee and the supervisor is $296.95.

BeLPT testing
      The estimated fee for the BeLPT is $259 (National Jewish Medical Center, 2005). With the addition of the time incurred by the worker to undergo the test (estimated to take five minutes, or 0.08 hours), the total cost for a BeLPT is $260.85 (0.08 x $22.16 + $259).  The standard requires a biennial BeLPT for each employee covered by the medical surveillance provision, so most workers would receive between two and five BeLPT tests over a ten year period (including the BeLPT performed during the initial examination), depending on whether the results of these tests were positive. OSHA therefore estimates a net present value (NPV) of $1,417 for all five tests.  This NPV annualized over a ten year period is $166.13.
      From the above cost for the annual medical examination, not including the BeLPT, is $269.96. Together, the annualized net present value of the BeLPT and the annualized cost of the remaining medical surveillance produce an annual cost of $436.09 ($166.13 + $269.96) per employee.

CT Scans
      The proposed standard requires that a helical tomography (CT scan) be offered to employees exposed to airborne beryllium above 0.2 g/m[3] for more than 30 days in a 12-month period, for a period of 5 years or more.  The five years do not need to be consecutive, and the exposure does not need to occur after the effective date of the standard.  The CT scan shall be offered every 2 years starting on the fifteenth year after the first year the employee was exposed above 0.2 g/m[3] for more than 30 days in a 12-month period, for the duration of their employment.  The total yearly cost for biennial CT scans consists of medical costs totaling $1,020, comprised of a $770 fee for the scan (CT-scan, 2012) and the cost of a specialist to review the results, which OSHA estimates would cost $250.  The Agency estimates an additional cost of $110.81 of lost work time, for a total of $1,130.81 ($1,020 + $110.81).  The annualized yearly cost for biennial CT scans is $573.76.

Number of workers requiring medical surveillance
      Based on OSHA's estimates explained earlier in this section, all workers in regulated areas, workers exposed in emergencies, and an estimated 15 percent of workers not in regulated areas who exhibit signs and symptoms of CBD will be eligible for medical surveillance other than CT scans.  The estimate for the number of workers eligible to receive CT scans is 25 percent of workers who are exposed above 0.2 in the exposure profile.  The estimate of 25 percent is based on the facts that roughly this percentage of workers have 15+ years of job tenure in the durable manufacturing sector (BLS, 2013) and the estimate that all those with 15+ years of job tenure and current exposure over 0.2 would have had at least 5 years of such exposure in the past.
      The costs estimated for this provision are likely to be significantly overestimated, since not all affected employees offered medical surveillance would necessarily accept the offer.  At Department of Energy facilities, only about 50 percent of eligible employees participate in the voluntary medical surveillance tests, and a report on an initial medical surveillance program at four aluminum manufacture facilities found participation rates to be around 57 percent (Taiwo et al., 2008).  Where employers already offer equivalent health surveillance screening, no new costs are attributable to the proposed standard.

CBD Diagnostic Center Referrals and Evaluations
      Within 30 days after an employer learns that an employee has been confirmed positive for beryllium sensitization, the employer's designated licensed physician shall consult with the employee to discuss referral to a CBD diagnostic center that is mutually agreed upon by the employer and the employee.  If, after this consultation, the employee wishes to obtain a clinical evaluation at a CBD diagnostic center, the employer must provide the evaluation at no cost to the employee.  OSHA estimates this consultation will typically be done by telephone and take less than 15 minutes.  For purposes of costing this consultation, OSHA used the marginal costs of a doctor's time (wages plus benefits) of $110.25 per hour (Physicians and Surgeons, All Other, SOC: 29-1069), the doctor's cost for the 15 minute consultation is $27.56 ((15/60) X $110.25).  Similarly the worker's time for this consultation, with a production worker's hourly wage of $22.16 (Production Occupations, SOC: 51-0000) results in a cost for the employee's time of $5.54 ((15/60) X $22.16).  Hence the total cost of the prior consultation is $33.10 ($27.56 + $5.54).
      Table V-18 below lists the direct unit costs for a clinical evaluation with a specialist at a CBD diagnostic center.  To estimate these costs, ERG contacted a healthcare provider who commonly treats patients with beryllium-related disease, and asked them to provide both the typical tests given and associated costs of an initial examination for a patient with a positive BeLPT test, presented in Table V-18  Their typical evaluation includes bronchoscopy with lung biopsy, a pulmonary stress test, and a chest CAT scan.  The total cost for the entire suite of tests is $6,305.46.

	In addition, there are costs for lost productivity and travel.  The Agency has estimated the clinical evaluation would take three days of paid time for the worker to travel to and from one of two locations: Penn Lung Center at the Cleveland Clinic Foundation in Cleveland, Ohio or National Jewish Medical Center in Denver, Colorado.  OSHA estimates lost work time is 24 (3 x 8) hours at a wage of $22.16 (Production Occupations, SOC: 51-0000) for a total cost for the three days of $531.87 (24 x $22.16).
      OSHA estimates that roundtrip air-fare would be available for most facilities at $400 (U.S. DOT, 2012), and the cost of a hotel room would be approximately $100 per night, for a total cost of $200 for the hotel room.  OSHA estimates a per diem cost of $50 for three days, for a total of $150 (3 x $50).  The total cost per trip for traveling expenses is therefore $750 ($400 + $100 + $150).
	The total cost of a clinical evaluation with a specialist at a CBD diagnostic center is equal to the cost of the examination plus the cost of lost work-time and the cost for the employee to travel to the CBD diagnostic center, or $7,620.43 ($33.10 + $6,305.46 + $531.87 + $750).
      Based on the data from the exposure profile and the prevalence of beryllium sensitization observed at various levels of cumulative exposure, OSHA estimated the number of workers eligible for BeLPT testing (4,181) and the percentage of workers who will be confirmed positive for sensitization (two positive BeLPT tests, as specified in the proposed standard) and referred to a CBD diagnostic center.  During the first year that the medical surveillance provisions are in effect, OSHA estimates that 9.4 percent of the workers who are tested for beryllium sensitization will be identified as sensitized.  This percentage is an average based on: (1) the number of employees in the baseline exposure profile that are in a given cumulative exposure range; (2) the expected prevalence for a given cumulative exposure range (from Table VI-6 in Section VI of the preamble); and (3) an assumed even distribution of employees by cumulative years of exposure at a given level -- 20 percent having exposures at a given level for 5 years, 20 percent for 15 years, 20 percent for 25 years, 20 percent for 30 years, and 20 percent for 40 years.
      OSHA did not assume that all workers with confirmed sensitization would choose to undergo evaluation at a CBD diagnostic center, which may involve invasive procedures and/or travel.  For purposes of this cost analysis, OSHA estimates that approximately two-thirds of workers who are confirmed positive for beryllium sensitization will choose to undergo evaluation for CBD.  OSHA requests comment on the CBD evaluation participation rate. OSHA estimates that about 264 of all non-dental lab workers will go to a diagnostic center for CBD evaluation in the first year.
      The calculation method described above applies to all workers except dental technicians, who were analyzed with one modification.  The rates for dental technicians are calculated differently due to the estimated 75 percent beryllium-substitution rate at dental labs, where the 75 percent of labs that eliminate all beryllium use are those at higher exposure levels.  None of the remaining labs affected by this standard had exposures above 0.1 μg/m[3] (see the engineering control costs section for dental labs above).  For the dental labs, the same calculation was done as presented in the previous paragraph, but only the remaining 25 percent of employees (2,314) who would still face beryllium exposures were included in the baseline cumulative exposure profile.  With that one change, and all other elements of the calculation the same, OSHA estimates that 9 percent of dental lab workers tested for beryllium sensitization will be identified as sensitized.  The predicted prevalence of sensitization among those dental lab workers tested in the first year after the standard takes effect is slightly lower than the predicted prevalence among all other tested workers combined.  This slightly lower rate is not surprising because only dental lab workers with exposures below 0.1 μg/m[3] are included (after adjusting for substitution), and OSHA's exposure profile indicates that the vast majority of non-dental workers exposed to beryllium are also exposed at 0.1 μg/m[3] or lower.  OSHA estimates that 20 dental lab workers (out of 347 tested for sensitization) would go to a diagnostic center for CBD evaluation in the first year.
      In each year after the first year, OSHA relied on a 10 percent worker turnover rate in a steady state (as discussed in Chapter VII of this PEA) to estimate that the annual sensitization incidence rate is 10 percent of the first year's incidence rate.  Based on that rate and the number of workers in the medical surveillance program, the CBD evaluation rate for workers other than those in dental labs would drop to 0.63 percent (.063 x .10).  The evaluation rate for dental labs technicians is similarly estimated to drop to 0.58 percent (.058 x .10).  These evaluation rates may be an overestimate to the extent that reduced worker exposures resulting from the proposed rule would tend to reduce the number of sensitized workers requiring CBD evaluation.  OSHA invites comment on this issue.
      Based on these unit costs and the number of employees requiring medical surveillance estimated above, OSHA estimates that the medical surveillance and referral provisions would result in an annualized total cost of $2,882,076.  These costs by NAICS code are shown in Table V-19 at the end of the program cost section.

Medical Removal Provision

      Once a licensed physician diagnoses an employee with CBD or the employee is confirmed positive for sensitization to beryllium, that employee is eligible for medical removal and has two choices:
         a) Removal from current job, or
         b) Remain in a job with exposure above the action level while wearing a respirator pursuant to 29 CFR 1910.134.
      To be eligible for removal, the employee must accept comparable work if such is available, but if not available the employer would be required to place the employee on paid leave for six months or until such time as comparable work becomes available, whichever comes first.  During that six-month period, whether the employee is re-assigned or placed on paid leave, the employer must continue to maintain the employee's base earnings, seniority and other rights, and benefits that existed at the time of the first test.
      For purposes of this analysis, OSHA has conservatively estimated the costs as if all employees will choose removal, rather than remaining in the current job while wearing a respirator.  In practice, many workers may prefer to continue working at their current job while  wearing a respirator, and the employer would only incur the respirator costs identified earlier in this chapter. The removal costs are significantly higher over the same six-month period, so this analysis likely overestimates the total costs for this provision.

Reassignment to a comparable job
      OSHA estimated that the majority of firms would be able to reassign the worker to a job at least at the clerical level.  The employer will often incur a cost for re-assigning the worker because this provision requires that, regardless of the comparable work the medically removed worker is performing, the employee must be paid the full base earnings for the previous position for six months.  The cost per hour of reassigning a production worker to a clerical job is based on the wage difference of a production worker of $22.16 (Production Occupations, SOC: 51-0000) and a clerical worker of $19.97 (File Clerks, SOC: 43-4071), for a difference of $2.19 ($22.16  -  $19.97).  Over the six-month period, the incremental cost of reassigning a worker to a clerical position would be $2,189.87 ($2.19 x (250 /12) x 6 x 8) per employee.  This estimate is based on the employee remaining in a clerical position for the entire 6-month period, but the actual cost would be lower if there is turnover or if the employee is placed in any alternative position (for any part of the six-month period) that is compensated at a wage closer to the employee's previous wage.

Removal with 6 months paid leave
      Some firms may not have the ability to place the worker in an alternate job.  If the employee chooses not to remain in the current position, the additional cost to the employer would be at most the cost of equipping that employee with a respirator, which would be required if the employee would continue to face exposures at or above the action level.  Based on the earlier discussion of respirator costs, that option would be significantly cheaper than the alternative of providing the employee with six months of paid leave.  Therefore, in order to estimate the maximum potential economic cost of the remaining alternatives, the Agency has conservatively estimated the cost per worker based on the cost of 6 months paid leave.
      Using the wage rate of a production worker of $22.16 (production occupations, SOC: 51-0000), and six months (or one half) of a 250 day, eight hour per-day work year the total per-worker cost for this provision when a firm cannot place a worker in an alternate job is $22,161.13 ($22.16 x (250/12) x 6 x 8).
      OSHA has estimated an average medical removal cost per worker assuming 75 percent of firms are able to find the employee an alternate job, and the remaining 25 percent of firms would not.  The weighted average of these costs is $7,182.68 (0.75 x $2,189.87 + 0.25 x $22,161.13). Based on these unit costs OSHA estimates that the medical removal provision would result in an annualized total cost of $148,826. The breakdown of these costs by NAICS code can be seen in Table V-19 at the end of this program cost section.

Training

	As specified in the proposed standard and existing OSHA standard 29 CFR 1910.1200 on hazard communication, training is required for all employees where there is potential exposure to beryllium.  In addition, newly hired employees would require training before starting work.
      OSHA anticipates that training in accordance with the requirements of the proposed rule, which includes hazard communication training, would be conducted by in-house safety or supervisory staff with the use of training modules or videos.  ERG estimated that this training would last, on average, eight hours.  (Note that this estimate does not include the time taken for hazard communication training that is already required by 29 CFR 1910.1200.)  The Agency judged that establishments could purchase sufficient training materials at an average cost of $2 per worker, encompassing the cost of handouts, video presentations, and training manuals and exercises.  For initial and periodic training, ERG estimated an average class size of five workers (each at a wage of $22.16 (Production Occupations, SOC: 51-0000)) with one instructor (at a wage of $37.39 (Median Wage for Training and Development Specialists, SOC: 13-1151)) over an eight hour period.  The per-worker cost of initial training is therefore $239.11 (8 x ($22.16 + ($37.39/5)) + $2).
      Annual retraining of workers is also required by the standard.  OSHA estimates the same unit costs as for initial training, so retraining would require the same per-worker cost of $239.11.
      Finally, to calculate training costs, the Agency needs the turnover rate of affected workers to know how many workers are receiving initial training versus retraining.  Using these elements and based on a 26.3 percent new hire rate (BLS 2012, annual manufacturing new hire rate), OSHA calculated a total net present value (NPV) of ten years of initial and annual retraining of $2,100.69 per employee. Annualizing this NPV gives a total annual cost for training of $246.27.
      Based on these unit costs, OSHA estimates that the training requirements in the standard would result in an annualized total cost of $5,797,535.  The breakdown of these costs by NAICS code is presented in Table V-19 below.

Total Annualized Cost
      As shown in Table V-20, the total annualized cost of the proposed rule is estimated to be about $37.6 million.  As shown, at $27.8 million, the program costs represent about 74 percent of the total annualized costs of the proposed rule.  The annualized cost of complying with the PEL accounts for the remaining 26 percent, almost all of which is for engineering controls and work practices.  Respiratory protection, at about $250,000, represents only 3 percent of the annualized cost of complying with the PEL and less than 1 percent of the annualized cost of the proposed rule.

TIME DISTRIBUTION OF COSTS

      OSHA analyzed the stream of (unannualized) compliance costs for the first ten years after the rule would take effect.  As shown in Table V-21, compliance costs are expected to decline from Year 1 to Years 2 by about two-thirds after the initial set of capital and program start-up expenditures has been incurred.  Costs are then essentially flat with small variation for the following years.  Table V-22 breaks out total costs by each application group for the first ten years.  Each application group follows the same pattern of a sharp decrease in compliance costs between years 1 and 2, and then stays essentially flat for the remaining years.

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ERG, 2003a. Cost and Economic Impact Analysis of the Draft Crystalline Silica Standard for General Industry. Eastern Research Group, Inc. Lexington, MA. Prepared for the OSHA, Office of Standards and Guidance. Draft. August.

ERG, 2003b.  Site visit to a copper-beryllium casting facility (ERG Site 7).  Eastern Research Group, Inc. Lexington, MA. September 16 - 17.

ERG, 2004. Technological Feasibility Study and Cost and Impact Analysis of the Draft Crystalline Silica Standard for Construction, Eastern Research Group, Inc. Lexington, MA. Prepared for the Occupational Safety and Health Administration. August 19.

ERG, 2004b.  ERG walkthrough of a copper-beryllium alloy facility (ERG Site 11). Eastern Research Group, Inc., Lexington, Massachusetts. November 16.

ERG, 2007b.  Rulemaking Support for Supplemental Economic Feasibility Data for a Preliminary Economic Impact Analysis of a Proposed Crystalline Silica Standard; Updated Cost and Impact Analysis of the Draft Crystalline Silica Standard for General Industry. Task Report.  Eastern Research Group, Inc. Lexington, MA. Submitted to Occupational Safety And Health Administration, Directorate of Evaluation and Analysis, Office of Regulatory Analysis under Task Order 11, Contract No. DOLJ049F10022. April 20.

ERG, 2013. Eastern Research Group.  Revised Excel Spreadsheet Support for OSHA's Preliminary Economic Analysis for Proposed Respirable Crystalline Silica Standard: Excel Spreadsheets of Economic Costs and Impacts.  Submitted to Occupational Safety and Health Administration, Directorate of Standards and Guidance, Office of Regulatory Analysis under Task Order 34, Contract No. GS-10F-0125P, May 2013. OSHA Docket No. OSHA-2010-0034-1781.

Frigon, T., 2005. Telephone conversation between Eastern Research Group, Inc. and Tom Frigon, Environmental, Health and Safety Manager, Brush Ceramic Products, Tucson, Arizona. February 7.

Gemplers, 2012. GVP 6000 Series Full-face Powered Air Purifying Respirator System, $1,096. From http://www.gemplers.com/product/127566/GVP-6000-Series-Full-face-Powered-Air-Purifying-Respirator-System.
Globalindustry, 2012. $44.95 for a box of 10 masks (P95 Particulate Respirators, 3M 8577, Box of 10). From http://www.globalindustrial.com/p/safety/breathing/disposable-respirators/p95-maint-free-particulate-respirator-8577.

Grainger, 2012a. Safety Hazard Tape. From http://www.grainger.com/Grainger/HARRIS-Safety-Hazard-Tape-8WU61?r=l&cm_mmc=LabSafety-_-Integration-_-AllPages-_-AllPages#.

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Grangier, 2012c. Online price quotes for neoprene gloves, splash aprons, shoe covers, and face shields from Grangier.com. October 31.
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Grainger, 2013. 3M Breathing Tube; Breathing Tube, For Use With Mfr. No. 7800S, 6000 DIN Series, Includes Connectors, $178.25. Cost assumes 3 used per year. Accessed 2013 from http://www.grainger.com/Grainger/3M-Breathing-Tube-5F788?gclid=CN3QgLWHj7kCFUqk4AodzxEA9A&cm_mmc=PPC:GooglePLA-_-Safety-_-Respiratory-_-5F788&ci_src=17588969&ci_sku=5F788&ef_id=Uff1uwAAAHQhwAw9:20130821172544:s.
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Lab Safety Supply. 2004. Safety and Industrial Supplies, General Catalog. Amount inflated to 2010 values.
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Magidglove, 2012. North by Honeywell 7700 Series Silicone Half Mask Respirator, $28.60. From http://www.magidglove.com/North-Safety-7700-Series-Silicone-Half-Mask-Respirator-N770030S.aspx?DepartmentId=224.
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National Jewish Medical Center, 2005. Charge quoted for BeLPT test, telephone conversation with ERG. May 16.

Nikro Industries, 2012. Online price quote ($1,104) for Nikro Industries Incorporated Model HD55110 (55 gallon HEPA vacuum). http://www.rewci.com/55gahevawand.html Accessed July 30.

Nilfisk, 2012a. Online price quote ($2,000) for Nilfisk Vacuums Model GWD 244 (55 gallon Wet/Dry HEPA vacuum). http://nelsonjameson.com/Nilfisk-Advance-GWD-255-Wet-Dry-Drum-Vacuum-p9403.html Accessed July 30.

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NIOSH, 1972.  Industrial Hygiene Survey of the Brush Wellman Plant, June 12-16, 1972 and August 21-25, 1972.  Report No. IWS-37.11/NTIS No. PB82100686.  Environmental Investigations Branch, Division of Field Studies and Clinical Investigations, National Institute for Occupational Safety and Health, Cincinnati, Ohio.

NIOSH, 1977. NIOSH Testimony to the U.S. Department of Labor, Occupational Safety and Health Administration, Public Hearing on the Occupational Standard for Beryllium. Statement of Edward J. Baier, Deputy Director, National Institute for Occupational Safety and Health, Center for Disease Control, U.S. Department of Health, Education, and Welfare. August 19.
NIOSH, 2003.  In-Depth Survey Report: Control of Respirable Dust and Crystalline Silica from Breaking Concrete with a Jackhammer at Bishop Sanzari Companies, North Bergen, New Jersey. Report No. EPHB 282-11a. U.S. Department of Health and Human Services, Public Health Service, Centers for Disease Control and Prevention, National Institute for Occupational Safety and Health, Division of Applied Research and Technology, Engineering and Physical Hazards Branch, Cincinnati, Ohio, February.

NIOSH, 2008a. EPHB 326-11a. Control Technology and Exposure Assessment for Occupational Exposure to Beryllium: Beryllium Facility #1 -- Copper/Beryllium Foundry. Report No. EPHB 326-11a. U.S. Department of Health and Human Services, Public Health Service, Centers for Disease Control and Prevention, National Institute for Occupational Safety and Health, Division of Applied Research and Technology. Cincinnati, Ohio, July.
NIOSH, 2008b. EPHB 326-16a. Control Technology and Exposure Assessment for Occupational Exposure to Beryllium: Beryllium Facility #3 -- Aluminum/Beryllium Foundry, and Copper/Beryllium Foundry and Machine Shop. Report No. EPHB 326-16a. U.S. Department of Health and Human Services, Public Health Service, Centers for Disease Control and Prevention, National Institute for Occupational Safety and Health, Division of Applied Research and Technology. Cincinnati, Ohio, November.
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Parsonage, T., 2011. System Performance of a Lightweight Beryllium Composite Heat Sink for Advanced Electronic Packaging. Materion Brush Beryllium and Composites, Elmore, Ohio. Available at http://materion.com/~/media/Files/PDFs/Beryllium/ApplicationsElectrical-MAE/MAE-004SysPerfofaLtweightBeCompHeatSinkforAdvElecPkg.pdf. Accessed November 8, 2011.

Refractory (Refractory Services Provider A), 2003.  Personal communication between Refractory Services Provider A and Eastern Research Group, Inc.  October 7.

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U.S DOT, 2012. representative estimate from the US Department of Transportation's Consumer Fare Report for late 2012.

U.S. Navy, 2003.  U.S. Navy Response to Occupational Safety and Health Administration, Beryllium Request for Information.  See OSHA Beryllium Docket H005C-2006-0870.  Document ID Numbers OSHA-H005C-2006-0870-0144 (Navy Response to Occupational Safety and Health Administration's Occupational Exposure to Beryllium; Request for Information) and OSHA-H005C-2006-0870-0145 (Attachment 1.  Navy Occupational Exposure Database (NOED) Query Report Personal Breathing Zone Air Sampling Results for Beryllium).

Washington, 2009.  Technical data sheets for aluminum welding wire (1100, 4043, 4643, 5183, 5356, and 5556) and aluminum welding and brazing wire (4047 and 4145).  Washington Alloy Company, Charlotte, North Carolina.  Available at http://www.weldingwire.com/documentation.asp.  Accessed December 26, 2009.

Wassell, RW et al., 2002. Crowns and extra-coronal restorations: Materials selection. British Dental Journal 192, 199  -  211.
Wataha, JC, 2002. Alloys for prosthodontic restorations. The Journal of Prosthetic Dentistry. 2002 Apr; 87(4):351-63.
Werra, 2005. Telephone communication between Janet Kaczenski, Senior Industrial Hygienist, ERG, and Bill Werra, Technical Sales Representative. Sentry Equipment Co. February 18 and 22.
Zorotools, 2012a. N99 - Replacement Filters (Filter Respirator, For Welding Respirator and 7190N99, Package 2), $4.75. From http://www.zorotools.com/g/00066271/k-G0408886?utm_source=google_shopping&utm_medium=cpc&utm_campaign=Google_Shopping_Feed&kw={keyword}&gclid=CJy14uPdwbECFQp66wodMlsAdw.
Zorotools, 2013. 3M Breathing Tube; Breathing Tube, For Use With Mfr. No. 7800S, 6000 DIN Series, Includes Connectors, $75.89. Cost assumes 3 used per year. Accessed 2013 from http://www.zorotools.com/g/00052249/k-G2062776?utm_source=google_shopping&utm_medium=cpc&utm_campaign=Google_Shopping_Feed&kw={keyword}&gclid=CL-Rz96Hj7kCFZSi4AodPw4AYQ.

Appendix V-A

Summary of Annualized Costs by Entity Size under Alternative Discount Rates

      In addition to using a three percent discount rate in its cost analysis, OSHA estimated compliance costs using alternative discount rates of seven percent and zero percent.  Tables V-A-1 and V-A-2 present --  for seven percent and zero percent discount rates, respectively -- total annualized costs for affected employers by NAICS industry code and employment size class (all establishments, small entities, and very small entities).
      As shown in these tables, the choice of discount rate has only a minor effect on total annualized compliance costs -- for example, with annualized costs for all establishments increasing from $37.6 million using a three percent discount rate to $39.1 million using a seven percent discount rate, and declining to $36.5 million using a zero percent discount rate.

Appendix V-B
Summary of Annualized Costs by Cost Type under Alternative Discount Rates

In addition to using a three percent discount rate in its cost analysis, OSHA estimated compliance costs using alternative discount rates of seven percent and zero percent.  Tables V-B-1 and V-B-2 present --  for seven percent and zero percent discount rates, respectively -- total annualized costs for affected employers by NAICS industry code and type of cost.

CHAPTER VI:  ECONOMIC FEASIBILITY ANALYSIS AND REGULATORY FLEXIBILITY DETERMINATION

      In this chapter OSHA investigates the economic impacts of its proposed beryllium rule on affected employers.  This impact investigation has two overriding objectives:  (1) to establish whether the proposed rule is economically feasible for all affected application groups/industries, and (2) to determine if the Agency can certify that the proposed rule will not have a significant economic impact on a substantial number of small entities.
      In the discussion below, OSHA first presents its approach for achieving these objectives and next applies this approach to industries with affected employers.  The Agency invites comment on any aspect of the methods and data used in this chapter and on any of the preliminary economic impact and economic feasibility findings presented in this chapter.

Analytic Approach
Economic Feasibility
      Section 6(b)(5) of the OSH Act states:
      The Secretary . . . shall set the standard which most adequately assures, to the extent feasible, on the basis of the best available evidence, that no employee will suffer material impairment of health or functional capacity . . . . [emphasis added]
OSHA interpreted the phrase "to the extent feasible" to encompass economic feasibility and was supported in this view by the U.S. Court of Appeals for the D.C. Circuit in its 1974 asbestos decision.  The court noted that "Congress does not appear to have intended to protect employees by putting their employers out of business . . ." and then proceeded to define the concept of economic feasibility and to indicate its boundaries:
      Standards may be economically feasible even though, from the standpoint of employers, they are financially burdensome and affect profit margins adversely.  Nor does the concept of economic feasibility necessarily guarantee the continued existence of individual employers.  It would appear to be consistent with the purposes of the Act to envisage the economic demise of an employer who has lagged behind the rest of the industry in protecting the health and safety of employees and is consequently financially unable to comply with new standards as quickly as other employers.  As the effect becomes more widespread within an industry, the problem of economic feasibility becomes more pressing.
      Thus, according to the court, OSHA standards would satisfy the economic feasibility criterion even if they imposed significant costs on regulated industries and forced some marginal firms out of business, so long as they did not cause massive economic dislocations within a particular industry or imperil the existence of the industry.
      The implication, for analysis of economic impacts, is that OSHA is required to determine whether its standards will eliminate or alter the competitive structure of an industry, not to determine whether any individual plants will close, or whether some marginal plants may close earlier than they otherwise might have.  OSHA thus has an obligation to examine industries, and to consider industry definitions carefully.  However, OSHA does not have an obligation to conduct a facility-by-facility analysis of the thousands of facilities in the dozens of industries covered by a major standard.
The Price Elasticity of Demand and Its Relationship to Economic Feasibility
      In practice, the economic burden of an OSHA standard on an industry -- and whether the standard is economically feasible for that industry -- depends on the magnitude of compliance costs incurred by establishments in that industry and the extent to which they are able to pass those costs on to their customers.  That, in turn, depends, to a significant degree, on the price elasticity of demand for the products sold by establishments in that industry.
      The price elasticity of demand refers to the relationship between the price charged for a product and the demand for that product:  the more elastic the relationship, the less an establishment's compliance costs can be passed through to customers in the form of a price increase and the more the establishment has to absorb compliance costs in the form of reduced profits.  When demand is inelastic, establishments can recover most of the costs of compliance by raising the prices they charge; under this scenario, profit rates are largely unchanged and the industry remains largely unaffected. Any impacts are primarily on those customers using the relevant product. On the other hand, when demand is elastic, establishments cannot recover all compliance costs simply by passing the cost increase through in the form of a price increase; instead, they must absorb some of the increase from their profits. Commonly, this will mean reductions both in the quantity of goods and services produced and in total profits, though the profit rate may remain unchanged.  In general, "[w]hen an industry is subjected to a higher cost, it does not simply swallow it; it raises its price and reduces its output, and in this way shifts a part of the cost to its consumers and a part to its suppliers," in the words of the court in Am. Dental Ass'n v. Sec'y of Labor (984 F.2d 823, 829 (7th Cir. 1993)).
      The court's summary is in accord with microeconomic theory.  In the long run, firms can remain in business only if their profits are adequate to provide a return on investment that ensures that investment in the industry will continue.  Over time, because of rising real incomes and productivity increases, firms in most industries are able to ensure an adequate profit. As technology and costs change, however, the long-run demand for some products naturally increases and the long-run demand for other products naturally decreases.  In the face of additional compliance costs (or other external costs), firms that otherwise have a profitable line of business may have to increase prices to stay viable.  Increases in prices typically result in reduced quantity demanded, but rarely eliminate all demand for the product.  Whether this decrease in the total production of goods and services results in smaller output for each establishment within the industry or the closure of some plants within the industry, or a combination of the two, is dependent on the cost and profit structure of individual firms within the industry.
      If demand is perfectly inelastic (i.e., the price elasticity of demand is zero), then the impact of compliance costs that are one percent of revenues for each firm in the industry would be a one percent increase in the price of the product, with no decline in quantity demanded.  Such a situation represents an extreme case, but might be observed in situations in which there were few, if any, substitutes for the product in question, or if the products of the affected sector account for only a very small portion of the revenue or income of its customers.
      If the demand is perfectly elastic (i.e., the price elasticity of demand is infinitely large), then no increase in price is possible and before-tax profits would be reduced by an amount equal to the costs of compliance (net of any cost savings -- such as reduced workers' compensation insurance premiums -- resulting from the proposed standard) if the industry attempted to maintain production at the same level as previously.  Under this scenario, if the costs of compliance are such a large percentage of profits that some or all plants in the industry could no longer operate in the industry with hope of an adequate return on investment, then some or all of the firms in the industry would close.  This scenario is highly unlikely to occur, however, because it can only arise when there are other products -- unaffected by the proposed rule -- that are, in the eyes of their customers, perfect substitutes for the products the affected establishments make.
	A commonly-discussed intermediate case would be a price elasticity of demand of one.  In this situation, if the costs of compliance amount to one percent of revenues, then production would decline by one percent and prices would rise by one percent.  As a result, industry revenues would remain the same, with somewhat lower production, but with similar profit rates per unit of output (in most situations where the marginal costs of production net of regulatory costs would fall as well).  Customers would, however, receive less of the product for their (same) expenditures, and firms would have lower total profits; this, as the court described in Am. Dental Ass'n v. Sec'y of Labor, is the more typical case.
Variable Costs Versus Fixed Costs
      A decline in output as a result of an increase in price may occur in a variety of ways: individual establishments could each reduce their levels of production; some marginal plants could close; or, in the case of an expanding industry, new entry may be delayed until demand equals supply.   In some situations, there could be a combination of these three effects.  Which possibility is most likely depends on the form that the costs of the regulation take.  If the costs are variable costs (i.e., costs that vary with the level of production at a facility), then economic theory suggests that any reductions in overall output will be the result of reductions in output at each affected facility, with few, if any, plant closures.  If, on the other hand, the costs of a regulation primarily take the form of fixed costs (i.e., costs that do not vary with the level of production at a facility), then reductions in overall output are more likely to take the form of plant closures or delays in new entry.
      Most of the costs of this regulation, as estimated in Chapter V of this PEA, are variable costs in the sense that they will tend to vary by production levels and/or employment levels. Almost all of the major costs of program elements, such as medical surveillance and training, will vary in proportion to the number of employees (which is a rough proxy for the amount of production).  Exposure monitoring costs will vary with the number of employees, but do have some economies of scale to the extent that a larger firm need only conduct representative sampling rather than sample every employee. Finally, the costs of operating and maintaining engineering controls tend to vary by usage -- which typically closely tracks the level of production and are not fixed costs in the strictest sense.
      This leaves two kinds of costs that are, in some sense, fixed costs -- capital costs of engineering controls and certain initial costs.  The capital costs of engineering controls due to the standard -- many of which are scaled to production and/or employment levels -- constitute a relatively small share of the total costs, representing 10 percent of total annualized costs (or approximately $870 per year per affected establishment).
      Some ancillary provisions require initial costs that are fixed in the sense that they do not vary by production activity or the number of employees.  Some examples are the costs to develop a training plan for general training not currently required and to develop a written exposure control plan.
      As a result of these considerations, OSHA expects it to be quite likely that any reductions in total industry output would be due to reductions in output at each affected facility rather than as a result of plant closures.  However, closures of some marginal plants or poorly performing facilities are always possible.
Economic Feasibility Screening Analysis
      To determine whether a rule is economically feasible, OSHA begins with two screening tests to consider minimum threshold effects of the rule under two extreme cases:  (1) all costs are passed through to customers in the form of higher prices (consistent with a price elasticity of demand of zero), and (2) all costs are absorbed by the firm in the form of reduced profits (consistent with an infinite price elasticity of demand).
      In the former case, the immediate impact of the rule would be observed in increased industry revenues.  While there is no hard and fast rule, in the absence of evidence to the contrary, OSHA generally considers a standard to be economically feasible for an industry when the annualized costs of compliance are less than a threshold level of one percent of annual revenues.  Retrospective studies of previous OSHA regulations have shown that potential impacts of such a small magnitude are unlikely to eliminate an industry or significantly alter its competitive structure, particularly since most industries have at least some ability to raise prices to reflect increased costs, and normal price variations for products typically exceed three percent a year.
      In the latter case, the immediate impact of the rule would be observed in reduced industry profits. OSHA uses the ratio of annualized costs to annual profits as a second check on economic feasibility. Again, while there is no hard and fast rule, in the absence of evidence to the contrary, OSHA generally considers a standard to be economically feasible for an industry when the annualized costs of compliance are less than a threshold level of ten percent of annual profits.  In the context of economic feasibility, the Agency believes this threshold level to be fairly modest, given that normal year-to-year variations in profit rates in an industry can exceed 40 percent or more.  OSHA's choice of a threshold level of ten percent of annual profits is low enough that even if, in a hypothetical worst case, all compliance costs were upfront costs, then upfront costs -- assuming a three percent discount rate and a ten-year time period -- would be no more than 89 percent of first-year profits and thus would be affordable from profits without resort to credit markets.  If the threshold level were first-year costs of ten percent of annual profits, firms could even more easily expect to cover first-year costs at the threshold level out of current profits without having to access capital markets and otherwise being threatened with short-term insolvency.
      In general, because it is usually the case that firms would be able to pass on to their customers some or all of the costs of the proposed rule in the form of higher prices, OSHA will tend to give much more weight to the ratio of industry costs to industry revenues than to the ratio of industry costs to industry profits.  However, if costs exceed either the threshold percentage of revenue or the threshold percentage of profits for an industry, or if there is other evidence of a threat to the viability of an industry because of the proposed standard, OSHA will examine the effect of the rule on that industry more closely.  Such an examination would include market factors specific to the industry, such as normal variations in prices and profits, and any special circumstances, such as close domestic substitutes of equal cost, which might make the industry particularly vulnerable to a regulatory cost increase.
      The preceding discussion focused on the economic viability of the affected industries in their entirety.  However, even if OSHA found that a proposed standard did not threaten the survival of affected industries, there is still the question of whether the industries' competitive structure would be significantly altered.  For example, if the annualized costs of an OSHA standard were equal to ten percent of an industry's annual profits, and the price elasticity of demand for the products in that industry were equal to one, then OSHA would not expect the industry to go out of business.  However, if the increase in costs were such that most or all small firms in that industry would have to close, it might reasonably be concluded that the competitive structure of the industry had been altered.  For this reason, OSHA also calculates compliance costs by size of firm and conducts its economic feasibility screening analysis for small and very small entities.
Regulatory Flexibility Screening Analysis
      The Regulatory Flexibility Act (RFA), Pub. L. No. 96-354, 94 Stat. 1164 (codified at 5 U.S.C. 601), requires Federal agencies to consider the economic impact that a proposed rulemaking will have on small entities.  The RFA states that whenever a Federal agency is required to publish general notice of proposed rulemaking for any proposed rule, the agency must prepare and make available for public comment an initial regulatory flexibility analysis (IRFA).  5 U.S.C. 603(a). Pursuant to section 605(b), in lieu of an IRFA, the head of an agency may certify that the proposed rule will not have a significant economic impact on a substantial number of small entities.  A certification must be supported by a factual basis.  If the head of an agency makes a certification, the agency shall publish such certification in the Federal Register at the time of publication of general notice of proposed rulemaking or at the time of publication of the final rule.  5 U.S.C. 605(b).
      To determine if the Assistant Secretary of Labor for OSHA can certify that the proposed beryllium rule will not have a significant economic impact on a substantial number of small entities, the Agency has developed screening tests to consider minimum threshold effects of the proposed rule on small entities.  These screening tests do not constitute hard and fast rules and are similar in concept to those OSHA developed above to identify minimum threshold effects for purposes of demonstrating economic feasibility.
      There are, however, two differences.  First, for each affected industry, the screening tests are applied, not to all establishments, but to small entities (defined as "small business concerns" by SBA) and also to very small entities (as defined by OSHA as businesses with fewer than 20 employees).  Second, although OSHA's regulatory flexibility screening test for revenues also uses a minimum threshold level of annualized costs equal to one percent of annual revenues, OSHA has established a minimum threshold level of annualized costs equal to five percent of annual profits for the average small entity or very small entity.  The Agency has chosen a lower minimum threshold level for the profitability screening analysis and has applied its screening tests to both small entities and very small entities in order to ensure that certification will be made, and an IRFA will not be prepared, only if OSHA can be highly confident that a proposed rule will not have a significant economic impact on a substantial number of small entities or very small entities in any affected industry.
	Furthermore, certification will not be made, and an IRFA will be prepared, if OSHA believes the proposed rule might otherwise have a significant economic impact on a substantial number of small entities, even if the minimum threshold levels are not exceeded for revenues or profitability for small entities or very small entities in all affected industries.

IMPACTS ON AFFECTED INDUSTRIES
	In this section, OSHA applies its screening criteria and other analytic methods, as needed, to determine (1) whether the proposed rule is economically feasible for all affected industries within the scope of this proposed rule, and (2) whether the Agency can certify that the proposed rule will not have a significant economic impact on a substantial number of small entities.
Economic Feasibility Screening Analysis:  All Establishments
	Earlier chapters of this PEA identified the application groups potentially affected by the proposed rule; presented summary profile data for affected industries, including the number of affected entities and establishments, the number of at-risk workers, and average revenue for affected entities and establishments; and developed estimates, by affected industry, of the costs of the proposed rule.  Obviously, the economic impacts of the proposed rule are driven, in part, by the costs of additional control measures, respirators, and ancillary beryllium program activities needed to comply with the proposed rule.
      To determine whether the proposed rule's projected costs of compliance would threaten the economic viability of affected industries, OSHA first compared, for each affected industry, annualized compliance costs to annual revenues and profits per (average) affected establishment.  The results for all affected establishments in all affected industries are presented in Table VI-1.    Shown in the table for each affected industry are the total number of establishments, the total number of affected establishments, annualized costs per affected establishment, annual revenues per establishment, the profit rate, annual profits per establishment, annualized compliance costs as a percentage of annual revenues, and annualized compliance costs as a percentage of annual profits.
	The annualized costs per affected establishment for each affected industry were calculated by distributing the industry-level (incremental) annualized compliance costs among all affected establishments in the industry, where annualized compliance costs reflect a 3 percent discount rate.  The annualized cost of the proposed rule for the average affected establishment is estimated at $9,197 in 2010 dollars.  It is clear from Table VI-1 that the estimates of the annualized costs per affected establishment vary widely from industry to industry.  These estimates range from $1,257,214 for NAICS 331419 (Beryllium Production) and $120,372 for NAICS 327113a (Porcelain Electrical Supply Manufacturing (primary)) to $1,636 for NAICS 621210 (Offices of Dentists) and $1,632 for NAICS 339116 (Dental Laboratories).

      Based on analyses performed by OSHA's contractor (ERG, 2013), the Agency estimated revenues on a six-digit NAICS basis by applying revenue data from the Census Bureau's Statistics of U.S. Businesses for 2010 (U.S. Census Bureau, 2010). Although that data source from the Census Bureau provides annual industry-specific estimates of employment, establishments, firms, and payroll, revenue data are published only for years that coincide with the Economic Census (U.S. Census Bureau, 2007).  Revenues for 2010 were estimated by extrapolating the 2007 revenue data based on the assumption that the ratio of revenues to payroll for each industry would remain consistent over that time period.  The 2010 revenues were distributed among size categories (all entities, small entities, very small entities) in accordance with the proportion of total payroll found in those categories within each industry.
      Before-tax profit rates were estimated using corporate balance sheet data from the Internal Revenue Service's Corporation Source Book (IRS, 2010).  Profit rates as the ratio of total receipts to net income were calculated for each of the years 2002 through 2009 for each NAICS industry and averaged across the eight-year period.  Since some data provided by the IRS were not available at disaggregated levels for all industries and profit rates, data at more highly aggregated levels were used as proxy for such industries -- that is, where data were not available for each six-digit NAICS code, corresponding 4- and 5-digit NAICS codes were used as appropriate.
      As previously discussed, OSHA has established a minimum threshold level of annualized costs equal to one percent of annual revenues -- and, secondarily, annualized costs equal to ten percent of annual profits -- below which the Agency has concluded that costs are unlikely to threaten the economic viability of an affected industry.  The results of OSHA's threshold tests for all affected establishments are displayed in Table V-1. For all affected establishments, the estimated annualized cost of the proposed rule is, on average, equal to 0.11 percent of annual revenue and 1.52 percent of annual profit.
      As Table VI-1 shows, there are no industries in which the annualized costs of the proposed rule exceed one percent of annual revenues.  However there are three six-digit NAICS industries where annualized costs exceed ten percent of annual profits.
      NAICS 331525 (Copper foundries except die-casting) has the highest cost impact as a percentage of profits.  NAICS 331525 is made up of two types of copper foundries: sand casting foundries and non-sand casting foundries, incurring an annualized cost as a percent of profit of 16.25 percent and 14.92 percent, respectively.  The other two six-digit NAICS industries where annualized costs exceed ten percent of annual profits are NAICS 331534: Aluminum foundries (except die-casting), 13.65 percent; and NAICS 811310: Commercial and industrial machinery and equipment repair, 10.19 percent.
      OSHA believes that the beryllium-containing inputs used by these industries have a relatively inelastic demand for three reasons.  First, beryllium has rare and unique characteristics, including low mass, high melting temperature, dimensional stability over a wide temperature range, strength, stiffness, light weight, and high elasticity ("springiness") that can significantly improve the performance of various alloys.  These characteristics cannot easily be replicated by other materials. In economic terms, this means that the elasticity of substitution between beryllium and non-beryllium inputs will be low.  Second, products which contain beryllium or beryllium-alloy components typically have high-performance applications (whose performance depends on the use of higher-cost beryllium).  The lack of available competing products with these performance characteristics suggests that the price elasticity of demand for products containing beryllium or beryllium-alloy components will be low.  Third, components made of beryllium or beryllium-containing alloys typically account for only a small portion of the overall cost of the finished goods that these parts are used to make.  For example, the cost of brakes made of a beryllium-alloy used in the production of a jet airplane represents a trivial percentage of the overall cost to produce that airplane.  As economic theory indicates, the elasticity of derived demand for a factor of production (such as beryllium) varies directly with the elasticity of substitution between the input in question and other inputs; the price elasticity of demand for the final product that the input is used to produce; and, in general, the share of the cost of the final product that the input accounts for.  Applying these three conditions to beryllium points to the relative inelastic derived demand for this factor of production and the likelihood that cost increases resulting from the proposed rule would be passed on to the consumer in the form of higher prices.
      A secondary point is that the establishments in an industry that use beryllium may be more profitable than those that don't.  This follows from the prior arguments about beryllium's rare and desirable characteristics and its valuable applications.  For example, of the 208 establishments that make up NAICS 331525, OSHA estimated that 45 establishments (or 21 percent) work with beryllium.  Of the 394 establishments that make up NAICS 331524, OSHA estimated that only 7 establishments (less than 2 percent) work with beryllium. Of the 21,960 establishments that make up NAICS 811310, OSHA estimated that 143 (0.7 percent) work with beryllium.  However, when OSHA calculated the cost-to-profit ratio, it used the average profit per firm for the entire NAICs industry, not the average profit per firm for firms working with beryllium.
Normal Year-to-Year Variations in Prices and Profit Rates

      The United States has a dynamic and constantly changing economy in which an annual percentage increase in industry revenues or prices of one percent or more are common.  Examples of year-to-year changes in an industry that could cause such an increase in revenues or prices include increases in fuel, material, real estate, or other costs; tax increases; and shifts in demand.
	To demonstrate the normal year-to-year variation in prices for all the manufacturers in general industry affected by the proposed rule, OSHA developed Table VI-2, which shows year-to-year producer price indices from 1999-2010 (which are the most current data available), and Table VI-3, which shows year-to-year percentage changes in producer prices, by industry, over that time period.  For all of the industries estimated to be affected by this proposed standard over the 12-year period, Table VI-3 shows an average change in producer prices of  4.4 percent a year -- which is over 4 times as high as OSHA's 1 percent cost-to-revenue threshold.  For the industries found to have the largest estimated potential annual cost impact as a percentage of revenue in Table VI-1 -- NAICS 331524: Aluminum Foundries (except Die-Casting), (0.71 percent); NAICS 331525(a and b): Copper Foundries (except Die-Casting) (weighted average of 0.82 percent); NAICS 332721a: Precision Turned Product Manufacturing of high content beryllium  (0.49 percent); and NAICS 811310: Commercial and Industrial Machinery and Equipment (Except Automotive and Electronic) Repair and Maintenance (0.55 percent) -- the data in Table VI-3 show that the average annual changes in producer prices in these industries over the 12-year period analyzed were 3.1 percent, 8.2 percent, 3.6 percent and 2.3 percent, respectively.
	Based on these data, it is clear that the potential price impacts of the proposed rule in affected industries are all well within normal year-to-year variations in prices in those industries.  The maximum cost impact of the proposed rule as a percentage of revenue in any affected industry is 0.85 percent, while, as just noted, the average annual change in producer prices for affected industries was 4.4 percent for the period 1999-2010.  Furthermore, even a casual examination of Table VI-3 reveals that annual changes in producer prices in excess of 5 percent or even 10 percent are possible without threatening an industry's economic viability.  In fact, in two of the industries within the secondary smelting, refining, and alloying group, for example, prices rose over 60 percent in one year without imperiling the existence of those industries.  Thus, OSHA preliminarily concludes that the potential price impacts of the proposal would not threaten the economic viability of any industries affected by this proposed standard.

	Profit rates are also subject to the dynamics of the U.S. economy.  A recession, a downturn in a particular industry, foreign competition, or the increased competitiveness of producers of close domestic substitutes are all easily capable of causing a decline in profit rates in an industry of well in excess of ten percent in one year or for several years in succession.
      To demonstrate the normal year-to-year variation in profit rates for all the manufacturers affected by the proposed rule, OSHA developed Table VI-4 and Table VI-5, which show, respectively, year-to-year profit rates and year-to-year percentage changes in profit rates, by industry, for the years 2002 - 2009.  For the industries that OSHA has estimated will be affected by this proposed standard over the 8-year period, the average change in profit rates is calculated to be 39 percent per year (average for all industries calculated from the per-NAICS averages shown in Table VI-5).  For the industries with the largest estimated potential annual cost impacts as a percentage of profit -- NAICS 331524: Aluminum foundries (except die-casting), (14 percent); NAICS 331525(a and b): Copper foundries (except die-casting) (16 percent); NAICS 332721a: Precision Turned Product Manufacturing of high content beryllium (8 percent); and NAICS 811310 Commercial and Industrial Machinery and Equipment (Except Automotive and Electronic) Repair and Maintenance (10 percent) -- the average annual changes in profit rates in these industries over the eight-year period were 35 percent, 35 percent, 11 percent, and 5 percent, respectively.
	One complicating factor in analyzing how the proposed rule would affect the industries within the rule's scope is that the annualized costs of the proposed rule, if absorbed in lost profits, would involve not a temporary loss of profits but a longer-term negative effect on profits, relative to the baseline, over the annualization period.  To address this issue, the Agency compared the effect of a longer-term reduction in profits to much larger reductions in profits but over shorter periods.  Assuming a three-percent discount rate, the Agency determined a ten percent decline in profit rates relative to the original baseline, which remains constant at that lower level over a ten-year period, would be equivalent to:
   * an 88.5 percent decline in profit rates for one year;
   * a 44.5 percent decline in profit rates that remains constant at the lower level for two years; or
   * a 30 percent decline in profit rates that remains constant at the lower level for three years.
Keep in mind that this exercise shows a reduction in profit rates, not the elimination of profits.  Table VI-5, for the eight-year period from 2002 to 2009, clearly shows that short-run reductions in average industry profit rates of the above magnitudes -- that is, that satisfy at least one of the three equivalent conditions described above -- have occurred on numerous occasions in the industries affected by this proposed standard, presumably without threatening their economic viability.  For this reason, OSHA feels confident that potential profit rate impacts of 10 percent or less as a result of the proposed rule would not threaten the economic viability of the affected industries.
      A longer-term loss of profits in excess of 10 percent a year could be more problematic for some affected industries and might conceivably, under sufficiently adverse circumstances, threaten an industry's economic viability.  However, as previously discussed, OSHA's analysis indicates that affected industries would generally not absorb the costs of the proposed rule in reduced profits but, instead, would be able to pass on most or all of those costs in the form of higher prices (due to the relative price inelasticity of demand for beryllium and beryllium-containing inputs).  It is possible that such price increases will result in some reduction in output, and the reduction in output might be met through the closure of a small percentage of the plants in the industry.  The only realistic circumstance where an entire industry would be significantly affected by small potential price increases would be where there is a very close or perfect substitute product available not subject to OSHA regulation.  In most cases where beryllium is used, there is no substitute product that could be used in place of beryllium and achieve the same level of performance.  The main potential concern would be substitution by foreign competition, but the following discussion reveals why such competition is not likely.
International Trade Effects

      World production of beryllium is a thin market, with only a handful of countries known to process beryllium ores and concentrates into beryllium products, and characterized by a high degree of variation and uncertainty.  The United States accounts for approximately 65 percent of world beryllium deposits and 90 percent of world production, but there is also a significant stockpiling of beryllium materials in Kazakhstan, Russia, China, and possibly other countries (USGS, 2013a).  For the individual years 2008-2012, the United States' net import reliance as a percentage of apparent consumption (that is, imports minus exports net of industry and government stock adjustments) ranged from 10 percent to 61 percent (USGS, 2013b).  To assure an adequate stockpile of beryllium materials to support national defense interests, the U.S. Department of Defense, in 2005, under the Defense Production Act, Title III, invested in a public-private partnership with the leading U.S. beryllium producer to build a new $90.4 million primary beryllium facility in Elmore, Ohio.  Construction of that facility was completed in 2011 (USGS, 2013b).
      One factor of importance to firms working with beryllium and beryllium alloys is to have a reliable supply of beryllium materials.  U.S. manufacturers can have a relatively high confidence in the availability of beryllium materials relative to manufacturers in many foreign countries, particularly those that do not have economic or national security partnerships with the United States.
      Firms using beryllium in production must consider not just the cost of the chemical itself but also the various regulatory costs associated with the use, transport, and disposal of the material.    For example, for marine transport, metallic beryllium powder and beryllium compounds are classified by the International Maritime Organization (IMO) as poisonous substances, presenting medical danger.  Beryllium is also classified as flammable.  The United Nations classification of    beryllium and beryllium compounds for the transport of dangerous goods is "poisonous substance" and, for packing, a "substance presenting medium danger" (World Health Organization, 1990).  Because of beryllium's toxicity, the material is subject to various workplace restrictions as well as international, national, and State requirements and guidelines regarding beryllium content in environmental media (USGS, 2013a).
      As the previous discussion indicates, the production and use of beryllium and beryllium alloys in the United States and foreign markets appears to depend on the availability of production facilities; beryllium stockpiles; national defense and political considerations; regulations limiting the shipping of beryllium and beryllium products; international, national, and State regulations and guidelines regarding beryllium content in environmental media; and, of course, the special performance properties of beryllium and beryllium alloys in various applications.  Relatively small changes in the price of beryllium would seem to have a minor effect on the location of beryllium production and use.  In particular, as a result of this proposed rule, OSHA would expect that, if all compliance costs were passed through in the form of higher prices, a price increase of 0.11 percent, on average, for firms manufacturing or using beryllium in the United States -- and not exceeding 1 percent in any affected industry -- would have a negligible effect on foreign competition and would therefore not threaten the economic viability of any affected domestic industries.

Economic Feasibility Screening Analysis:  Small and Very Small Businesses
      The preceding discussion focused on the economic viability of the affected industries in their entirety.  Even though OSHA found that the proposed standard did not threaten the survival of these industries, there is still the possibility that the competitive structure of these industries could be significantly altered such as by small entities exiting from the industry as a result of the proposed standard.
      To address this possibility, OSHA examined the annualized costs of the proposed standard per affected small entity, and per affected very small entity, for each affected industry.  Again, OSHA used a minimum threshold level of annualized compliance costs equal to one percent of annual revenues -- and, secondarily, annualized compliance costs equal to ten percent of annual profits -- below which the Agency has concluded that the costs are unlikely to threaten the survival of small entities or very small entities or, consequently, to alter the competitive structure of the affected industries.
      Based on the results presented in Table VI-6, the annualized cost of compliance with the proposed rule for the average affected small entity is estimated to be $8,108 in 2010 dollars.  Based on the results presented in Table VI-7, the annualized cost of compliance with the proposed rule for the average affected very small entity is estimated to be $1,955 in 2010 dollars.  These tables also show that there are no industries in which the annualized costs of the proposed rule for small entities or very small entities exceed one percent of annual revenues.   NAICS 331525b: Sand Copper Foundries (except die-casting) has the highest estimated cost impact as a percentage of revenues for small entities, 0.95 percent, and NAICS 336322b: Other motor vehicle electrical and electronic equipment has the highest estimated cost impact as a percentage of revenues for very small entities, 0.70 percent.
      Small entities in four industries -- NAICS 331525: Sand and non-sand foundries (except die-casting); NAICS 331524(a and b): Aluminum foundries (except die-casting); NAICS 811310: Commercial and Industrial Machinery and Equipment; and NAICS 331522: Nonferrous (except aluminum) die-casting foundries -- have annualized costs in excess of 10 percent of annual profits (17.45 percent, 16.12 percent, 11.68 percent, and 10.64 percent, respectively). Very small entities in seven industries are estimated to have annualized costs in excess of 10 percent of annual profit: NAICS 336322b: Other motor vehicle electrical and electronic equipment (38.49 percent); NAICS 336322a: Other motor vehicle electrical and electronic equipment, (18.18 percent); NAICS 327113: Porcelain electrical Supply Manufacturing (13.82 percent); NAICS 811310: Commercial and Industrial Machinery and Equipment (Except Automotive and Electronic) Repair and Maintenance (12.76 percent); NAICS 332721a: Precision turned product manufacturing (10.50 percent); NAICS 336214: Travel trailer and camper manufacturing (10.75 percent); and NAICS 336399: All other motor vehicle parts manufacturing (10.38 percent).
      In general, cost impacts for affected small entities or very small entities will tend to be somewhat higher, on average, than the cost impacts for the average business in those affected industries.  That is to be expected. After all, smaller businesses typically suffer from diseconomies of scale in many aspects of their business, leading to less revenue per dollar of cost and higher unit costs.  Small businesses are able to overcome these obstacles by providing specialized products and services, offering local service and better service, or otherwise creating a market niche for themselves.  The higher cost impacts for smaller businesses estimated for this rule -- other than very small entities in NAICS 336322b: Other motor vehicle electrical and electronic equipment -- generally fall within the range observed in other OSHA regulations and, as verified by OSHA's lookback reviews, have not been of such a magnitude to lead to the economic failure of regulated small businesses.
      The ratio of annualized costs to annual profit is a sizable 38.49 percent in NAICS 336322b: Other motor vehicle electrical and electronic equipment.  However, OSHA believes that the actual ratio is significantly lower.  There are 386 very small entities in NAICS 336322, of which only 6, or 1.5 percent, are affected entities using beryllium. When OSHA calculated the cost-to-profit ratio, it used the average profit per firm for the entire NAICs industry, not the average profit rate for firms working with beryllium. The profit rate for all establishments in NAICS 336322b was estimated at 1.83 percent. If, for example, the average profit rate for a very small entity in NAICS 336322b were equal to 5.95 percent, the average profit rate for its application group, Beryllium Oxide Ceramics and Composites, then the ratio of the very small entity's annualized cost of the proposed rule to its annual profit would actually be 11.77 percent.  OSHA tentatively concludes the 6 establishments in the NAICS specializing in beryllium production will have a higher than average profit rate and will be able to pass much of the cost onto the consumer for three main reasons: (1) the absence of substitutes containing the rare performance characteristics of beryllium; (2) the relative price insensitivity of (other) motor vehicles containing the special performance characteristics of beryllium and beryllium alloys; and (3) the fact that electrical and electronic components made of beryllium or beryllium-containing alloys typically account for only a small portion of the overall cost of the finished (other) motor vehicles.  The annualized compliance cost to annual revenue ratio for NAICS 336332b is 0.70 percent, 0.30 percent below the 1 percent threshold.  Based on OSHA's past experience, price increases of this magnitude have not historically been associated with the economic failure of small businesses.

Regulatory Flexibility Screening Analysis
      To determine if the Assistant Secretary of Labor for OSHA can certify that the proposed beryllium standard will not have a significant economic impact on a substantial number of small entities, the Agency has developed screening tests to consider minimum threshold effects of the proposed standard on small entities.  The minimum threshold effects for this purpose are annualized costs equal to one percent of annual revenues, and annualized costs equal to five percent of annual profits, applied to each affected industry.  OSHA has applied these screening tests both to small entities and to very small entities.  For purposes of certification, the threshold level cannot be exceeded for affected small entities or very small entities in any affected industry.
      Tables VI-6 and Table VI-7, presented above, show that the annualized costs of the proposed standard do not exceed one percent of annual revenues for affected small entities or affected very small entities in any affected industry.  These tables also show that the annualized costs of the proposed standard exceed five percent of annual profits for affected small entities in 12 industries and for affected very small entities in 30 industries. OSHA is therefore unable to certify that the proposed standard will not have a significant economic impact on a substantial number of small entities and must prepare an Initial Regulatory Flexibility Analysis (IRFA).  The IRFA is presented in Chapter IX of this PEA.

REFERENCES
BLS (Bureau of Labor Statistics), 2010.  Producer Price Index Program. http://www.bls.gov/ppi/.

ERG (Eastern Research Group), 2007.  Rulemaking Support for Supplemental Economic Feasibility Data for a Preliminary Economic Impact Analysis of a Proposed Crystalline Silica Standard; Updated Cost and Impact Analysis of the Draft Crystalline Silica Standard for General Industry. Task Report.  Submitted to Occupational Safety And Health Administration, Directorate of Evaluation and Analysis, Office of Regulatory Analysis under Task Order 11, Contract No. DOLJ049F10022. April 20, 2007.

ERG (Eastern Research Group), 2013..  Revised Excel Spreadsheet Support for OSHA's Preliminary Economic Analysis for Proposed Respirable Crystalline Silica Standard: Excel Spreadsheets of Economic Costs and Impacts.  Submitted to Occupational Safety and Health Administration, Directorate of Standards and Guidance, Office of Regulatory Analysis under Task Order 34, Contract No. GS-10F-0125P, May 2013. OSHA Docket No. OSHA-2010-0034-1781.

IRS (U.S. Internal Revenue Service), 2007. Corporation Source Book, 2006. http://www.irs.gov/uac/SOI-Tax-Stats-Corporation-Source-Book-Statistical-Tables-2009-All-Sectors , Accessed by ERG, 2009.

IRS (U.S. Internal Revenue Service), 2010.  Corporation SourceBook, 2010. http://www.irs.gov/uac/SOI-Tax-Stats-Corporation-Source-Book:-U.S.-Total-and-Sectors-Listing,  Accessed by ERG, 2013.

Layard, P.R.G., and A.A. Walters,  1978.  Microeconomic Theory, McGraw-Hill: New York.

U.S. Census Bureau, 2007.  County Business Patterns, 2007.

U.S. Census Bureau, 2010.  County Business Patterns, 2010.

USGS (United States Geological Survey), 2013a. 2011 Minerals Yearbook: Beryllium [Advance Release]. Available at: http://minerals.usgs.gov/minerals/pubs/commodity/beryllium/myb1-2011-beryl.pdf

USGS (United States Geological Survey), 2013b. Mineral Commodity Summaries. [Online]. Available at http://minerals.usgs.gov/minerals/pubs/mcs/2013/mcs2013.pdf

World Health Organization, 1990.  International Programme on Chemical Safety (IPCS 1990). Beryllium: health and safety guide. No. 44. [online]. Available at: http://www.inchem.org/documents/hsg/hsg/hsg044.htm#SectionNumber:7.3.

                                 Appendix VI-A

Screening Analysis for Establishments Affected by the Proposed Beryllium Standard (Applying Alternative Discount Rates of 7% and 0%)

                                 Appendix VI-B

Screening Analysis for Small Businesses Affected by the Proposed Beryllium Standard (Applying Alternative Discount Rates of 7% and 0%)

                                 Appendix VI-C

Screening Analysis for Very Small Businesses Affected by the Proposed Beryllium Standard (Applying Alternative Discount Rates of 7% and 0%)

CHAPTER VII:  BENEFITS AND NET BENEFITS
INTRODUCTION
      In this chapter, OSHA estimates the benefits and net benefits of the proposed beryllium rule.
      This chapter proceeds in five steps.  The first step estimates the numbers of diseases and deaths prevented by comparing the current (baseline) situation to a world in which the proposed PEL is adopted in a final standard to which employees are exposed throughout their working lives.  The second step also assumes that the proposed PEL is adopted, but uses the results from the first step to estimate what would happen under a more realistic scenario in which employees have been exposed for varying periods of time to the baseline situation and will thereafter be exposed to the new PEL.
      The third step covers the monetization of benefits.  Then, in the fourth step, OSHA estimates the net benefits and incremental benefits of the proposed rule by comparing the monetized benefits to the costs presented in Chapter V of this PEA.  The models underlying each step inevitably need to make a variety of assumptions based on limited data.  In the fifth step, OSHA provides a sensitivity analysis to explore the robustness of the estimates of net benefits with respect to many of the assumptions made in developing and applying the underlying models.  OSHA invites comments on each aspect of the data and methods used in this chapter.  Because dental labs constitute a significant source of both costs and benefits to the rule (over 40 percent), OSHA is particularly interested in comments regarding the appropriateness of the model, assumptions, and data to estimating the benefits to workers in that industry.
      OSHA has added to the docket the spreadsheets used to calculate the estimates of benefits outlined below (OSHA, 2015a).  Those interested in exploring the details and methodology of OSHA benefits analysis, such as how the life table referred to below was developed and applied, should consult those spreadsheets.

STEP 1 - Estimation of the Steady-state Number of Beryllium-Related Diseases Avoided
      Methods of Estimation
      This section covers the first step in OSHA's development of the benefits analysis -- comparing the situation in which employees continue to be at baseline exposure levels for their entire working lives to the situation in which all employees have been exposed at a given PEL for their entire working lives.  This is a comparison of two steady-state situations.   To do this, OSHA must estimate both the risk associated with the baseline exposure levels and the risk following the promulgation of a new beryllium standard. OSHA's approach assumes for inputs such as the turnover rate and the exposure response function that they are similar across all workers exposed to beryllium, regardless of industry.
      An exposure-response model, discussed below, is used to estimate a worker's risk of beryllium-related disease based on the worker's cumulative beryllium exposure.  The Agency used a lifetime risk model to estimate the baseline risk and the associated number of cases for the various disease endpoints.  A lifetime risk model explicitly follows a worker each year, from work commencement onwards, accumulating the worker's beryllium exposure in the workplace and estimating outcomes each year for the competing risks that can occur. To go from exposure to number of cases, the Agency needs to estimate an exposure-response relationship, and this is discussed below. The possible outcomes are no change, or the various health endpoints OSHA has considered (beryllium sensitization, CBD, lung cancer, and the mortality associated with these endpoints).   As part of the estimation discussion, OSHA will mention specific parameters used in some of the estimation methods, but will further discuss how these parameters were derived later in this section.
      The baseline lifetime risk model is the most complicated part of the analysis. The Agency only needs to make relatively simple adjustments to this model to reflect changes in activities and conditions due to the standard, which, working through the model, then lead to changes in relevant health outcomes.  There are three channels by which the standard generates benefits. First are estimated benefits due to the lowering of the PEL.  Second are estimated benefits with further exposure reductions from the substitution of non-beryllium for beryllium-containing materials, ending workers' beryllium exposures entirely. This potential source of benefits is particularly significant with respect to OSHA' s assumptions for how dental labs are likely to reduce exposures (see below).  Finally, the model estimates benefits due to the ancillary programs that are required by the proposed standard.  The last channel affects CBD and sensitization, endpoints which may be mitigated or prevented with the help of ancillary provisions such as dermal protection and medical surveillance for early detection, and for which the Agency has some information on the effects on risk of ancillary provisions.  The benefits of ancillary provisions are not estimated for lung cancer because the benefits from reducing lung cancer are considered to be the result of reducing airborne exposure only and thus the ancillary provisions will have no separable effect on airborne exposures.  The discussion here will concentrate on CBD as being the most important and complex endpoint, and most illustrative of other endpoints: the structure for other endpoints is the same; only the exposure response functions are different. Here OSHA will discuss first the exposure-response model, then the structure of the year-to-year changes for a worker, then the estimated exposure distribution in the affected population and the risk model with the lowering of the PEL, and, last, the other adjustments for the ancillary benefits and the substitution benefits.
      The exposure response model is designed to translate beryllium exposure to risk of adverse health endpoints.  In the case of beryllium sensitization and CBD, the Agency uses the cumulative exposure data from a beryllium manufacturing facility.  Specifically, OSHA uses the quartile data from the Cullman plant that are presented in Table VI-7 of the Preliminary Risk Assessment in the preamble.  The raw data from this study show cases of CBD with cumulative exposures that would represent an average exposure level of less than 0.1 ug/m[3] if exposed for ten years; show cases of CBD with exposures lasting less than one year; and show cases of CBD with actual average exposure of less than 0.1 ug/m[3].
      Prevalence is defined as the percentage of persons with a condition in a population at a given point in time.  The quartile data in Table VI-7 are prevalence percentages (the number of cases of illness documented over several years in the 319 person cohort from the Cullman plant) at different cumulative exposure levels.  The Cullman data do not cover persons who left the work force or what happened to persons who remained in the workforce after the study was completed.   For the lifetime risk model, the prevalence percentages will be translated into incidence percentages -- the estimated number of new cases predicted to occur each year.   For this purpose OSHA assumed that the incidence for any given cumulative exposure level is constant from year to year and continues after exposure ceases.
      To calculate incidence from prevalence, OSHA assumed a steady state in which both the size of the beryllium-exposed affected population, exposure concentrations during employment and prevalence are constant over time.  If these conditions are met, and turnover among workers with a condition is equal to turnover for workers without a condition, then the incidence rate will be equal to the turnover rate multiplied by the prevalence rate.  If the turnover rate among persons with a condition is higher than the turnover rate for workers without the condition, then this assumption will underestimate incidence.  This might happen if, in addition to other reasons for leaving work, persons with a condition leave a place of employment more frequently because their disabilities cause them to have difficulty continuing to do the work.  If the turnover rate among persons with a condition is lower than the turnover rate for workers without the condition, then this assumption will overestimate incidence.  This could happen if an employer provides special benefits to workers with the condition, and the employer would cease to provide these benefits if the employee left work.
      To illustrate, if 10 percent of the work force (including 10 percent of those with the condition) leave each year and if the overall prevalence is at 20 percent, then a 2 percent (10 percent times 20 percent) incidence rate will be needed in order to keep a steady 20 percent group prevalence rate each year.  OSHA's model assumes a constant 10 percent turnover rate (see later in this chapter for the rationale for this particular turnover rate).  While turnover rates are not available for the specific set of employees in question, for manufacturing as a whole, the turnover rates are greater than 20 percent, and greater than 30 percent for the economy as a whole (BLS, 2013).  For this analysis, OSHA assumed an effective turnover rate of 10 percent. Different turnover rates will result in different incidence rates.  The lower the turnover rate the lower the estimated incidence rate.  This is a conservative assumption for the industries where turnover rates may be higher.  However, some occupations/industries, such as dental lab technicians, may have lower turnover rates than manufacturing workers.  Additionally, the typical dental technician even if leaving one workplace, has significant likelihood of continuing to work as a dental technician and going to another workplace that uses beryllium.   OSHA welcomes comments on its turnover estimates and on sectors, such as dental laboratories, where turnover may be lower than ten percent.
      Using Table VI-7 of the preliminary risk assessment, when a worker's cumulative exposure is below 0.147 (μg/m[3]-years), the prevalence of CBD is 2.5 percent and so the derived annual risk would be 0.25 percent (0.10 x 2.5 percent). It will stay at this level until the worker has reached a cumulative exposure of 1.468, where it will rise to 0.80 percent.
      The model assumes a maximum 45-year (250 days per year) working life (ages 20 through 65 or age of death or onset of CBD, whichever is earlier) and follows workers after retirement through age 80. The 45-year working life is based on OSHA's legal requirements and is longer than the working lives of most exposed workers.  A shorter working life will be examined later in this section. While employed, the worker accumulates beryllium exposure at a rate depending on where the worker is in the empirical exposure profile presented in Chapter IV (i.e., OSHA calculates a general risk model which depends on the exposure level and then plug in our empirical exposure distribution to estimate the final number of cases of various health outcomes).  Following a worker's retirement, there is no increased exposure, just a constant annual risk resulting from the worker's final cumulative exposure.
      OSHA's model follows the population of workers each year, keeping track of cumulative exposure and various health outcomes. Explicitly, each year the model calculates: the increased cumulative exposure level for each worker versus last year, the incidence at the new exposure level, the survival rate for this age bracket, and the percentage of workers who have not previously developed CBD in earlier years.
      For any individual year, the equation for predicting new cases of CBD for workers at age t is:
      new CBD cases rate(t) =  modeled incidence rate(t) * survival rate(t) * (1- currently have CBD rate(t)), where the variables used are:
       new CBD cases rate(t) is the output variable to be calculated;
      cumulative exposure(t) = cumulative exposure(t-1) + current exposure;
      modeled incidence rate(t) is a function of cumulative exposure; and
      survival rate(t) is the background survival rate from mortality due to other causes in the national population.
      Then for the next year the model updates the survival rate (due to an increase in the worker's age), incidence rate (due to any increased cumulative exposure), and the rate of those currently having CBD, which increases due to the new CBD case rate of the year before. This process then repeats for all 60 years.
      It is important to note that this model is based on the assumption that prevalence is explained by an underlying constant incidence, and as a result, prevalence will be different depending on the average number of years of exposure in the population examined and (though a sensitivity analysis is provided later) on the assumption of a maximum of 45 years of exposure.   OSHA also examined (OSHA 2015c) a model in which prevalence is constant at the levels shown in Table VI-7 of the preliminary risk assessment, with a population age (and thus exposure) distribution estimated based on an assumed constant turnover rate.  OSHA solicits comment on this and other alternative approaches to using the available prevalence data to develop an exposure-response function for this benefits analysis.
      In the next step, OSHA uses its model to take into account the adoption of the lower proposed PEL.  OSHA uses the exposure profile for workers as estimated in Chapter IV of this PEA for each of the various application groups. These exposure profiles estimate the number of workers at various exposure levels, specifically the ranges less than 0.1 ug/m[3], 0.1 to 0.2, 0.2 to 0.5, 0.5 to 1.0, 1.0 to 2.0, and greater than 2.0 ug/m[3]. Translating these ranges into exposure levels for the risk model, the model assumes an average exposure equal to the midpoint of the range, except for the lower end, where it was assumed to be equal to 0.1 ug/m[3], and the upper end, where it was assumed to be equal to 2.0 ug/m[3].
      The model increases the workers' cumulative exposure each year by these midpoints and then plugs these new values into the new case equation.  This alters the incidence rate as cumulative exposure crosses a threshold of the quartile data. So then using the exposure profiles by application group from Chapter IV of this PEA, the baseline exposure flows through the life time risk model to give us a baseline number of cases. Next OSHA calculated the number of cases estimated to occur after the implementation of the proposed PEL of 0.2 ug/m[3]. Here OSHA simply takes the number of workers with current average exposure above 0.2 ug/m[3] and set their exposure level at 0.2 ug/m[3]; all exposures for workers exposed below 0.2 ug/m[3] stay the same.  After adjusting the worker exposure profile in this way, OSHA goes through all the same calculations and obtains a post-standard number of CBD cases. Subtracting estimated post-standard CBD cases from estimated pre-standard CBD cases gives us the number of CBD cases that would be averted due to the proposed change in the PEL.
      Based on these methods, OSHA's estimate of benefits associated with the proposed rule does not include benefits associated with current compliance that have already been achieved with regard to the new requirements, or benefits obtained from future compliance with existing beryllium requirements.  However, available exposure data indicate that few employees are currently exposed above the existing standard's PEL of 2.0 ug/m[3].  To achieve consistency with the cost estimation method in chapter V, all employees in the exposure profile that are above 2.0 ug/m[3] are assumed to be at the 2.0 ug/m[3] level.
      There is also a component that applies only to dental labs.  OSHA has preliminarily assumed, based on the estimates of higher costs for engineering controls than using substitutes presented in the cost chapter, that rather than incur the costs of compliance with the proposed standard, many dental labs are likely to stop using beryllium-containing materials after the promulgation of the proposed standard.  OSHA estimated earlier in this PEA that, for the baseline, only 25 percent of dental lab workers still work with beryllium.   OSHA estimates that, if OSHA adopts the proposed rule, 75 percent of the 25 percent still using beryllium will stop working with beryllium; their beryllium exposure level will therefore drop to zero. OSHA estimates that the 75 percent of workers will not be a random sample of the dental lab exposure profile but instead will concentrate among workers who are currently at the highest exposure levels because it would cost more to reduce those higher exposures into compliance with the proposed PEL. Under this judgment OSHA is estimating that the rule would eliminate all cases of CBD in the 75 percent of dental lab workers with the highest exposure levels.  As discussed in the sensitivity analysis below, dental labs constitute a significant source of both costs and benefits to the rule (over 40 percent), and the extent to which dental laboratories substitute other materials for beryllium has significant effects on the benefits and costs of the rule.  To derive its baseline estimate of cases of CBD in dental laboratories, OSHA 1) estimated baseline cases of CBD  using the existing rate of beryllium use in dental labs without a projection of further substitution; 2) estimated cases of CBD with the proposed regulation using an estimate that 75 percent of the dental labs with higher exposure would switch to other materials and thus eliminate exposure to beryllium; and 3)  the turnover rate in the industry is 10 percent. OSHA welcomes comments on all aspects of the analysis of substitution away from beryllium in the dental laboratories sector.
      Estimation results for both dental labs and non-dental workplaces appear in Table VII-0.
Table VII-0.  CBD case estimates, 45-year totals, baseline and with PEL of 0.2 ug/m[3]

                     Current beryllium exposure (ug/m[3])
                                     Total

                                   < 0.1
                                  0.1  -  0.2
                                  0.2  -  0.5
                                  0.5  -  1.0
                                  1.0  -  2.0
                                   > 2.0

Baseline
Dental labs
                                      827
                                      636
                                      432
                                      608
                                      155
                                      466
                                     3,124

Non-dental
                                     5,912
                                      631
                                      738
                                      287
                                      112
                                      214
                                     7,893

Total
                                     6,739
                                     1,267
                                     1,171
                                      895
                                      267
                                      679
                                    11,017
PEL = 0.2 ug/m[3]
Dental labs
                                      679
                                       0
                                       0
                                       0
                                       0
                                       0
                                      679

Non-dental
                                     5,912
                                      631
                                      693
                                      255
                                      98
                                      186
                                     7,774

Total
                                     6,591
                                      631
                                      693
                                      255
                                      98
                                      186
                                     8,454
Prevented by PEL reduction
Dental labs
                                      148
                                      636
                                      432
                                      608
                                      155
                                      466
                                     2,444

Non-dental
                                       0
                                       0
                                      45
                                      32
                                      14
                                      27
                                      119

Total
                                      148
                                      636
                                      478
                                      640
                                      169
                                      493
                                     2,563

      In contrast to this PEL component of the benefits, both the ancillary program benefits calculation and the substitution benefits calculation are relatively simple. Both are percentages of the lifetime-risk-model CBD cases that still occur in the post-standard world. OSHA notes that in the context of existing CBD prevention programs, some ancillary-provision programs similar to those included in OSHA's proposal have eliminated a significant percentage of the remaining CBD cases (discussed later in this chapter). If the ancillary provisions reduce remaining CBD cases by 90 percent for example, and if the estimated baseline contains 120 cases of CBD, and post-standard compliance with a lower PEL reduces the total to 100 cases of CBD, then 90 of those remaining 100 cases of CBD would be averted due to the ancillary programs.
      OSHA assumed, based on the clinical experience discussed further below, that approximately 65 percent of CBD cases ultimately result in death.  Later in this chapter, OSHA provides a sensitivity analysis of the effects of different values for assuming this percentage at 50% and 80% on the number of CBD deaths prevented.  OSHA welcomes comment on this assumption.  OSHA's exposure-response model for lung cancer is based on lung cancer mortality data.  Thus, all of the estimated cases of lung cancer in the benefits analysis are cases of premature death from beryllium-related lung cancer.
      Finally, in recognition of the uncertainty in this aspect of these models, OSHA presents a "high" estimate, a "low" estimate, and uses the midpoint of these two as our "primary" estimate. The low estimate is simply those CBD fatalities prevented due to everything except the ancillary provisions, i.e., both the reduction in the PEL and the substitution by dental labs. The high estimate includes both of these factors plus all the ancillary benefits calculated at an effectiveness rate of 90 percent in preventing cases of CBD not averted by the reduction of the PEL.   The midpoint is the combination of reductions attributed to adopting the proposed PEL, substitution by dental labs, and the ancillary provisions calculated at an effectiveness rate of only 45 percent.

Chronic Beryllium Disease and Sensitization
      CBD is a respiratory disease in which the body's immune system reacts to the presence of beryllium in the lung, causing a progression of pathological changes including chronic inflammation and tissue scarring. Immunological sensitization to beryllium (BeS) is a precursor that occurs before early-stage CBD.  Only sensitized individuals can go on to develop CBD.  In early, asymptomatic stages of CBD, small granulomatous lesions and mild inflammation occur in the lungs.  As CBD progresses, the capacity and function of the lungs decrease, which eventually affects other organs and bodily functions as well.  Over time the spread of lung fibrosis (scarring) and loss of pulmonary function cause symptoms such as: a persistent dry cough, shortness of breath, fatigue, night sweats, chest and join pain, clubbing of fingers due to impaired oxygen exchange, and loss of appetite.  In these later stages CBD can also impair the liver, spleen, and kidneys, and cause health effects such as granulomas of the skin and lymph nodes, and cor pulmonale.  The speed and extent of disease progression may be influenced by the level and duration of exposure, treatment with corticosteroids, and genetics, but these effects are not fully understood.