ECONOMIC ANALYSIS OF PROPOSED AMENDMENTS TO THE TSCA SECTION 8 INVENTORY UPDATE RULE Economic and Policy Analysis Branch Economics, Exposure and Technology Division Office of Pollution Prevention and Toxics U. S. Environmental Protection Agency March 1, 1999 Addendum, Executive Summary, and Summary Revised July 29, 1999 i TABLE OF CONTENTS Page LIST OF TABLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii FIGURES AND BOXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ES 1 SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S 1 ADDENDUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . AD 1 I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I 1 A. Statutory Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I 1 B. Description of Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I 2 C. Overview of the Regulated Community . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I 8 D. Purpose and Contents of Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I 11 II. STATEMENT OF PROBLEM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II 1 A. Statement of Need . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II 1 B. Approaches to Regulation and Options for Collecting Information . . . . . . . . . . . . . . . . . II 10 III. INDUSTRY COSTS OF THE PROPOSAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III 1 A. Overview and Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III 1 B. Baseline Costs of Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III 10 C. Costs of the Proposed Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III 18 D. Overview of Reporting Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III 35 IV. AGENCY COSTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV 1 A. Overview and Methodology of Determining Agency Costs of Reporting . . . . . . . . . . . . . . IV 1 B. Agency Tasks and Costs Under the Original IUR  The Baseline . . . . . . . . . . . . . . . . . . . IV 2 C. Agency Tasks and Costs Under the Proposed IUR Amendments . . . . . . . . . . . . . . . . . . . IV 7 D. Total Agency Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV 10 V. IUR AMENDMENTS BENEFITS ASSESSMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V 1 A. Benefits from Use and Exposure Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V 2 B. Benefits Due to Fewer CBI Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V 16 C. Benefits of Changing Certain Exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V 17 D. Administrative and Related Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V 19 E. Benefits From Reporting Thresholds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V 19 F. Benefits From Reporting Cycle Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V 24 VI. COST BENEFIT ANALYSIS AND COST EFFECTIVENESS COMPARISONS . . . . . . . . . . . VI 1 VII. SMALL ENTITITY AND ENVIRONMENTAL JUSTICE IMPACT DETERMINATIONS . . . . . VII 1 A. Small Entity Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII 1 B. Analysis of Economic Impacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII 5 C. Environmental Equity / Justice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII 9 REFERENCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . R 1 ii Appendix A. Draft Reporting Form for the Proposed IUR Amendments . . . . . . . . . . . . . . . . . . . . . . A 1 Appendix B. Current Data Collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B 1 Appendix C. Development of the Estimated Numbers of Expected Submissions for the Original IUR and IUR Amendments Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C 1 Appendix D. Industry Survey Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D 1 Appendix E. Sensitivity Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E 1 iii LIST OF TABLES Table S 1: Options Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S 6 Table S 2: Summary of Proposed IUR Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S 13 Table AD 1: Proposed IUR Amendments  Cost and Burden Estimates  Variations Based on Changes in Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . AD 4 Table I 1: Standard Industrial Codes for Industries Likely to Be Subject to IUR Reporting . . . . . I 9 Table II 1: Components of Exposure Assessments and Exposure Related Data Elements . . . . . II 6 Table II 2: Options for the Proposed IUR Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II 14 Table III 1: Loaded Hourly Wage Rates by Labor Category . . . . . . . . . . . . . . . . . . . . . . . . . . . . III 4 Table III 2: Estimate of Industry Reporting Burden for Sections of Revised Form U . . . . . . . . . III 9 Table III 3: Baseline Cost of Compliance Determination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III 13 Table III 4: Baseline Cost of Rule Familiarization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III 13 Table III 5: Baseline Cost of Report Preparation and Submission . . . . . . . . . . . . . . . . . . . . . . III 14 Table III 6: Baseline Cost of Recordkeeping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III 15 Table III 7: Baseline Cost of Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III 16 Table III 8: Annual Baseline Cost by Production Volume Category . . . . . . . . . . . . . . . . . . . . . III 17 Table III 9: Baseline First Year, Net Present Value, and Annualized Costs According to Chemical Type, Discounted at 3 Percent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III 18 Table III 10: Incremental Burden Per Site of Rule Familiarization . . . . . . . . . . . . . . . . . . . . . . . III 20 Table III 11: Incremental Costs of Rule Familiarization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III 21 Table III 12: First Year Incremental Cost of Preparation and Submission of a Report Associated with the Amendments for Sites Already Reporting . . . . . . . . . . . . . . . . III 24 Table III 13: Scaling Factors for Unit Cost of Preparation and Submission of Reports in Future Reporting Cycles Under Proposed IUR Amendments . . . . . . . . . . . . . . . . . III 27 Table III 14: Future Years Incremental Cost of Preparation and Submission of a Report under the Proposed IUR Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III 28 Table III 15: Incremental Burden Per Report of Recordkeeping . . . . . . . . . . . . . . . . . . . . . . . . . III 29 Table III 16: Incremental Cost of Recordkeeping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III 30 Table III 17: Summary of Incremental Per Report Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III 31 Table III 18: Summary of Incremental Per Site Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III 31 iv Table III 19: Incremental First Year Cost of Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III 33 Table III 20: Total First Year Cost of IUR Compliance, with Amendments . . . . . . . . . . . . . . . . . III 34 Table III 21: Incremental Annual Cost of Amendments in Future Years . . . . . . . . . . . . . . . . . . III 34 Table III 22: Total Annual Cost of IUR Compliance, with Amendments, in Future Years . . . . . . III 35 Table III 23: Reporting Options for the Proposed IUR Amendments . . . . . . . . . . . . . . . . . . . . . III 37 Table III 24a: Numbers of Reports Expected for Each Option . . . . . . . . . . . . . . . . . . . . . . . . . . . III 38 Table III 24b: Numbers of Reports by Chemical Type Expected for Each Option . . . . . . . . . . . . III 39 Table III 25: Numbers of Sites Expected for Each Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III 40 Table III 26: Numbers of Chemicals Expected to be Reported for Each Option . . . . . . . . . . . . . III 41 Table III 27: Incremental Net Present Values and Annualized Costs of Amendment Options Discounted at Three Percent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III 43 Table III 28: Total Net Present Values and Annualized Costs of IUR Compliance, with Different Amendment Options Discounted at Three Percent . . . . . . . . . . . . . . III 44 Table III 29: Results for Sensitivity Around the Number of Reports per Site . . . . . . . . . . . . . . . III 48 Table III 30: Incremental Net Present Values and Annualized Costs of Amendment Options Discounted at Seven Percent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III 49 Table III 31: Total Net Present Values and Annualized Costs of IUR Compliance, with Different Amendment Options Discounted at Seven Percent . . . . . . . . . . . . . III 50 Table IV 1: Estimated Annual Costs for Determining Agency Costs for the Original IUR . . . . . . IV 5 Table IV 2: Estimated One Time Costs for Determining Agency Costs for the Original IUR . . . IV 6 Table IV 3: Estimated Incremental Annual Costs for Determining Agency Costs for the Proposed IUR Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV 10 Table IV 4: Estimated Incremental One Time Costs for Determining Agency Costs for the Proposed IUR Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV 10 Table IV 5: Estimated Total Annual Agency Costs for the Amended IUR . . . . . . . . . . . . . . . . . IV 11 Table IV 6: Estimated Total One Time Agency Costs for the Amended IUR . . . . . . . . . . . . . . IV 11 Table V 1: Benefits to Existing OPPT Programs of Chemical Processing and Use Information Collected Under the Proposed IUR Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . V 9 Table V 2: Reporting Threshold Options for the Proposed IUR Amendments . . . . . . . . . . . . . . V 21 Table VI 1: Comparison of Information Collected Under Each Regulatory Option . . . . . . . . . . . VI 3 Table VI 2: Comparison of Incremental First Year Industry Costs Under Each Regulatory Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI 5 v Table VII 1: Size of Manufacturing Companies Producing Organic Chemicals Based on Annual Sales Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII 4 Table VII 2: Effect of IUR Amendments on Small Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . VII 8 Table VII 3: Effect of IUR Amendments on Small Businesses Assuming Two Sites Per Small Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII 9 vi FIGURES AND BOXES Figure III 1: Allocation of IUR Reporting Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III 46 Figure V 1: Flow of Chemicals Through OPPT's Screening and Risk Management Programs . . . V 6 Box I 1: Chemical specific Information EPA is Authorized to Collect Under Section 8( a) of the Toxic Substances Control Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I 2 Box I 2: Proposed Function Categories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I 7 Box I 3: Proposed Commercial and Consumer Product Categories . . . . . . . . . . . . . . . . . . . . . I 8 Box I 4: Reporting Processing and Use Information on Chemicals . . . . . . . . . . . . . . . . . . . . I 11 Box II 1: Progress on Screening Chemicals for Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II 2 Box II 2: Reasons for Lack of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II 3 Box II 3: Risk Screening Activities Lack Important Data on Exposure . . . . . . . . . . . . . . . . . . . II 7 Box II 4: Current Existing Chemical Review Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II 9 Box III 1: Comparison of Data Elements for Completion of the Original and Amended Form U . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III 8 Box III 2: Reporting Burden of Complying with CBI Requirements . . . . . . . . . . . . . . . . . . . . III 26 Box V 1: EPA Tools to Evaluate and Manage Chemical Risk . . . . . . . . . . . . . . . . . . . . . . . . . . V 8 ES 1 EXECUTIVE SUMMARY The Environmental Protection Agency ( EPA) currently requires manufacturers and importers of certain chemical substances to report plant site and production volume information to the Agency every four years. The information is collected under reporting requirements known as the Inventory Update Rule ( IUR), based on EPA's authority under Section 8( a) of the Toxic Substances Control Act ( TSCA). EPA is proposing to amend these reporting requirements to collect additional information.

The economic analysis presented here examines changes in reporting that would result from these amendments and associated costs, benefits, and impacts.

The proposed rule would amend the IUR data collection in several ways. First, it would collect various types of exposure related data about certain chemicals ( such as the number of workers potentially exposed, the types of industrial processes the chemical is used in, the number and type of processing sites, the types of commercial and consumer uses of the chemical, and the concentration in these products). The IUR amendments would also make inorganic chemicals reportable, raise the reporting threshold, add a second threshold for reporting use information, reduce inappropriate or unnecessary CBI claims, improve links to other EPA data, and make administrative changes that would enhance the effectiveness of the data collected under the existing regulation.

EPA would use the information collected under this proposed rule to screen chemicals based on relative risk, set risk assessment priorities among chemical substances of potential concern, and support EPA's pollution prevention and environmental protection activities. The data collected through these amendments would help to determine potential risks, identify opportunities for safer substitutes,

target specific population groups, and evaluate the need for risk management. The data would allow EPA to better focus its programs and use resources more efficiently. Currently, the lack of nationwide information related to chemical production and use prevents the Agency from screening large numbers of chemicals in a timely manner. The amended IUR data are critical if EPA is to meet its Government Performance and Results Act ( GPRA) goal to screen all chemicals in commerce by 2005. ES 2 This report analyzes multiple regulatory options for amending the IUR by varying the reporting thresholds, exemptions, and reporting cycle. The proposed IUR amendments would collect basic information on about 8,900 chemicals out of the more than 75,000 chemicals on the TSCA Inventory.

Approximately 1,000 chemical manufacturers or importers would be required to report. These companies would submit 25,500 reports covering approximately 3,050 sites. Approximately 40 percent of the reports ( covering forty five percent of the chemicals) would be full reports ( i. e., containing exposure based use information), while the remaining 60 percent would be partial reports. Most of these reports must already be submitted under the existing IUR requirements, and companies would simply be providing additional information. However the IUR amendments would also adjust the universe of reportable chemicals. There are over 1,200 inorganic chemicals that would be reportable to the IUR for the first time, and about 1,500 originally reportable chemicals that would no longer be reported as a result of the increase in the reporting threshold. Please note that the proposed rule was revised substantially during the interagency review process; the addendum to this economic report that appears before chapter 1 contains important information on these changes.

EPA estimates the incremental cost of the amendments to be between $ 36 million and $ 51 million for the first reporting cycle. Costs would be lower after the first year, and are estimated at $ 27 million to $ 41 million in each subsequent reporting cycle ( every four years). These startup and quadrennial costs are equivalent to an annual cost of between $ 10 million and $ 14 million.

EPA has taken a number of steps to reduce reporting burden, including raising the reporting threshold from the existing level of 10,000 pounds up to 25,000 pounds; introducing a second threshold of 300,000 pounds to reduce the number of reports for which processing and use information must be provided; establishing a partial exemption for inorganic chemicals ( at least in the first reporting cycle);

establishing a partial exemption for petroleum stream chemicals, and a full exemption for natural gas;

requiring the reporting of only known or reasonably ascertainable facility and manufacturing information and readily obtainable processing and use information; and allowing submitters to report much of the information in ranges.

The small business impacts of the rule are minimal. Most small businesses are not affected,

since the regulations exempt companies meeting certain small business criteria. The costs would be relatively small for those small businesses that would report. For the roughly 200 to 350 small ES 3 businesses expected to report, the cost of reporting is estimated at 0.20 percent or less of sales.

Because the regulatory costs represent a small fraction of a typical firm's sales, the financial impacts of the regulation would not be significant.

Because the proposed IUR amendments are an information collection exercise, there are no negative environmental equity issues associated with them. Instead, the information that would become available through the proposed rule would enable the Agency to target educational, regulatory,

or enforcement activities towards industries or chemicals that pose the greatest risks and to target programs for population groups that are at the highest risk. Thus, the information proposed to be gathered under the IUR amendments would help EPA to make decisions that would benefit potentiallyat risk communities, some of which may be disadvantaged. S 1 SUMMARY Introduction Based on its authority under Section 8( a) of the Toxic Substances Control Act ( TSCA), the Environmental Protection Agency ( EPA) currently requires manufacturers and importers of certain chemicals to report limited data, including production volume, every four years. The regulation that requires the reporting is known as the Inventory Update Rule ( IUR). EPA is proposing to amend the IUR to change the reporting threshold, alter certain reporting exemptions, require companies to provide use and exposure information for some of the chemicals, and make administrative and confidential business information ( CBI) reporting changes that would enhance the effectiveness of the existing regulation. The additional data would assist EPA in evaluating potential exposures and risks resulting from industrial chemical operations and consumer uses of chemical substances. EPA would use the information collected under this proposed rule to set risk assessment priorities among chemical substances of potential concern and to support EPA's pollution prevention and environmental protection activities. The information would also be valuable to other public and private sector organizations for similar purposes. This analysis reviews the costs, benefits, and impacts of the proposed rule to amend the TSCA Inventory Update Rule reporting requirements.

Background Congress enacted TSCA in 1976 to establish a number of new requirements and authorities for identifying and controlling toxic chemical risks to human health and the environment. To implement its responsibilities under TSCA, EPA must identify potential chemical risks, assess the magnitude of the identified risks, and manage risks determined to be unreasonable. TSCA provides EPA with the authority to gather information ( such as chemical toxicity, chemical exposure, and other related data)

to determine whether a chemical substance may present an unreasonable risk of injury to human health or the environment.

Section 8( b) of TSCA requires EPA to compile and keep current an inventory of chemical substances in commerce ( excluding pesticides, tobacco, nuclear material and byproducts, firearms and ammunition, food and food additives, drugs, and cosmetics). In 1977 EPA collected basic information 1 It should be noted that the numbers of chemicals, reports and facilities presented above include statistics for chemicals with a production volume lower than 10,000 pounds that reported voluntarily.

S 2 about subject chemicals, including the chemical identity, the identity of sites that were manufacturing or importing the chemical, and the chemical's production volume ( in a range). EPA compiled the information into the initial TSCA Inventory. The TSCA Inventory originally contained approximately 60,000 chemicals. As new chemicals enter into commerce in the U. S., they are added to the Inventory. As a result, the Inventory currently contains more than 75,000 chemicals.

Section 8( a) of TSCA authorizes EPA to collect a broad variety of information about chemicals in commerce. EPA exercised this authority in 1986 when it promulgated the Inventory Update Rule ( 51 FR 21438; June 12, 1986). The Inventory Update Rule ( IUR), codified at 40 CFR Part 710, requires chemical manufacturers and importers to provide updated information for chemicals in the TSCA Inventory meeting specific criteria. IUR reporting is limited to manufacturers and importers of chemical substances. Small businesses as defined in TSCA section 8 are exempted from reporting.

There is a production volume threshold of 10,000 pounds a year, and exemptions from reporting for inorganic chemicals, polymers, microorganisms, and naturally occurring substances. EPA created the thresholds and exemptions in the IUR to focus the data collection on the chemicals thought at the time to be most likely to require information for screening and risk assessment purposes and to exclude chemicals for which screening data were thought unlikely to be needed.

The IUR requires companies to submit reports every four years; data have been collected in 1986, 1990, 1994 and 1998. Under the original IUR, companies report company, plant site, and chemical identity information; whether the chemical is manufactured or imported; whether it is site limited or is distributed off site; and the production volume. Companies can claim specific data elements as confidential business information ( CBI) by using a check box, although CBI claims for chemical identity require up front substantiation. Companies must retain records that support their submissions for four years following the reporting period. EPA received about 25,000 submissions from 3,000 facilities for about 8,900 chemicals in the 1994 reporting cycle. 1 EPA enters the information into the Chemical Update System ( CUS), a confidential database. S 3 Need to Amend the Inventory Update Rule EPA uses the IUR data to identify chemical substances, plant sites, and exposures of most concern and to set priorities for more detailed risk assessment and potential risk management actions.

Although risk is based on hazard and exposure, EPA's past approaches to chemical risk screening have primarily used production volume as a proxy for exposure. Where available, this is supplemented by relatively scarce public data on chemical use and exposures. To make more accurate estimates, EPA needs better information on exposure. Information such as how chemicals are used, how many sites use the chemical, and how many workers are potentially exposed would enable EPA and others to develop exposure scenarios.

The existing public data sources are inadequate because they are very spotty in coverage and are often outdated. While EPA has used these sources in the past ( because they do contain some useful data), they are far from adequate for prioritizing, identifying chemicals of concern to specific populations, and managing risks on a nationwide basis.

Existing EPA data collections typically do not provide exposure related information that the Agency needs for risk screening, such as industrial and commercial uses, the number of workers potentially exposed, or levels of use in consumer products. Many programs cover only a limited set of chemical substances, or a limited number of chemical uses, or only specific industry sectors. Others are regional, rather than national in scope. Some of the programs collect information on categories of pollutants or on waste streams and not on specific chemical substances, making it difficult to use data in chemical risk screening. And some collect monitoring data for a specific media ( e. g., air or water),

but do not collect information on the potential sources of the chemical releases to the environment.

Commercial data sources are very limited in the number of uses and detail of use information,

and generally provide information only on large volume chemicals. Although the sources can provide some useful information for these large volume chemicals, none of these information sources ( considered individually or in aggregate) would be adequate substitutes for the information EPA is proposing to collect because each either covers a narrow set of reportable chemicals, was a one time collection, or does not contain adequate exposure related data elements for risk screening.

Information specific to the manufacture and use of chemicals, including information on the potential for exposure during the chemical's life cycle, have not been comprehensively or S 4 systematically collected at the national level. Each of the existing data sources has limited utility due to a small or specialized sample size, a limited number of chemicals, or age of the data. None of the databases, either alone or combined, provide the Agency with the necessary array of screening level data.

After reviewing the data available from existing sources, EPA determined that the best way to address the lack of exposure related data was to collect basic information related to potential chemical exposures through the IUR. EPA has also identified problems associated with the original IUR reporting requirements, including incomplete facility identity information that creates difficulties in matching the IUR data to other Agency databases and the Agency's inability to publicly cite useful information because a company has inappropriately claimed that the data should be classified as TSCA CBI. The Agency determined that amending some of the IUR's administrative and CBI provisions would provide EPA and others with needed flexibility in using these data.

Options for IUR Amendments Analyzed In addition to those options analyzed during the interagency review process, and presented in the addendum, this report analyzes fourteen regulatory options for amending the IUR reporting requirements. The options were created by varying the reporting threshold for facility and manufacturing data, the threshold for processing and use data, exemptions based on the type of chemical, and the reporting cycle. These options are summarized in Table S 1, below.

EPA originally considered proposing to amend the IUR based on Option 4, which raises the threshold for reporting facility and manufacturing information from 10,000 to 25,000 pounds; adds a requirement to provide processing and use data; creates a 100,000 pound threshold for reporting use and exposure data; retains the existing four year reporting cycle; and provides a partial reporting exemption for certain petroleum stream chemicals. However, during the interagency review process,

the proposed option was revised to include a full exemption for natural gas, a partial exemption for inorganic chemicals, and a 300,000 pound threshold for reporting use and exposure data. In particular,

the revised proposed amendments would:

! Increase reporting threshold: The reporting threshold would be increased from 10,000 to 25,000 pounds. 2 " natural gas" includes the following CAS Registry Numbers: 64741 48 6, 68919 39 1, 8006 61 9, 68425 31 0, 8006 14 2, 68410 63 9.

S 5 ! Remove inorganic exemption: Inorganic chemicals would no longer be exempted from reporting ( inorganic chemicals would not be required to report exposure and use data, see below).

! Add exposure related data: Two types of exposure related data would be added:

° All reportable chemicals would supply exposure related manufacturing information on the number of workers potentially exposed during manufacturing, the physical state of the chemical, the maximum concentration of the chemical when manufactured, and whether production volume is confidential when reported in a range.

° Large volume chemicals would also report exposure related use information on industrial processing and use and commercial and consumer use. Industrial processing and use information includes process or use codes, 5 digit North American Industry Classification System ( NAICS) codes, industrial function categories, the percent of production volume in each category, site limited status, number of sites ( in ranges), and number of potentially exposed workers ( in ranges). Consumer and commercial end use information includes commercial/ consumer end use categories, percent of production volume in each category, and maximum concentration ( in ranges) of the chemical in the commercial/ consumer end use.

! Create reporting exemptions. Certain petroleum streams, inorganic chemicals, and any chemicals that the Agency determines to be low priorities for assessment would be exempted from providing exposure related use data ( industrial processing and use information, and commercial and consumer use information). In addition, natural gas2 would be fully exempted from reporting.

! Create a second reporting threshold. Chemicals produced or imported at volumes less than 300,000 pounds would complete a partial reporting form, requiring only facility and manufacturing information and CBI reassertion. Chemicals with production volumes greater than 300,000 pounds would complete the full form, requiring reporting of facility and manufacturing information as well as exposure related use data.

! Change the CBI requirements: Companies would be required to provide up front substantiation before claiming facility identity as CBI, and to resubstantiate previous CBI claims. Companies would be required to determine if CBI claims for production volume are valid if the information is presented in a specified range.

! Make certain administrative changes: The reporting cycle would be changed from the current fiscal year to the calendar year. As part of the facility identification, companies would be required to report the EPA Identification Number and county name of the plant site, as well as the Dun & Bradstreet Number and mailing address of the parent company. The records retention period would be lengthened from four to five years. S 6 Table S 1. Options Summary Option Thresholds Reporting Cycles New Exemptions Number of Chemicals Number of Sites Numbe r of Report s Percent of Reports First Year Cost ($ million)

Facility and Manufacturing Information Use Information Partial Full Reporting Threshold Options 1 10,000 lb 10,000 lb 4 yrs. Partial Exemption Chemicalsa 10,439 3,670 30,598 19% 81% $ 69.2  91.2 2 25,000 lb 25,000 lb 4 yrs. Partial Exemption Chemicalsa 8,904 3,485 26,811 21% 79% $ 58.3  76.6 3 10,000 lb 100,000 lb 4 yrs. Partial Exemption Chemicalsa 10,439 3,670 30,598 42% 58% $ 47.9  65.4 4b 25,000 lb 100,000 lb 4 yrs. Partial Exemption Chemicalsa 8,904 3,485 26,811 42% 58% $ 47.9  65.4 4ac 25,000 lb 300,000 lb 4 yrs. Partial Exemption Chemicalsa, c 8,898 3,045 25,586 61% 39% $ 36.0  51.4 5 10,000 lb 500,000 lb 4 yrs. Partial Exemption Chemicalsa 10,439 3,670 30,598 67% 33% $ 42.3  62.0 6 25,000 lb 500,000 lb 4 yrs. Partial Exemption Chemicalsa 8,904 3,485 26,811 62% 38% $ 38.1  54.8 7 25,000 lb 1,000,000 lb 4 yrs. Partial Exemption Chemicalsa 8,904 3,485 26,811 69% 31% $ 35.1  51.4 8 25,000 lb 10,000,000 lb 4 yrs. Partial Exemption Chemicalsa 8,904 3,485 26,811 84% 16% $ 27.7  43.4 9 25,000 lb 500,000 lb/

100,000 lbd 4 yrs. Partial Exemption Chemicalsa 8,904 3,485 26,811 62% 38% $ 38.1  54.8 42% 58%

Reporting Exemption Option 4ac 25,000 lb 300,000 lb 4 yrs. Partial Exemption Chemicalsa, c 8,898 3,045 25,586 61% 39% $ 36.0  51.4 10 25,000 lb 100,000 lb 4 yrs. Site Limited Petroleum Streams 8,617 3,365 25,577 23% 77% $ 54.4  71.5 11 25,000 lb 100,000 lb 4 yrs. Partial Exemption Chemicalsa 7,796 2,945 22,309 46% 54% $ 36.8  50.4 Reporting Cycle Options 4ac 25,000 lb 300,000 lb 4 yrs. Partial Exemption Chemicalsa, c 8,898 3,045 25,586 61% 39% $ 36.0  51.4 12 25,000 lb 100,000 lb 2 yrs./ 4yrs. e Partial Exemption Chemicalsa 8,904 3,485 26,811 42% 58% $ 47.9  65.4 13 25,000 lb 100,000 lb 2 yrs. Partial Exemption Chemicalsa 8,904 3,485 26,811 42% 58% $ 47.9  65.4 14 25,000 lb 100,000 lb one time Partial Exemption Chemicalsa 8,904 3,485 26,811 42% 58% $ 47.9  65.4 a Partial exemption chemicals currently include only petroleum stream chemicals. These chemicals are exempted from providing processing and use information.

b Option 4 was the proposed option.

c Option 4a was added during Interagency review and is discussed in the addendum to this report.

d Option 9 has a reporting threshold of 500,000 pounds for the full report in the first reporting cycle and 100,000 pounds for the full report in future reporting cycles. S 7 e Option 12 has a 2 year reporting cycle for facility and manufacturing information and a 4 year reporting cycle for processing and use information. S 8 Analysis of Options Table S 1 also summarizes the results of the analysis for each of the fourteen different options,

including the number of sites that would report, the number of reports that would be submitted, the distribution of partial and full reports, and the cost of reporting. Under the proposed rule ( not shown in the table), the amended IUR would collect basic information on about 8,900 chemicals out of the more than 75,000 chemicals on the TSCA Inventory. Approximately 1,000 chemical manufacturers or importers would be required to report. These companies would submit about 25,500 reports covering approximately 3,300 sites. Approximately 40 percent of the reports ( covering forty five percent of the chemicals) would be full reports ( i. e., containing processing and use information), while the remainder would be partial reports. Most of these reports must already be submitted under the existing IUR requirements and companies would simply be providing additional information. There are more than 1,200 inorganic chemicals that would be reportable to the IUR for the first time, and about 1,500 originally reportable chemicals that would no longer be reported as a result of raising the reporting threshold.

Costs of the IUR amendments would be borne by the chemical industry and EPA. Industry costs are associated with complying with the regulation, while EPA costs are associated with administering the regulation and maintaining the collected data. EPA estimated industry costs based on the time required for companies to determine if they must comply with the amended IUR, become familiar with the rule, prepare and submit reports, and maintain records of the submitted data. EPA has assumed that the burden associated with reporting under the IUR amendments would decrease over time as companies become more familiar with the new requirements. Burden would also decrease over time to the extent that the information being reported remains somewhat constant from one reporting period to the next. EPA assumed that no capital costs would be associated with this rule. EPA estimated the total cost of the IUR amendments by multiplying these estimated costs by the estimated number of sites and submissions that would be affected by the IUR amendments.

The estimated cost to submit a report depends on the type of chemical being reported ( e. g.,

organic chemical, petroleum stream chemical, or inorganic chemical) and the production volume of the chemical being reported ( e. g., between 25,000 and 300,000 pounds, or greater than or equal to 300,000 pounds). The estimated incremental cost or savings per report are as follows: S 9

Chemicals produced at a volume between 10,000 pounds and 25,000 pounds are exempt from reporting. This results in avoided reporting costs ( i. e., savings) of approximately $ 565 to $ 892 per report for these chemicals.

Chemicals with a production volume between 25,000 and 300,000 pounds, or those qualifying for one of the partial exemptions, can submit a partial report that does not contain use information. The incremental cost for a partial report is estimated to range from $ 688 to $ 1,883 in the first year and $ 459 to $ 1,813 in subsequent reporting cycles.

Chemicals produced at over 300,000 pounds that do not qualify for one of the partial exemptions must file a full report. The incremental cost for a full report is estimated at $ 2,520 to $ 3,872 in the first year and $ 2,036 to $ 3,267 in subsequent reporting cycles.

In all of these cases the high end of the range represents inorganic chemicals, which have a higher incremental cost because they have heretofore been exempt from reporting. Companies are expected to file an average of 8.4 reports per site. An estimate of the average cost per site can be derived by multiplying the cost per report by the estimated 8.4 reports per site.

EPA estimates the incremental cost of the amendments to be between $ 36 million and $ 51 million for the first reporting cycle. Costs for subsequent reporting cycles ( every 4 years) are estimated at $ 27 million to $ 41 million. The startup and quadrennial costs are equivalent to an annual cost of $ 10 million to $ 14 million per year. Projected incremental costs to EPA are relatively small and are estimated at $ 524,879 in the first year of reporting, and $ 275,364 annually.

EPA used exemptions or partial exemptions to reduce the number of reports ( and thus costs),

where this did not conflict with the utility of the data collection. Specifically, EPA reduced the number of reports by:

raising the reporting threshold from 10,000 pounds to 25,000 pounds, and adding a full exemption for natural gas ( reducing the number of reports by about 3,800 and 1,200, repectively);

introducing a second threshold of 300,000 pounds for reporting use data ( reducing the number of reports for which full information must be provided by about 7,700); and

establishing a partial exemption for petroleum streams, and inorganic chemicals ( reducing the number of full reports by over 5,600 for petroleum streams ( some of these reports would have been for chemicals produced in volumes above 100,000 pounds), and by about 3,300 for inorganic chemicals).

The result is that full reports are expected on only about 4,000 chemicals and partial reports on about 5,000 chemicals ( out of the more than 75,000 chemicals on the TSCA Inventory). EPA also reduced the specificity of the information required by: S 10

requiring the reporting of only known or reasonably ascertainable facility and manufacturing information and readily obtainable processing and use information;

requiring that submitters report much of the information in ranges, reducing the need to generate precise estimates; and

requiring processing and use information only on the bulk of the chemical's volume, not necessarily on 100 percent of the volume ( for instance, only on the top ten NAICS codes).

These steps limit the amount of information required, reducing the time and effort spent by the chemical industry on complying with the amendments.

Benefits The data collected through this rule would assist EPA in evaluating potential exposures and risks resulting from industrial chemical operations and commercial and consumer uses of chemical substances. EPA would use the information collected under this proposed rule to set risk assessment priorities among chemical substances of potential concern and to support EPA's pollution prevention and environmental protection activities. The information would also be valuable to other public and private sector organizations for similar purposes.

Because the current state of knowledge about the economics of information is not highly developed, this analysis does not attempt to assign monetary value to the direct benefits of the information collected by this rule. The direct benefits are the improved quality and timeliness of decision making in EPA's risk screening process and EPA's improved ability to focus its programs and use resources more efficiently. Because the outcome of EPA's screening and risk management programs for these chemicals cannot be predicted, it is also not possible to quantitatively estimate the indirect benefits of the rule in terms of lives saved, illness averted, or ecosystem damages avoided.

While the benefits cannot be monetized or quantified, the analysis does qualitatively describe the types of benefits that are expected. The benefits of some of the major changes are described below and summarized in Table S 2.

The proposed amendments are directed at improving the data available for risk screening of existing chemicals. Improving the data available for the chemical screening process provides EPA with the means to more effectively protect human health and the environment. At present, EPA uses hazard information in conjunction with production volume ( as a proxy for exposure) as the primary tools to S 11 focus existing chemical resources. The addition of use and exposure related information would provide a better risk characterization and allow EPA to develop priorities based on that risk. Identifying and focusing on those chemicals with greater risks earlier in the process reduces the health care and environmental costs borne by society. The amendments will also require reporting on inorganic chemicals, which will enable the Agency to identify and target risks from this class of chemicals.

The amendments make a number of administrative changes that would increase the effectiveness of the data that is collected. One example is the proposed change to the reporting period.

Under the original IUR, companies report on the basis of their fiscal year, which varies from company to company. Changing the reporting period to coincide with the calendar year as opposed to a company's fiscal year would make the data set internally consistent. It would also make the reporting period for the IUR data consistent with other EPA databases, most of which are on a calendar year basis. Another example of an administrative change is the proposed requirement for companies to provide EPA identification numbers on the IUR report. This would enable the Agency to more readily and accurately combine site specific information from various databases. As one benefit, this would allow EPA to check the validity of its models, and improve its ability to predict exposures for all chemicals.

Much of the information reported through the original IUR is claimed CBI, which reduces the usability of the data. Information that is claimed to be CBI can only be used by staff with a security clearance, and the data cannot be included in any report or other document that will be made available to the public. As a result, if EPA uses this information ( for instance to set risk management priorities),

the basis for the decision cannot be completely shared with the public. If EPA only uses data that has not been claimed as confidential, the results will be incomplete and of limited usefulness. Several of the proposed amendments are intended to limit CBI claims to only those that are necessary to protect legitimate business interests. For instance, since companies are less likely to claim production volume as CBI if the data is presented as a range rather than a point estimate, the IUR amendments add a range reporting element. Data that has been appropriately claimed as CBI would continue to be treated as confidential. These changes would allow EPA to provide answers the public needs without breaching the confidentiality of legitimate CBI data.

Finally, collecting the proposed IUR information would help further develop and measure the results of private sector stewardship programs. The data would help to identify potential risks and S 12 opportunities for safer substitutes, target specific population groups, and evaluate the need for risk management.

In general, the additional information collected through the IUR amendments would be used to identify and manage human health and environmental risks. The data would aid in identifying chemicals to which consumers, children, and workers are exposed, establishing priority chemicals for testing, and finding areas where voluntary programs are more likely to provide real gains in environmental protection. Currently, the lack of nationwide information related to chemical production and use prevents the Agency from screening large numbers of chemicals in a timely manner. These amendments are critical if EPA is to meet its GPRA goal to screen all chemicals in commerce by 2005.

As presented in Table S 1, EPA considered a variety of options. These options can be separated into three categories  reporting threshold, reporting exemption, and reporting cycle options.

In determining which reporting threshold to propose, EPA considered the number of chemicals on which information would be collected, the burden associated with reporting the information, comments received from a variety of sources, and the future direction of EPA's program. For the reporting exemption options, EPA considered its ability to use the information and the information otherwise available to the Agency. For the reporting cycle options, EPA considered the dynamic nature of the chemical industry and the burden associated with reporting the information. Options based upon the information collected were not analyzed in this economic analysis. Decisions as to the specific information collected were based upon EPA's experience and information needs and are described in the technical support documents.

Small Entity Analysis Small businesses are the only small entities expected to be affected by the IUR amendments.

In addition to the reporting thresholds ( that help screen out small businesses), the existing regulation contains two small business exemptions ( 40 CFR 704.3). First, companies with annual sales of less than $ 4 million are exempt from reporting regardless of their production volume. Second, companies with annual sales less than $ 40 million are exempt from reporting if they produce less than 100,000 pounds of a regulated substance at a single site. These exemptions are not being changed by the proposed IUR amendments. For the purpose of the small entity analysis, firms with $ 40 million or less in annual sales but over 100,000 pounds of production were designated as small businesses. S 13 The rule is estimated to affect between 202 and 336 small businesses. EPA compared the first year cost of reporting due to the IUR amendments to sales at these small businesses. Even using conservative assumptions, the average cost to sales ratio in the first year of reporting is estimated to be 0.20 percent or less. Costs will be an even smaller percentage of sales in subsequent reporting cycles.

Because regulatory costs represent a small fraction of a typical firm's sales, the financial impacts of the regulation are likely to be minimal.

Environmental Justice Because the proposed IUR amendments are an information collection exercise, there are no negative environmental equity issues associated with them. Instead, the information that would become available through the proposed rule would enable the Agency to target educational, regulatory, or enforcement activities towards industries or chemicals that pose the greatest risks, and to target programs to geographic areas that are at the highest risk. Thus, the information proposed to be gathered under the IUR amendments would help EPA to make decisions that would benefit potentiallyat risk communities, some of which may be disadvantaged. Of the 121 million people who live within 10 miles of an IUR site, almost 38 million ( 30 percent) are minorities. This number is greater than the nationwide rate of approximately 20 percent minority individuals. Roughly 24 million ( 20 percent) of the people living within 12 miles of an IUR site are at or below 150 percent of the poverty level, which is consistent with the nationwide rate of 21 percent. S 14 Table S 2. Summary of Proposed IUR Amendments ACTION RESULT BENEFIT OR RATIONALE Raise threshold Raises the production volume reporting threshold from 10,000 pounds a year to 25,000 pounds a year. Exempts roughly 3,800 reports for 1,535 chemicals, at a savings of $ 21.3 to $ 25.8 million in the first year of reporting. Lowers companies' reporting burden.

Remove Inorganic Exemption Removes the exemption for inorganic chemicals in the original IUR. Adds approximately 4,500 reports for over 1,200 chemicals, at a cost of $ 5.1$ 8.5 million in the first year of reporting, and an annualized cost of $ 1.5$ 2.4 million. Allows EPA to make informed risk screening decisions about inorganic chemicals.

Production Volume Partial Exemption Adds a 300,000 pound production volumereporting threshold on processing and use information. This eliminates the requirement to report processing and use information for chemicals produced between 25,000 and 300,000 pounds each year. Eliminates roughly 7,700 reports for 3,200 chemicals from requirement to report processing and use information. Reduces the reporting burden on companies that manufacture these eliminated chemicals.

Petroleum Stream Partial Exemption Eliminates the requirement to report processing and use information for petroleum stream chemicals with multiple Chemical Abstracts Service ( CAS) numbers. Exempts roughly 5,600 reports from requirement to provide processing and use information,

saving $ 10.3 to $ 11.1 million in the first year of reporting. EPA does not feel that full reporting on petroleum streams is necessary at this time.

The exemption reduces the reporting burden on companies that manufacture chemicals whose risks are difficult to quantify.

Inorganic Partial Exemption Eliminates the requirement to report processing and use information for inorganic chemicals, at least in the first reporting cycle. Exempts roughly 3,300 reports from requirement to provide processing and use information,

saving $ 6.3 6. 9 million in the first year of reporting. EPA lacks even basic production information on inorganic chemicals, and will need to assess data on these chemicals before requiring processing and use data.

Natural Gas Exemption Eliminates all reporting for natural gas with six specific Chemical Abstracts Service ( CAS)

numbers. Exempts roughly 1,225 reports from all reporting,

saving $ 1.6 to $ 2.8 million in the first year of reporting. Reduces burden by eliminating a large number of reports on these specific chemicals for which EPA feels current IUR data is adequate. ACTION RESULT BENEFIT OR RATIONALE S 15 Low Priority Chemicals Partial Exemption EPA is considering eliminating the requirement to report processing and use information on those chemicals identified by EPA as low priorities for assessment ( See discussion in Preamble,

Section IV. C). Not estimated, because the number of chemicals of low priority has not yet been determined. Reduces the reporting burden on companies that manufacture chemicals that are currently low priorities for risk assessment as determined by EPA.

Facility & Manufacturing Information Requires additional facility and manufacturing information:

the company's Dun & Bradstreet number and mailing address;

the location of the plant site and mailing address;

the number of exposed workers;

the physical state of the chemical; and

the maximum concentration of the chemical. Does not change the number of reports required.

Increases costs by approximately $ 4.9 S$ 9.6 million in the first year of reporting. Increases the usefulness of information and improves EPA's ability to make more informed risk screening decisions.

Better facility and company identification improves EPA's ability to link information with other databases.

Worker exposure and chemical concentration information gives EPA the ability to complete a screening level assessment of risks during the manufacture of chemicals.

Processing & Use Information Requires additional processing and use information:

process or use code;

5 digit North American Industry Classification System ( NAICS) code for processing;

industrial function category;

percent of production volume in function category;

number of processing sites ( in ranges);

number of potentially exposed workers ( in ranges);

end use category;

percent production volume in end use category;

maximum concentration ( in ranges) of the chemical in the end use. Results in an increase in unit costs; does not change the number of reports required.

Processing and use exposure information is collected from approximately 15,431 reports on roughly 6,046 chemicals, at an estimated cost of approximately $ 35.4$ 44.3 million in the first year of reporting. Increases EPA's ability to make informed riskscreening decisions.

The earlier identification of problems and fewer misidentifications improves the targeting of resources by EPA and industry. ACTION RESULT BENEFIT OR RATIONALE S 16 Reporting period Changes the reporting period from the company's fiscal year to the calendar year. Does not change unit costs or the number of reports required. Reporting is easier for industry because the time frame would be the same as for other reporting requirements.

All data within the IUR database would reflect a consistent time frame, which would make data inferences more reliable.

Reporting period consistent with other EPA data collections.

Extend record retention period Extends record retention period from 4 to 5 years. Does not change the number of reports required. Since the reporting cycle is 4 years, this will make records from prior reporting period available for EPA enforcement activities.

Confidential Business Information Requires separate confidentiality claims for production volume ( PV) ranges, in addition to exact PV.

Requires up front substantiation of confidentiality claims for plant site information.

Requires the reassertion of CBI claims for each reporting period. Results in an increase in unit costs; does not change the number of reports required.

Increases first year industry costs by $ 6.4$ 14.3 million over the baseline. Annualized costs increase by $ 2.3  $ 5.1 million.

Approximately 20 percent of submissions received during the 1994 reporting period claimed plant site information as CBI, suggesting that a comparable percentage would provide upfront substantiation under the amendments.

Approximately 64 percent of submissions received during the 1994 reporting period claimed some data element as CBI, indicating that up to this percent may have to reassert claims under the IUR amendments. Produces greater flexibility in the use of the data.

PV ranges are less likely to be claimed to be confidential than point estimates. PV ranges maintain confidentiality for point estimates, while allowing greater flexibility in the use of the information.

Up front substantiation of plant site claims reduces the frequency of inappropriate CBI claims being filed, while protecting data that can legitimately be claimed as CBI. I 1 CHAPTER I. INTRODUCTION This economic analysis provides estimates of the costs and benefits expected to result from implementation of the Inventory Update Rule ( IUR) amendments. The original IUR requires chemical manufacturers and importers to collect, maintain, and submit location and production volume information for chemicals with production volumes of 10,000 pounds or higher. The proposed IUR amendments will change this reporting threshold to 25,000 pounds and will augment the required facility and production information. In addition, the amendments will require sites with production volumes of 100,000 pounds or higher to collect, maintain, and submit additional information to the Agency regarding chemical use and exposure. Furthermore, changes in administrative requirements and exemption status for various chemical groups are proposed.

The costs associated with these amendments include industry costs due to collecting,

maintaining, and submitting the required information and government costs attributable to data management. Benefits of the amendments include providing information necessary for the Agency to develop chemical screening priorities, streamline regulatory efforts, and make informed risk assessment and management decisions. The collected information will improve EPA's understanding of potential exposures resulting from industrial chemical use, allow EPA to more accurately track chemical exposure and use, and permit EPA to more effectively target chemicals that pose the greatest hazard or risk.

Ultimately, society will benefit from EPA's improved programs.

The remainder of this chapter provides information on EPA's statutory authority for implementing the proposed IUR amendments, a discussion of the regulatory history, a description of the original rule requirements and the proposed changes, an overview of the regulated community, and a detailed description of the contents of this report.

A. Statutory Authority Congress has granted EPA broad authority to collect information on chemical substances,

including information that will help EPA in assessing the magnitude and extent of human and environmental exposure to chemicals used in commerce. Specifically, under Section 8( a) of the Toxic Substances Control Act ( TSCA) ( 15 U. S. C. 2607( a)), EPA is authorized to promulgate regulations I 2 Box I 1. Chemical specific Information EPA Is Authorized To Collect Under Section 8( a) of the Toxic Substances Control Act 1. Common or trade name, chemical identity, and molecular structure of each chemical substance or mixture for which reports are required.

2. Categories or proposed categories of use for each substance or mixture reported.

3. The total amount of each substance and mixture manufactured or processed and each of its categories of use; reasonable estimates of the total amount to be manufactured or processed and each of its categories of use.

4. A description of the byproducts resulting from the manufacture, processing, use, or disposal of each such substance or mixture.

5. All existing data concerning the environmental and health effects of such substances or mixtures.

6. The number of individuals exposed, and reasonable estimates of the number who will be exposed, to such substances or mixtures in their places of employment and the duration of such exposure. requiring chemical industry entities to report production and use information on various types and classes of chemicals. A detailed description of the types of chemicalspecific information that the Agency is authorized to collect is provided under TSCA § 8( a)( 2); a summary is presented in Box I 1.

B. Description of Rule This section describes the regulatory history leading to the TSCA Inventory Update Rule, the original requirements of the rule,

and the proposed changes to the rule.

1. Regulatory History The TSCA Chemical Substances Inventory ( 42 FR 64572, December 23, 1977) was created just after TSCA's passage into law. The Inventory lists all TSCA chemicals in commerce in 1977, thereby providing a snapshot of the chemicals manufactured or processed in the United States.

All chemicals are included, with the exception of pesticides, tobacco, nuclear material, firearms and ammunition, food and food additives, drugs, and cosmetics. Chemicals completing the EPA's New 3 Chemicals listed on the TSCA Inventory are referred to as Existing Chemicals. Chemicals not currently listed are referred to as New Chemicals, and all producers intending to manufacture or import a new chemical must comply with the Agency's New Chemical program. The New Chemicals Program ( NCP) screens new chemicals to determine if and under what conditions they can be brought into the United States. Once a chemical passes through the program, the manufacturer or importer files a Notice of Commencement indicating that the chemical will now be in commerce.

I 3 Chemicals3 process and filing a Notice of Commencement have been added to the Inventory; no chemicals have been removed. There are currently about 75,000 chemicals listed.

Under the authority of TSCA Section 8( a), EPA promulgated regulations requiring chemical manufacturers and importers to submit data on a subset of the chemical substances listed in the TSCA Inventory ( 51 FR 21447, June 12, 1986). These regulations are commonly called the TSCA Inventory Update Rule ( IUR). Data are collected every four years on an average of 9,200 discrete chemicals. This collection provides a more up to date picture of the TSCA chemicals in commerce, generating data that are used, with the TSCA Inventory data, to support many EPA risk management activities. The data also provide general support to many other EPA and non EPA program activities.

After analyzing the data submitted under the IUR during the 1986, 1990, and 1994 reporting periods, EPA identified the need to amend the IUR to provide basic information related to potential chemical exposures. EPA plans to use this new information to improve its chemical screening, risk assessment, and risk management capabilities. EPA also identified the need to amend some administrative provisions in the IUR to enhance the data's usefulness.

2. Original IUR Requirements The original IUR requires that members of the regulated community submit information on certain TSCA chemicals once every four years. Reporting is mandatory for each regulated chemical produced or imported in annual quantities of 10,000 pounds or greater, although inorganic substances,

polymers, microorganisms, and naturally occurring chemical substances are exempt from reporting.

Reporters are required to provide the following information:

Company Information requires information for a technical contact including company name, contact name, company street address, and telephone number;

Plant Site Identification includes reporting the identification and address information for a manufacturing plant site, including plant site name, EPA Identification Number, Dun & Bradstreet number, and plant site street address; 4 Site limited chemicals are those chemicals that are produced and used at the same site. These chemicals do not undergo packaging and shipping.

I 4

Chemical Identifying Number involves reporting both the specific chemical name and the Chemical Abstracts Service ( CAS) Registry Number, or other identifying number, of the chemical substance;

Manufacturer/ Importer Activity requires identifying whether the chemical is produced or imported;

Site Limited Activity entails indicating whether the chemical substance reported is sitelimited 4

Production Volume must be reported for the relevant chemical manufactured at the plant site;

Confidential Business Information ( CBI) status ( claimed/ not claimed) must be indicated for plant site identification, company name, chemical identification, manufacturer/ importer activity, sitelimited activity, and production volume. For chemical identification, up front substantiation of CBI claims is required; and

Certification Statement requires a signature certifying that complete and accurate information is provided.

3. Proposed Reporting Requirements The proposed reporting requirements under the IUR amendments encompass changes in the reporting thresholds, timing of reports, exemptions, and the amount and type of information that must be collected and submitted to the EPA.

a. Reporting Thresholds, Reporting Cycles, and Exemptions The amendments propose raising the reporting threshold from 10,000 to 25,000 pounds and adding a second reporting threshold of 100,000 pounds for processing and use information.

This means that sites producing or importing TSCA chemicals at annual volumes of 25,000 pounds to 100,000 pounds are required to report only facility and manufacturing information. Sites producing or importing TSCA chemicals at annual volumes of 100,000 pounds or greater are required to report facility and manufacturing as well as processing and use information.

The amendments retain the original reporting cycle of every four years. The amendments propose to change the period of coverage for production from corporate fiscal year to calendar year.

The amendments propose certain changes to the original reporting exemptions. Under the amendments the inorganic chemical exemption is deleted and a partial exemption for petroleum stream chemicals is added. Inorganic chemical producers/ importers will follow the same requirements as those 5 Low priority chemicals would be defined as chemicals for which EPA has reduced concerns. These chemicals would be partially exempt under the amended IUR and would be considered low priority under this rulemaking only. Low priority chemicals for this purpose would be those chemicals: ( 1) that have undergone Agency review under TSCA and are believed to be of low priority for further risk assessment and risk management and ( 2) that are currently being assessed by the Agency and for which information is available and that is similar to that proposed to be collected under the amended IUR. The list of chemical substances that qualify for the low priority chemical substances partial reporting exemption would be expected to change from one reporting period to the next.

I 5 followed by organic chemical producers/ importers. Manufacturers of most petroleum streams will be exempt from reporting processing and use information, but will still need to report facility and manufacturing information. EPA is considering a partial reporting exemption for low priority chemicals and plans to publish a list of all the chemicals that would qualify for this exemption before each inventory collection period. 5 These listed chemicals may also be exempt from reporting processing and use information.

b. Information Collected The IUR amendments propose to add additional data elements to the information collected. Information already required under the original IUR will continue to be collected.

Form U, the instrument used to collect the IUR information, has been revised; a copy of the revised form is provided in Appendix A. The revised Form U is divided into four parts: Facility Identification Information, Manufacturing Information, Processing and Use Information, and Reassertion of Past CBI Claims. An overview of the proposed changes in the types of information to be reported follows:

Facility Identification Information

Company and Plant Site Identification would include more detailed information to determine the company and plant site identities. The most notable changes include the addition of the county name and the EPA facility identification numbers for the plant site. The EPA ID is a 12 character number originally developed for facilities covered by hazardous waste regulations under RCRA.

Up front CBI Substantiation for plant site identification is also being added. Under the original IUR, up front substantiation is only required for chemical identification.

Manufacturing Information

Exposure Related Data include the number of workers involved in manufacturing, the physical form as the chemical leaves the site, and the maximum concentration of the chemical as it leaves the site. Codes representing ranges would be used to report these data. I 6

Production Volume Data would now include production volume ranges and a CBI range check box, enabling submitters to determine if the production volume range for their chemical should be considered confidential. The ranges are predetermined.

Processing and Use Information

Industrial Processing and Use Exposure Related Data would be reported for the first time. These data include process or use codes, NAICS codes, industrial function codes, percent of production volume, number of sites, and number of workers for downstream processing and uses of the chemical. Codes representing ranges would be used to report this data and only readily obtainable data would be reported. These data would be reported for the top ten NAICS codes. In addition, a de minimis reporting exemption for these data is being proposed. Processing and use data for reportable substances need not be reported for sites where the concentration of the substance is less than 1 percent by weight, unless the volume not reported is greater than 100,000 pounds.

Consumer and Commercial End use Exposure Related Data would also be reported for the first time. These data include product category codes, percent of production volume, and maximum concentration of the chemical in each final product. Codes representing ranges would be used to report these data, and only readily obtainable data would be reported.

Reassertion of Past CBI Claims

Most of the information on Form U can be claimed confidential. This proposal requires the reassertion of any CBI claims made in the previous IUR reporting.

c. Definitions of Reporting Terms Definitions of several terms that correspond to data needs for the proposed regulatory requirements are provided below to give a general background for the new requirements.

The total number of workers reasonably likely to be exposed to each reportable chemical substance at each site where the substance is manufactured will be reported under the proposed changes. " Reasonably likely to be exposed" is defined as exposure to a chemical substance under foreseeable conditions of manufacture ( including import), processing, distribution in commerce, or use of each reportable chemical, that is more likely to occur than not to occur. This definition includes, but is not limited to, such activities as charging reactor vessels; drumming; bulk loading; cleaning equipment; maintenance operations; materials handling and transfers; and analytical operations. Accidental or merely speculative exposures are excluded. EPA is proposing to require reporting of exposure through the use of the range code corresponding to the submitters' estimate of the total number of potentially exposed workers.

Processing is 1) the preparation of a chemical substance, after its manufacture, for distribution in commerce in the same form or physical state or in a different form or physical state from that in which it was received, 2) the preparation of a chemical substance, after its manufacture, for distribution in commerce as a part of a mixture or article containing the substance, or 3) use as an intermediate. Based on this definition, processing involves the incorporation of the chemical into a formulation, an article, or a mixture.

North American Industry Classification System ( NAICS) codes describe the industrial activities associated with each reported industrial processing or use operation. If more than ten NAICS codes apply to a reportable chemical substance, only the ten codes for 6 The Standard Industrial Classification ( SIC) system has recently been replaced with the North American Industry Classification System ( NAICS). NAICS is a six digit coding system, therefore allowing for more detailed specification than the four digit SIC system.

I 7 Box I 2. Proposed Function Categories ° Adsorbents and absorbents; ° Adhesives and binding agents; ° Aerosol propellants; ° Agricultural chemicals ( non pesticidal); ° Anti adhesive agents; ° Bleaching agents; ° Coloring agents, dyes; ° Coloring agents, pigments; ° Corrosion inhibitors and anti scaling agents; ° Fillers; ° Fixing agents; ° Flame retardants; ° Flotation agents; ° Fuels; ° Functional fluids; ° Intermediates; ° Lubricants; ° Odor agents; ° Oxidizing agents; ° pH regulating agents; ° Photosensitive chemicals; ° Plating agents and metal surface treating agents; ° Processing aid, not otherwise listed; ° Process regulators, used in vulcanization or polymerization processes; ° Process regulators, other than polymerization or vulcanization processes; ° Reducing agents; ° Solvents ( for cleaning or degreasing); ° Solvents ( which become part of product formulation or mixture); ° Solvents ( for chemical manufacture and processing and are not part of the end product at greater than one percent by weight); ° Stabilizers; ° Surface active agents; ° Viscosity adjustors; and ° Other. the substance that cumulatively represent the largest percentage of production volume ( measured by weight) need be reported. 6

Industrial function category codes correspond to the appropriate functions of the reportable chemicals, based on a review of different chemical function classification systems both internal and external to EPA. For each NAICS code that is reported, the functional use category code that best represents the specific manner in which the reportable chemical substance is used must be selected. These categories were developed from the European Organization for Economic Cooperation and Development's ( OECD's) use categories and EPA experience from the New Chemicals Program. Box I 2 provides a listing of the initial Industrial Function Category Codes proposed for the IUR amendments. There is significant overlap between this suggested list for the amended IUR and the industrial function codes used for the Premanufacture Notifications ( PMNs), Use Cluster Scoring System ( UCSS), Use and Exposure Information Project ( UEIP), Comprehensive Assessment Information Rule ( CAIR) and the OECD's programs ( U. S. EPA 1996d).

Commercial and consumer product category codes must be reported for each category in which the reportable chemical substance is used. These categories have been developed based on a review of national usage surveys of consumer products, exposure monitoring data, product emissions testing, and a variety of other data sources. This review provided a list of consumer products and a subsequent categorization of these products by common characteristics, such as use scenarios, into major groupings of consumer and commercial products. Box I 3 provides a listing of these proposed commercial and consumer product categories. 7 The Office of Management and Budget prepares Standard Industry Classification ( SIC) Codes corresponding to classified industrial activities. These SIC codes are identified at the 2 digit, 3 digit, 4 digit, and higher levels based on the specificity of the activities undertaken.

I 8 Box I 3. Proposed Commercial and Consumer Product Categories

Artists' Supplies;

Adhesives and sealants;

Automotive care products;

Electrical electronic products;

Glass and ceramic products;

Fabrics, textiles and apparel;

Lawn and garden products ( non pesticidal);

Leather products;

Lubricants, greases and fuel additives;

Metal products;

Paper products;

Paints and coatings;

Photographic chemicals;

Polishes and sanitation goods;

Rubber and plastic products;

Soaps and detergents;

Transportation products;

Wood and wood furniture;

Other.

C. Overview of the Regulated Community The regulated community consists of companies manufacturing or importing chemicals listed on the TSCA Inventory and regulated under TSCA § 8. In general, the industry segments that compose the regulated community for the proposed rule are those that produce or import organic and inorganic chemical substances. Manufacturers and importers of non TSCA chemical substances ( such as pesticides, tobacco, nuclear material, firearms and ammunition, food and food additives, drugs, and cosmetics) are not required to report on those chemicals. Chemical processors are also exempt from all reporting. The sections below describe the industries affected by the proposed rule and the types of information that they would be required to report.

1. Chemical Industry Segments Likely to be Subject to the IUR Amendments The SIC codes correlating with the industry groups likely to be affected by the proposed IUR amendments are identified in Table I 1.7 These SIC codes show the primary activities for establishments within industries that manufacture or import chemicals listed on the TSCA Inventory. The 8 These segments of the chemical industry represent those most likely to be subject to TSCA § 8 reporting, but other industry sectors ( not listed here) may also manufacture certain subject chemicals.

I 9 sectors of the U. S. economy affected by the proposed rule can be classified into the 10 major industry groups briefly described below ( EOP 1987) 8: I 9 Major Group 10. Metal Mining Group 102: Copper Ores 1021 Copper Ores Major Group 13. Oil and Gas Extraction Group 131: Crude Petroleum and Natural Gas 1311 Crude Petroleum and Natural Gas Group 132: Natural Gas Liquids 1321 Natural Gas Liquids Group 138: Oil and Gas Field Services 1382 Oil and Gas Field Exploration Services 1389 Oil and Gas Field Services, Not Elsewhere Classified ( NEC)

Major Group 14. Mining and Quarrying of Nonmetallic Minerals Except Fuels Group 145: Clay Ceramic and Refractory Minerals 1459 Kaolin and Ball Clay Group 147: Chemical and Fertilizer Mineral Mining 1474 Potash, Soda, and Borate Minerals 1475 Phosphate Rock Major Group 20. Food and Kindred Products Group 207: Fats and Oil Mills 2074 Cottonseed Oil Mills 2075 Soybean Oil Mills 2076 Vegetable Oil Mills, Except Corn,

Cottonseed, and Soybean 2077 Animal and Marine Fats and Oils Major Group 26. Paper and Allied Products Group 261: Pulp Mills 2611 Pulp Mills Group 262: Paper Mills 2621 Paper Mills Group 263: Paperboard Mills 2631 Paperboard Mills Group 265: Paperboard Containers and Boxes 2653 Corrugated and Solid Fiber Boxes Group 267: Converted Paper and Paperboard Products,

Except Containers and Boxes 2672 Coated and Laminated Paper, ( NEC) Major Group 28. Chemicals and Allied Products Group 281 Industrial Inorganic Chemicals 2812 Alkalies and Chlorine 2813 Industrial Gases 2816 Industrial Pigments 2819 Industrial Inorganic Chemicals, NEC Group 282 Plastics Materials and Synthetic Resins,

Synthetic Rubber, Cellulosic and Other Manmade Fibers, Except Glass 2821 Plastics Materials, Synthetic Resins and Nonvulcanizable Elastomers 2822 Synthetic Rubber ( Vulcanizable Elastomers)

2823 Cellulosic Manmade Fibers 2824 Manmade Organic Fibers, Except Cellulosic Group 283: Drugs 2833 Medicinal Chemicals and Botanical Products 2834 Pharmaceutical Preparations 2835 In Vitro and In Vivo Diagnostic Substances 2836 Biological Products, Except Diagnostic Substance Group 284 Soap, Detergents, and Cleaning Preparations; Perfumes, Cosmetics, and Other Toilet Preparations 2841 Soap and Other Detergents, Except Specialty Cleaners 2842 Specialty Cleaning, Polishing, and Sanitation Preparations 2843 Surface Active Agents, Finishing Agents,

Sulfonated Oils, and Assistants 2844 Perfumes, Cosmetics, and Other Toilet Preparations Group 285 Paints, Varnishes, Lacquers, Enamels, and Allied Products 2851 Paints, Varnishes, Lacquers, Enamels, and Allied Products Group 286 Industrial Organic Chemicals 2861 Gum and wood Chemicals 2865 Cyclic Organic Crudes and Intermediates,

and Organic Dyes and Pigments 2869 Industrial Organic Chemicals, NEC Group 287 Agricultural Chemicals 2873 Nitrogenous Fertilizers 2874 Phosphate Fertilizers 2879 Pesticides and Agricultural Chemicals, NEC Group 289 Miscellaneous Chemical Products 2891 Adhesives and Sealants 2892 Explosives 2893 Printing Ink 2895 Carbon Black 2899 Chemicals and Chemical Preparations, NEC Table I 1. Standard Industrial Codes for Industries Likely to Be Subject to IUR Reporting Source: EOP 1987. I 11

Major Group 10  Metal Mining includes establishments primarily concerned with mining, developing mines, or exploring for metallic minerals ( ores). These ores are valued for the metals contained, to be recovered for use as such or as constituents of alloys, chemicals, pigments or other products.

Major Group 13  Oil and Gas Extraction includes establishments primarily engaged in the production of crude petroleum and natural gas, extraction of oil from oil sands and oil shale, production of natural gasoline and cycle condensate, and production of gas and hydrocarbon liquids from coal at the mine site.

Major Group 26  Paper and Allied Products includes establishments primarily engaged in the manufacture of pulps from wood and other cellulose fibers and from rags; the manufacture of paper and paperboard; and the manufacture of paper and paperboard into converted products.

Major Group 28  Chemicals and Allied Products include establishments producing basic chemicals and establishments manufacturing products by predominantly chemical processes. Major group 28 establishments manufacture three general classes of products: basic chemicals, chemical products to be used in further manufacture, and finished chemical products to be used for ultimate consumption.

Major Group 29  Petroleum Refining includes establishments that participate in petroleum refining, petroleum manufacturing, paving and roofing materials, and compounding lubricating oils and greases from purchased materials. Establishments providing gas to consumers are not included in this category, but rather are classified with Public Utilities Industries ( Major Group 49).

Major Group 51  Wholesale Trade  Nondurable Goods includes establishments primarily engaged in the wholesale distribution of nondurable goods. This group includes the wholesale distribution of plastics materials and of chemicals and allied products, not elsewhere classified.

The major groups identified above and the more detailed 4 digit groups presented in Table I 1 represent the designation of sites that would likely be subject to IUR amendment reporting. However, many factors relate to the nature of these sites, making identification of the regulated community more difficult. For example, SIC codes reflect a site's primary activity, omitting substantial participation a company may have in other industry activities.

Secondly, SIC codes assigned to parent companies reflect the parent company's primary activity, although many parent companies are primarily holding companies with small subsidiaries. Each of these small subsidiaries may belong in a completely different industry classification based on its own primary activity. Therefore, sites considered to fit into other SIC codes due to their primary activities or to their parent company activities may be subject to this rule. Likewise, sites whose parent companies fit into these SIC codes may not be subject to this rule. I 12 Box I 4. Reporting Processing and Use Information on Chemicals The regulated community will be expected to provide readily obtainable information on downstream processing and use of subject chemicals. Reporting this information could be straightforward for companies that manufacture a chemical for a single customer for a specific commercial end use. For example, a small volume, proprietary use chemical ( e. g., a specialty adhesive for aerospace applications) might have only one processor, very few users, no consumer use, and a limited exposure profile. By comparison, the nuances associated with distribution of a large volume chemical within and outside of a particular site will place a greater burden on the portion of the regulated community that provides chemicals to a wide range of sites and for a variety of end uses. An example of this might be a company distributing chemicals for use in various perfumes and fragranced toiletries, thereby reaching hundreds of processing sites. In either case, however, manufacturers and importers are required only to provide information considered to be readily obtainable; therefore, more complicated scenarios should require only a marginally greater effort than small volume, limited use 2. Information to be Reported In addition to the information required under the original IUR, companies reporting under the proposed amendments will be reporting additional information on facility and company identification, chemical use and exposure, and status of CBI claims. In addition to reporting information on their own site, the company will also report estimates of downstream uses and exposures, as well as provide information on commercial and consumer end uses of a particular chemical. Reported facility and manufacturing information is to be supplied as far as it is known to or reasonably ascertainable by the submitter, and reported processing and use information is to be supplied as far as it is readily obtainable by the submitter. As such,

supplying these data elements should not entail a particularly burdensome level of effort ( see Box I 4). Furthermore,

EPA proposes that some information should be reported in ranges, and that only the majority of the production volume be accounted for when reporting use information. Allowing for reporting in ranges will reduce the potential burden to submitters of developing a precise point estimate of their chemical production, but will provide information that is sufficiently precise for the Agency's risk screening purposes.

D. Purpose and Contents of Report 1. Purpose and Scope of Report This report presents an economic analysis of the costs and benefits associated with the proposed IUR amendments. EPA expects these amendments to have cost impacts for both industry and EPA. In addition, the rule is expected to generate substantial benefits by providing needed screening level information on TSCA chemical substances currently in commerce.

This economic analysis compares the costs and benefits of the proposed regulation. This report also presents an analysis of selected regulatory alternatives. For each alternative, the expected impacts on anticipated costs and benefits are assessed. The following analyses are provided in this report:

 an overview of changes in the reporting requirements; I 13  an assessment of the industry groups considered in this analysis ( i. e., regulated community);

 a compilation and estimation of industry and Agency unit and total costs;

 an assessment of the benefits that will result from the information collected; and  a comparison of the costs and the benefits of the proposed rule.

This report also discusses the impacts of the proposed amendments on small businesses and addresses other congressional mandates ( e. g., Paperwork Reduction Act).

2. Contents of the Report The contents of the six remaining chapters and five appendices contained in this report are organized as follows:

Chapter II describes the need for this rulemaking, existing data sources, and regulatory options considered. The statement of need explains the economic reasons for these amendments;

Chapter III presents original IUR reporting requirements ( i. e., the baseline) and quantifies industry and agency costs associated with the original rule. This chapter also presents an analysis of the industry burden expected to result from the implementation of the IUR amendments. This chapter provides a detailed analysis of the incremental costs to industry for complying with requirements for submission of required reports for each of the proposed reporting options relative to the original ( baseline) requirements;

Chapter IV provides estimates of the government costs attributable to additional data collection and processing activities for each of the proposed reporting options relative to costs incurred for original requirements;

Chapter V qualitatively describes the benefits that will be generated from the collection of additional information under the IUR amendments. This chapter describes how the information will be used by the Agency and how use of this information will generate societal benefits by reducing risks and improving government risk management activities;

Chapter VI presents a cost benefit comparison for each of the proposed reporting options;

Chapter VII provides a discussion of small business impacts and environmental equity considerations;

Appendix A provides the latest draft version of the Form U, the reporting form for the Inventory Update Rule;

Appendix B provides information on the types of data that are currently available to EPA, demonstrating the need for further collection of data under the IUR amendments;

Appendix C presents basic data regarding the number of chemicals, reports, and sites involved in IUR reporting, as well as the methodology used to generate numbers of reports expected to be submitted for each reporting cycle;

Appendix D describes the survey administered to determine the industry burden of reporting under the original IUR and the proposed IUR amendments and presents an analysis of the survey results; and

Appendix E provides a sensitivity analysis of several cost assumptions used in determining the industry cost of reporting. The analyzed cost assumptions include the number of chemicals reported per site and the discount rate used to calculate the net present value and annualized costs of the amendments. II 1 CHAPTER II. STATEMENT OF PROBLEM The production, processing, and use of chemicals can result in negative environmental externalities. ( An externality is usually defined as an unintentional side effect of production and consumption that affects a third party either positively or negatively.) Negative externalities may remain unidentified due to the lack of available information on the hazards of and exposures to chemicals. The market has not provided the public or the government with information on risks associated with chemicals. Because of these externalities, and because the market does not necessarily provide needed information to interested parties, socially suboptimal levels of human health and environmental quality exist.

This chapter describes the underlying problem and market failure that the proposed IUR amendments are designed to address and discusses how the proposed regulatory option addresses the problem. The chapter is divided into two parts. Section A describes the market failure, the need for information, and the manner in which the proposed rule addresses these information needs. Section B discusses alternative approaches, both regulatory and non regulatory, and summarizes the regulatory options under consideration.

A. Statement of Need Under Executive Order Number 12866, EPA is required to identify whether or not the proposed rule addresses a significant market failure. The major types of market failure are identified as externality,

natural monopoly, market power and inadequate or asymmetric information. This proposed rule uses the information gathering process as a means to develop policies to address a problem of externality.

1. Market Failure: Externalities and the Need for Information A defining feature of a market failure is the inequality between the social consequences of an action and its purely private perception of benefits and costs. For environmental problems resulting from market failures, this divergence between private and social perspectives is normally called an externality or external cost. Such divergences occur when the actions of one economic entity impose costs on parties that are external to, or not accounted for in, a market transaction or activity. Although many different types of environmental externalities exist, regulations under TSCA and other OPPT II 2 Box II 1. Progress on Screening Chemicals for Risks Identifying chemical substances, plant sites, and exposures of most concern and setting priorities for more detailed risk assessment and potential risk management actions are important components of a successful chemical risk management program. As indicated in EPA's TSCA Inventory, there are more than 75,000 chemicals in commerce. Screening the potential risks of these chemical substances, and setting priorities for more detailed risk assessment and possible risk management, is an enormous challenge given the extremely large number of manufacturing, processing, and use sites and exposure scenarios. However, of these 75,000 chemicals, EPA has determined that the majority of the chemicals are likely to be of low concern and is focusing attention on the top 10%  15% of the chemicals.

Additional information is required to adequately assess the risks of these top chemicals ( about 10,000 chemicals) on which EPA would like to focus attention. EPA plans to begin screening the top 6,000 of these chemicals and requires additional use and exposure information to adequately screen their risks. Without the additional information EPA may not identify the potential risks posed by these chemicals. If the potential risks are not identified, EPA may not be able to evaluate nor address the risks associated with the chemical or use. In the future, EPA plans to expand this evaluation to include other TSCA chemicals. EPA believes that collecting the slightly augmented facility and manufacturing information for the remaining chemicals provides sufficient information to maintain a profile of the chemical industry and to react to unanticipated risks.

A key benefit of the IUR amendments for these programs will result from the reduction in time required to collect and process data and to develop exposure estimates. Because the process by which chemicals enter and proceed through EPA's risk management programs is hindered by the lack of data on exposure, the risks posed by these chemicals cannot be dealt with efficiently. Therefore, detrimental worker and consumer exposures and releases to the environment cannot be mitigated in a timely manner, resulting in continued negative consequences for human and ecosystem health.

This shortfall was highlighted in a GAO report entitled " Toxic Substances Control Act: Legislative Changes Could Make the Act More Effective." The report states that, in total, EPA has reviewed about 16 percent of the Inventory, either as new or existing chemicals. EPA has been reviewing about 100 existing chemicals per year. ( New chemicals are evaluated through the New Chemicals Program prior to becoming part of the Inventory.) At this rate it seems clear that EPA cannot effectively screen and manage chemical risks for the 6,000 chemicals for which there are significant concerns without additional information. Adding the information collected through the proposed IUR amendments provides the information needed by the Agency to determine which chemicals or chemicals and use scenarios are likely to pose significant risks, to determine which chemicals are selected for more detailed analysis, and, ultimately, to determine which initiatives typically focus on those related to chemical production and use. In this area, exposure of humans and the environment to hazardous substances typically results in market outcomes that are less than optimal. A common example would be a manufacturing process that emits some amount of a chemical while producing or using that chemical. As a result of this activity, environmental and health risks are imposed on its employees, the public at large, and the environment. These risks are created by the manufacturing facility, but it is society ( employees and the public) that bears the cost of these risks.

Given the host of substances and potentially risky activities within OPPT's purview, the number of environmental externalities possibly requiring EPA's investigation and intervention is quite large.

Because of the diverse character of the chemical industry, its products, and the uses of those products,

the first crucial step in remedying market failures is to identify instances in which these externalities are II 3 Box II 2. Reasons for Lack of Information Negative incentives  Manufacturers have an incentive not to provide information that highlights the negative characteristics of the product or job for consumers or workers. Such information would lessen the attractiveness of purchasing the product or accepting employment.

Information production/ dissemination costs  The production and dissemination of information has a cost which may or may not be expensive. Someone has to be willing to pay this cost for the information to be made available.

Causation difficult to establish  Often substantial distance may separate the original polluting event and subsequent human or environmental damage; frequently many possible sources exist. Moreover, often the linkages from a pollution or exposure event may be extremely numerous and hard to trace. For example, the impact of toxics released in one part of a wetland on oceanic aquatic species is difficult to determine. If establishing a chain of causation from the harm to the responsible party and event is hard, the market and even extra market systems ( such a conventional legal remedies) may not adequately address these risks.

Exposures not perceptible  If exposure to harmful substances are not perceptible when they occur, individuals may have difficulty taking action to ensure that these exposures are adequately reflected in market demands and prices.

Long time lags between exposure and effects  Long latency periods and other factors that cause harms to occur far after the exposure event can also hinder the market's attempts to establish and enforce responsibility for environmental consequences of some activities. likely to occur. Thus, identifying situations in which externalities are present   and where the potential risks posed by these externalities are sufficiently large as to warrant further investigation   is a key goal of the chemical screening that EPA performs as part of its risk management activities. In order to improve internalization of environmental externalities, EPA must first identify these risks of concern. Information about exposure is a critical component of this screening. The detailed and accurate information required to identify relevant externalities is not currently available to EPA's risk management process ( See Box II

1). The question thus arises: " why does the market fail to provide the information needed to identify these externalities?"

There are several causes of this information void. There is little incentive to provide information,

the provision of information is not costless in the real world, and providing the information may have negative consequences for the company by either dissuading customers from purchasing the product or by providing competitors with information. In part, the lack of information is a motivation for the activities that EPA undertakes ( examples of the reasons there is a lack of information are discussed in Box II 2 and the text below). EPA's mission is to act in the public's interest, undertaking actions to correct the lack of information, and thereby enble the identification of existing externalities that cause a suboptimal level of protection for the environment and the public. II 4 Market forces encourage the provision of some types of information. For example, consumers and job seekers are able to obtain information on some types of product and job characteristics relatively easily. In particular, producers of products have an incentive to provide information if it encourages a potential consumer of the product to purchase it. Similarly, employers have an incentive to entice potential employees to join by highlighting attractive and safe features of the work environment.

Consumers and workers can also seek out some types of relevant information that is not readily provided in the market through indirect sources such as consumer magazines and labor unions. However, not all the information that consumers and workers could use to make safety decisions or that EPA needs to determine the existence and magnitude of potential externalities is readily provided by the market.

For example, manufacturers do not have an incentive to provide information that would dissuade consumers from purchasing the product or workers from choosing employment in the manufacturing firm.

Such information might be information on the safety characteristics of the product or job. In some cases manufacturers may feel that alerting consumers or workers to such characteristics, even in the context of improvements that have been made or steps that individuals can take to minimize risks, would negatively affect the attractiveness of the product or employment. Thus, they may not have incentives to provide such information, and they may have an incentive not to provide it.

A potential failure to provide adequate information can occur for the simple reason that information may be costly to generate and disseminate. Moreover, there may be economies of scale associated with information provision, interpretation, and use. From society's point of view, the benefits of collecting the information extend beyond one person to all potential consumers of the product or to workers manufacturing the product. Even if information could be collected, it may not be in any individual's best interest to do so. Thus, government's role ( in this case EPA's) is to collect and maintain this information, and to interpret it in order to identify the externalities and determine if action is warranted to protect the public's interest 2. Data Required to Conduct Risk Screening and Management Currently, the process of collecting information on chemical effects and exposures to support risk management actions is a resource intensive and time consuming process. EPA's ability to II 5 improve priority setting and resource allocation activities is dependent on the availability of exposure data that is not currently collected on a comprehensive basis. Consequently, the primary goal of this rule is to enhance the quality and quantity of information about chemical uses and exposures that EPA may use to identify risks under TSCA, with the ultimate goal of protecting the public.

To fully assess human exposure to a chemical, EPA needs to know how many workers,

consumers, and others are exposed, the mechanism through which exposure occurs, and the amount and duration of exposures. The Agency has systematically defined the components of exposure assessment in its Guidelines for Exposure Assessment, which discuss the information requirements for several different approaches to exposure assessment, ranging from initial risk screening to full scale risk assessments ( U. S. EPA 1992). Specific data needs include:

Estimates of the number of workers potentially exposed to specific chemicals;

Information on whether a chemical substance is used in consumer products;

Information on frequency and duration of exposure or time of contact;

Information to enable EPA to sort and screen information by industry sector;

Information on the industrial function of a chemical substance; and

Standard facility identifiers to allow linkages of data with other sources of information.

Table II 1 below lists the three components of risk assessment, examples of variables affecting these components, and specific exposure related data elements to be collected under the amended IUR for initial screening assessments. These data elements provide a variety of useful information for estimating potential exposures. For example, industrial process and use activity, production volume,

function code, and industry sector information can aid in the determination of the frequency, magnitude,

and duration of potential worker exposures. Similarly, consumer use information and the number of chemical processing and manufacturing sites will provide information on the nature and size of the general population that may potentially be exposed. II 6 Table II 1. Components of Exposure Assessments and Exposure Related Data Elements Component of Exposure Assessmentsa Examples of Variables Effecting Component for Exposure Assessments Exposure Related Screening Data Elements in IUR Amendments Source and concentration of chemical substances ° Industrial process/ use activity ° Unit operations ° Process type ° Industry practices ° Industrial function ° Application methods ° Throughput rates ° Use concentrations ° Physical and chemical properties ° Efficiency ° Control technologies ° Treatment and disposal options ° Ventilation design ° Use of personal protective equipment ° Regulations ° Production volume ° Industrial process/ use activities and volumes ° Industry sectors ° Industrial chemical function ° Physical form ° Maximum concentration Population and receptor information ° Number of workers ° Size of general population exposed ( consumer products are assumed to have widespread potential exposures) ° Time activity patterns ° Physical characteristics ° Age ° Number of workers ° Number of sites ° Consumer use information Frequency and duration of exposure or time of contact ° Default values are typically used ( i. e. 250 days/ yr, 8 hrs/ day for workers) Default values ( not collected)

a Source: U. S. EPA 1992 3. Existing Data Sources and Data Gaps The specific information that OPPT needs to provide more accurate preliminary screens of chemicals in commerce, to identify chemicals of concern, to identify potentially safer substitute chemicals, and to properly allocate resources and set priorities for its programs is currently not available ( see Box II 3). Currently, chemical data collection efforts occurring within various EPA offices do not systematically or comprehensively collect chemical use and/ or worker exposure data. The information collected by these EPA offices is described in Appendix B.

Additionally, chemical information is collected at the state level to support a variety of state and federal programs and regulations, including EPCRA, state Right to Know programs, state permitting requirements, and other state programs. According to EPA regional offices and state environmental II 7 Box II 3. Risk Screening Activities Lack Important Data on Exposure Currently, EPA often must conduct its screening activities based on assumed conditions, outdated information, or incomplete data sets. For instance, EPA's major source of data on the number of workers exposed is the National Occupational Exposure Survey conducted by the National Institute for Occupational Safety and Health in the early 1980s. This survey contains estimates of the number of workers exposed nationally to over 10,000 chemicals. It also contains data such as the number of sites at which a chemical is manufactured or used. Although EPA officials recognize that the survey is old and probably outdated, it is often the only available data on the number of workers exposed to a particular chemical.

Exposure assessments can also be conducted using data on chemical release such as those provided by the TRI. However, few release data are available for chemicals not included in the TRI, which contains estimates of annual releases to the air, water, and land for only about 600 chemicals. Many other potentially harmful chemicals are produced in large quantities. Even for the TRI chemicals, information such as the numbers of workers potentially exposed, the functions of the chemical, and the uses of the chemical is often not available. Considering the diversity of release sources, the large number of associated parameters, and the limited availability of existing data, the effort needed to perform an exposure assessment for thousands of agencies, chemical use and worker exposure information generally is not collected at the state level ( Codina 1996, Layne 1996, Fried 1996, Browning 1996, Hope 1996, Larmee 1996). For example, under EPCRA § 311 and § 312, states collect data on the maximum and average amount of a chemical on site for the purposes of emergency response planning. Information on total annual volume, function of the chemical, or use of the chemical, however, is not available from this source.

Although several states and other federal agencies have or are developing programs to collect information related to chemical manufacturing, processing, storage, and distribution ( OSPIRG 1993),

the information typically is used to support waste reduction programs and/ or emergency management plans and is not designed to rank chemical exposure and use concerns at the manufacturing level.

None of these groups collect the data needed to effectively conduct chemical risk screening at the national level. Information on these programs is provided in Appendix B.

The available commercial data sources characterizing chemical use are generally not comprehensive in nature. Such data sources include the following:

chemical industry journals, such as Chemical and Engineering News and the Chemical Marketing Reporter;

chemical and business directories, including the Directory of Chemical Produces and the Thomas Register;

chemical reference documents, including the Kirk Othmer Encyclopedia of Chemical Technology, SRI International's Chemical Economics Handbook, the Freedonia Market Research database, and the Frost & Sullivan Market Intelligence database; and II 8

publications from chemical trade associations, such as the Chemical Manufactures Association, and the American Chemical Society.

These sources are sometimes useful for characterizing production volume, use categories, physical form, and chemical function information. For instance, once EPA has determined that a particular chemical has a high potential risk, EPA searches these data sources for information on the chemical.

However, these data sources do not provide information useful for screening large numbers of chemicals. Some of these sources provide only general chemical information that cannot be used to determine production and use at the plant level. Other sources only specify production and use information for particular companies, and do not provide data on industry wide chemical production.

These sources typically lack useful information on potential worker and consumer exposures. Further information on these sources can be found in the EPA report A Review of Existing Exposure Related Data Sources and Approaches to Screening Chemicals: A Response to CMA ( U. S. EPA 1998a).

Overall, it has become increasingly evident that the information routinely made available to EPA through the available sources falls short of the information needed to identify potential risks swiftly and accurately. In particular, the Inventory and Inventory Update process provides very limited information   only the volume of production   to screen chemicals for exposure risks. However, actual human health and other risks posed by a chemical depend critically on its uses and other exposure scenarios. Without such data, EPA cannot adequately or 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.

4. Current Risk Screening Approach To implement its responsibilities for managing chemical risks under TSCA, EPA identifies or screens potential chemical risks, assesses identified potential risks in more detail, and, if necessary,

manages risks determined to be unreasonable. There are tens of thousands of chemicals in use and many ways that exposures can occur. OPPT's past approaches to chemical risk screening have been primarily based on relative chemical hazard, coupled with IUR production volume data. This approach,

used because large scale, national level data on worker and consumer use and exposure are generally not available, has proven inadequate for screening the large number of chemicals in commerce. II 9 Box II 4. Current Existing Chemical Review Process Since there is no adequate current system available for screening all of the chemicals in commerce, EPA relies of various methods to determine which chemicals enter the existing chemical review process, including referrals from the European Union, the Interagency Testing Committee ( ITC), state agencies, and environmental groups. Once a chemical or group of chemicals is determined to have a potential for risk, the chemical enters the existing chemical review process. The existing chemical review process typically takes from 12 to 16 weeks and requires about 100 staff hours per chemical, although the required level of effort to complete the process may vary. Despite EPA's attempts to prioritize chemical review efforts according to the potential for risk, under the current system there is no guarantee that those chemicals chosen for review necessarily pose the greatest risk. The proposed changes to the IUR would provide EPA with more information to effectively determine which chemicals pose the greatest potential for risk.

During the review process, the Agency searches its files and public data bases for information on the chemical's effects, physical properties, production volumes, manufacturing processes, uses, releases to the environment, and other data, such as the number of workers exposed to the chemical. Because limited information is generally available, EPA uses various computer models to estimate or project certain data, such as the amounts and types of environmental releases. A further complication is that a chemical may have various potential health and environmental effects that EPA needs to consider in evaluating its risks. In addition, chemicals often have multiple uses, each of which needs to be examined to determine the amount of exposure ( GAO 1994). EPA uses the chemical hazard/ production volume approach, among others, to initially screen many chemical substances for potential risks to select candidate chemicals for inclusion in its Existing Chemical review program ( see Box II 4). Other approaches include recommendations from the Interagency Testing Committee ( ITC), the European Union, States, or environmental groups. The initial screening is designed to select chemical substances in commerce that appear to present the greatest potential risk to human health and the environment. At the close of the review, there are three possible outcomes: a testing recommendation, a recommendation for further evaluation, or closure. " Closure"

may include referrals to other programs or agencies; dissemination of screening results; or the decision to discontinue further evaluation based on the chemical substance's low hazard or low risk reduction potential, or because it will be considered as part of a broader cluster of chemical substances.

5. Advantages of the New Information Collection The need for EPA to properly allocate resources and set priorities for its programs has been widely recognized and documented. Two reports, the EPA Science Advisory Board's " Reducing Risk: Setting Priorities and Strategies for Environmental Protection" and the National Academy of Public Administration's " Setting Priorities, Getting Results, A New Direction for EPA" recognize that EPA's ability to improve its priority setting and resource allocation activities has been limited by the lack of exposure data. By collecting the exposure related data included in the proposed IUR amendments, II 10 the Agency would acquire the necessary information to improve identification, prioritization, and chemical risk screening capabilities.

EPA recognizes that production volume information, supplemented by relatively scarce public sources of information, generally is not sufficient for identifying chemical exposures and human risks.

This recognition motivates the revised and more detailed data collection proposed under the IUR amendments. EPA anticipates that the collection of additional use and exposure information, when combined with hazard data, will provide the means to develop a better risk based screening mechanism that will benefit workers, consumers, the general population, and the environment.

The primary goal of this rule is to enhance the quality and quantity of information about chemical uses and exposures that EPA may use to identify risks under TSCA and to protect and inform the public. The information proposed to be collected under the IUR amendments will enable EPA to evaluate the potential risks associated with chemical production and use, and will improve EPA's consequent ability to conduct risk management activities ( especially screening), in a more comprehensive and timely manner. It will also enable EPA to be knowledgeable about a wider variety of chemicals and to be proactive, rather than reactive, in identifying risks.

B. Approaches to Regulation and Options for Collecting Information This section provides information on regulatory approaches and options considered for collecting information necessary to EPA's risk management programs under TSCA. The first subsection presents the approaches considered for implementation of the information collection. The second subsection presents specific details on the levels of information required under different regulatory options.

1. Approaches to Regulation In the case of a significant market failure, public intervention is often required to override the market directly or to configure market incentives to achieve a more socially efficient outcome. Several alternative approaches are available to address market failures and thereby correct the results of environmental externalities. These fall into three broad categories: command and control approaches, incentive based strategies, and information based remedies. In addition, EPA may choose II 11 to take no regulatory action in response to market failures, if it is determined that failures are not significant or if costs of the action overwhelm benefits.

Command and control approaches are the most specific forms of regulation. Command and control approaches addressing environmental problems include product or process bans and controls,

standards for the manner in which a chemical may be manufactured or used, and other measures directly mandated by EPA or other environmental authorities. Incentive based strategies seek to alter the incentives of private sector market participants to consider environmental externalities in decision making. This is accomplished by changing price or cost conditions related to polluting or riskgenerating activities. Incentive based strategies include charges, subsidies, tradeable permit systems,

financial assurance, and other market related mechanisms. Information based strategies are the third general class of approaches for addressing environmental risks to human health and the environment.

These strategies seek to alter decisions indirectly by improving the information base upon which those decisions are made.

The relative efficacy of each approach for addressing market failures depends on the specific circumstances surrounding different risk and pollution problems. Sometimes, outright product or process bans, mandatory exposure controls, or other direct interventions might best achieve the goal of improved environmental protection and maximizing net benefits. In others, economic incentive based strategies might do better, especially when a substantial variation in the costs of pollution control exists across many sources.

The issues of concern here are best suited to information related remedies, such as the information provision required by the IUR amendments. The other regulatory remedies focus on controlling specific sources of risk, and would normally come into play after a particular risk management problem has been identified. The IUR amendments, however, are focused on collecting data which will allow EPA to identify instances of potential market failures and environmental externalities. Thus, the goal is to supplement EPA's current chemical risk management strategies by enhancing the volume and detail of information available to EPA concerning chemical characteristics,

uses, and exposures.

Clearly, improved information on chemical exposure will allow EPA to more effectively and accurately identify and initially assess the extent of market failures and the resulting externalities II 12 associated with chemical exposures and risks. In addition, information disseminated to chemical producers, consumers, and the public will help to achieve more efficient solutions to risk management problems specific to their particular circumstances.

EPA also has the option of taking no regulatory action. Under a " no action" approach, EPA would continue to rely on production volume information and public data sources to screen human health and other risks. However, EPA believes that the relatively scarce body of information currently available is not sufficient to accurately identify chemical exposures and risks, and hence, that some regulatory action is required.

One alternative to a mandatory information collection rule might be a voluntary survey approach under which the added information targeted under the IUR amendments would be collected on a non mandatory basis. This would entail EPA sending a survey to all or some portion of chemical manufacturers and allowing the manufacturers to decide what information to include in the response.

However, despite the apparent advantages of a purely voluntary data reporting program, the value of the additional information provided to EPA would be far lower compared with a mandatory information collection program. In particular, no clear way would exist to determine the extent to which responses span the entire universe of relevant chemicals and their uses, so data gaps of perhaps substantial proportions would continue to exist. Moreover, uncompleted surveys might not be random in the sense that risks may be higher for chemicals and uses for which surveys are not returned.

Finally, EPA would not have a systematic method to ensure quality control and timeliness of the survey responses. Because of these shortcomings, this voluntary survey alternative is unlikely to produce the volume, scope, and detail of information ultimately required by EPA.

2. Regulatory Options  Levels of Information Collected The Agency has considered various regulatory options that would alter the scope of coverage under the IUR reporting requirements. Three basic parameters for the options are reporting thresholds, exemptions based on type of chemical, and reporting cycles. Within the reporting threshold parameter, two categories of reporting thresholds are used in the proposed IUR amendments; the two reporting thresholds determine submission of facility and manufacturing data and submission of use and exposure data, respectively. The options are summarized below and presented in detail in Table II 2.

Note that these are the differences between the options and do not represent all of the changes from II 13 the baseline. The first 10 options are based on different reporting thresholds and a four year reporting cycle.

Option 4 is the proposed Option and sets the reporting threshold at 25,000 pounds for facility and manufacturing data and 100,000 pounds for processing and use data. Manufacturers of most petroleum streams will be exempt from reporting processing and use information.

Options 1 3 and 5 8 vary the thresholds for both facility and manufacturing data and for processing and use data.

Option 9 contains a staged threshold for processing and use information; the threshold for the first year of reporting is 500,000 pounds and for subsequent reporting years is 100,000 pounds. This option retains the 25,000 pound threshold for facility and manufacturing information.

Option 10 assumes the reporting thresholds are the same as those in the proposed option, and includes an exemption from all reporting requirements for site limited petroleum stream chemicals rather than the petroleum stream partial exemption in the proposed option.

Option 11 requires the reporting thresholds used in Option 4, but this option examines the continued exemption of inorganic chemicals under the proposed IUR amendments.