Options 12 14 vary the reporting cycle. Option 12 assumes a two year reporting cycle for facility and manufacturing information and four years for processing and use information. Option 13 uses a two year reporting cycle for all information, while Option 14 uses one time reporting . II 14 Table II 2. Options for the Proposed IUR Amendments Option # Thresholds Reporting Cycles New Exemptions Facility and Manufacturin g Information Processin g and Use Information Facility and Manufacturin g Information Processin g and Use Information Facility and Manufacturin g Information Processing and Use Informationa Proposed Option 4 25,000 lb 100,000 lb 4 yrs. 4 yrs.  Partial Exemption Chemicals Alternate Threshold Options 1 10,000 lb 10,000 lb 4 yrs. 4 yrs.  Partial Exemption Chemicals 2 25,000 lb 25,000 lb 4 yrs. 4 yrs.  Partial Exemption Chemicals 3 10,000 lb 100,000 lb 4 yrs. 4 yrs.  Partial Exemption Chemicals 5 10,000 lb 500,000 lb 4 yrs. 4 yrs.  Partial Exemption Chemicals 6 25,000 lb 500,000 lb 4 yrs. 4 yrs.  Partial Exemption Chemicals 7 25,000 lb 1,000,000 lb 4 yrs. 4 yrs.  Partial Exemption Chemicals 8 25,000 lb 10,000,000 lb 4 yrs. 4 yrs.  Partial Exemption Chemicals 9 25,000 lb 500,000 lb/ 100,000 lb 4 yrs. 4 yrs.  Partial Exemption Chemicals Reporting Exemption Option 10 25,000 lb 100,000 lb 4 yrs. 4 yrs. Site Limited Petroleum Streams 11 25,000 lb 100,000 lb 4 yrs. 4 yrs. Inorganic Chemicals  Partial Exemption Chemicals Reporting Cycle Options 12 25,000 lb 100,000 lb 2 yrs. 4 yrs.  Partial Exemption Chemicals 13 25,000 lb 100,000 lb 2 yrs. 2 yrs.  Partial Exemption Chemicals 14 25,000 lb 100,000 lb one time one time  Partial Exemption Chemicals a Partial exemption chemicals currently include only petroleum stream chemicals. II 15 III 1 CHAPTER III. INDUSTRY COSTS OF THE PROPOSAL This chapter analyzes the costs to industry associated with the original Inventory Update Rule ( IUR) and EPA's proposed IUR amendments. This chapter is organized as follows:

Section A presents an overview of the approach used to determine industry costs, including the determination of tasks required to comply, the development of unit costs of compliance, the determination of the number of forms and reports, and the development of the total costs of compliance.

Section B discusses the costs associated with the original IUR, defined as the " baseline" costs. This section also presents the reporting requirements and exemptions and the number of submissions under the original IUR.

Section C outlines the requirements and costs under the proposed IUR amendments. Both incremental and total costs for the first and future years of the amended rule are presented. The incremental cost is defined as the difference between the original and proposed IUR, and the total cost is defined as the overall cost of compliance to industry under the amended IUR ( the sum of the baseline cost and incremental cost).

Section D presents an overview of the proposed threshold and reporting cycle options, the estimated costs associated with each option, and the sensitivity analysis. This section also discusses issues of uncertainty and limitations that affect the quantified costs.

A. Overview and Methodology The general methodology employed for estimating the costs to industry of the original IUR and the proposed IUR amendments is described below. The expected costs include those attributable to compliance determination, rule familiarization, preparation and submission of forms, and recordkeeping.

The following methodology was used:

Step 1: Identify the tasks that sites perform to comply with reporting requirements for both the original IUR and for the proposal;

Step 2: Determine the unit costs for all activities identified in Step 1, based on requirements for managerial, technical, and clerical labor hours;

Step 3: Determine the number of forms and reports filed under the original IUR and the number expected to be reported under the proposed amendments; and Step 4: Determine the estimated total costs of compliance for the original and the amended IUR and calculate incremental costs.

1. Determination of Tasks 10 The burden of compliance determination for chemicals produced in quantities less than 25,000 pounds is assumed to be zero. Although chemicals produced in volumes close to this threshold may also require staff time to determine whether compliance with the rule is necessary, the cost associated with this time is expected to be minimal, and is therefore not considered in the quantified cost estimates. Furthermore, because this is a site based cost rather than a report or chemical cost, the number of sites not captured would be low.

III 2 Compliance with the original IUR and with the proposed amendments requires the completion of certain steps. These steps can be broken down into compliance determination, rule familiarization, preparation and submission of reports, and recordkeeping. The amount of effort ( and therefore cost) required for each of these steps varies depending upon the type of chemical, company size, and the variety of uses of the chemical. The steps for compliance with the original IUR and the proposed amendments are described below. A detailed comparison of the information required under the original rule with that required under the amendments is provided in Section A. 5 of this chapter.

Compliance Determination  For chemicals produced at or imported through a site, a determination of the need for compliance must be completed, by ascertaining the following information for each chemical produced or imported at a particular site: ( 1) does the chemical being manufactured or imported meet the requirements under any exemptions, ( 2) is the annual production or import volume above the reporting threshold, and ( 3) does the site's parent company meet the small business criteria as set forth in the TSCA § 8( a) Small Manufacturer Exemption Rule ( 40 CFR 704.3)? 10

Rule Familiarization  Once the need for compliance has been determined, sites must familiarize themselves with the rule. Sites that previously reported must become familiar with new requirements and sites new to reporting must become familiar with all requirements. This entails reading the rule, understanding the various reporting and administrative requirements, and determining the manner in which the reporting requirements will be met. The proposal adds exposure related information to the original reporting requirements, changes the reporting cycle, and amends certain other parts of the rule.

Preparation and Submission of Reports  Once a site has determined that its chemical output must be reported and has become familiar with the rule, the required information must be collected and a Form U must be completed, reviewed, and submitted to EPA. New requirements, including chemical use and exposure information, up front substantiation for plant site identification CBI claims, and reassertion of previous CBI claims, are included in this task.

Recordkeeping  Under the proposal, submitters must retain records for 5 years. III 3 2. Development of Unit Costs To calculate costs of compliance associated with these amendments, it is necessary to estimate both the costs associated with original requirements and costs anticipated when the proposed IUR amendments would go into effect. Unit costs of reporting for both the proposed IUR amendments and the original IUR were developed based on estimates of the wage rates and labor requirements, by labor category, for various activities.

Estimates of Wage Rates: Estimates for wage rates were developed for clerical, technical, and managerial staff. A more detailed description of the analysis by which these estimates were developed is presented below.

Estimates of Labor Hours: Estimates of labor hours were divided among clerical, technical, and managerial staff for each task described above. The methodology for developing labor hour estimates is presented below. Actual estimates are developed later in this chapter.

This section presents first the estimates of wage rates for employment categories followed by estimates of labor hours for each of the listed activities. The labor hours, when combined with the labor rates, result in an average basic cost of information for each activity. This analysis assumes that all industry compliance costs are incurred in the year in which reporting occurs.

a. Estimates of Wage Rates Standard wage rates for managerial, technical, and clerical levels were developed from information published by the Bureau of Labor Statistics ( BLS) and an analysis adopted from the Economic Analysis of the Final Rule to Add Certain Industry Groups to EPCRA Section 313 ( U. S. EPA 1997a). Data used to develop basic wage rates were derived from 1993 salary information published by BLS for all goods producing, private industries. Four BLS occupation categories were analyzed: Engineers, Accountants, Attorneys, and Secretaries.

As presented in Table III 1, the managerial and technical level composite salaries used for the analysis are composites of the BLS average salaries for several occupation categories and levels.

Weighting factors were applied to the average salaries for each of the occupation categories within the managerial and technical labor categories to develop the composite salary. The weighting factors were based on information provided by the chemical industry and chemical industry trade associations for the typical fraction of total reporting effort that is accounted for by each specific BLS occupation category ( U. S. EPA 1997a). III 4 The 1993 composite annual salary estimates were adjusted to first quarter 1997 dollars using the Employment Cost Index ( ECI) for white collar occupations in private industries. The 1997 adjusted,

composite salaries for the managerial, technical, and clerical labor categories were then multiplied by benefits and overhead factors to estimate 1997 loaded, annual salaries. Detailed benefits data for white collar occupations in private, goods producing industries were used to account for the additional cost of benefits for managerial, technical, and clerical labor. The overhead factor of 17 percent is based on information provided by the chemical industry and chemical industry trade associations. The loaded annual salary was then divided by 2,080 hours ( i. e., the average annual number of hours worked per year by a full time employee) to derive the loaded, hourly wage rates used in this analysis for each labor category.

Table III 1. Loaded Hourly Wage Rates by Labor Category Labor Category Occupation ( levels) Average Salary ($ 1993) Weightin g Factor Comp. Salarya ($ 1993) ECI Ratio 6/ 93: 3/ 9 7b Adjuste d Salary ($ 1997) 1997 Benefits (% Salary) 1997 Overhead (% Salary) Loaded Annual Salary ($ 1997) Loaded Hourly Rate ($ 1997)

Managerial Engineer ( 6 8) $ 93,981 10/ 17 $ 55,28 3 Attorney ( 4 6) $ 111,263 5/ 17 $ 32,72 4 Account ( 5 6) $ 73,528 2/ 17 $ 8,650 Composite 17/ 17 $ 96,65 8 1.136 $ 109,803 37.6 17.0 $ 169,756 $ 81.61 Technical Engineer ( 3 8) $ 74,802 5/ 6 $ 62,33 5 Account.( 3 6) $ 59,436 1/ 6 $ 9,906 Composite 6/ 6 $ 72,24 1 1.11 $ 80,188 37.4 17.0 $ 123,810 $ 59.52 Clerical Sec. ( 1 5) $ 28,850 1/ 1 $ 28,85 0 Composite 1/ 1 $ 28,85 0 1.12 $ 32,312 39.6 17.0 $ 50,601 $ 24.33 a 1993 Composite Salaries are determined by multiplying average salaries by the weighting factor and summing across occupations. b The ECI ratio measures the percent change in wages, salaries and employee benefits between June 1993 and March 1997, controlling for inflation.

Sources: U. S. EPA 1997a, BLS 1997. III 5 b. Methodology for Estimates of Labor Hours and Associated Costs Estimates of the industry reporting burden developed for compliance determination, rule familiarization, report preparation and submission, and recordkeeping were based on previously prepared economic analyses and new EPA estimates. New estimates were developed in cases where previously prepared data did not accurately reflect the specific reporting requirements contained in the proposal. The procedures used to develop the industry reporting burden estimates are as follows:

review comparable reporting requirements for other rules;

develop assumptions concerning the relationship between previous industry reporting burden estimates and the IUR amendments reporting requirements and adjust the estimates accordingly;

develop new estimates as necessary; and

present the total burden estimates ( by staff level) for each task associated with the proposed and original reporting requirements. Note that the analysis of burden is segmented between organic chemicals, partially exempt chemicals, and inorganic chemicals to indicate the differential impact of the changes to the IUR on the reporting requirements for each chemical type and production level threshold.

3. Determination of Number of Forms and Reports Currently, about 8,800 chemicals are reportable under the original Inventory Update Rule ( CUS Database 1997). In 1994, more than 25,000 submissions were received during the IUR reporting cycle. The reporting instrument for the IUR is the Form U. Each reporting site files one Form U, regardless of the number of reportable chemicals it manufactures or imports. Information such as site and company identification are common to all chemicals produced at a single site, and therefore this information need only be reported one time on Form U. Contained within the Form U are any number of individual chemical reports. The site prepares a report for each subject chemical produced at or imported through the site. If there are multiple chemicals produced at a single site, multiple reports are prepared, and the reports are submitted together on one Form U. EPA therefore estimated some costs on a per report basis and some on a per site basis. Per report costs are those costs which are incurred through completion of the individual reports for each reportable chemical. Per site costs are those which are incurred one time for each site through completion of the Form U. III 6 Costs associated with rule compliance are either site or report based. Each site must determine whether it must comply with the IUR and then must familiarize itself with the requirements of the rules. The costs associated with these tasks are calculated as per site. For each reportable chemical, a report must be prepared and submitted and a record of it must be kept, therefore the costs associated with these tasks are calculated as per report.

Estimates of the total number of reports expected under the proposed IUR Amendments were determined using data complied from EPA's Chemical Update System ( CUS) and EPA's Chemicals in Commerce Information System ( CICIS). The CUS databases contain information collected under the IUR for the 1986, 1990, and 1994 reporting cycles, and were used to generate estimates of expected reports for organic chemicals and petroleum stream chemicals. The CICIS database was used to determine the number of inorganic chemicals likely to be reported, because these chemicals are currently exempt and therefore are not included in the CUS. The CICIS contains information collected by EPA on TSCA chemicals in commerce in the United States in 1977, including company and chemical identification, site location, manufactured or imported status, and production volume in ranges. Appendix C contains a detailed description of the analysis used to determine the expected number of reports under the proposed amendments.

4. Determination of Total Costs of Compliance The total industry cost of reporting under both the original IUR and proposed amendments is calculated by first determining the unit cost for each task involved in reporting and then multiplying those unit costs by the number of occurrences ( i. e, reporting forms submitted or number of sites submitting reporting forms under the IUR). The costs associated with reporting under both the original IUR and proposed amendments consist of ( 1) compliance determination, ( 2) rule familiarization,

( 3) preparation and submission of reports, including CBI determination and substantiation, and ( 4)

recordkeeping.

5. Development of Burden Estimates The baseline, total, and incremental costs of the IUR were developed through an analysis and comparison of the type of information required for compliance with both the original and 11 These data elements are discussed in more detail in Chapter I, Section B.

12 The contents, administration, and results of the survey are described in detail in Appendix D.

III 7 amended rule, as detailed in Box III 1.11 The time required by industry to prepare and submit information for each of these data elements provides a basis for determining the total cost of reporting.

To examine this issue, the Agency developed a survey to assess the labor hours required to complete each section of the proposed Form U. The survey was administered to 81 chemical manufacturers in the spring/ summer of 1996.12 Table III 2 presents the estimates of reporting burden for each section of the revised Form U ( see Appendix A) as determined from the survey ( see Appendix D). Requirements of the original Form U are represented by the shaded areas of the table. The unshaded portion of Table III 2 represents the parts of Form U added by the proposal. For chemicals produced between 25,000 and 100,000 pounds and for chemicals meeting the partial exemptions, only sections I, II, and IV of the revised Form U would be completed. III 8 Box III 1. Comparison of Data Elements for Completion of the Original and Amended Form U Baseline Data Elements Additions from Proposal Certification

signature

date

name and title of the representative responsible for the accuracy of the information provided.

Company Information

technical company name

contact name

company street address

telephone number Plant Site Identification

plant site name

Dun & Bradstreet Number

plant site street address Chemical Specific Information

CAS Number or other identifying number

ID code

chemical name

site limited status ( yes or no)

activity ( manufacturing or import)

production volume Confidential Business Information

up front substantiation for chemical identity CBI claims

substantiation of CBI claims in the event of a Freedom of Information Act ( FOIA) request III 9 Table III 2. Estimate of Industry Reporting Burden for Sections of Revised Form U ( hours)

Task Clerical Hours Technical Hours Managerial Hours I. Facility Identification Informationa 0.57  1.03 0.95  1.03 1.03  1.10 1. Certification 0.46  0.89 0.81  0.89 0.97  1.05 2. Company Information Company Name, Contact, Address 0.03  0.04 0.04  0.04 0.02  0.02 D & B Number, Mailing Address 3. Plant Site Identification 0.08  0.10 0.10  0.11 0.04  0.04 Plant Name, D & B Number, Address EPA ID Number, Mailing Address II. Manufacturing Information 1.36  1.41 6.03  9.63 1.79  4.68 1. Chemical Identification 2. Site Limited 0.49  0.55 1.97  2.59 0.28  0.84 3. Activity  4. Production Volume ( lbs)

5. Chemical Identification Up front CBI Substantiation 0.26  0.26 1.08  1.82 0.48  1.05 6. Plant Site Up front CBI Substantiation 0.12  0.12 0.54  1.12 0.23  0.79 7. Production Volume Range CBI 0.14  0.14 0.49  1.09 0.24  0.85 8. Total Number of Workers 0.21  0.21 1.13  1.73 0.29  0.88 9. Physical Stateb    10. Maximum Concentration 0.14  0.14 0.82  1.28 0.27  0.27 III. Processing and Use Information 3.29  3.43 21.11  23.12 6.08  6.48 A. Industrial Processing and Use Exposure Related Data 2.58  2.72 16.22  17.69 4.61  4.89 1. Determination of Applicability 0.21  0.21 1.71  1.83 0.45  0.45 2. Process and Use Codec    3. 5 Digit NAICS Coded 0.33  0.39 2.17  2.32 0.61  0.61 4. Function Code 0.35  0.35 1.53  1.72 0.77  0.79 5. Percent Production Volume 0.45  0.45 3.34  3.63 0.81  0.95 6. Total number of processing and use sites 0.54  0.60 2.85  3.22 0.88  0.91 7. Total number of potentially exposed workers 0.71  0.73 4.64  4.97 1.09  1.17 B. Commercial and Consumer End Use Exposure Related Data 0.71  0.71 4.89  5.43 1.47  1.59 1. Determination of Applicability 0.17  0.17 1.07  1.13 0.28  0.31 2. Identification of end use 0.17  0.17 0.92  1.05 0.28  0.30 3. Percent production volume 0.24  0.24 1.40  1.56 0.51  0.55 4. Estimated weight percent in consumer 0.13  0.13 1.51  1.69 0.39  0.42 IV. Reassertion of Past CBI Claimse 0.50  1.00 1.00  2.00 2.00  4.00 Note: 1. Shaded area represents original requirements; the unshaded area represents the proposed additional requirements. 2. The sum of the components under a particular information category may not add due to rounding. a The burden associated with determining Facility Identification Information has been adjusted to account for the additional information required under the proposed amendments. The baseline burden associated with providing Facility Identification Information is presented in Table III 5. b The burden associated with determining the physical state of manufactured chemicals was subsumed under the task of determining chemical identification ( Task II( 1)) in the industry survey. c The burden associated with determining the Process and Use Code was subsumed under the task of determining the total number of processing and use sites and potentially exposed workers ( Tasks III( I. e) and ( I. f)) in the industry survey. d The SIC system has recently been replaced with the North American Industry Classification System ( NAICS). The IUR survey and the cost information developed in this report are based on requirements for providing SIC information. For purposes of this analysis, it has been assumed that the burden associated with providing an NAICS identification number would be the same as for providing an SIC code. e See discussion in Section C. 3. b. Sources: U. S. EPA 1994, Appendix D. III 10 Survey respondents provided low and high estimates of labor hours required to complete each task for each of three staff levels. These estimates were then weighted, based on company size, to provide an average low and high burden estimate that would reflect the range of companies expected to report under the proposed amendments. The estimates in Table III 2 are the foundation of the estimates of baseline, total, and incremental costs of the proposal. These costs are presented in Sections B and C of this chapter. A sensitivity analysis is discussed in Section D.

B. Baseline Costs of Compliance The costs of compliance under the original IUR requirements are estimated in this section.

Original reporting requirements, exemptions, and number of submissions received are presented.

Industry baseline costs by category for compliance with the requirements of the rule are determined.

Compliance determination ( per site), rule familiarization ( per site), report preparation and submission ( per report), and recordkeeping ( per report) costs are presented. These costs are then combined with the numbers of reports and sites to estimate the per year, net present value, and annual baseline costs by chemical type ( i. e., organic, inorganic, and partial exemption chemicals).

1. Original Inventory Update Rule Requirements The original IUR requires chemical manufacturers and importers to submit information on certain chemical substances listed on the TSCA Chemical Substances Inventory. Companies must submit a report every four years and maintain records that support their submission for four years following the reporting year. The requirements and exemptions of the original IUR are detailed below.

a. Original Reporting Requirements The IUR requires manufacturers and importers of subject chemicals to report data on production volume, plant site and chemical identification, and site limited status for the subject chemicals. These data are reported on a four year reporting cycle and should reflect manufacturing and importing activities over the last complete corporate fiscal year preceding the reporting year.

b. Original Exemptions The TSCA Inventory includes approximately 75,000 substances, but exemptions and reporting thresholds reduce the number of TSCA chemicals reportable under the III 11 original IUR to about 8,800 discrete chemicals. The specific exemptions to the original IUR are briefly described below.

i. Low Volume Threshold Exemption Chemicals produced at a manufacturing site in a volume less than 10,000 pounds during the last corporate fiscal year preceding the reporting period are exempt from reporting under the original IUR. This reporting threshold applies equally to importers and refers to a single site that contains an operating unit responsible for the import.

ii. Small Business Exemption Small businesses, as defined by TSCA § 8( a), are exempt from reporting under the original IUR requirements. Small businesses are those whose annual sales are less than $ 40 million and whose annual production volume is less than 100,000 pounds. The annual sales level is for the overall parent company and the production volume is site specific. Any company with annual sales less than or equal to $ 4 million is considered to be a small business regardless of production volume.

iii. Chemical Substance Exemption Certain chemical substances are exempt from the original IUR requirements. These substances include polymers, microorganisms, naturally occurring substances,

and inorganic chemicals. Chemicals falling into these categories are not required to be reported,

regardless of production volume or small business status.

c. Number of Submissions The number of submissions received under the original IUR requirements has hovered around 25,000 for each of the three reporting periods ( i. e., 1986, 1990, and 1994). The number of discrete chemicals reported during a single reporting period increased by 3.4 percent between 1986 and 1990, but the number reported in 1994 was 6.7 percent fewer than the number reported in 1990. Averaging the information from these three reporting periods, 25,614 reports were 13 It should be noted that the numbers of reports and sites presented above include statistics for chemicals with a production volume lower than 10,000 pounds that reported voluntarily.

14 Note that the analysis of burden is segmented between organic chemicals, partial exemption chemicals, and inorganic chemicals, to indicate the differential impact of the amendments to the IUR on the reporting requirements for each chemical type.

15 Costs were translated between per site and per report using the average of 8.4 reports per site for the 1994 CUS reporting period. This average was calculated based on the 25,058 reports filed from 2,981 sites in the 1994 reporting period ( these numbers include chemicals with a production volume lower than 10,000 pounds that reported voluntarily).

III 12 filed from 2,894 sites. These statistics produce an average of about 8.85 reports per site for the original IUR. 13 2. Industry Baseline Costs The costs of reporting under the original IUR are defined as the " baseline" costs. These costs consist of the four steps for compliance with the requirements of the rule, as defined above: ( 1)

compliance determination, ( 2) rule familiarization, ( 3) preparation and submission of reports, including CBI determination and substantiation, and ( 4) recordkeeping.

Costs associated with compliance determination and rule familiarization are incurred by each site, regardless of the number of reports submitted. Costs for preparation and submission of reports, as well as recordkeeping costs, are incurred separately for each report that is submitted. The original reporting form, the Form U, may consist of a number of individual chemical reports from one submitter site ( see discussion in Section A. 3 above). Table III 3 presents the baseline burden14 of compliance determination per site of between one and four technical staff hours for organic and partial exemption chemicals. These burden estimates are presented as a range to reflect the variation in the reporting community. Sites that produce fewer chemicals may only need one hour to determine compliance,

while sites that produce numerous chemicals may require up to four hours ( U. S. EPA 1990). The baseline cost of compliance determination is between $ 59.52 and $ 238.08 per site, and between $ 7.09 and $ 28.34 per report for organic and partial exemption chemicals. 15 Inorganic chemicals are not required to report under the original IUR, and therefore the baseline burden and cost of all reporting requirements is zero for this chemical type. Table III 4 presents the baseline burden of rule familiarization per site of two technical and two managerial staff hours for organic chemicals and partial III 13 exemption chemicals. The total cost of rule familiarization is $ 282.26 per site, and $ 33.60 per report,

for organic and partial exemption chemicals. III 14 Table III 3. Baseline Cost of Compliance Determination ( 1997$)

Type of Chemical Clerical ($ 24.33/ hr) Technical ($ 59.52/ hr) Managerial ($ 81.61/ hr)

Low High Low High Low High Organic Chemicals and Partial Exemption Chemicals Burden per Site ( hours) 0 0 1 4 0 0 Cost per Site ($) $ 0 $ 0 $ 59.52 $ 238.08 $ 0 $ 0 Total Cost for Compliance Determination Per Site $ 59.52  $ 238.08 Per Reporta $ 7.09  $ 28.34 Inorganic Chemicals Burden per Site ( hours) 0 0 0 0 0 0 Cost per Site ($) $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Total Cost for Compliance Determination Per Site $ 0 Per Reporta $ 0 a Assumes an average of 8.4 reports per site ( CUS Database 1997). III 15 Table III 4. Baseline Cost of Rule Familiarization ( 1997$)

Type of Chemical Clerical ($ 24.33/ hr) Technical ($ 59.52/ hr) Managerial ($ 81.61/ hr)

Low High Low High Low High Organic Chemicals and Partial Exemption Chemicals Burden per Site ( hours) 0 0 2 2 2 2 Cost per Site ($) $ 0 $ 0 $ 119.04 $ 119.0 4 $ 163.22 $ 163.22 Total Cost for Rule Familiarization Per Site $ 282.26 Per Reporta $ 33.60 Inorganic Chemicals Burden per Site ( hours) 0 0 0 0 0 0 Cost per Site ($) $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Total Cost for Rule Familiarization Per Site $ 0 Per Reporta $ 0 16 The original Form U does not include Sections III and IV, and therefore the baseline burden for these categories is zero.

III 16 a Assumes an average of 8.4 reports per site ( CUS Database 1997). Table III 5 presents the cost of report preparation and submission for the original IUR. As the table indicates, burden is distributed by labor category among the four sections of the proposed Form U. 16 The total cost is estimated to be between $ 412 and $ 605 per report, and between $ 3,460 and $ 5,079 per site. It should be noted that the baseline burden estimates for Facility Identification Information are not equivalent to those presented in Table III 2, because of the difference in the number of reports per Form U under the baseline versus the amendments, and because of adjustments made to account for the additional information required under the amended IUR.

Table III 5. Baseline Cost of Report Preparation and Submissiona ( 1997$)

Clerical ($ 24.33/ hr) Technical ($ 59.52/ hr) Managerial ($ 81.61/ hr)

Low High Low High Low High Reporting Form Section ( Hours)

I. Facility ID 0.40 0.73 0.94 1.02 1.02 1.10 II. Manufacturing Information 0.75 0.81 3.05 4.41 0.77 1.89 III . Use and Exposure Information 0 0 0 0 0 0 IV . CBI Reassertion 0 0 0 0 0 0 Total Hours per Report 1.15 1.54 3.99 5.43 1.79 2.99 Costs per Report $ 28.10 $ 37.45 $ 237.70 $ 323.12 $ 146.09 $ 244.12 Total Cost for Report Preparation and Submission Per Report $ 411.89  $ 604.68 Per Siteb $ 3,460  $ 5,079 a For sites reporting under the original IUR. b Assumes an average of 8.4 reports per site ( CUS Database 1997). Source: Table III 1 and Table III 2. III 17 Table III 6 presents the per report recordkeeping burden for the original IUR. Estimated burden is between one half hour and one hour of clerical staff time, one and two hours of technical staff time,

and one half hour and one hour of managerial staff time. Total cost of recordkeeping is between $ 112 and $ 225 per report, and between $ 945 and $ 1,890 per site.

Table III 6. Baseline Cost of Recordkeeping ( 1997$)

Type of Chemical Clerical ($ 24.33/ hr) Technical ($ 59.52/ hr) Managerial ($ 81.61/ hr)

Low High Low High Low High Organic Chemicals and Partial Exemption Chemicals Burden per Report ( hours) 0.5 1 1 2 0.5 1 Cost per Report ($) $ 12.16 $ 24.33 $ 59.52 $ 119.0 4 $ 40.80 $ 81.61 Total Cost for Recordkeeping Per Report $ 112.48  $ 224.98 Per Sitea $ 945  $ 1,890 Inorganic Chemicals Burden per Report ( hours) 0 0 0 0 0 0 Cost per Report ($) $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Total Cost for Recordkeeping Per Report $ 0 Per Sitea $ 0 a Assumes an average of 8.4 reports per site ( CUS Database 1997). Source: U. S. EPA 1994, U. S. EPA 1997a.

The total cost of compliance is estimated by summing the costs of individual compliance determination, rule familiarization, report preparation and submission, and recordkeeping activities.

The baseline total cost is between $ 565 and $ 892 per report, and between $ 4,700 and $ 7,500 per site ( on average). These costs are presented in Table III 7. 17 An average of 25,614 submissions were received during the 1986, 1990, and 1994 reporting periods. This total includes some reports for chemicals produced below 10,000 pounds, which some companies voluntarily submitted. Removing reports for chemical submissions that do not meet the 10,000 pound threshold results in an estimate of 25,324 reports for future reporting periods. This average estimate is comparable to the number of submissions ( 24,774) received under the 1994 reporting period, indicating that the CUS 1994 data are a reasonable source for determining the total industry baseline cost.

III 18 Table III 7. Baseline Cost of Compliance ( 1997$)

Compliance Task Per Report Per Sitea Low High Low High Compliance Determination $ 7 $ 28 $ 60 $ 238 Rule Familiarization $ 34 $ 282 Report Preparation and Submission $ 412 $ 605 $ 3,46 0 $ 5,07 9 Recordkeeping $ 112 $ 225 $ 945 $ 1,89 0 Total $ 565 $ 892 $ 4,74 7 $ 7,48 9 a Assumes an average of 8.4 reports per site ( CUS Database 1997). Source: Tables III 3, III 4, III 5, and III 6.

The total industry baseline cost associated with the original IUR requirements has been calculated based on the number of submissions ( 24,774) received during the 1994 reporting period. 17 Based on this number of reports, Table III 8 presents first year baseline costs by chemical type and production volume category. The total baseline industry cost for the 1998 reporting period is expected to be between $ 13.9 million and $ 21.9 million, as presented in Table III 9. The annualized cost of reporting under the original IUR is estimated to be $ 4.3 million to $ 6.8 million, and the net present value for reporting under the original IUR over a 20 year period is estimated to be between $ 63.7 million and $ 100.5 million.

Because the benefits resulting from the proposed regulation will not occur simultaneously with the costs, it is necessary to discount the future streams of costs and benefits before comparing them.

The time horizon over which costs and benefits are discounted in this analysis is 20 years. A 3 percent discount rate is used in this chapter, and the results of an analysis using a 7 percent discount rate are presented in Appendix E for comparison. There is considerable debate in the economics discipline 18 Further discussion of the approach used to develop the appropriate discount rate is presented in Appendix E.

III 19 whether to use the social rate of time preference or the rate of return on investment when discounting.

The debate between using a rate of return on investment capital and the consumption rate of return focuses on whether investment or consumption is being displaced. The issues involving the appropriate discount rates and procedures are complex, and are not likely to be resolved soon. Much of the recent economic literature summarizing the discounting debate concludes that it is appropriate to use either the social rate of time preference or the rate of return on investments; there is not much difference between the rates. For example, Moore and Viscusi ( 1990) find no evidence that the rate of time preference for environmental related health effects differs from financial rates of return and cite evidence that a 2 percent rate is appropriate. Lind ( 1990) recommends a range of one to 3 percent, and Freeman ( 1993)

recommends 2 to 3 percent. Based on this information, this analysis uses a 3 percent discount rate. 18 Table III 8. Annual Baseline Cost by Production Volume Category ( 1997$) a Type of Chemical Reports with Production Volumes 10K  25K lbs. Reports with Production Volumes 25K  100K lbs. Reports with Production Volumes > 100K lbs.

Low High Low High Low High Organic Chemicals $ 1,521,23 1 $ 2,406,83 2 $ 2,296,26 7 $ 3,633,06 4 $ 10,090,52 7 $ 15,910,07 6 Partial Exemption $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Inorganic Chemicals $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Total $ 1,521,23 $ 2,406,83 $ 2,296,26 $ 3,633,06 $ 10,090,52 $ 15,910,07 a Costs are incurred only in the reporting year ( i. e., every four years). III 20 Table III 9. Baseline First Year, Net Present Value, and Annualized Costs According to Chemical Type, Discounted at 3 Percent ( million 1997$)

Type of Chemical First Year Cost Net Present Value Annualized Cost Low High Low High Low High Organic Chemicals $ 13.9 $ 21.9 $ 63.7 $ 100.5 $ 4.3 $ 6.8 Partial Exemption $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Inorganic Chemicals $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Total $ 13.9 $ 21.9 $ 63.7 $ 100.5 $ 4.3 $ 6.8 C. Costs of the Proposed Amendments The costs of compliance under the proposed IUR amendments are estimated in this section.

Unit costs are presented based on the four steps for compliance ( see Section A. 1): compliance determination; rule familiarization; report preparation and submission; and recordkeeping. Costs per site and per report are estimated, followed by discussions of the number of reports and sites under the proposed IUR amendments. Unit costs are then multiplied by the number of reports and sites to estimate the first year costs, net present value, and annual costs by chemical type.

Under the proposed amendments, submitters of certain categories of chemicals complete a partial reporting form, reporting only the facility and manufacturing information and completing the reassertion of past CBI claims. These categories of chemicals are those with annual production volumes of 25,000 to 100,000 pounds and chemicals meeting the partial exemption requirements ( e. g.

multiple chemical petroleum stream chemicals). The remaining chemicals, with annual production volumes greater than 100,000 pounds, must complete the full form, requiring reporting of additional information on industrial use and exposure and consumer/ commercial use.

1. Costs of Compliance Determination The labor requirements for compliance determination under the amendments are the same as the requirements under the original IUR. Essentially, each site incurs costs to determine whether compliance is necessary. Therefore, the cost of compliance attributable to the amendments, III 21 for those sites already reporting under the original IUR, is zero. For sites not reporting under the original IUR ( such as inorganic chemical companies), the cost of compliance for a typical site is between $ 60 and $ 238 for each reporting period. As described in the baseline section, this cost is derived from the estimated 1  4 hours of technical labor necessary for a compliance determination,

consisting of a review of production and import data for all chemicals.

The burden of compliance determination is estimated to remain constant for first and future year reporting, given the length of the time lag between reporting cycles and the potential for changes in a site's chemical output over that time period.

2. Costs of Rule Familiarization Once a site determines that reporting is required under either the IUR or the amendments, it is necessary for one or more individuals at the site to become familiar with the rule.

Rule familiarization entails reading the rule, understanding the various reporting and administrative requirements, and determining the manner in which the reporting requirements will be met.

EPA estimates that rule familiarization for the amendments would require between 16 and 18 hours of technical labor and 6 to 8 hours of managerial labor in the first year of reporting for sites already reporting under the original IUR. For sites new to reporting ( such as those reporting inorganic chemicals), EPA estimates that between 18 and 20 hours of technical labor and 8 to 10 hours of managerial labor are required. These estimates are based on EPA's estimate that rule familiarization for TRI requires an average of 22.5 hours of technical review and 12 hours of managerial review ( U. S.

EPA 1997a). The scope of the reporting requirements under the TRI program is similar to the proposed IUR amendments. However, the requirements under the TRI program are more complicated and therefore the burden estimate for the IUR amendments should be slightly lower. It is assumed therefore, that the time required for familiarization with the amended IUR will be reduced by 2.5 4.5 hours of technical time and 2 4 hours of managerial time relative to the estimates developed for rule familiarization with the TRI requirements. 19 The following tables categorize the burden and cost estimates for the various compliance steps according to chemical type and the type of Form U completed. Chemicals with production volumes less than 25,000 pounds are denoted by " PV< 25K lbs.," chemicals with production volumes between 25,000 and 100,000 pounds and chemicals meeting the partial exemption requirements are denoted by " Partial Form," and chemicals with production volumes greater than 100,000 pounds are denoted by " Full Form."

III 22 In future reporting years, the burden of rule familiarization under the amendments is estimated to be equal to the burden under the original IUR. For sites currently reporting, there is no incremental burden associated with the amendments. For sites new to reporting, the burden is estimated to be two hours of technical labor and two hours of managerial labor. EPA has assumed that the burden of rule familiarization is incurred in both first and future reporting due to the length of the time between reporting cycles. EPA recognizes, however, that the burden of familiarization in future years is significantly less than the initial first year burden.

Multiplying by the appropriate labor costs, EPA estimates incremental rule familiarization costs for the proposed amendments of $ 1,442 to $ 1,724 per site in the first year of reporting for typical sites reporting under the original IUR. For those sites, and assuming an average of 8.4 reports per site, rule familiarization costs are between $ 172 and $ 205 per report. For sites new to reporting, first year costs of rule familiarization are slightly higher. Those costs are estimated to be between $ 1,724 and $ 2,006 per site, or between $ 205 and $ 239 per report. The incremental labor requirements and estimated costs associated with rule familiarization are presented in Tables III 10 and III 11 below. 19 III 23 Table III 10. Incremental Burden Per Site of Rule Familiarization ( hours)

Type of Chemical First Year Reporting Future Year Reporting Clerical Technical Managerial Clerical Technical Managerial Lo Hig Lo Hig Lo Hig Lo Hig Lo Hig Lo Hig Organic and Partial Exemption Chemicals PV < 25K 0 0 ( 2) ( 2) ( 2) ( 2) 0 0 ( 2) ( 2) ( 2) ( 2)

Partial Form 0 0 16 18 6 8 0 0 0 0 0 0 Full Form 0 0 16 18 6 8 0 0 0 0 0 0 Inorganic Chemicals PV < 25K 0 0 0 0 0 0 0 0 0 0 0 0 Partial Form 0 0 18 20 8 10 0 0 2 2 2 2 Full Form 0 0 18 20 8 10 0 0 2 2 2 2 Source: U. S. EPA 1990 and U. S. EPA 1997a.

Table III 11. Incremental Costs of Rule Familiarization ( 1997$)

Type of Chemical Per Site Cost Per Report Costa First Year Future Years First Year Future Years Low High Low High Low High Low High Organic and Partial Exemption Chemicals PV < 25K ($ 282) ($ 282) ($ 282) ($ 282) ($ 34) ($ 34) ($ 34) ($ 34)

Partial Form $ 1,442 $ 1,724 $ 0 $ 0 $ 172 $ 205 $ 0 $ 0 Full Form $ 1,442 $ 1,724 $ 0 $ 0 $ 172 $ 205 $ 0 $ 0 Inorganic Chemicals PV < 25K $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Partial Form $ 1,724 $ 2,006 $ 282 $ 282 $ 205 $ 239 $ 34 $ 34 Full Form $ 1,724 $ 2,006 $ 282 $ 282 $ 205 $ 239 $ 34 $ 34 a Assumes an average of 8.4 reports per site ( CUS Database 1997). Note: Parentheses denote negative estimates ( i. e., savings instead of costs).

3. Costs of Preparation and Submission of Report Once a site has determined that its chemical output must be reported and has become familiar with the rule, the required information must be collected and a Form U must be completed,

reviewed, and submitted to EPA. This section presents the burden and cost estimates associated with 20 Although average unit costs of submissions are expected to fall within the ranges presented in Tables III 2 and III 12, individual submissions with especially few or numerous customers, processing, and/ or use sites may have costs outside the presented ranges.

21 This analysis assumes an average of 8.4 reports per site of one type of chemical. A more typical scenario would involve a mixture of chemical types.

III 24 this process. A more detailed description of the survey results upon which these burden estimates are based is provided in Appendix D.

a. Data Requirements The original IUR requires the provision of certain basic production and manufacturer identification information. The costs associated with these data elements comprise the baseline cost of preparation and reporting. The proposed amendments add requirements for information related to worker exposure and chemical use. The costs associated with these additional data elements comprise the costs of the proposal. Box III 1, at the beginning of this chapter, presents these additional data requirements. Chapter I, Section B presents a more detailed discussion.

b. Estimates of Labor Hours and Associated Costs Estimates for the amount of time required to complete and submit the amended Form U were developed from the results of the survey described in Appendix D. Survey results were adjusted to account for changes in the draft Form U prior to proposal and were weighted based on company size to reflect the universe of companies expected to report under the proposed amendments.

The final estimates are presented in Table III 2 at the beginning of this chapter.

Table III 12 presents the incremental costs of preparation and submission of a report under the proposed amendments. 20 For chemicals produced between 25,000 and 100,000 pounds and for chemicals meeting the partial exemptions, the incremental cost is estimated to be between $ 404 and $ 809 per report for each organic and partially exempt chemical and $ 692 to $ 1,166 per report for each inorganic chemical. The incremental per site cost is estimated to be between $ 3,393 and $ 6,793 for organic and partially exempt chemical reporting and between $ 5,815 and $ 9,796 for inorganic chemical reporting. 21 For the first year of reporting under the proposed amendments, the incremental cost for inorganic chemicals is expected to be higher because reporting of inorganic chemicals is not required III 25 under the original IUR; therefore the full cost of reporting is attributable to the amendments. This is slightly offset by the lack of need for CBI reassertion for the first year.

For chemicals not partially exempt and produced at volumes greater than 100,000 pounds, all sections of the form would be completed. The incremental unit cost for those large volume chemicals is expected to range from $ 2,236 to $ 2,797 per report for each organic chemical and from $ 2,524 to $ 3,155 for each inorganic chemical. The incremental per site cost is estimated to be between $ 18,782 and $ 23,498 for organic chemical reporting and between $ 21,205 and $ 26,502 for inorganic chemical reporting. 13 Note that these costs are overestimated because not all reports contained CBI claims in the last reporting period, and therefore not all will bear the burden of reassertion of past claims.

The burden associated with CBI claims is accounted for in a variety of ways. For the basic CBI claim, the estimated burden is included with the burden estimates for each data element.

Upfront substantiation burdens are accounted for separately, as reported in Table III 2. The burden of complying with these requirements and the frequency of CBI claims is discussed further in Box III 2,

below. Reassertion of CBI claims is identified as Section IV of the reporting form. For the first year of reporting under the proposed amendments, reassertion applies to claims made under the original IUR.

This means two things: ( 1) that the first year burden estimates for CBI reassertion are roughly equal to the estimated reassertion burden associated with chemicals reporting only facility identification and manufacturing information and ( 2) that the first year's estimates do not depend upon production volume or chemical type ( except for inorganic chemicals, which were not reported under the original IUR). The estimated burden of reassertion in the first year of reporting is 0.5 to 1.0 hours of clerical time, 0.5 to 1.0 hours of technical time, and 1.0 to 2.0 hours of managerial time ( U. S. EPA 1994, U. S. EPA 1996c, U. S.

EPA 1996f). III 26 Table III 12. First Year Incremental Cost of Preparation and Submission of a Report Associated with the Amendments for Sites Already Reporting ($ 1997)

Clerical ($ 24.33/ hr) Technical ($ 59.52/ hr) Managerial ($ 81.61/ hr)

Low High Low High Low High Reporting Form Section ( Hours)

I. Facility Identification 0.17 0.30 Minimal Minimal Minimal Minimal II. Manufacturing Information 0.61 0.61 2.98 5.22 1.02 2.79 III . Processing and Use Information 3.29 3.43 21.11 23.12 6.07 6.48 IV CBI 0.50 1.00 0.50 1.00 1.00 2.00 Total Hours per Report, by Labor Category Partial Form 1.27 1.90 3.49 6.23 2.02 4.79 Full Form 4.56 5.34 24.60 29.35 8.10 11.28 Total Costs per Report, by Labor Category Partial Form $ 30.93 $ 46.26 $ 207.84 $ 371.09 $ 165.11 $ 391.31 Full Form $ 110.98 $ 129.82 $ 1,464.3 $ 1,747.1 $ 660.72 $ 920.34 Total Cost per Report Partial Form $ 404  $ 809b, c Full Form $ 2,236  $ 2,797b Total Cost per Sited Partial Form $ 3,393  $ 6,793b, c Full Form $ 18,782  $ 23,498b Note: Numbers may not calculate exactly due to rounding. a The burden of CBI reassertion for reporting in the first year is less than the burden incurred in future years, because reassertion applies only to the information required under the original IUR. The burden of CBI reassertion for future year reporting is presented in Table III 14. b Total cost for inorganic chemicals reporting the partial form is $ 692 to $ 1,166 per report and the cost for the full form is $ 2,524 to $ 3,155 per report. The per site costs for inorganic chemicals are $ 5,815 to $ 9,796 for completion of the partial form and $ 21,205 to $ 26,502 for completion of the full form. The difference in cost from the other chemicals is due to the lack of any baseline costs ( therefore the full cost of reporting is due to the amendments) and the lack of first year CBI reassertion costs. In future years, reassertion costs for inorganic chemicals will be incurred ( see Table III 14). c This is also the first year per report cost for chemicals meeting the partial exemption requirements. d Assumes an average of 8.4 reports of one type per site. Please note that a more typical scenario would involve a mixture of report types. Sources: Tables III 1, III 2, and III 5. 22 Analysis is entitled Economic Analysis of the Final Rule to Add Certain Industry Groups to EPCRA Section 313 ( U. S. EPA 1997a).

23 Note that there are no first year CBI reassertion costs for inorganic chemicals because these chemicals did not previously report, and, therefore, have no information to reassert as CBI. In future years, reassertion costs for inorganic chemicals will be incurred.

III 27 c. Unit Cost Scaling Factors Unit costs for future reporting cycles are expected to be lower than unit costs attributed to first year reporting because of efficiencies achieved through the establishment of compliance processes, the availability of data from previous reporting cycles, and familiarity with reporting requirements. To account for these efficiencies, EPA has incorporated a set of scaling factors for the unit cost of preparation and substantiation of future year reports. The remainder of this section focuses on the methodology and assumptions used to determine these scaling factors.

The unit cost of preparation and submission of reports in future years is assumed to be lower than the cost of reporting in the first year due to efficiencies of repeated reporting. These efficiencies vary based on the types of information reported and whether or not that information changes significantly from year to year. Based on these assumptions and a cost analysis for a similar reporting rule22, scaling factors have been developed for each section of the reporting form under the proposed IUR amendments. These scaling factors, presented in Table III 13, are applied to each reporting period following the first. For reassertion of past CBI claims, first year costs do not include reassertion for exposure and use information ( because this information has not been previously reported). However,

the second reporting year would include CBI claims for exposure and use information, and, hence, the full burden of reassertion is first incurred during the second reporting period. 23 Table III 14 presents the estimated incremental burden and cost of preparation and submission of a report in future years. As shown, the expected incremental cost for chemicals required to complete the partial form is between $ 347 and $ 696 per report for organic and partial exemption chemicals, and between $ 759 and $ 1,301 per report for inorganic chemicals. The incremental per site costs for partial reporters are between $ 2,915 and $ 5,846 for organic and partial exemption reporting, and between $ 6,376 and $ 10,928 for inorganic chemical reporting. The estimated incremental cost of completing the full form is between $ 1,924 and $ 2,510 per report for organic and partial exemption chemicals, and between $ 2,336 and $ 3,115 per report for inorganic chemicals. The incremental per site cost for full III 28 Box III 2. Reporting Burden of Complying with CBI Requirements The calculations used to develop CBI compliance costs for the Economic Analysis ( EA) are based on information from the industry survey ( ICF 1996). As derived from the survey, Table III 2 presents typical costs associated with compliance for various CBI substantiation issues attributable to the proposed IUR amendments. The costs range from $ 215 to $ 472, as compared to $ 110 to $ 200 under the current IUR requirements, resulting in incremental costs of between $ 105 and $ 272. Survey respondents indicated that chemical identification, plant site identification, and production volume range information would be claimed confidential by 58 percent, 36 percent, and 78 percent of reporting companies, respectively. Companies that indicated no CBI claims were estimated to have zero compliance costs for each appropriate element.

Costs of CBI substantiation for an individual company claiming CBI status for chemical identification, plant site identification, and production volume range may be higher than the average values used in the analysis, however. Hence, typical costs may be more accurately characterized by excluding burden estimates of zero for companies that do not claim CBI status. Using only the non zero entries, the cost of CBI compliance ranges from $ 181 to $ 322 for the baseline scenario, and from $ 391 to $ 840 under the amendments. Based on these values, the incremental cost of meeting CBI related requirements is estimated to be between $ 210 and $ 518, or about twice as much as used in the cost analysis.

To place this discrepancy in perspective, it is worth noting that, historically, companies have claimed information CBI less often than survey responses suggested. Information from the CUS database for the 1986, 1990, and 1994 reporting cycles indicates significantly lower percentages of CBI claims for each type of data. According to the CUS database, the fraction of companies claiming CBI status for chemical identification, plant site identification, and production volume was 3 percent, 20 percent, and 65 percent, respectively. The difference between the percentage of companies claiming CBI as derived from the CUS database and the percentage indicated by the survey data suggests that survey respondents may have been concerned about providing detailed information on uses, and hence, were conservative in their estimates of the frequency of CBI claims. EPA is aware of companies' potential reluctance to disclose such data and has elected, therefore, to ask for some information ( e. g., production volume) in ranges to reduce potential confidentiality concerns. In particular, by adding check boxes for production volume range information and using this information for analysis and in public reports, EPA expects to reduce companies' confidentiality concerns.

Because of the considerations identified here, the costs presented in this analysis may tend to overestimate the number of CBI claims and therefore, the average cost of CBI substantiation, both under the baseline and the proposal. This is somewhat offset by the higher rate of claims identified in the survey as compared to historical rates identified from the CUS database. The costs used in the development of CBI compliance impacts are not expected to greatly influence costs presented in the EIA because confidentiality costs are small compared to overall costs. form reporters is between $ 16,162 and $ 21,084 for organic and partial exemption chemical reporting and between $ 19,622 and $ 26,166 for inorganic chemical reporting. III 29 Table III 13. Scaling Factors for Unit Cost of Preparation and Submission of Reports in Future Reporting Cycles Under Proposed IUR Amendments Part Section of Reporting Form Description of Information Incurred Percent of First Year Cost Comments 2 Year Reportin g Cycle 4 Year Reportin g Cycle Facility Identification and Manufacturing Information I 1 Certification 100 100 No reduction expected.

I 2 Company Information 20 20 Technical contact may change, but other information unlikely to change.

I 3 Plant Site Identification 20 20 Information unlikely to change.

II 1 Chemical Identification 20 20 Information unlikely to change.

II 6, II 7, II 8, II 9, II 10 Manufacturing 70 80 Information may change.

Processing and Use Information III A Industrial Use and Exposure Related Data 70 80 Information may change.

III B Consumer and Commercial End Use Exposure Related Data 70 80 Information may change.

Reassertion of Past CBI Claims IV Reassertion 100 100 No reduction expected. However, cost is not incurred for reassertion of exposure and use information in the first reporting year. III 30 Table III 14. Future Years Incremental Cost of Preparation and Submission of a Report under the Proposed IUR Amendments ( 1997$)

Clerical ($ 24.33/ hr) Technical ($ 59.52/ hr) Managerial ($ 81.61/ hr)

Low High Low High Low High Reporting Form Section ( Hours)

I. Facility Identification 0.14 0.26 Minimal Minimal Minimal Minimal II. Manufacturing Information 0.48 0.48 2.38 4.18 0.82 2.23 III. Processing and Use Information 2.63 2.75 16.89 18.50 4.86 5.19 IV. CBI Reassertiona 0.50 1.00 1.00 2.00 2.00 4.00 Total Hours per Report, by Labor Category Partial Form 1.12 1.74 2.89 5.18 1.82 4.23 Full Form 3.75 4.49 20.28 24.68 7.67 11.42 Total Costs per Report, by Labor Category Partial Form $ 27.25 $ 42.41 $ 171.84 $ 308.37 $ 148.20 $ 345.48 Full Form $ 91.29 $ 109.26 $ 1,206.7 7 $ 1,468.7 6 $ 626.30 $ 931.93 Total Cost per Report Partial Form $ 347  $ 696b Full Form $ 1,924  $ 2,510b Total Cost per Sitec Partial Form $ 2,915  $ 5,846b Full Form $ 16,162  $ 21,084b Note: Numbers may not calculate exactly due to rounding. a CBI reassertion burden estimates for completion of the partial form in future years are equal to CBI reassertion burden estimates in the first year of reporting under the amendments, as detailed in Table III 12. b The future years cost for inorganic chemicals reporting the partial form is $ 759 to $ 1,301 and the cost for the full form is $ 2,336 to $ 3,115. The per site future years costs for inorganic chemicals are $ 6,376 to $ 10,928 for completion of the partial form and $ 19,622 to $ 26,166 for completion of the full form. These costs are higher than for organic chemicals because inorganic chemicals are not required to report under the original IUR. CBI reassertion costs for inorganic chemicals are included in estimates of future year costs. c Assumes an average of 8.4 reports per site. Please note that a more typical scenario would involve a mixture of report types. III 31 Sources: Tables III 1, III 2, III 5, and III 13. 24 Recordkeeping costs for completion of the partial form may be overstated because the level of information required to be maintained is slightly lower than for completion of the full form. It is assumed however that because these overstated costs are small relative to other costs, they will have a minimal impact on total cost estimates.

III 32 4. Costs of Recordkeeping The original IUR requires that sites maintain records of reported information for at least 4 years from the effective date of the reporting period. The quantified costs associated with these original recordkeeping requirements consist of the costs of labor to compile and maintain collected information. Sites may maintain records such as invoices, receiving tickets, and incident and operating logs. EPA assumes that the average burden of recordkeeping under the proposed amendments will be somewhat greater than the burden under the original IUR because it is likely submitters under the proposal would maintain additional records, and the records must be maintained for five years, one year longer than the original requirements. It is expected that recordkeeping of files is an on going activity and that the cost associated with maintaining these records will be constant for each reporting period.

Based on the labor requirements presented in Table III 15, the estimated incremental cost of recordkeeping incurred under the proposal is between $ 112 and $ 225 per report for organic and partial exemption chemicals, 24 and between $ 225 and $ 450 per report for inorganic chemicals. The per site incremental recordkeeping cost III 33 Table III 15. Incremental Burden Per Report of Recordkeeping ( hours)

Type of Chemical Clerical Technical Managerial Low High Low High Low High Organic and Partial Exemption Chemicals PV < 25K ( 0.5) ( 1) ( 1) ( 2) ( 0.5) ( 1)

Partial Form 0.5 1 1 2 0.5 1 Full Form 0.5 1 1 2 0.5 1 Inorganic Chemicals PV < 25K 0 0 0 0 0 0 Partial Form 1 2 2 4 1 2 Full Form 1 2 2 4 1 2 Note: Parentheses denote savings instead of costs.

is between $ 945 and $ 1,890 for organic and partial exemption chemical reporting, and between $ 1,890 and $ 3,780 for inorganic chemical reporting for completion of either the full or partial form. Costs are higher for inorganic chemicals since they currently do not report. Table III 16 presents the incremental costs per report associated with these routine recordkeeping activities ( U. S. EPA 1994, U. S. EPA 1997a). III 34 Table III 16. Incremental Cost of Recordkeeping ( 1997$)

Type of Chemical Per Report Cost Per Site Costa First Year Future Years First Year Future Years Low High Low High Low High Low High Organic and Partial Exemption Chemicals PV < 25K ($ 112 ) ($ 225 ) ($ 112 ) ($ 225 ) ($ 945) ($ 1,890 ) ($ 945) ($ 1,890)

Partial Form $ 112 $ 225 $ 112 $ 225 $ 945 $ 1,890 $ 945 $ 1,890 Full Form $ 112 $ 225 $ 112 $ 225 $ 945 $ 1,890 $ 945 $ 1,890 Inorganic Chemicals PV < 25K $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Partial Form $ 225 $ 450 $ 225 $ 450 $ 1,89 0 $ 3,780 $ 1,89 0 $ 3,780 Full Form $ 225 $ 450 $ 225 $ 450 $ 1,89 0 $ 3,780 $ 1,89 0 $ 3,780 a Assumes an average of 8.4 reports per site ( CUS Database 1997). Note: Parentheses denote savings instead of costs. 25 Translations between per site and per report assumed that all reports at a site were of the same type ( i. e., full form versus partial form). In reality, a mix of report types would be expected.

III 35 5. Summary of Estimated Unit Costs This section summarizes the incremental costs of compliance with the IUR amendments. Costs are presented for three categories of reporting ( production volume less than 25,000 pounds, partial form U reporting, and full form U reporting) and for two types of chemicals ( organic and inorganic). Table III 17 presents the summary on a per report basis. Table III 18 presents the summary on a per site basis. As discussed previously, numbers were translated based upon an average of 8.4 reports per site. 25 Table III 17. Summary of Incremental Per Report Costs ( 1997$)

Type of Chemical First Year Future Years Low High Low High Organic and Partial Exemption Chemicals PV < 25K lbs. ($ 565) ($ 892) ($ 565) ($ 892)

Partial Form $ 688 $ 1,239 $ 459 $ 921 Full Form $ 2,520 $ 3,227 $ 2,036 $ 2,735 Inorganic Chemicals PV < 25K lbs. $ 0 $ 0 $ 0 $ 0 Partial Form $ 1,129 $ 1,883 $ 1,025 $ 1,813 Full Form $ 2,961 $ 3,872 $ 2,602 $ 3,267 Sources: Tables III 11, III 12, III 14, and III 16. III 36 Table III 18. Summary of Incremental Per Site Costs ( 1997$)

Type of Chemical First Year Future Years Low High Low High Organic and Partial Exemption Chemicals PV < 25K lbs. ($ 4,747) ($ 7,489) ($ 4,747) ($ 7,489)

Partial Form $ 5,780 $ 10,407 $ 3,860 $ 7,736 Full Form $ 21,169 $ 27,112 $ 17,107 $ 22,974 Inorganic Chemicals PV < 25K lbs. $ 0 $ 0 $ 0 $ 0 Partial Form $ 9,489 $ 15,820 $ 8,608 $ 15,228 Full Form $ 24,879 $ 32,526 $ 21,854 $ 30,466 Sources: Tables III 11, III 12, III 14, and III 16.

6. Numbers of Reports To calculate the industry wide incremental and total expected costs, EPA estimated the anticipated number of reports for the first and future reporting cycles. EPA first examined the historical levels of submissions during the 1986, 1990, and 1994 reporting periods. The number of reports submitted over those three periods varied from the average submission level of 25,614 by only 0.3 to 2.5 percent. Since the number of reports previously submitted has remained fairly constant, EPA held the yearly number of reports constant over the 20 year period covered by the cost analysis. EPA then estimated the number of inorganic chemicals using historical proportions of organic to inorganic chemicals from the Chemical in Commerce Information System ( CICIS) database. Details on the development of these estimates can be found in Appendix C. Accounting for the changes in exemptions and reporting threshold under the amendments, EPA estimates that the total number of reports submitted under the proposal would be 26,811. Approximately 58 percent of those reports would be for chemicals produced in excess of 100,000 pounds and not eligible for partial exemption. 26 The proposed amendments currently include a partial exemption for petroleum stream chemicals. Additionally, EPA is considering an expansion of the set of chemicals eligible for this exemption. Chemicals deemed by EPA to be of low priority would be eligible for the same reduced level of reporting. These chemicals would be considered to be low priority for further risk assessment and management. At the time of this analysis, EPA has not determined the chemicals that would be eligible for the low priority exemption and hence they are not included in this economic analysis. However, EPA feels that the number of chemicals that would be eligible for this exemption is likely to be small and therefore any effect on the burden would also be small.

27 Tables III 24a, III 24b and III 25 present the estimated number of reports and reporting sites under the proposed amendments. The estimates in these tables were used to develop industry wide incremental and total costs of the proposed amendments in Tables III 19 through III 22, however they have been placed in Section D below for organizational purposes.

III 37 Reports for these chemicals would require that the entire Form U be completed. The remaining 42 percent would be required to complete only the partial Form U. 26 7. Number of Sites There are an estimated 3,485 sites that manufacture or import a reportable chemical at a volume greater than 25,000 pounds annually. These sites would have to report under the IUR amendments ( CUS Database 1997, CICIS Database 1986). This estimate reflects the number of sites that would be reporting organic chemicals, including petroleum streams, and inorganic chemicals, as outlined in the proposed amendments.

8. Total Cost for Proposed IUR Amendments The total costs to industry of the proposed IUR amendments are estimated for the first year of reporting and for future reporting years in constant 1997 dollars. Total costs are calculated based on the unit costs and the number of reports and sites estimated earlier in this chapter. These costs were developed based on costs for each type of chemical ( i. e., inorganic chemicals, organic chemicals, or partial exemption) and for each reporting threshold ( i. e., completing a full or partial form,

based on production volume and exemption status).

a. First Year Costs of Proposed Amendments Incremental first year costs for the proposed amendments were developed by combining information from Tables III 17, III 18, III 24a, III 24b and III 25.27 These costs are presented 28 Although Tables III 17 and III 18 indicate a negative per report and per site cost for partial exemption chemicals with production volumes less than 25,000, the costs associated with partial exemption chemicals under this production threshold are zero. This is because there are no partial exemption chemicals under the baseline. Chemicals that were reported under the baseline, such as petroleum stream chemicals, but that would be eligible for the partial exemption under the amendments, have been included with the totals for organic chemicals under the baseline.

III 38 in Table III 19 below. 28 Table III 20 presents the sum of the baseline and incremental costs, or the total costs of the amended IUR. As shown, incremental first year industry cost for the proposal is approximately $ 47.9 million to $ 65.4 million. For the full amended IUR, the total estimated first year industry cost is approximately $ 61.8 million to $ 87.4 million.

Table III 19. Incremental First Year Cost of Amendments ( million 1997$)

Type of Chemical PV< 25K Partial Form Full Form Total Low High Low High Low High Low High Organic Chemicals ($ 1.5 ) ($ 2.4) $ 2.3 $ 4.6 $ 29.1 $ 36.3 $ 29. 9 $ 38.5 Partial Exemption Chemicals $ 0 $ 0 $ 6.9 $ 11.9 $ 0 $ 0 $ 6.9 $ 11.9 Inorganic Chemicals $ 0 $ 0 $ 1.1 $ 2.0 $ 10.0 $ 13.0 $ 11. 1 $ 15.0 Total ($ 1.5 ) ($ 2.4) $ 10.3 $ 18.4 $ 39.1 $ 49.4 $ 47. 9 $ 65.4 Source: Tables III 17, III 18, III 24a, 24b, and III 25.

Table III 20. Total First Year Cost of IUR Compliance, with Amendments ( million 1997$)

Type of Chemical PV< 25K Partial Form Full Form Total Low High Low High Low High Low High Organic Chemicals $ 0 $ 0 $ 4.6 $ 8.2 $ 39.2 $ 52.2 $ 43. $ 60.5 Partial Exemption Chemicals $ 0 $ 0 $ 6.9 $ 11.9 $ 0 $ 0 $ 6.9 $ 11.9 Inorganic $ 0 $ 0 $ 1.1 $ 2.0 $ 10.0 $ 13.0 $ 11. $ 15.0 Total $ 0 $ 0 $ 12.6 $ 22.1 $ 49.2 $ 65.3 $ 61. 8 $ 87.4 Source: Tables III 17, III 18, III 24a, III 24b, and III 25.

b. Future Costs of Proposed Amendments III 39 The annual incremental industry costs associated with the proposed IUR amendments in each future reporting year are presented in Table III 21; the total costs are presented in Table III 22.

Table III 21. Incremental Annual Cost of Amendments in Future Years ( million 1997$)

Type of Chemical PV< 25K Partial Form Full Form Total Low High Low High Low High Low High Organic Chemicals ($ 1.5) ($ 2.4) $ 2.0 $ 4.1 $ 21.9 $ 28.7 $ 22. 4 $ 30.4 Partial Exemption Chemicals $ 0 $ 0 $ 5.8 $ 10.3 $ 0 $ 0 $ 5.8 $ 10.3 Inorganic Chemicals $ 0 $ 0 $ 1.2 $ 2.1 $ 8.6 $ 12.0 $ 9.8 $ 14.1 Total ($ 1.5) ($ 2.4) $ 9.1 $ 16.6 $ 30.4 $ 40.6 $ 38. 0 $ 54.8 Source: Tables III 17, III 18, III 24a, III 24b, and III 25.

Table III 22. Total Annual Cost of IUR Compliance, with Amendments, in Future Years ( million 1997$)

Type of Chemical PV< 25K Partial Form Full Form Total Low High Low High Low High Low High Organic Chemicals $ 0 $ 0 $ 4.4 $ 7.7 $ 32.0 $ 44.6 $ 36. 3 $ 52.3 Partial Exemption Chemicals $ 0 $ 0 $ 5.8 $ 10.3 $ 0 $ 0 $ 5.8 $ 10.3 Inorganic Chemicals $ 0 $ 0 $ 1.2 $ 2.1 $ 8.6 $ 12.0 $ 9.8 $ 14.1 Total $ 0 $ 0 $ 11.4 $ 20.2 $ 40.5 $ 56.5 $ 51. 9 $ 76.7 Source: Tables III 17, III 18, III 24a, III 24b, and III 25.

D. Overview of Reporting Options EPA examined a variety of options to the proposed amendments, including changes in reporting thresholds, reporting exemptions, and reporting cycles. Overall, fourteen options were analyzed. For all but two options, the partial exemption of petroleum stream chemicals and the elimination of the III 40 inorganic chemical exemption were held constant. Table III 23 summarizes the options. Options 1 9 assumed a four year reporting cycle, but each option incorporated a different reporting threshold scheme.

The options use a reporting threshold for the partial form ( facility identification and manufacturing information), of either the original 10,000 pounds or 25,000 pounds. The reporting threshold for the full form was varied from 10,000 pounds to ten million pounds. Option 9 incorporated a stepped threshold for the full form  for the first reporting period, the threshold is 500,000 pounds and for subsequent reporting periods the threshold drops to 100,000 pounds. Option 10 incorporated the reporting thresholds outlined in the proposed option, but proposes a full exemption from reporting for certain petroleum streams ( those that are site limited), rather than the proposed petroleum stream partial exemption. Option 11 used the same reporting thresholds as Option 4, but continued the existing exemption for inorganic chemicals.

Options 12, 13, and 14 used the same reporting thresholds as the proposed option ( 25,000 pounds for the partial form and 100,000 pounds for the full form), but incorporate different reporting cycles. Option 12 used a reporting cycle of two years for the partial form ( which must be completed by all sites) and four years for the full form, Option 13 called for a reporting cycle of two years for all information, and Option 14 required only one time reporting.

1. Numbers of Reports and Sites Table III 24a presents the number of reports expected for each option, and Table III

24b details these reports by chemical type. Under the proposed amendments, partial forms will be completed for 4,421 organic chemicals, 5,733 partial exemption chemicals, and 1,226 inorganic chemicals. Of these 5,733 partial exemption chemicals, 131 are produced at volumes less than the 100,000 pound threshold. The partial exemption provides a smaller degree of benefit for these chemicals, because the lower production volume already exempts them from completion of the full form. Full forms will be completed for 12,155 organic chemicals and 3,276 inorganic chemicals under the proposed option. III 41 Table III 23. Reporting Options for the Proposed IUR Amendments Optio n Thresholds Reporting Cycles Exemptions Facility Identification and Manufacturin g Information Processin g and Use Informatio n Facility Identification and Manufacturin g Information Processin g and Use Informatio n Facility Identification and Manufacturin g Information Processing and Use Information Proposed Option 4 25,000 lb 100,000 lb 4 yrs. 4 yrs.  Partial Exemption Chemicals Alternate Threshold Options 1 10,000 lb 10,000 lb 4 yrs. 4 yrs.  Partial Exemption Chemicals 2 25,000 lb 25,000 lb 4 yrs. 4 yrs.  Partial Exemption Chemicals 3 10,000 lb 100,000 lb 4 yrs. 4 yrs.  Partial Exemption Chemicals 5 10,000 lb 500,000 lb 4 yrs. 4 yrs.  Partial Exemption Chemicals 6 25,000 lb 500,000 lb 4 yrs. 4 yrs.  Partial Exemption Chemicals 7 25,000 lb 1,000,000 lb 4 yrs. 4 yrs.  Partial Exemption Chemicals 8 25,000 lb 10,000,000 lb 4 yrs. 4 yrs.  Partial Exemption Chemicals 9 25,000 lb 500,000 lb/ 100,000 lb 4 yrs. 4 yrs.  Partial Exemption Chemicals Reporting Exemption Options 10 25,000 lb 100,000 lb 4 yrs. 4 yrs. Site Limited Petroleum Streams 11 25,000 lb 100,000 lb 4 yrs. 4 yrs. Inorganic Chemicals  Partial Exemption Chemicals Reporting Cycle Options 12 25,000 lb 100,000 lb 2 yrs. 4 yrs.  Partial Exemption Chemicals 13 25,000 lb 100,000 lb 2 yrs. 2 yrs.  Partial Exemption Chemicals 14 25,000 lb 100,000 lb One time Reporting One time Reporting  Partial Exemption III 42 The number of partial and full forms completed for organic, partial exemption, and inorganic chemicals varies by option. Under Options 1 and 2, a greater number of full forms are completed than under the proposed option, because these options have lower thresholds for facility and manufacturing information. The total number of reports completed is greater under the proposed option than under Option 1, while under Option 2 the total number of reports, and their allocation by chemical type, is equal to the proposed option. Under Option 3, the number of full forms completed, and the allocation of these forms by chemical type, is the same as under the proposed option. The number of partial forms completed under this option, and the number of partial exemption chemicals produced at volumes under 100,000 pounds, are greater than under the proposed option. Under Options 5, 6, 7, and 8, and the first reporting period under Option 9, the number of partial forms completed and the number of partial exemption chemicals produced under the 100,000 pound threshold are greater than under the proposed option, because of the higher thresholds for facility and manufacturing information under these options. For all of the options except Option 5, the allocation of the total number of reports by chemical type is equal to the allocation under the proposed option. III 43 Table III 24a. Number of Reports Expected for Each Option Option Total # of Report s Partial Form Full Form Threshol d Level Number of Reports % of Total Threshol d Level Number of Reports % of Total Baselin 24,774 10,000 24,774 100 N/ A 0 0 1 30,598 10,000 5,833 19.1 10,000 24,765 80.9 2 26,811 25,000 5,733 21.4 25,000 21,078 78.6 3 30,598 10,000 15,167 49.6 100,000 15,431 50.4 4 26,811 25,000 11,380 42.4 100,000 15,431 57.6 5 30,598 10,000 20,511 67.0 500,000 10,087 33.0 6 26,811 25,000 16,724 62.4 500,000 10,087 37.6 7 26,811 25,000 18,393 68.6 1,000,000 8,418 31.4 8 26,811 25,000 22,435 83.7 10,000,00 4,376 16.3 9a 26,811 25,000 16,724 62.4 500,000 10,087 37.6 11,380 42.4 100,000 15,431 57.6 10b 25,577 25,000 5,763 22.5 100,000 19,814 77.5 11 22,309 25,000 10,154 45.5 100,000 12,155 54.5 12 26,811 25,000 11,380 42.4 100,000 15,431 57.6 13 26,811 25,000 11,380 42.4 100,000 15,431 57.6 14 26,811 25,000 11,380 42.4 100,000 15,431 57.6 a This option would have a reporting threshold of 500,000 pounds for the full form in the first year and 100,000 pounds for the full form in future reporting years. b Site limited petroleum streams are exempt from all reporting under this option. The number of organic chemical reports includes all reportable petroleum stream chemicals except site limited petroleum streams. Sources: CUS Database 1996, CUS Database 1997, and CICIS Database 1986. III 44 Table III 24b. Number of Reports by Chemical Type Expected for Each Option Option Partial Form Full Form Threshol d Level Number of Reports Threshol d Level Number of Reports Organic Chemical s Partial Exemption Chemicals Inorganic Chemical s Organic Chemical s Partial Exemption Chemicals Inorganic Chemical s Baselin 10,000 24,774 0 0 N/ A 0 0 0 1 10,000 0 5,833 0 10,000 19,490 0 5,275 2 25,000 0 5,733 0 25,000 16,576 0 4,502 3 10,000 7,335 5,833 1,999 100,000 12,155 0 3,276 4 25,000 4,421 5,733 1,226 100,000 12,155 0 3,276 5 10,000 11,474 5,833 3,204 500,000 8,016 0 2,071 6 25,000 8,560 5,733 2,431 500,000 8,016 0 2,071 7 25,000 9,844 5,733 2,816 1,000,000 6,732 0 1,686 8 25,000 12,989 5,733 3,713 10,000,00 3,587 0 789 9a 25,000 8,560 5,733 2,431 500,000 8,016 0 2,071 4,421 5,733 1,226 100,000 12,155 0 3,276 10b 25,000 4,537 NA 1,226 100,000 16,538 0 3,276 11 25,000 4,421 5,733 0 100,000 12,155 0 0 12 25,000 4,421 5,733 1,226 100,000 12,155 0 3,276 13 25,000 4,421 5,733 1,226 100,000 12,155 0 3,276 14 25,000 4,421 5,733 1,226 100,000 12,155 0 3,276 a This option would have a reporting threshold of 500,000 pounds for the full form in the first year and 100,000 pounds for the full form in future reporting years. b Site limited petroleum streams are exempt from all reporting under this option. The number of organic chemical reports includes all reportable petroleum stream chemicals except site limited petroleum streams. Source: Appendix C.

Under Option 10, the number of reports completed for organic chemicals is greater than under the proposed option; however, the number of partial and full forms completed for inorganic chemicals is the same as for the proposed option. Under Option 11, the number of full and partial forms completed for organic chemicals and partial exemption chemicals is the same as under the proposed option,

however no inorganic chemical reports are completed under this option. Under Options 12, 13, and 14,

and subsequent reporting periods under Option 9, the total number of reports and their allocation by chemical type are the same as under the proposed option ( because there are no changes to the reporting thresholds or exemptions).

The expected number of sites that would report under each option for the proposed amendments is presented in Table III 25 below. Additionally, Table III 26 presents the number of III 45 chemicals expected to be reported. Although information on number of chemicals is not used to calculate the estimates of industry costs, the table provides a useful comparison of the expected number of chemicals for each option.

Table III 25. Numbers of Sites Expected for Each Option Option Threshold Level Number of Sites Organic Chemicals Partial Exemption Chemicals Inorganic Chemicals Total Baselin 10,000 2,683 0 0 2,683 1 10,000 2,511 526 633 3,670 2 25,000 2,416 529 540 3,485 3 10,000 2,511 526 633 3,670 4 25,000 2,416 529 540 3,485 5 10,000 2,511 526 633 3,670 6 25,000 2,416 529 540 3,485 7 25,000 2,416 529 540 3,485 8 25,000 2,416 529 540 3,485 9 25,000 2,416 529 540 3,485 10a 25,000 2,825 NA 540 3,365 11 25,000 2,416 529 0 2,945 12 25,000 2,416 529 540 3,485 13 25,000 2,416 529 540 3,485 14 25,000 2,416 529 540 3,485 a Site limited petroleum streams are exempt from all reporting under this option. The number of organic chemical reports in this option includes all reportable petroleum stream chemicals except site limited petroleum streams. Source: Appendix C. 29 Net present values for the amendment options were calculated over a twenty year period using a discount rate of three percent. Additional discussion on the basis for using this discount rate is provided in Appendix E.

III 46 Table III 26. Number of Chemicals Expected to be Reported for Each Option Option Total # of Chemicals Partial Form Full Form Threshol d Level Number of Chemicals Threshold Level Number of Chemicals Baselin 8,809 10,000 8,809 N/ A 0 1 10,439 10,000 431 10,000 10,008 2 8,904 25,000 430 25,000 8,474 3 10,439 10,000 4,393 100,000 6,046 4 8,904 25,000 2,858 100,000 6,046 5 10,439 10,000 6,780 500,000 3,659 6 8,904 25,000 5,245 500,000 3,659 7 8,904 25,000 6,000 1,000,000 2,904 8 8,904 25,000 7,745 10,000,000 1,159 9a 8,904 25,000 5,245 500,000 3,659 2,858 100,000 6,046 10b 8,617 25,000 2,431 100,000 6,186 11 7,796 25,000 2,556 100,000 5,240 12 8,904 25,000 2,858 100,000 6,046 13 8,904 25,000 2,858 100,000 6,046 14 8,904 25,000 2,858 100,000 6,046 a This option would have a reporting threshold of 500,000 pounds for the full form in the first year and 100,000 pounds for the full form in future reporting years. b Site limited petroleum streams are exempt from all reporting under this option. The number of organic chemical reports includes all reportable petroleum stream chemicals except site limited petroleum streams. Sources: CUS Database 1996, CUS Database 1997, and CICIS Database 1986.

2. Estimates of Industry Costs EPA has estimated incremental and total costs to industry associated with the proposal and with the other options analyzed. Incremental costs associated with the amendment are presented in Table III 27. EPA estimates incremental first year costs for the proposed amendments, relative to original requirements, to be between $ 48 million and $ 65 million. The estimated annualized incremental cost for this proposal is between $ 12 million and $ 18 million, and the estimated net present value over a twenty year period ranges from $ 184 million to $ 261 million. 29 These costs are attributed to the time required for compliance determination, rule familiarization, preparation and submission of III 47 reports, and recordkeeping. The largest portion of the incremental cost corresponds to the new requirement to provide processing and use information. Total costs, combining baseline and incremental costs, are presented in Table III 28.

Industry costs for Options 1 through 3 are higher than the costs for the proposed option because information would be collected for more chemicals and/ or more information would be collected.

Industry costs for Options 5 through 9 have lower costs than the proposed option because fewer numbers of reports would be expected under the higher reporting threshold options. Industry costs for Option 10 are higher than the costs for the proposed option because more reports containing use and exposure information are expected under this option than under the proposed option. Industry costs for Option 11 are less than for the proposed option because all inorganic chemicals would be exempt from reporting either facility identification and manufacturing information or processing and use information.

While first year costs for the three reporting cycle options ( Options 12, 13, 14) are the same as for the proposal, net present value and annualized costs are significantly higher for Options 12 and 13 because information would be collected more frequently. Net present values and annualized costs are significantly less for Option 14 because information would be collected only once. III 48 Table III 27. Incremental Net Present Values and Annualized Costs of Amendment Options Discounted at Three Percent ( million 1997$)

Option First Year Cost Net Present Valuea Annualized Cost Low High Low High Low High Threshold Options Option 1 $ 69.2 $ 91.2 $ 271.1 $ 371.7 $ 18.2 $ 25.0 Option 2 $ 58.3 $ 76.6 $ 225.8 $ 309.1 $ 15.2 $ 20.8 Option 3 $ 52.1 $ 72.7 $ 201.4 $ 292.6 $ 13.5 $ 19.7 Option 4 $ 47.9 $ 65.4 $ 183.7 $ 261.2 $ 12.3 $ 17.6 Option 5 $ 42.3 $ 62.0 $ 161.5 $ 247.3 $ 10.8 $ 16.6 Option 6 $ 38.1 $ 54.8 $ 143.8 $ 215.9 $ 9.7 $ 14.5 Option 7 $ 35.1 $ 51.4 $ 131.3 $ 201.8 $ 8.8 $ 13.6 Option 8 $ 27.7 $ 43.4 $ 101.1 $ 167.5 $ 6.8 $ 11.3 Option 9 $ 38.1 $ 54.8 $ 174.2 $ 250.9 $ 11.7 $ 16.9 Reporting Exemption Options Option 4 $ 47.9 $ 65.4 $ 183.7 $ 261.2 $ 12.3 $ 17.6 Option 10 $ 54.4 $ 71.5 $ 210.4 $ 287.9 $ 14.1 $ 19.3 Option 11 $ 36.8 $ 50.4 $ 137.6 $ 195.8 $ 9.2 $ 13.2 Reporting Cycle Options Option 4 $ 47.9 $ 65.4 $ 183.7 $ 261.2 $ 12.3 $ 17.6 Option 12 $ 47.9 $ 65.4 $ 268.8 $ 413.2 $ 18.1 $ 27.8 Option 13 $ 47.9 $ 65.4 $ 353.6 $ 512.8 $ 23.8 $ 34.5 Option 14 $ 47.9 $ 65.4 $ 46.5 $ 63.5 $ 3.1 $ 4.3 Note: Incremental costs may not calculate exactly due to rounding. a NPV determined for a 20 year period. III 49 Table III 28. Total Net Present Values and Annualized Costs of IUR Compliance, with Different Amendment Options Discounted at Three Percent ( million 1997$)

Option First Year Cost Net Present Valuea Annualized Cost Low High Low High Low High Baseline $ 13.9 $ 21.9 $ 63.7 $ 100.5 $ 4.3 $ 6.8 Threshold Options Option 1 $ 83.1 $ 113.2 $ 334.8 $ 472.2 $ 22.5 $ 31.7 Option 2 $ 72.2 $ 98.6 $ 289.6 $ 409.6 $ 19.5 $ 27.5 Option 3 $ 66.0 $ 94.6 $ 265.1 $ 393.1 $ 17.8 $ 26.4 Option 4 $ 61.8 $ 87.4 $ 247.4 $ 361.8 $ 16.6 $ 24.3 Option 5 $ 56.2 $ 84.0 $ 225.2 $ 347.8 $ 15.1 $ 23.4 Option 6 $ 52.0 $ 76.7 $ 207.4 $ 316.4 $ 13.9 $ 21.3 Option 7 $ 49.0 $ 73.4 $ 195.0 $ 302.3 $ 13.1 $ 20.3 Option 8 $ 41.6 $ 65.4 $ 164.8 $ 268.0 $ 11.1 $ 18.0 Option 9 $ 52.0 $ 76.7 $ 237.9 $ 351.4 $ 16.0 $ 23.6 Reporting Exemption Options Option 4 $ 61.8 $ 87.4 $ 274.4 $ 361.8 $ 16.6 $ 24.3 Option 10 $ 68.4 $ 93.5 $ 274.1 $ 388.4 $ 18.4 $ 26.1 Option 11 $ 50.7 $ 72.4 $ 201.3 $ 296.3 $ 13.5 $ 19.9 Reporting Cycle Options Option 4 $ 61.8 $ 87.4 $ 274.4 $ 361.8 $ 16.6 $ 24.3 Option 12 $ 61.8 $ 87.4 $ 329.0 $ 508.2 $ 22.1 $ 34.2 Option 13 $ 61.8 $ 87.4 $ 413.8 $ 607.8 $ 27.8 $ 40.8 Option 14 $ 61.8 $ 87.4 $ 60.0 $ 84.8 $ 4.0 $ 5.7 Note: Total Costs may not calculate exactly due to rounding. a NPV determined for a 20 year period. III 50 2. Cost Analysis for Threshold and Reporting Cycle Options A model was developed to calculate compliance costs for future reporting cycles in real terms for the baseline case and for each of the regulatory options under the proposed IUR amendments. To calculate industry burden, the estimated number of reports and sites for the baseline and for each option was multiplied by the unit costs for completing each of the tasks identified in Section B of this chapter. Incremental costs were then determined by subtracting the compliance costs associated with the baseline from the compliance costs for each reporting option.

Figure III 1 provides a graphic representation of the allocation of IUR Reporting Costs expected under the proposed amendments in relation to the original IUR. The relative costs for industry for reporting facility and manufacturing information and use and exposure information are presented in relation to the expected number of reports at the 10,000 pound, 25,000 pound, and 100,000 pound reporting thresholds. As the figure indicates, some chemicals that are originally reported under the IUR ( those with a production volume between 10,000 pounds and 25,000 pounds) would not be required to report under the proposed IUR amendments. In addition, chemicals manufactured above a 25,000 pound threshold would be required to report additional facility and manufacturing information and those above a 100,000 pound threshold would report processing and use information, as well as the facility and manufacturing information.

Other aspects of the industry burden calculation are as follows:

all industry compliance costs are incurred in the year in which reporting occurs;

the reporting cycle for the baseline and each of the threshold options is four years; and,

all costs are presented in first quarter 1997 dollars, costs begin to be incurred in 1998, and are analyzed for a period of twenty years ( i. e., only compliance costs between 1998 and 2017 are considered).

3. Limitations of the Industry Burden Analysis There are a number of uncertainties that result from the approach and methodology used to model the industry costs associated with the IUR amendments. Some of these uncertainties lead to III 51 Identification of Information Reporting Costs:

A: Processing and use information reporting costs for production volumes between 10,000 and 25,000 pounds. These costs are not incurred under either the existing or amended IUR information requirements.

B: Additional facility and manufacturing information reporting costs for production volumes between 10,000 and 25,000 pounds. These costs are not incurred under either the existing or amended IUR information requirements.

C: Baseline reporting costs for production volumes between 10,000 and 25,000 pounds under the existing IUR requirements. These chemicals are excluded from reporting under the amended IUR information requirements.

D: Processing and use information reporting costs for companies completing the partial form. These costs are not incurred under either the existing or amended IUR information requirements due to either the production volume ( under 100,000 lbs) or the partial exemptions.

E: Facility and manufacturing information reporting costs for companies completing the partial form. These costs are incurred under the proposal but are not incurred under the existing IUR information requirements.

F: Reporting costs for companies completing the partial form that are incurred under both the existing and the amended IUR information requirements.

G: Processing and use information reporting costs for companies completing the full form. These costs are incurred under the proposal but are not incurred under the existing IUR information requirements.

H: Facility and manufacturing information reporting costs for companies completing the full form. These costs are incurred under the proposal but are not incurred under the existing IUR information requirements.

I: Reporting costs for companies completing the full form that are incurred under both the existing and the amended IUR information requirements.

Summary of Reporting Costs:

Baseline Costs: C+ F+ I Incremental Costs of Proposed Amendments: E+ H+ G Total Reporting Costs: E+ F+ G+ H+ I Savings: C Figure III 1 30 ICF. 1996. Survey for Estimating the Industry Burden Associated With Collecting Additional Chemical Use Data Under TSCA Section 8 ( IUR Amendments). OMB Control No. 2070 0034. Conducted for EPA by ICF Incorporated, Washington, D. C.

31 As discussed in Appendix D, small companies were identified as having annual sales less than or equal to $ 40 million, medium sized companies as having annual sales greater than $ 40 million and less than or equal to $ 200 million, and large companies as having annual sales greater than $ 200 million.

III 52 overestimates of quantified industry costs. The following points discuss some uncertainties that could significantly impact the results of the analysis:

The analysis may overestimate the costs of compliance for smaller companies. According to the survey30 ( see Appendix D), the average cost of preparing and submitting a report for a large company is $ 3,101 to $ 4,368, for a medium company is $ 3,162 to $ 3,509 and for a small company is $ 1,408 to $ 1,683.31 The burden estimates for completion of the other tasks associated with compliance may also be more appropriate for a typical large company. Large companies may have to coordinate various levels of management and technical personnel to prepare the required information, while smaller companies are likely to have less variation in their chemical output and use and a more contained managerial and technical staff. Given the differences between small and large companies, the unit cost estimates presented in this analysis are probably somewhat high for a typical small company.

It is possible that the cost of supplying the exposure and use information for a small volume chemical with few uses is lower than for a large volume and widely used chemical. For example, if compliance costs for a small use, low volume chemical are 1/ 3 of the compliance costs for a larger volume, multi use chemical, a substantial drop in the total expected costs could be possible. Although this analysis attempts to account for this by scaling the burden estimates reported in the industry survey according to company size categories, the average unit cost of compliance presented in this analysis still may not entirely account for these two different scenarios.

The weighting factors that have been applied to future unit costs are based on an assumed reduction in reporting burden in future reporting cycles. These factors may be high if information for many of the reportable chemicals does not change significantly over time, resulting in overestimates of the industry reporting burden. Conversely, these factors may be too low if changes to the industry are greater than expected or if there is a large turnover in companies reporting or chemicals being reported.

The estimated number of reports in future reporting cycles, which is an average of the past three IUR reporting cycles, may be an overestimate. The number of reports submitted under the original IUR has continually decreased slightly from reporting cycle to reporting cycle; insufficient data exist to determine if this decrease will continue.

Insufficient data exist to determine how many sites currently subject to reporting will be affected by the proposal to remove the exemption on inorganic chemicals. It is assumed that in response to this change there will be an increase in the number of sites reporting, rather than an increase in the number of chemicals reported per site. This assumption may overestimate the total cost of the rule, but underestimate the per site cost.

The analysis assumes that a site only submits one type of report ( i. e., full form or partial form). In reality, it is likely that sites will report both full and partial forms. This assumption may significantly over or underestimate the costs of compliance for a given site, depending on the particular mix of report types. III 53 4. Sensitivity Analysis Appendix E presents a detailed sensitivity analysis that varies certain assumptions used in the cost analysis to assess the sensitivity of those assumptions. For example, changing the number of reports completed per site affects the costs presented for the proposed option. As shown in Table III

29, the sensitivity analysis for Scenarios 1a and 1b is based on variations in the assumed number of reports per site. For these scenarios, incremental costs are presented only in terms of the effect on per site costs. In addition, Tables III 30 and III 31 present the impacts on incremental, baseline, and total net present value and annualized costs of the proposed IUR amendments using a 7 percent instead of a 3 percent discount rate. More detail on the basis for varying the discount rate is provided in Appendix E.

Table III 29. Results for Sensitivity Around the Number of Reports per Site Scenario Reports Per Site Incremental Cost Per Site ( 1997$)

Low High Proposal 8.4 Organic Chemicals $ 21,169 $ 27,112 Petroleum Streams $ 5,780 $ 10,407 Inorganic $ 24,878 $ 32,526 Scenario 1a 1 Organic Chemicals $ 3,790 $ 4,747 Petroleum Streams $ 1,958 $ 2,758 Inorganic $ 4,533 $ 5,849 Scenario 1b 20 Organic Chemicals $ 48,412 $ 62,171 Petroleum Streams $ 11,769 $ 22,397 Inorganic $ 56,771 $ 74,343 III 54 Table III 30. Incremental Net Present Values and Annualized Costs of Amendment Options Discounted at Seven Percent ( million 1997$)

Option Net Present Valuea Annualized Cost Low High Low High Threshold Options Option 1 $ 243.6 $ 333.6 $ 23.0 $ 31.5 Option 2 $ 203.0 $ 277.5 $ 19.2 $ 26.2 Option 3 $ 181.0 $ 262.7 $ 17.1 $ 24.8 Option 4 $ 165.1 $ 234.6 $ 15.6 $ 22.1 Option 5 $ 145.2 $ 222.0 $ 13.7 $ 21.0 Option 6 $ 129.3 $ 194.0 $ 12.2 $ 18.3 Option 7 $ 118.1 $ 181.3 $ 11.1 $ 17.1 Option 8 $ 91.0 $ 150.6 $ 8.6 $ 14.2 Option 9 $ 155.9 $ 224.6 $ 14.7 $ 21.2 Reporting Exemption Options Option 4 $ 165.1 $ 234.6 $ 15.6 $ 22.1 Option 10 $ 189.1 $ 258.4 $ 17.8 $ 24.4 Option 11 $ 123.8 $ 175.9 $ 11.7 $ 16.6 Reporting Cycle Options Option 4 $ 165.1 $ 234.6 $ 15.6 $ 22.1 Option 12 $ 226.2 $ 347.1 $ 21.4 $ 32.8 Option 13 $ 297.0 $ 430.2 $ 28.0 $ 40.6 Option 14 $ 44.8 $ 61.1 $ 4.2 $ 5.8 Note: 1. Option 4 is the proposed option. 2. Incremental costs may not calculate exactly due to rounding. a NPV determined for a 20 year period. III 55 Table III 31. Total Net Present Values and Annualized Costs of IUR Compliance, with Different Amendment Options Discounted at Seven Percent ( million 1997$)

Option Net Present Valuea Annualized Cost Low High Low High Baseline $ 57.0 $ 90.0 $ 5.4 $ 8.5 Threshold Options Option 1 $ 300.6 $ 423.6 $ 28.4 $ 40.0 Option 2 $ 260.0 $ 367.5 $ 24.5 $ 34.7 Option 3 $ 238.0 $ 352.7 $ 22.5 $ 33.3 Option 4 $ 222.1 $ 324.6 $ 21.0 $ 30.6 Option 5 $ 202.2 $ 312.0 $ 19.1 $ 29.4 Option 6 $ 186.3 $ 284.0 $ 17.6 $ 26.8 Option 7 $ 175.1 $ 271.3 $ 16.5 $ 25.6 Option 8 $ 148.0 $ 240.6 $ 14.0 $ 22.7 Option 9 $ 213.0 $ 314.6 $ 20.1 $ 29.7 Reporting Exemption Options Option 4 $ 222.1 $ 324.6 $ 21.0 $ 30.6 Option 10 $ 246.1 $ 348.4 $ 23.2 $ 32.9 Option 11 $ 180.8 $ 265.9 $ 17.1 $ 25.1 Reporting Cycle Options Option 4 $ 222.1 $ 324.6 $ 21.0 $ 30.6 Option 12 $ 276.7 $ 426.8 $ 26.1 $ 40.3 Option 13 $ 347.5 $ 509.9 $ 32.8 $ 48.1 Option 14 $ 57.8 $ 81.6 $ 5.4 $ 7.7 a NPV determined for a 20 year period. IV 1 CHAPTER IV. AGENCY COSTS This chapter provides an analysis of the costs associated with the proposed amendments to the Inventory Update Rule ( IUR amendments) expected to be incurred by EPA for establishing and maintaining IUR amendments data. The activities associated with the proposed IUR amendments and the attendant costs are discussed below. The remainder of the chapter is organized as follows:

Section A outlines the approach used to determine Agency costs, including a description of the methodology;

Section B discusses the tasks and develops costs attributable to requirements under the original IUR;

Section C discusses the tasks and incremental costs that would be attributed to requirements under the proposed IUR amendments;

Section D provides an estimate of total expected Agency costs.

A. Overview and Methodology of Determining Agency Costs of Reporting This section describes the assumptions and general methodology employed for estimating Agency costs associated with both the original IUR and the proposed IUR amendments. The expected costs include costs attributable to systems development, document processing, contract oversight and management, and publication of forms and materials. Costs related to using the data are not included.

The following methodology for developing estimated costs for both the original IUR and proposed IUR amendments was used:

Step 1: Identify the tasks performed for both the original IUR and the proposed IUR amendments;

Step 2: Determine the costs for each activity under the original IUR and the proposed IUR amendments;

Step 3: Determine the estimated total costs for the original IUR and the proposed IUR amendments.

In addition, it should be noted that in developing the cost estimates for determining Agency burden,

activities associated with one time events were distinguished from costs that are incurred annually.

This distinction was considered throughout the discussion of individual tasks and is handled directly in the presentation of Agency costs. IV 2 B. Agency Tasks and Costs Under the Original IUR  The Baseline This section describes the Agency tasks required for processing submissions under the original IUR.

These tasks, described below in Section 1, include database systems development, Form U processing,

document development, and mailings. Section 2 presents an account of the costs incurred by the Agency for each identified task.

1. Description of Tasks Associated with the Original IUR The tasks associated with the original IUR for which the Agency is responsible are presented under four main categories: database systems development, guidance document development, Form U processing, and additional tasks.

Database Systems Development and Maintenance  The Agency is responsible for having adequate information systems in place to support the Chemical Update System ( CUS) that serves as the primary data storage medium for IUR collections. For the 1994 collection period, the Agency incurred capital expenses associated with redeveloping CUS for operation on a PC LAN environment, replacing the CBI Mainframe environment of the past. Systems development is a one time cost for the original IUR.

File servers with appropriate backup are used to contain the IUR databases. In addition, IUR data are tracked via the correspondence tracking system utilized by the Confidential Business Information Tracking System ( CBITS) located within the Confidential Business Information Center ( CBIC). Hence, a portion of the CBIC overhead is attributable to IUR.

The Agency has plans to improve the quality control of these databases. These plans range from the development of computer programs to check information against previously submitted information and to look for abnormalities in the submitted data to the use of electronic submissions to increase the speed and accuracy of adding information to the database. The cost of these improvements are not included in this analysis as the Agency plans to make these changes regardless of the status of these amendments.

Additional costs associated with recordkeeping include purchasing and maintaining file cabinets and office space to store accumulated records. Estimates of the costs attributable to these activities have not been developed because costs are expected to result from both original IUR and IUR amendments requirements and because these costs are expected to be small.

Guidance Document Development  The Agency is responsible for developing guidance for the IUR to assist reporters in complying with IUR requirements. The guidance documents usually are developed by a contractor with oversight by Agency personnel. The costs associated with guidance document development are discussed below under both Extramural Tasks and Tasks Performed by Agency Personnel.

Form U Processing  The Agency is responsible for handling processing of IUR submissions. This includes developing standard operating procedures and documentation for all stages in the IUR document life cycle, document receipt and tracking, data input, quality control, file and database maintenance, information security, CBI aggregation policy, data dissemination, and staff training. The various tasks associated with document processing are performed by both Agency personnel and contractors.

Additional Activities  The Agency undertakes the publication and printing of the IUR form and other miscellaneous materials. In addition, the Agency is responsible for providing the TSCA * One time costs of approximately $ 328,515 have been incurred for development of the current guidance document, development of the current database systems, and hardware and software expenses. These costs are not part of the baseline annual Agency costs.

33 Based on an additional 41 percent of the salary for fringe benefits and 17 percent of the salary plus fringe benefits for overhead ( U. S. EPA 1997a).

IV 3 Hotline with standardized responses for frequently asked questions; preparing mailings, mailing lists, and labels; and developing outgoing informational materials.

2. Costs of Tasks Associated with the Original IUR The Agency incurs costs associated with the original IUR that are attributable to the task areas described above. Costs for tasks in these categories can be divided into those performed by Agency personnel, those performed by contractors, and additional tasks. The costs associated with the development of a database system and the development of a guidance document are assumed to be one time costs32 that have already been incurred by the Agency.

a. Tasks Performed by Agency Personnel To estimate the cost of tasks performed by Agency personnel, in terms of full time equivalents ( FTEs), the number of FTEs and the GS level required to perform each task were determined. The salary rates were taken from Salary Table No. 96 DCB from the U. S. Office of Personnel Management ( OPM 1996). The salary rates are presented by GS level and Step. For this analysis, a Step 3 is assumed for all FTEs.

The original IUR requires one FTE, GS 12 at a salary of $ 47,423 to perform quality control of data entry. One FTE, GS 13 at a salary of $ 56,392 is required to perform data processing, systems development, and contract oversight & management. The annual cost of tasks performed by Agency personnel sums to two FTEs for a total of $ 103,815. In addition, 0.5 FTE, GS 13 at a salary of $ 56,392 is required to oversee the development of a guidance document for the IUR. The cost associated with this task is a one time cost. After accounting for fringe benefits and overhead, agency personnel tasks cost $ 171,264 annually, with one time costs of $ 46,515 ( IMD 1996a, U. S. EPA 1996b). 33 b. Extramural Tasks Extramural tasks are described as those performed by contractors. Under the original IUR, annual document receipt and tracking and data entry costs amount to $ 40,000; backup systems IV 4 operations costs are $ 25,000, annually. Hence, the total annual costs associated with extramural tasks for the original IUR are equal to about $ 65,000. In addition, hardware and software costs, systems development, and the development of a guidance document for the original IUR represented a one time cost of approximately $ 282,000 ( IMD 1996a, U. S. EPA 1996b).

c. Additional Tasks Additional tasks include publication and printing of forms and materials, provision of supplies and materials for the hotline, staffing, and costs associated with mailings. IUR informational materials that would need to be printed include guidance documents, policy letters, and current and past forms. The hotline staff ( contractor) are responsible for responding to phone calls, faxes, letters, and email regarding questions about the IUR and requests for materials. In addition, the hotline staff performs all activities associated with mailing requested materials and bulk mailings.

Under the original IUR, it is estimated that the cost of publishing forms, developing other materials,

including guidance documents and policy letters, is approximately $ 1,000 annually. In addition,

approximately seven percent of the calls received and handled by the TSCA hotline can be attributed to the IUR. Therefore, the portion of hotline costs that are attributable to the IUR is estimated to be about seven percent of the hotline budget, or approximately $ 40,200, annually. Costs associated with preparing mailings in response to information requests under the original IUR are approximately $ 400 annually. This cost is based on approximately 21 mailings per month at a cost of $ 1.50 each.

Therefore, the total estimated cost for provision of supplies and materials, as well as operation of the hotline to handle IUR related calls, is estimated to be $ 41,600 ( U. S. EPA 1996g, U. S. EPA 1998b).

3. Total Baseline Agency Costs Baseline Agency costs are divided into two categories: total annual costs and total one time costs. The total one time costs under the original IUR are sunk costs. The annual costs of the original IUR are incurred each year reports are submitted. The total annual costs under the original IUR are presented in Table IV 1.

The total annual cost associated with the original IUR is approximately $ 280,000. This cost includes the cost of Agency tasks ( quality control of data entry, data processing, systems development, IV 5 Table IV 1. Estimated Annual Costs for Determining Agency Costs for the Original IUR Task Original IUR Costs Tasks Performed by Agency Personnel Quality Control of Data Entry $ 78,234 ( 1 FTE, GS 12)

Data Processing, Systems Development, and Contract Oversight & Management $ 93,030 ( 1 FTE, GS 13)

Sub total $ 171,264 Extramural Tasks ( contractor)

Document Receipt & Tracking and Data Entry $ 40,000 Backup Systems Operations $ 25,000 Sub total $ 65,000 Additional Tasks Publication and Printing Forms & Materials $ 1,000 Hotline $ 40,200 Mailing $ 400 Sub total $ 41,600 Total Annual Cost $ 277,864 Note: All costs associated with FTEs include 41 percent fringe benefits and 17 percent overhead.

Sources: OPM 1996, U. S. EPA 1997a, IMD 1996a, U. S. EPA 1996g, U. S. EPA 1998b.

Table IV 2. Estimated One Time Costs for Determining Agency Costs for the Original IURa Task Original IUR Costs Tasks Performed by Agency Personnel Guidance Document Development $ 46,515 ( 0.5 FTE, GS 13)

Sub total $ 46,515 Extramural Tasks ( contractor)

Systems Development $ 190,000 Hardware & Software $ 42,000 Guidance Document Development $ 50,000 Sub total $ 282,000 Total One Time Cost $ 328,515 Note: All costs associated with FTEs include 41 percent fringe benefits and 17 percent overhead.

a Systems development, hardware/ software, and guidance document development costs under the original IUR are considered to be sunk costs and are not included in the estimates of total costs associated with the original IUR. These costs are presented, however, for the purposes of developing incremental costs for the IUR amendments relevant to current requirements. These one time costs total $ 328,515.

Sources: U. S. EPA 1996b, OPM 1996, IMD 1996a, U. S. EPA 1997a. IV 6 and contract oversight and management), extramural tasks ( document receipt and tracking, data entry,

and backup systems operations), and additional tasks ( publication and printing forms and materials, the hotline, and mailings). The total one time cost of $ 328,515 is attributable to guidance document development and costs associated with systems hardware and software, as presented in Table IV 2 ( IMD 1996a, U. S. EPA 1996b).

C. Agency Tasks and Costs Under the Proposed IUR Amendments This section describes the Agency tasks required for processing submissions under the proposed IUR amendments. These tasks, described below, include database systems development,

Form U processing, document development, and mailings. Section 2 presents an account of the costs incurred by the Agency for each identified task.

1. Description of Tasks Associated with the IUR Amendments The tasks that must be performed under the proposed IUR amendments consist largely of an expanded effort for tasks already undertaken for the original IUR. Thus, the task descriptions presented in Section B. 1 generally do not change. However, the magnitude of any specific task may change. One change worthy of explanation involves database systems development and maintenance.

A description of particular modifications required by the IUR amendments is provided below:

Database Systems Development and Maintenance  In addition to the tasks identified for this category under Section B. 1, the IUR amendments would require that the database be expanded to handle the additional reporting requirements of the IUR amendments. The cost estimate for the IUR amendments accounts for further expenses associated with the expansion of the database system. Recreating the CUS entails the following tasks:

 procurement of new hardware and software;  contractor supported programming for database redesign;  development of new input modules to facilitate scanning and text recognition of paper versions, these include a manual data entry module, an electronic ( ASCII) version of the form, and subsequent upload modules;  creation of retrieval modules that standardize reports; and  incorporation of CBI protection into the design of the system.

A change in the magnitude of each task described in Section B. 1 is reflected in the number of Agency personnel or contractors required and/ or in the incremental cost.

2. Incremental Costs of Tasks Associated with the IUR Amendments IV 7 This section describes the costs associated with the additional tasks performed under the IUR amendments. Because tasks are performed by both Agency personnel and contractors, the costs are organized as: tasks performed by Agency personnel, extramural tasks performed by contractors, and additional tasks ( e. g., hotline administration and production of informational materials).

a. Tasks Performed by Agency Personnel ( FTEs)

As mentioned in an earlier section, the cost of tasks performed by Agency personnel,

in terms of full time equivalents ( FTEs), was estimated using the number of FTEs and the GS level required to perform each task. The salary rates were taken from Salary Table No. 96 DCB from the U. S. Office of Personnel Management ( OPM 1996). The salary rates are presented by GS level and Step. For this analysis, a Step 3 is assumed for all FTEs.

The IUR amendments would require one additional FTE, GS 12 at a salary of $ 47,423, to perform quality control of data entry and an additional FTE, GS 13 at a salary of $ 56,392, to perform data processing, systems development, and contract oversight and management, relative to the original IUR. The cost of tasks performed by these personnel for the proposed IUR amendments would amount to incremental salary costs of $ 103,815. The development of a guidance document for the amended IUR would require 0.5 FTE at a salary of $ 56,392. This cost would be a one time cost. Once fringe benefits and overhead are added, this represents incremental annual costs of $ 171,264 ( IMD 1996a,

U. S. EPA 1996b, U. S. EPA 1997a).

b. Extramural Tasks As explained in Section B. 2. b, extramural tasks are described as those performed by contractors. For the proposed IUR amendments, document receipt and tracking and data entry would increase by approximately $ 40,000; backup systems operations cost would double, causing an incremental cost of $ 25,000. Hence, the annual incremental costs of extramural activities for the IUR amendments is estimated to be about $ 65,000. Compared to the original systems development and hardware/ software costs, the one time costs of hardware and software acquisition, systems development, and the development of a new guidance document would require a one time incremental cost of $ 203,000. This incremental cost is the one time cost for conducting the necessary systems and IV 8 hardware/ software upgrades to handle submissions under the IUR amendments ( IMD 1996a, U. S. EPA 1996b).

c. Additional Tasks Additional tasks associated with the proposed IUR amendments include publication and printing of forms and materials, provision of supplies and materials for the hotline,

staffing, and costs associated with mailings. IUR informational materials that would need to be printed include guidance documents, policy letters, and current and past forms. As with the original IUR, the hotline staff ( contractor) is responsible for responding to phone calls, faxes, letters, and e mail regarding questions about the IUR and requests for materials. In addition, the hotline staff performs all activities associated with mailing requested materials and bulk mailings.

Under the proposed IUR amendments, it is estimated that the incremental costs of providing forms and materials would be approximately $ 4,000. In addition to these costs, it is anticipated that the costs associated with operating the TSCA hotline to handle IUR related calls will increase by $ 30,000 in the first year of reporting under the proposed amendments. No incremental costs are expected for every year thereafter because it is estimated that the annual hotline cost associated with the IUR will return to $ 40,200 ( the original cost of this activity under the original IUR). The cost associated with preparing mailings under the IUR amendments is estimated to increase by $ 5,100 in the first year,

based on approximately 3,400 more mailings than the original IUR at $ 1.50 each for a peak period of 6 months and then a return to the current rate of mailings for the remainder of the year. Thus, the annual incremental costs of preparing mailings under the proposed IUR amendments is estimated to be zero in future years. Therefore, the incremental costs for additional tasks under the IUR amendments is approximately $ 4,000 annually while the costs estimated for the first reporting year are $ 39,100 ( U. S.

EPA 1996g, U. S. EPA 1998b).

3. Incremental Agency Costs of the Proposed IUR Amendments Agency costs are divided into two categories: total annual costs and total one time costs. Under the proposed IUR amendments, the one time costs would be incurred in the first reporting year. The annual cost would be incurred for every year thereafter. The total annual incremental costs under the proposed IUR amendments are presented in Tables IV 3 and IV 4. 34 The values in Table IV 6 are identical to the values in Table IV 4, because the baseline one time costs are considered sunk costs and are not included in the calculation of total one time costs under the amended IUR. Incremental one time Agency costs and total one time Agency costs are therefore equal.

IV 9 The incremental Agency cost associated with the proposed IUR amendments in the first year of reporting is $ 524,879 ( this includes the one time costs associated with the amendments). The annual incremental cost is $ 275,364.

D. Total Agency Costs The total annual Agency cost associated with the proposed amended IUR is estimated to be approximately $ 550,000, attributable to the same tasks as the total annual costs under the original IUR.

The total first year cost, including one time costs, associated with the proposed IUR amendments is estimated at approximately $ 802,743. This cost would be incurred in the first year of reporting under the amendments. Total Agency costs for each of the tasks described in this chapter are presented in Tables IV 5 and IV 6.34 IV 10 Table IV 3. Estimated Incremental Annual Costs for Determining Agency Costs for the Proposed IUR Amendments Task IUR Amendment Costs Tasks Performed by Agency Personnel Quality Control of Data Entry $ 78,234 ( 1 FTE, GS 12)

Data Processing, Systems Development, and Contract Oversight & Management $ 93,030 ( 1 FTE, GS 13)

Sub total $ 171,264 Extramural Tasks ( contractor)

Document Receipt & Tracking and Data Entry $ 40,000 Backup Systems Operations $ 25,000 Sub total $ 65,000 Additional Tasks Publication and Printing Forms & Materials $ 4,000 Hotlinea $ 30,000 Mailinga $ 5,100 Sub total $ 39,100 Total Annual Cost $ 275,364 Note: All costs associated with FTEs include 41 percent fringe benefits and 17 percent overhead.

a These costs are the costs that would be incurred in the first year of reporting under the proposed IUR amendments. No incremental costs are expected for these tasks in subsequent years.

Sources: U. S. EPA 1997a, OPM 1996, IMD 1996a, U. S. EPA 1996g, U. S. EPA 1998b.

Table IV 4. Estimated Incremental One Time Costs for Determining Agency Costs for the Proposed IUR Amendments Task IUR Amendment Costs Tasks Performed by Agency Personnel Guidance Document Development $ 46,515 ( 0.5 FTE, GS 13)

Sub total $ 46,515 Extramural Tasks ( contractor)

Systems Development $ 95,000 Hardware & Software $ 8,000 Guidance Document Development $ 100,000 Sub total $ 203,000 Total One Time Cost $ 249,515 Note: All costs associated with FTEs include 41 percent fringe benefits and 17 percent overhead.

Sources: U. S. EPA 1997a, OPM 1996, IMD 1996a, U. S. EPA 1996b. IV 11 Table IV 5. Estimated Total Annual Agency Costs for the Amended IUR Task Total Amended IUR Costs Tasks Performed by Agency Personnel Quality Control of Data Entry $ 156,468 ( 2 FTE, GS 12)

Data Processing, Systems Development, and Contract Oversight & Management $ 186,060 ( 2 FTE, GS 13)

Sub total $ 342,528 Extramural Tasks ( contractor)

Document Receipt & Tracking and Data Entry $ 80,000 Backup Systems Operations $ 50,000 Sub total $ 130,000 Additional Tasks Publication and Printing Forms & Materials $ 5,000 Hotlinea $ 70,200 Mailinga $ 5,500 Sub total $ 80,700 Total Annual Cost $ 553,228 Note: All costs associated with FTEs include 41 percent fringe benefits and 17 percent overhead.

a These costs are the costs that would be incurred in the first year of reporting under the proposed IUR amendments. Costs are expected to be equal to costs under the original IUR in subsequent years.

Sources: U. S. EPA 1997a, OPM 1996, IMD 1996a, U. S. EPA 1996g, U. S. EPA 1998b.

Table IV 6. Estimated Total One Time Agency Costs for the Amended IUR Task Total Amended IUR Costs Tasks Performed by Agency Personnel Guidance Document Development $ 46,515 ( 0.5 FTE, GS 13)

Sub total $ 46,515 Extramural Tasks ( contractor)

Systems Development $ 95,000 Hardware & Software $ 8,000 Guidance Document Development $ 100,000 Sub total $ 203,000 Total One Time Cost $ 249,515 Note: All costs associated with FTEs include 41 percent fringe benefits and 17 percent overhead.

Sources: U. S. EPA 1997a, OPM 1996, IMD 1996a, U. S. EPA 1996b. V 12 CHAPTER V. IUR AMENDMENTS BENEFITS ASSESSMENT As discussed in Chapter II, neither EPA nor the public have access to the information needed to effectively and accurately identify the potential risks of chemicals in production or use in the United States. The benefits from this proposed rule stem from filling this information void. Some of the benefits are immediate  information is provided which enables EPA and others to identify chemicals of potential concern. Some of the benefits are in the future  once the chemicals of concern are identified,

EPA or others must take additional action to further characterize and to address the associated risks,

thereby garnering the benefits associated with reducing those risks.

Effective screening of human health and other risks potentially posed by chemicals depends critically on having sufficient information to characterize a chemical's uses and to predict or model potential exposure. The current approach, using production volume information supplemented by relatively scarce public sources of information, is not sufficient for identifying chemical exposures and human risks, even at the screening level. EPA expects that the collection and compilation of additional manufacturing, processing, use, and exposure information, when combined with hazard data, will provide EPA with the data it needs to conduct effective risk based screening. EPA believes that a better compilation of use and exposure data will enable its programs to more accurately predict the magnitude and nature of ecosystems and human populations potentially exposed; the concentrations, frequency,

and duration of exposures; and a host of other specific factors related to potential chemical exposures.

With the additional information, EPA will be able to pre screen chemicals to identify whether additional risk screening and management steps may be needed.

Ultimately, because the process by which chemicals enter and proceed through EPA's risk screening programs will be enhanced by the availability of data on exposure, EPA expects to more effectively and expeditiously reduce the risks posed by these chemicals, which will have positive consequences for human and ecosystem health.