.

ECONOMIC
IMPACT
ANALYSIS
AND
SMALL
ENTITY
IMPACT
ANALYSIS
OF
THE
TSCA
SECTION
4(
a)
TEST
RULE
FOR
34
CHEMICALS
TARGETED
FOR
IN
VITRO
DERMAL
ABSORPTION
RATE
TESTING
C
DOES
NOT
CONTAIN
TSCA
CBI
­­

Prepared
by:

Economic
and
Policy
Analysis
Branch
Economics,
Exposure
and
Technology
Division
Office
of
Pollution
Prevention
and
Toxics
U.
S.
Environmental
Protection
Agency
1200
Pennsylvania
Ave.,
N.
W.
(
7406)
Washington,
D.
C.
20460
February
3,
2004
CONTRIBUTORS
The
analyst
responsible
for
completion
of
this
report
was
Wendy
Hoffman.
Analytical
and
draft
preparation
support
was
provided
by
Eastern
Research
Group,
Inc.
of
Lexington,
Massachusetts
and
Abt
Associates
Inc.
of
Cambridge,
Massachusetts
under
EPA
Contract
Nos.
68­
D2­
0175,
68­
W6­
0022,
and
68­
W­
99B85.
i
TABLE
OF
CONTENTS
Page
1.0
INTRODUCTION
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1
2.0
DESCRIPTION
OF
THE
RULE
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1
2.1
Identification
of
Chemicals
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2
2.2
Relationship
of
the
Rule
to
Export
Notification
Requirements
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3
2.3
Identification
and
Characteristics
of
Entities
Covered
by
This
Analysis
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3
2.3.1
Number
of
Manufacturers/
Importers
Identified
and
Covered
By
This
Analysis,
and
Their
Revenues
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4
3.0
ECONOMIC
IMPACT
ANALYSIS
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4
3.1
Analytical
Procedure
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5
3.1.1
Identify
Testing
Procedures
and
Estimate
Costs
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5
3.1.2
Determine
Chemical
Prices
and
Calculate
Economic
Impacts
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7
3.1.3
Assess
the
Magnitude
of
the
Economic
Impacts
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10
3.2
Estimate
the
Burden
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10
3.2.1
Export
Notification
Burden
and
Cost
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11
4.0
SMALL
ENTITY
ANALYSIS
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14
4.1
Analytical
Procedure
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14
4.1.1
Determine
the
Appropriate
Small
Entity
Definition
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15
4.1.2
Determine
the
Number
of
Small
Businesses
Affected
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15
4.1.3
Calculate
the
Magnitude
of
the
Economic
Impact
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18
4.1.4
Evaluate
the
Economic
Impacts
on
Small
Entities
at
the
Level
of
1.0
Percent
or
Greater
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21
4.2
Summary
of
Small
Entity
Impact
Analysis
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22
4.3
Impacts
on
Small
Exporters
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23
5.0
UNFUNDED
MANDATES
REFORM
ACT
AND
EXECUTIVE
ORDERS
12875
AND
13084.
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23
6.0
ENVIRONMENTAL
JUSTICE
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24
7.0
CHILDREN'S
HEALTH
AND
EXECUTIVE
ORDER
13045
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25
8.0
CONCLUSIONS
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25
9.0
REFERENCES
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27
ii
List
of
Tables
Page
Table
1
Chemicals
Designated
for
In
Vitro
Dermal
Absorption
Rate
Testing
by
TSCA
§
4(
a)
Rule
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2
Table
2
Laboratory
Costs
for
In
Vitro
Dermal
Absorption
Rate
Testing
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6
Table
3
Economic
Impacts
of
Testing
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8
Table
4
Calculation
of
Average
Hourly
Administrative
Cost
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12
Table
5
Export
Notification
Costs
under
TSCA
Section
12(
b)
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13
Table
6
Estimated
Number
of
Small
Businesses
Based
on
SIC
and
NAICS
Size
Standards
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19
Table
7
Testing
and
Administrative
Cost
Share
Assumptions
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21
Table
8
Summary
of
Results
from
Small
Entity
Analysis
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23
1
1.0
INTRODUCTION
This
document
presents
EPA's
analysis
of
the
economic
impacts
(
including
small
entity
impacts)
of
the
final
test
rule
for
34
chemicals
targeted
for
in
vitro
dermal
absorption
rate
testing.
The
analysis
was
undertaken
to
address
the
requirements
of
Executive
Order
12866,
and
the
Regulatory
Flexibility
Act
(
RFA),
as
amended
by
the
Small
Business
Regulatory
Enforcement
Fairness
Act
(
SBREFA).
E.
O.
12866
generally
requires
regulatory
agencies
to
prepare
an
analysis
of
the
economic
impacts
of
proposed
and
final
regulations,
while
the
RFA
requires
agencies
to
consider
the
economic
impacts
of
their
actions
on
small
entities
including
small
businesses,
small
organizations,
and
small
governmental
units.
The
analysis
also
considers
the
impacts
of
the
rule
on
unfunded
mandates
and
environmental
justice.

This
report
does
not
contain
TSCA
(
Toxic
Substances
Control
Act)
Confidential
Business
Information
(
CBI),
although
TSCA
CBI
information
sources
were
used
in
its
preparation.

2.0
DESCRIPTION
OF
THE
RULE
In
its
31st,
32nd,
and
35th
reports,
the
Interagency
Testing
Committee
(
ITC)
designated
83
chemicals
of
interest
to
the
Occupational
Safety
and
Health
Administration
(
OSHA)
for
in
vitro
dermal
absorption
rate
testing
under
TSCA
section
4(
e)
(
59
FR
67596;
December
29,
1994),
out
of
658
chemicals
nominated
by
OSHA.
The
ITC
subsequently
withdrew
its
nomination
of
3
chemicals
in
its
36th
report
upon
finding
that
sufficient
data
had
been
obtained
under
TSCA
sections
8(
a)
and
8(
d)
rules
that
had
been
promulgated
for
the
83
chemicals.
A
Federal
Register
notice
was
issued
on
April
3,
1996
inviting
interested
parties
to
submit
written
proposals
for
enforceable
consent
agreements
(
ECAs)
to
conduct
the
testing
(
61
FR
14773).
EPA
received
a
proposal
for
one
chemical
which
resulted
in
the
development
of
an
ECA,
and
an
acceptable
study
was
submitted
for
another.
After
reviewing
additional
information
on
production
and
worker
exposure,
EPA
proceeded
to
develop
a
TSCA
section
4(
a)
test
rule
for
38
chemicals
for
which
data
showing
substantial
production
volumes
and
substantial
worker
exposure
have
been
gathered.
In
the
process
of
finalizing
the
rule,
EPA
reviewed
the
most
recent
production
data
available
from
the
2002
Inventory
Update
Rule
(
USEPA
202a).
The
Agency
determined
that
four
of
the
chemicals
are
no
longer
produced
in
substantial
volume
and
dropped
those
four
chemicals
from
the
rule.
Thus,
the
final
rule
covers
a
total
of
34
chemicals.

Under
TSCA
section
4(
a),
EPA
is
authorized
to
require
by
rule
that
manufacturers
and
processors
of
chemical
substances
conduct
testing
to
determine
the
effect
of
these
substances
on
human
health
and
the
environment.
A
test
rule
must
be
promulgated
for
any
chemical
substance
that
the
Administrator
finds:
(
a)
may
present
an
unreasonable
risk
of
injury
to
health
or
the
environment;
or
(
b)
is
or
will
be
produced
in
substantial
quantities
and
may
either
enter
the
environment
in
substantial
quantities
or
result
in
significant
or
substantial
human
exposure
to
the
chemical.
Once
a
finding
under
(
a)
or
(
b)
above
is
made,
EPA
may
then
require
health
effects
or
environmental
testing
that
is
deemed
necessary
to
address
unanswered
questions
about
the
effects
of
the
chemical
substance
that
pertain
to
the
issue
of
unreasonable
risk
of
injury
to
health
or
the
environment.
2
As
detailed
below
in
Section
2.3,
this
rule
would
apply
to
manufacturers
(
including
importers)
of
each
subject
chemical.
The
final
rule
would
trigger
notification
requirements
under
TSCA
section
12(
b)
applicable
to
exporters,
as
explained
in
Section
2.2.

2.1
Identification
of
Chemicals
The
specific
chemicals
addressed
by
this
rule
are
shown
in
Table
1
along
with
their
Chemical
Abstracts
Service
(
CAS)
numbers.
All
chemicals
listed
in
Table
1
have
production
volumes
equaling
or
exceeding
one
million
pounds
per
year
based
on
2002
data
submitted
by
producers
to
the
TSCA
Chemical
Update
System
(
CUS).

Table
1.
Chemicals
Designated
for
In
Vitro
Dermal
Absorption
Rate
Testing
by
TSCA
§
4(
a)
Rule
No.
CAS
No.
Chemical
Name
1
75­
05­
8
ACETONITRILE
2
75­
15­
0
CARBON
DISULFIDE
3
75­
35­
4
VINYLIDENE
CHLORIDE
4
77­
73­
6
DICYCLOPENTADIENE
5
77­
78­
1
DIMETHYL
SULFATE
6
78­
59­
1
ISOPHORONE
7
78­
87­
5
PROPYLENE
DICHLORIDE
8
79­
20­
9
METHYL
ACETATE
9
79­
46­
9
2­
NITROPROPANE
10
91­
20­
3
NAPHTHALENE
11
92­
52­
4
BIPHENYL
12
98­
29­
3
TERT­
BUTYLCATECHOL
13
100­
00­
5
P­
NITROCHLOROBENZENE
14
100­
01­
6
P­
NITROANILINE,

15
100­
44­
7
BENZYL
CHLORIDE
16
106­
42­
3
P­
XYLENE
17
106­
46­
7
P­
DICHLOROBENZENE
18
107­
06­
2
ETHYLENE
DICHLORIDE
19
107­
31­
3
METHYL
FORMATE
20
108­
03­
2
1­
NITROPROPANE
21
108­
90­
7
CHLOROBENZENE
22
108­
93­
0
CYCLOHEXANOL
23
109­
66­
0
PENTANE
(
cont.)
3
Table
1.
(
cont.)
Chemicals
Designated
for
In
Vitro
Dermal
Absorption
Rate
Testing
by
TSCA
§
4(
a)
Rule
No.
CAS
No.
Chemical
Name
24
109­
99­
9
TETRAHYDROFURAN
25
110­
12­
3
METHYL
ISOAMYL
KETONE
26
111­
84­
2
NONANE
27
120­
80­
9
CATECHOL
28
122­
39­
4
DIPHENYLAMINE
29
123­
42­
2
DIACETONE
ALCOHOL
30
127­
19­
5
DIMETHYL
ACETAMIDE
31
142­
82­
5
N­
HEPTANE
32
150­
76­
5
P­
METHOXYPHENOL
33
25013­
15­
4
VINYL
TOLUENE
34
34590­
94­
8
DIPROPYLENE
GLYCOL
METHYL
ETHER
2.2
Relationship
of
the
Rule
to
Export
Notification
Requirements
According
to
TSCA
section
12(
b)
and
40
CFR
part
707,
subpart
D,
all
exporters
of
chemicals
for
which
the
submission
of
data
is
required
under
TSCA
section
4(
a)
must
give
EPA
a
one­
time
notification
for
each
country
to
which
a
subject
chemical
is
shipped.
Thus,
in
addition
to
analyzing
the
potential
impacts
of
the
rule
on
small
manufacturers
and
importers,
the
small
entity
portion
of
this
analysis
(
Section
4)
also
considers
the
potential
impact
on
small
exporters.

2.3
Identification
and
Characteristics
of
Entities
Covered
by
This
Analysis
This
analysis
attempts
to
reflect
as
closely
as
possible
the
entities
covered
by
the
rule.
The
analysis
generally
includes
manufacturers
initially
covered
by
the
rule,
which
are
called
"
covered
entities"
in
this
analysis.
The
analysis
excludes
processors
of
the
subject
chemicals,
manufacturers/
importers
of
less
than
500
kg
of
a
subject
chemical,
entities
that
manufacture
or
import
only
small
quantities
for
R&
D
purposes,
and
in
general,
other
manufacturers
not
initially
covered
by
the
rule.
For
a
complete
description
of
who
is
a
covered
entity,
see
Unit
V.
E.,
"
Would
I
Be
Required
to
Test
Under
This
Rule,"
and
subsections
b
through
e
of
the
regulatory
text.

To
identify
producers
of
the
34
chemicals,
EPA
performed
a
search
of
the
most
recent
EPA
CUS
database.
Manufacturers
or
importers
of
chemicals
listed
in
the
TSCA
CUS
database
are
required
to
provide
quadrennial
reports
to
EPA
on
their
production
or
import
volumes.
EPA
considers
the
CUS
records
to
be
the
best
available
source
of
production
and
import
data
for
most
of
the
chemicals
because
the
data
are
required
to
be
submitted
by
statute.
The
2002
data
are
the
most
recent
data
currently
available
(
USEPA
2002a).
1
Excludes
six
UCEs
for
which
revenue
data
were
not
available.

4
2.3.1
Number
of
Manufacturers/
Importers
Identified
and
Covered
By
This
Analysis,
and
Their
Revenues
Beginning
with
the
initial
list
of
manufacturers/
importers,
a
screen
was
first
performed
to
eliminate
manufacturers
or
importers
which
have
been
identified,
but
will
not
be
covered
by
the
rule
or
this
analysis.
This
screen
eliminated
only
one
facility
that
will
not
be
covered
by
the
rule
on
the
basis
of
its
manufacture/
import
volume
(
i.
e.,
it
manufactures
or
imports
less
than
500
kg).

The
remaining
facilities
were
linked
to
their
parent
company,
or
ultimate
corporate
entity
(
UCE),
by
matching
facility
names
and/
or
Dun
&
Bradstreet
(
D&
B)
identification
numbers
(
DUNs
number)
as
reported
by
the
facilities
to
D&
B.
A
total
of
84
UCEs
responsible
for
producing
the
subject
chemicals
were
identified
and
are
included
in
this
analysis.
Companies
that
manufactured/
imported
less
than
10,000
pounds
of
a
subject
chemical
in
2002
are
not
reflected
in
the
CUS
database,
and
thus
are
not
included
in
this
analysis.
For
a
small
number
of
manufacturers/
importers
for
which
the
UCEs
could
not
be
found,
the
production
facility
itself
was
treated
as
the
UCE
for
purposes
of
the
analysis.

Based
on
revenue
data
available
through
the
D&
B
search,
the
UCEs
responsible
for
production
of
the
34
chemicals
have
average
annual
revenues
of
$
12.8
billion
per
year,
and
range
from
$
380,000
to
$
213.5
billion.
1
Total
revenues
for
all
UCEs
associated
with
production
of
the
34
subject
chemicals
are
$
996.3
billion
per
year.

3.0
ECONOMIC
IMPACT
ANALYSIS
This
section
presents
the
results
from
the
economic
impact
analysis
of
the
section
4
test
rule
for
34
chemicals
targeted
for
in
vitro
dermal
absorption
rate
testing.
This
analysis
does
not
purport
to
contain
an
exhaustive
listing
of
all
manufacturers
or
importers
of
these
34
chemicals.
Nor
does
it
purport
to
present
an
accounting
of
all
production
of
the
chemicals.
Rather,
it
is
an
assessment,
drawn
from
available
data,
of
whether
each
subject
chemical
generates
a
sufficient
revenue
stream
to
support
the
testing.

To
the
extent
that
there
are
additional
manufacturers
or
additional
production
of
a
particular
chemical,
resulting
in
a
greater
production
volume
than
is
accounted
for
by
this
analysis,
the
unit
test
costs
as
a
function
of
domestic
production
and
imports
would
be
reduced,
as
would
the
price
impact
as
a
percentage
of
the
sales
price
(
see
Section
4).
Therefore,
additional
production
not
accounted
for
in
this
analysis
would
imply
additional
manufacturers
that
could
share
the
cost
of
conducting
required
testing
under
this
rule.
This
would
potentially
further
reduce
the
burden
of
the
testing
requirements.
2
See
http://
www.
epa.
gov/
opptintr/
itc/
mbrorgs.
htm
for
a
list
of
ITC
member
Agencies.

5
3.1
Analytical
Procedure
The
economic
impact
methodology
involves
a
comparison
of
the
per­
pound
costs
of
testing
to
the
sales
price
per
pound
for
each
chemical.
The
testing
costs
were
evaluated
using
EPA's
standard
assumption
that
the
test
costs
associated
with
such
rules
are
amortized
over
15
years
using
a
7
percent
discount
rate.

3.1.1
Identify
Testing
Procedures
and
Estimate
Costs
The
rule
will
require
that
manufacturers
complete
testing
of
all
34
chemicals
subject
to
the
rule
using
the
analytical
testing
standard
in
this
rule.
The
standard
was
refined
by
a
group
of
scientists
from
the
agencies
represented
on
the
Interagency
ITC
based
on
the
methods
described
in
Bronaugh
and
Collier
(
1991).
2
The
standard
outlines
procedures
for
measuring
three
parameters:
(
1)
a
10­
minute
short­
term
absorption
rate,
(
2)
a
60­
minute
short­
term
absorption
rate,
and
(
3)
a
permeability
constant
(
Kp)
for
chemicals
in
liquid
form.

EPA
has
estimated
the
laboratory
costs
of
determining
the
short­
term
absorption
rates
and
permeability
constant,
and
these
costs
are
summarized
in
Table
2.
The
cost
estimates
for
the
shortterm
rates
include
costs
of
measuring
both
the
10­
and
60­
minute
absorption
rates.
The
test
standard
requires
the
use
of
either
static
diffusion
or
flow­
through
cell
apparatus,
and
the
tests
have
been
costed
using
both
types
of
apparatus.
The
average
of
the
test
costs
for
the
two
methods
has
been
used
in
the
economic
analysis.
For
each
test
standard,
EPA
also
estimates
a
cost
range.
The
cost
range
is
calculated
by
substituting
the
lowest
and
highest
expected
overhead
rates
into
the
total
cost
calculation.
Overhead,
including
rent,
utilities,
insurance,
equipment,
and
fringe
benefits,
is
used
as
the
main
variable
because
it
is
the
most
significant
cost
component
in
the
overall
test
cost
and
can
vary
greatly
from
company
to
company
and
within
specific
departments
within
a
company.
EPA's
"
best"
estimate
is
then
made
based
on
professional
judgement
and
is
usually
the
midpoint
of
the
cost
estimate
range.

With
the
requirement
that
the
short­
term
absorption
rates
and
permeability
constant
be
determined
for
each
chemical,
EPA's
best
estimate
of
the
testing
costs
is
$
25,787
per
chemical
using
the
static
cell
method
(
with
a
range
of
$
20,953
to
$
30,903)
and
$
28,592
per
chemical
using
the
flowthrough
method
(
with
a
range
of
$
23,277
to
$
34,245).
Taking
the
average
of
these
costs
for
the
static
cell
and
flow­
through
methods,
EPA's
best
estimate
of
the
testing
costs
are
$
27,190
per
chemical
(
with
a
range
of
$
22,115
to
$
32,574).
All
costs
are
in
2003
dollars.

In
addition
to
laboratory
costs,
expenses
associated
with
the
administration
of
the
testing
program
will
be
incurred
by
the
companies
subject
to
the
test
rule.
These
activities
include
preparing
letters
of
intent
to
conduct
testing,
soliciting
laboratory
bids,
selecting
laboratories
to
conduct
the
testing,
preparing
laboratory
samples
that
meet
the
test
standard,
monitoring
tests
in
progress,
developing
cost
sharing
agreements,
submitting
reports
to
EPA
on
the
testing
progress
and
test
6
results,
and
auditing
the
laboratories
for
compliance
with
EPA's
Good
Laboratory
Practice
(
GLP)
standards
(
40
CFR
part
792).
These
administrative
costs
are
estimated
to
be
25
percent
of
the
2003
laboratory
costs
(
i.
e.,
$
6,797
based
on
the
best
estimate
laboratory
cost
of
$
27,190).
The
25
percent
estimate
is
based
on
a
survey
which
examined
the
actual
laboratory
and
administrative
costs
incurred
in
response
to
several
previous
test
rules
(
USEPA
1989).
Combining
the
administrative
costs
and
the
laboratory
costs,
the
total
testing
cost
per
chemical
is
$
33,987
($
6,797
+
$
27,190).

Table
2.
Laboratory
Costs
for
In
Vitro
Dermal
Absorption
Rate
Testing
($
2003)

Description
Low
High
Best
Short­
term
absorption
rates
Static
diffusion
cells
$
7,670
$
11,810
$
9,690
Flow
through
cells
$
8,890
$
13,560
$
11,160
Average
$
8,280
$
12,685
$
10,425
Permeability
constant
(
Kp)

Static
diffusion
cells
$
13,283
$
19,093
$
16,097
Flow
through
cells
$
14,387
$
20,685
$
17,432
Average
$
13,835
$
19,889
$
16,765
Total
testing
costs
Static
diffusion
cells
$
20,953
$
30,903
$
25,787
Flow
through
cells
$
23,277
$
34,245
$
28,592
Average
$
22,115
$
32,574
$
27,190
Source:
USEPA
2003a
and
2003b.

The
estimated
testing
cost
of
$
33,987
per
chemical
may
overstate
the
actual
testing
burden
on
an
individual
firm
if
companies
form
consortia
to
share
the
costs
of
testing
a
single
chemical,
or
if
consortia
or
individual
companies
test
chemicals
in
batches.
Under
these
circumstances,
the
perchemical
costs
for
a
batch
of
chemicals,
or
the
cost
to
an
individual
firm
for
testing
an
individual
chemical,
would
decline
accordingly.

The
costs
shown
in
Table
2
are
one­
time
costs
associated
with
performing
the
in
vitro
dermal
absorption
rate
testing.
To
annualize
these
costs,
EPA
assumes
that
industry
amortizes
testing
costs
over
a
15­
year
period
using
a
7
percent
discount
rate.
Under
these
assumptions,
the
annualized
cost
per
chemical,
assuming
one­
time
costs
of
$
33,987,
is
$
3,732
per
year.

Assuming
that
each
of
the
34
chemicals
targeted
for
in
vitro
dermal
absorption
rate
testing
is
tested,
that
the
Kp
and
short­
term
absorption
rate
tests
are
required,
that
the
laboratory
costs
per
chemical
are
as
shown
in
Table
2,
and
that
an
additional
25
percent
is
added
for
administration
of
the
testing,
the
total
costs
of
testing
are
$
1.16
million
(
34
x
$
33,987)
and
the
total
annualized
cost
is
$
126,888
(
34
x
$
3,732).
3
The
five
chemicals
are:
carbon
disulfide
(
CAS
No.
75­
15­
0);
dicylcopentadiene
(
CAS
No.
77­
73­
6);
naphthalene
(
CAS
No.
91­
20­
3);
p­
xylene
(
CAS
No.
106­
42­
3);
and
ethylene
dichloride
(
CAS
No.
107­
06­
2).

7
3.1.2
Determine
Chemical
Prices
and
Calculate
Economic
Impacts
Price
data
for
the
subject
chemicals
were
obtained
from
chemical
industry
publications
(
e.
g.,
Chemical
Marketing
Reporter,
Chemical
Engineering
News,
Chemical
Week)
and
are
presented
in
Table
3.
Price
data
were
obtained
for
26
of
the
34
chemicals
subject
to
the
rule
(
76.5
percent
of
the
chemicals
representing
88.3
percent
of
the
combined
production
volume).
These
prices
range
from
a
low
of
$
0.10
per
pound
to
a
high
of
$
2.50
per
pound,
and
average
$
0.88
per
pound.

The
economic
impact
of
the
testing
requirement
is
calculated
by
dividing
the
testing
cost
per
pound
of
annual
production
by
the
price
per
pound
for
each
chemical.
The
testing
cost
per
pound
is
obtained
by
dividing
the
annualized
testing
cost,
$
3,732,
by
1
million
pounds,
which
is
a
minimum
production
volume
assumption
used
for
all
chemicals
subject
to
this
test
rule.
For
21
of
26
chemicals
with
price
data
(
80.8
percent)
the
testing
cost
per
pound,
as
shown
in
Table
3,
is
less
than
1.0
percent
of
the
price.
For
the
remaining
five
of
the
26
chemicals
(
19.2%),
the
testing
cost
per
pound
exceeds
1.0
percent.
3
The
average
test
cost
impact
for
the
26
chemicals
with
price
data
is
0.68
percent,
and
the
maximum
is
3.7
percent.
Thus,
using
very
conservative
assumptions
regarding
production
volumes
(
i.
e.,
that
production
volumes
for
each
chemical
are
only
one
million
pounds),
the
price
impact
exceeds
1.0
percent
for
only
five
chemicals.
For
those
five
chemicals,
the
price
impacts
range
from
1.33
percent
to
3.70
percent,
with
an
average
of
1.96
percent.

In
fact,
EPA
has
verified
production
for
these
five
chemicals
in
the
TSCA
CUS
database
and
found
that
the
actual
production
volume
in
2002
exceeds
10
million
pounds
in
each
case
(
USEPA
2002a).
Thus,
the
impact
for
these
chemicals
can
be
reduced
by
a
factor
of
10,
making
the
impact
below
1.0
percent
for
those
five
chemicals.

For
the
eight
remaining
chemicals
without
price
data,
the
Agency
calculated
the
price
below
which
there
would
be
an
impact
of
1.0
percent
or
greater
(
i.
e.,
the
"
critical"
price).
Assuming
annualized
testing
costs
of
$
3,732
per
chemical
and
production
volume
of
one
million
pounds
for
all
chemicals,
the
"
critical"
price
for
all
chemicals
is
$
0.3732
per
pound.
This
means
that
the
economic
impact
of
the
testing
requirement
can
exceed
1.0
percent
for
these
chemicals
only
if
their
actual
price
is
below
$
0.37
per
pound.
As
indicated
above,
for
the
26
chemicals
for
which
price
data
were
available,
the
mean
price
was
$
0.88
per
pound.
Only
five
chemicals
had
prices
below
the
"
critical"
price
of
$
0.37
per
pound,
and
the
average
price
among
these
was
$
0.22
per
pound.
8
Table
3.
Economic
Impacts
of
Testing
No.
CAS
No.
Chemical
Name
Price/
lb
($)
Annualized
Test
Cost
($)
Test
Cost/
lb
($)
Impact
 
Test
Cost
as
Percent
of
Price
Price
Below
Which
There
is
a
1%
Impact
1
75­
05­
8
ACETONITRILE
$
0.70
$
3,732
$
0.003732
0.5331%
$
0.3732
2
75­
15­
0
CARBON
DISULFIDE
$
0.22
$
3,732
$
0.003732
1.6964%
$
0.3732
3
75­
35­
4
VINYLIDENE
CHLORIDE
$
0.43
$
3,732
$
0.003732
0.8679%
$
0.3732
4
77­
73­
6
DICYCLOPENTADIENE
$
0.28
$
3,732
$
0.003732
1.3329%
$
0.3732
5
77­
78­
1
DIMETHYL
SULFATE
$
0.70
$
3,732
$
0.003732
0.5331%
$
0.3732
6
78­
59­
1
ISOPHORONE
$
0.85
$
3,732
$
0.003732
0.4391%
$
0.3732
7
78­
87­
5
PROPYLENE
DICHLORIDE
n/
a
$
3,732
$
0.003732
­­
$
0.3732
8
79­
20­
9
METHYL
ACETATE
n/
a
$
3,732
$
0.003732
­­
$
0.3732
9
79­
46­
9
2­
NITROPROPANE
n/
a
$
3,732
$
0.003732
­­
$
0.3732
10
91­
20­
3
NAPHTHALENE
$
0.28
$
3,732
$
0.003732
1.3329%
$
0.3732
11
92­
52­
4
BIPHENYL
$
0.69
$
3,732
$
0.003732
0.5409%
$
0.3732
12
98­
29­
3
TERT­
BUTYLCATECHOL
n/
a
$
3,732
$
0.003732
­­
$
0.3732
13
100­
00­
5
P­
NITROCHLOROBENZENE
n/
a
$
3,732
$
0.003732
­­
$
0.3732
14
100­
01­
6
P­
NITROANILINE,
$
2.50
$
3,732
$
0.003732
0.1493%
$
0.3732
15
100­
44­
7
BENZYL
CHLORIDE
$
0.68
$
3,732
$
0.003732
0.5488%
$
0.3732
16
106­
42­
3
P­
XYLENE
$
0.22
$
3,732
$
0.003732
1.6964%
$
0.3732
9
Table
3
(
cont).
Economic
Impacts
of
Testing
No.
CAS
No.
Chemical
Name
Price/
lb
($)
Annualized
Test
Cost
($)
Test
Cost/
lb
($)
Impact
 
Test
Cost
as
Percent
of
Price
Price
Below
Which
There
is
a
1%
Impact
17
106­
46­
7
P­
DICHLOROBENZENE,
$
0.58
$
3,723
$
0.003723
0.6419%
$
0.3723
18
107­
06­
2
ETHYLENE
DICHLORIDE
$
0.10
$
3,723
$
0.003723
3.7230%
$
0.3723
19
107­
31­
3
METHYL
FORMATE
$
0.50
$
3,723
$
0.003723
0.7446%
$
0.3723
20
108­
03­
2
1­
NITROPROPANE
$
2.00
$
3,723
$
0.003723
0.1862%
$
0.3723
21
108­
90­
7
CHLOROBENZENE
$
0.55
$
3,723
$
0.003723
0.6769%
$
0.3723
22
108­
93­
0
CYCLOHEXANOL
$
0.83
$
3,723
$
0.003723
0.4486%
$
0.3723
23
109­
66­
0
PENTANE
n/
a
$
3,723
$
0.003723
­­
$
0.3723
24
109­
99­
9
TETRAHYDROFURAN
$
1.55
$
3,723
$
0.003723
0.2402%
$
0.3723
25
110­
12­
3
METHYL
ISOAMYL
KETONE
$
0.65
$
3,723
$
0.003723
0.5728%
$
0.3723
26
111­
84­
2
NONANE
n/
a
$
3,723
$
0.003723
­­
$
0.3723
27
120­
80­
9
CATECHOL
n/
a
$
3,723
$
0.003723
­­
$
0.3723
28
122­
39­
4
DIPHENYLAMINE
$
1.80
$
3,723
$
0.003723
0.2068%
$
0.3723
29
123­
42­
2
DIACETONE
ALCOHOL
$
0.60
$
3,723
$
0.003723
0.6205%
$
0.3723
30
127­
19­
5
DIMETHYL
ACETAMIDE
$
1.10
$
3,723
$
0.003723
0.3385%
$
0.3723
31
142­
82­
5
N­
HEPTANE
$
1.43
$
3,723
$
0.003723
0.2604%
$
0.3723
32
150­
76­
5
P­
METHOXYPHENOL
$
2.38
$
3,723
$
0.003723
0.1564%
$
0.3723
33
25013­
15­
4
VINYL
TOLUENE
$
0.50
$
3,723
$
0.003723
0.7446%
$
0.3723
34
34590­
94­
8
DIPROPYLENE
GLYCOL
METHYL
ETHER
$
0.68
$
3,723
$
0.003723
0.5475%
$
0.3723
n
/
a
=
n
o
t
av
a
i
l
ab
l
e
.

S
o
u
r
c
e
s
:
C
W
,
C
E
N
,
C
M
R
(
p
r
i
c
e
d
a
t
a
)
;
U
S
E
P
A
,
2
0
0
3
a
an
d
2
0
0
3
b
(
t
e
s
t
co
s
t
s
)
.
10
3.1.3
Assess
the
Magnitude
of
the
Economic
Impacts
Without
complete
price
data
for
all
of
the
chemicals
subject
to
the
rule,
it
is
difficult
to
assess
definitively
the
potential
significance
of
the
economic
impacts
of
the
testing
requirements
for
all
34
chemicals.
For
the
26
chemicals
for
which
prices
are
available,
potential
impacts
of
1.0
percent
or
greater
occur
for
five
chemicals.
However,
these
results
are
based
on
the
worst­
case
assumption
that
the
production
volume
for
each
chemical
subject
to
the
test
rule
is
only
1
million
pounds.
In
fact,
this
represents
a
minimum
production
level
for
all
chemicals
subject
to
the
rule,
thus
increasing
the
likelihood
that
actual
impacts
are
smaller.
Furthermore,
EPA
has
verified
that
the
five
impacted
chemicals
are
actually
produced
in
volumes
greater
than
10
million
pounds,
thus
reducing
the
adverse
impact
shown
at
the
one
million
pound
production
level
by
a
factor
of
at
least
10.

While
prices
for
at
least
one
chemical
are
as
low
as
$
0.10
per
pound,
the
average
price
of
those
chemicals
for
which
price
data
are
available
is
$
0.88
per
pound.
The
eight
chemicals
for
which
no
price
data
were
available
could
be
impacted
at
the
1.0
percent
level
or
greater
if
their
actual
prices
are
below
the
threshold
of
$
0.37
per
pound.
At
prices
above
$
0.37
per
pound,
no
adverse
impacts
occur.
Again,
the
threshold
is
based
on
the
worst­
case
assumption
of
a
one
million
pound
production
volume,
which
represents
the
minimum
level
for
all
chemicals
subject
to
the
rule.
Higher
actual
production
volumes
would
lower
the
annualized
unit
testing
cost,
and
further
reduce
any
impacts.

3.2
Estimate
the
Burden
Under
the
Paperwork
Reduction
Act
(
44
U.
S.
C.
3501
et
seq.),
Federal
agencies
are
required
to
estimate
the
reporting
burden
that
would
be
imposed
by
a
rule.
In
this
context,
the
term
"
burden"
means
the
total
time,
effort,
or
financial
resources
expended
by
persons
to
generate,
maintain,
retain,
or
disclose
or
provide
information
to
or
for
a
Federal
agency.
This
includes
the
time
needed
to
review
instructions;
develop,
acquire,
install,
and
utilize
technology
and
systems
for
the
purposes
of
collecting,
validating,
and
verifying
information,
processing
and
maintaining
information,
and
disclosing
and
providing
information;
adjust
the
existing
ways
to
comply
with
any
previously
applicable
instructions
and
requirements;
train
personnel
to
be
able
to
respond
to
a
collection
of
information;
search
data
sources;
complete
and
review
the
collection
of
information;
and
transmit
or
otherwise
disclose
the
information.

In
this
analysis,
the
administrative
burden
is
represented
by
the
administrative
hours
spent
by
the
manufacturers
of
the
chemicals
to
arrange
for,
monitor,
and
report
the
test
results.
Several
assumptions
were
made
in
estimating
the
administrative
burden.
First,
as
described
in
this
report,
it
is
assumed
that
the
costs
associated
with
administrative
tasks
are
equivalent
to
25
percent
of
the
laboratory
costs.
Given
the
estimate
of
laboratory
costs
of
$
27,190
(
from
Table
2),
the
administrative
cost
is
$
6,797
per
chemical.
Next,
all
administrative
costs
are
assumed
to
be
labor.
This
assumption
results
in
an
overestimate
of
the
number
of
burden
hours
because
some
administrative
costs
would
cover
non­
labor
items
like
travel
costs
to
visit
the
laboratories,
printing
and
reproduction,
and
mailing.
Since
it
is
not
known
how
large
this
non­
labor
portion
is
(
it
is
likely
to
be
relatively
small),
the
conservative
assumption
is
made
that
all
costs
are
labor.
3
For
example,
in
September
2002
total
hourly
compensation
in
the
"
Professional
specialty
and
technical"
labor
category
was
$
38.65.
This
was
composed
of
$
27.01
in
wages
and
salaries
(
69.9
percent)
and
$
11.65
in
benefits
(
30.1
percent).
The
"
loading
factor"
for
this
labor
category
is
43.1
percent
(
0.301
÷
0.699
=
0.431).

11
Administrative
hours
are
composed
of
managerial,
clerical
and
technical
labor.
Based
on
the
types
of
activities
covered
(
e.
g.,
submitting
letters
of
intent
to
conduct
studies,
soliciting
bids,
selecting
laboratories,
preparing
test
protocols,
monitoring
tests
in
progress,
developing
cost
sharing
agreements,
preparing
reports
to
EPA
on
the
progress
and
results
of
the
testing,
and
auditing
the
laboratories),
the
analysis
assumes
that
the
hours
are
composed
of
20
percent
managerial
labor,
60
percent
technical
labor,
and
20
percent
clerical
labor
(
USEPA
1997b).
Based
on
these
assumptions,
the
number
of
administrative
burden
hours
was
calculated
by
dividing
the
total
administrative
costs
by
the
weighted
hourly
administrative
wage
rate.

The
weighted
average
hourly
administrative
wage
rate
was
calculated
using
the
methodology
described
in
USEPA
(
2002b),
based
on
September
2002
data
on
average
hourly
wages
and
salaries
for
all
private,
goods­
producing
industries
available
from
the
Bureau
of
Labor
Statistics
(
BLS
2003).
The
representative
managerial,
technical,
and
clerical
wage
rates
are
based
on
the
BLS
"
Executive,
administrative,
and
managerial,"
"
Professional
specialty
and
technical,"
and
"
Administrative
support,
including
clerical"
labor
categories,
respectively.

The
additional
employer
costs
of
benefits,
such
as
paid
leave
and
insurance,
are
calculated
from
the
same
BLS
source.
Loading
factors
for
benefits
are
obtained
by
dividing
the
benefit
share
of
total
compensation
by
the
wage
and
salary
share
of
total
compensation.
3
EPA
adds
to
the
benefits
loading
factor
an
additional
17
percent
to
reflect
general
overhead
costs,
based
on
prior
industry
estimates
provided
to
EPA
(
Heiden
1989;
cited
in
USEPA
2002b).
Table
4
shows
the
derivation
of
the
final,
weighted
average
hourly
wage
rate
of
$
41.26
used
to
convert
administrative
costs
into
burden
hours.

The
estimated
burden
hours
for
each
chemical
are
thus
equal
to
the
administrative
cost
divided
by
the
administrative
cost
per
hour,
i.
e.,
$
6,797
÷
$
41.26
=
165
hours.
Multiplying
this
by
the
number
of
chemicals,
the
total
administrative
burden
associated
with
the
rule
is
estimated
to
be
5,610
hours
(
165
hours
x
34
chemicals),
or
a
per
respondent
burden
of
66.8
hours.

3.2.1
Export
Notification
Burden
and
Cost
The
TSCA
section
4
rule
would
trigger
additional
reporting
requirements
under
TSCA
section
12(
b).
Under
TSCA
section
12(
b),
all
exporters
of
chemicals
for
which
the
submission
of
data
is
required
under
TSCA
section
4(
a)
must
notify
EPA
of
each
country
to
which
a
subject
chemical
is
shipped.
For
chemicals
subject
to
TSCA
section
4(
a),
this
is
a
one­
time
notification
requirement,
i.
e.,
the
exporter
only
submits
the
notification
when
it
is
exporting
a
particular
chemical
for
the
first
time
to
a
country
for
which
it
has
not
previously
submitted
a
notification.
12
Table
4.
Calculation
of
Average
Hourly
Administrative
Cost
($
2003)

Labor
Category
BLS
Labor
Category
Hourly
Wage
and
Salary
Benefits
Loading
Factora
Overhead
Loading
Factor
Total
Employer
Costb
Relative
Weight
Managerial
Executive,
administrative,
and
managerial
$
33.11
0.431
0.170
$
53.01
20%

Technical
Professional
specialty
and
technical
$
27.01
0.431
$
43.24
60%

Clerical
Administrative
support,
including
clerical
$
14.65
0.440
$
23.59
20%

Weighted
Hourly
Administrative
Cost
$
41.26
a
Calculated
as
total
benefits
divided
by
wages
and
salaries.
b
Calculated
as
hourly
wage
and
salary
times
the
sum
of
the
benefits
loading
factor
and
the
overhead
loading
factor.
Source:
BLS
2003;
USEPA
2002b.

The
rule
would
therefore
impact
chemical
exporters
because
the
testing
requirement
would
trigger
TSCA
section
12(
b)
reporting
requirements.
Data
on
export
shipments
of
the
34
chemicals
are
limited.
While
some
data
sources
do
present
aggregate
export
volumes
for
recent
years,
they
do
not
indicate
the
number
of
exporters,
number
of
export
shipments,
or
number
of
countries
to
which
each
chemical
is
exported.
For
purposes
of
this
analysis,
it
would
be
necessary
to
know
both
the
number
of
exporters
and
the
number
of
countries
to
which
they
export
each
chemical.
More
specifically,
because
regulations
promulgated
pursuant
to
TSCA
section
12(
b)
(
40
CFR
part
707)
require
only
a
one­
time
notification
per
country,
data
are
needed
for
each
chemical
on
the
number
of
new
countries
that
receive
exports
of
these
chemicals
in
each
year
following
promulgation
of
the
rule.
These
data,
however,
are
not
available.

Given
the
data
limitations,
the
burden
hours
for
export
notification
for
this
rule
were
estimated
using
an
alternative
estimation
procedure.
EPA
received
an
estimated
7,651
export
notifications
in
the
1997
calendar
year
that
were
triggered
by
TSCA
section
4.
These
notifications
were
associated
with
118
unique
chemicals.
This
analysis,
therefore,
assumes
that
there
will
also
be
65
export
notifications
per
chemical
subject
to
the
rule
(
7,651
÷
118).

EPA
used
estimates
of
labor
requirements
for
preparing
and
submitting
export
notifications
presented
in
the
economic
analysis
prepared
in
support
of
the
TSCA
section
12(
b)
Information
Collection
Request
(
USEPA
1998).
For
initial
notices,
labor
requirements
include
1.0
hours
of
4
Applying
the
assumption
of
65
export
notifications
per
chemical,
the
total
number
of
notifications
associated
with
the
rule
is
2,210
(
65
x
34
chemicals).
The
burden
hour
estimate
ranges
from
1,105
hours
(
2,210
x
0.5
hours)
under
the
assumption
that
all
notices
are
subsequent
notices,
to
3,315
hours
(
2,210
x
1.5
hours)
under
the
assumption
that
all
notices
are
initial
notices.
The
assumption
that
all
notices
are
initial
notices
is
not
realistic,
so
the
actual
burden
is
likely
to
be
closer
to
the
1,105
hours
estimate.
These
hours
are
not
included
in
the
total
burden
estimate
for
the
section
4
rule
because
they
are
already
covered
by
the
Information
Collection
Request
(
ICR)
for
section
12(
b).

13
technical
labor
to
prepare
a
notification
letter
and
0.5
hours
of
clerical
labor
to
print,
mail,
and
file
a
copy
of
the
letter.
Subsequent
notices
would
require
only
0.5
hours
of
clerical
labor.
4
To
estimate
the
cost
of
the
12(
b)
reporting
requirements,
EPA
used
the
methodology
for
calculating
reporting
burden
under
the
Toxic
Release
Inventory
(
EPA
2002b).
The
2003
weighted
average
labor
costs,
including
wages,
benefits,
and
overhead,
are
derived
in
Table
4
above.
Thus,
EPA
used
a
cost
of
$
23.59
per
hour
for
clerical
labor
and
$
43.24
per
hour
for
technical
labor
in
calculating
export
notification
costs.
Mailing
costs
per
notice
(
using
registered
mail)
were
also
estimated,
and
these
average
$
6.27
per
notice.
These
factors
combine
to
produce
a
range
of
costs
for
preparing
and
submitting
TSCA
section
12(
b)
notices.
As
shown
in
Table
5,
these
costs
will
range
from
$
61.31
per
notice
for
an
initial
notice
to
$
18.07
for
a
subsequent
notice.

Table
5.
Export
Notification
Costs
under
TSCA
Section
12(
b)
($
2003)

Activity
Requirements
Initial
Notice
Subsequent
Notice
Write
letter
1.0
hours
technical
labor
@
$
43.24/
hr
$
43.24
­­

Check
order
and
send
notice
0.5
clerical
hours
@
$
23.59/
hr
$
11.80
$
11.80
Mailing
cost
$
6.27
$
6.27
$
6.27
TOTAL
$
61.31
$
18.07
Source:
USEPA
1998;
USEPA
2002b.
5Exceptions
to
the
RFA
requirement
include
Agency
actions
that
are
not
rules,
and
rules
that
the
Agency
is
not
required
to
propose
before
promulgating.
EPA
Interim
Guidance
for
Implementing
the
Small
Business
Regulatory
Enforcement
Fairness
Act
and
Related
Provisions
of
the
Regulatory
Flexibility
Act,
Feb.
5,
1997,
prepared
by
the
SBREFA
Task
Force,
pp.
1­
4.

14
4.0
SMALL
ENTITY
ANALYSIS
The
Regulatory
Flexibility
Act,
as
amended
by
SBREFA
in
1996,
requires
every
federal
agency
to
prepare
a
regulatory
flexibility
analysis
for
all
proposed
and
final
notice­
and­
comment
rules
it
issues,
unless
the
agency
certifies
that
the
rule:

"
will
not,
if
promulgated,
have
a
significant
economic
impact
on
a
substantial
number
of
small
entities."

(
Section
605
(
b)
of
the
RFA).
5
Three
factors
are
examined
in
order
to
characterize
the
small
entity
impacts
of
a
rule:
(
1)
the
size
of
the
adverse
impact
(
measured
as
the
ratio
of
the
cost
to
sales
or
revenues),
(
2)
the
total
number
of
small
entities
that
experience
the
adverse
impact,
and
(
3)
the
percentage
of
the
total
number
of
small
entities
that
experience
the
adverse
impact.

In
the
RFA,
the
term
"
small
entities"
includes
small
businesses,
small
governments,
and
small
nonprofit
organizations.
This
analysis,
however,
examines
only
the
impacts
on
small
businesses
because
EPA
does
not
believe
that
other
types
of
small
entities
will
be
burdened
by
the
requirements
contained
in
the
rule.
This
report
considers
two
classes
of
affected
small
businesses:
(
1)
small
manufacturers
(
including
importers)
and
small
processors
who
would
be
subject
to
the
rule,
and
(
2)
small
exporters,
who
would
become
subject
to
TSCA
section
12(
b)
notification
requirements.
The
treatment
of
exporters
is
explained
in
Section
4.3
below.

4.1
Analytical
Procedure
This
analysis
provides
further
information
about
the
potential
for
the
TSCA
section
4
rulemaking
for
the
34
chemicals
targeted
for
in
vitro
dermal
absorption
rate
testing
to
have
a
significant
impact
on
a
substantial
number
of
small
entities.

The
major
steps
in
the
analysis
are
as
follows:

#
Define
small
entities
for
the
purposes
of
the
analysis.

#
Determine
the
number
of
covered
manufacturers/
importers
that
are
small
entities.

#
Calculate
each
small
manufacturer's
or
importer's
share
of
testing
costs
for
each
chemical.

#
Determine
the
level
of
the
test
cost
impact.

#
Determine
the
number
of
small
entities
that
are
impacted.
6
These
standards
are
reviewed
and
revised
each
year.
The
most
current
size
standards
are
available
on
the
SBA
internet
site
http://
www.
sba.
gov/
size/
indextableofsize.
html,
accessed
March
2003.

7
The
definition
also
includes
a
provision
that
allows
EPA
to
adjust
the
total
annual
sales
values
for
inflation
whenever
EPA
deems
it
necessary
to
do
so.
However,
at
this
time
EPA
has
not
made
any
adjustments
to
the
size
criteria
to
account
for
inflation.

15
Each
of
these
steps
in
the
small
entity
analysis
are
described
in
the
sections
below.

4.1.1
Determine
the
Appropriate
Small
Entity
Definition
As
indicated
in
Section
2.3.2,
an
initial
screening
was
performed
to
identify
manufacturers
or
importers
that
are
covered
under
the
rule.
This
screen
identified
a
total
of
84
ultimate
corporate
entities
(
UCEs)
that
manufacture
or
import
the
34
chemicals
subject
to
the
rule.

A
second
screen
must
then
be
used
to
identify
manufacturers
or
importers
who
qualify
as
small
businesses.
Under
the
RFA,
businesses
are
classified
as
"
small"
based
on
the
definition
of
"
small
business
concern"
provided
in
section
3
of
the
Small
Business
Act.
The
Small
Business
Act
authorizes
the
Small
Business
Administration
(
SBA)
to
establish
"
detailed
definitions
or
standards
by
which
a
business
concern
may
be
determined
to
be
a
small
business
concern
for
the
purposes
of
this
[
Act]
or
any
other
Act."
SBA
has
established
these
standards,
which
vary
according
to
the
North
American
Industry
Classification
System
(
NAICS)
code
of
the
manufacturer
or
importer,
at
13
CFR
121.201.6
The
RFA
also
authorizes
agencies
to
adopt
alternative
definitions,
which
could
include
alternative
size
standards,
where
appropriate
in
accordance
with
specified
procedures.

For
this
rulemaking,
EPA
analyzed
small
business
impacts
using
the
standards
developed
by
the
SBA.
Secondarily,
the
Agency
also
examined
potential
impacts
using
the
small
manufacturer
definitions
found
in
TSCA
(
40
CFR
704.3).
Under
the
TSCA
regulatory
definition,
a
manufacturer
or
importer
is
small
if
it
meets
either
of
the
following
criteria:
(
1)
total
annual
sales
of
the
company,
combined
with
those
of
any
parent
company,
are
below
$
40
million
and
annual
production
volume
or
importation
volume
at
the
facility
is
less
than
or
equal
to
100,000
pounds;
or
(
2)
total
annual
sales
of
the
company,
combined
with
those
of
any
parent
company,
are
below
$
4
million.
7
4.1.2
Determine
the
Number
of
Small
Businesses
Affected
4.1.2.1
Affected
Small
Businesses
Under
the
SBA
Definition
Under
section
632
(
a)(
1)
of
the
Small
Business
Act,
a
small
business
concern
is
defined
as
"
one
which
is
independently
owned
and
operated
and
which
is
not
dominant
in
its
field
of
operation."
Thus,
for
purposes
of
this
analysis,
EPA
has
considered
the
employment,
revenue,
or
other
industryspecific
SBA­
defined
indicator
of
size
for
the
business
entity
that
has
ultimate
ownership
and
control
over
a
manufacturing
or
importing
establishment
affected
by
the
testing
rule.
For
each
manufacturer/
importer
identified
by
a
search
of
the
EPA's
CUS
database,
therefore,
EPA
attempted
8
This
applies
in
the
case
of
an
industry
with
an
SBA­
defined
employment­
based
size
standard.
As
noted
below,
while
size
standards
for
most
industries
are
defined
in
terms
of
employment,
they
may
also
be
defined
in
terms
of
receipts,
assets,
or
other
appropriate
criteria.

9
According
to
Dun
&
Bradstreet's
website,
the
company
is
"
currently
conducting
research
to
determine
customer
needs
related
to
NAICS".
See
http://
www.
dnb.
com/
us/
communities/
marketing/
resource_
center/
naics.
asp,
accessed
4/
21/
03.

10
Effective
October
1,
2000,
the
SBA
converted
its
size
standards
from
an
SIC­
based
to
a
NAICS­
based
system.
Since
the
D&
B
database
has
not
yet
been
converted
to
a
NAICS
basis,
and
the
D&
B
revenue
and
employment
data
generally
reflect
data
for
2000
or
2001,
EPA
began
the
analysis
using
the
SIC­
based
industry
classification
for
each
affected
entity,
from
its
D&
B
record.

16
to
identify
the
parent
company,
or
"
ultimate
corporate
entity"
(
UCE),
and
obtain
data
on
its
employment
size.

The
UCEs
were
identified
through
a
search
of
the
Dun
&
Bradstreet
(
D&
B)
facility
file
(
D&
B
2003).
The
facilities
were
linked
to
their
parent
company,
or
UCE,
by
matching
facility
names
and/
or
D&
B
identification
number
(
DUNs
number)
as
reported
by
the
facilities.
Among
other
information,
the
D&
B
record
indicates
whether
a
manufacturer
or
importer
itself
is
a
UCE
(
i.
e.,
a
headquarters
or
single
location).
If
not,
the
record
includes
the
DUNs
number
for
the
UCE.
The
DUNs
number
for
the
UCE
would
then
be
used
to
locate
the
D&
B
record
for
the
top­
most
firm
in
a
family
of
companies.
Depending
on
whether
the
manufacturer/
importer
was
itself
a
UCE,
then
either
its
employment
or
the
employment
size
of
the
UCE
was
extracted
for
use
in
this
analysis.
8
The
D&
B
data
available
for
this
analysis
assigns
an
industry
code
to
each
business
using
the
older
Standard
Industrial
Classification
(
SIC)
code
system.
9
To
present
its
analysis
in
terms
of
the
current
NAICS
size
standards,
EPA
had
to
first
conduct
an
SIC­
NAICS
crosswalk
exercise.
Table
6
shows
the
results
of
this
exercise.
On
the
left
is
the
distribution
of
affected
businesses
according
to
SIC
code.
For
each
SIC,
Table
6
shows
the
size
standard
using
the
SIC­
based
standards
in
place
in
2000,10
and
the
number
of
affected
entities
that
fail
to
meet
the
size
threshold
(
and
hence
considered
small
entities).
Under
the
SIC­
based
standards,
from
a
total
of
84
businesses
all
but
23
are
confirmed
to
exceed
the
small
business
size
threshold,
and
thus
are
not
classified
as
small.
For
an
additional
seven
businesses
EPA
lacked
data
on
either
the
SIC,
employment,
or
other
size
indicator,
and
therefore
was
unable
to
conclude
that
these
businesses
are
not
small.
The
maximum
estimated
number
of
small
businesses
is
therefore
30
(
23
confirmed
small
plus
seven
that
could
not
be
verified).

The
right
hand
side
of
Table
6
shows
an
attempt
to
map
each
SIC
to
the
corresponding
NAICS
code,
and
to
determine
the
number
of
small
entities
using
the
NAICS­
based
size
standards.
To
do
this,
EPA
used
the
Bureau
of
the
Census's
SIC­
NAICS
"
bridge"
at
http://
www.
census.
gov/
epcd/
ec97brdg
(
accessed
4/
4/
03).
For
each
SIC,
the
bridge
indicates
the
number
of
establishments
from
the
1997
Economic
Census
that
have
been
classified
into
each
NAICS
industry.
As
seen
in
Table
6,
for
18
of
34
SICs
(
SICs
1311
through
5051)
there
is
a
one­
to­
one
SIC
to
NAICS
correspondence.
For
the
16
other
SICs,
however,
establishments
in
the
SIC
were
assigned
to
more
than
one
NAICS
code.
17
With
some
exceptions,
the
SIC­
NAICS
bridge
provides
the
number
of
establishments
from
a
particular
SIC
assigned
to
each
NAICS
industry.
For
those
SICs
corresponding
to
a
single
NAICS
industry,
Table
6
shows
the
corresponding
NAICS
size
standard.
In
all
of
these
cases
the
NAICSbased
size
standard
is
equal
to
or
larger
than
the
SIC­
based
size
standard.
For
SICs
2077
through
7363,
more
than
one
NAICS
code
corresponds
to
each
SIC,
but
the
size
standard
for
each
NAICS
code
is
at
least
equal
to
or
larger
than
the
corresponding
SIC­
based
size
standard.
Therefore,
all
businesses
in
these
SICs
that
are
considered
small
under
the
SIC­
based
standards
are
also
considered
small
under
the
NAICS­
based
standard.

For
one
SIC
(
2819),
there
is
more
than
one
corresponding
NAICS
but
not
all
NAICS­
based
size
standards
equal
or
exceed
the
SIC­
based
size
standard
of
1,000
employees.
However,
because
the
vast
majority
of
establishments
(
95.6
percent)
are
assigned
to
NAICS
325131,
which
has
the
same
size
standard
as
the
corresponding
SIC,
EPA
believes
it
is
reasonable
to
conclude
that
the
same
number
of
businesses
that
are
small
under
the
SIC­
based
standard
are
likely
to
be
small
under
the
NAICS­
based
standard.

Finally,
for
three
SICs
(
3728,
5122,
and
5191)
there
is
more
than
one
corresponding
NAICS
code,
no
distribution
of
establishments
by
NAICS
industry
is
available,
and
the
NAICS­
based
size
standards
do
not
fully
match
the
SIC­
based
standards.
For
example,
businesses
in
SIC
3728
(
with
an
SIC­
based
size
standard
of
1,000
employees)
are
assigned
to
one
of
four
different
NAICS
codes.
These
NAICS
codes,
however,
have
size
standards
that
range
from
500
to
1,500
employees.
Thus,
depending
on
which
NAICS
a
particular
business
is
assigned
to,
it
may
or
may
not
be
classified
as
small
under
the
NAICS­
based
system.
Because
of
this,
for
these
four
industries
EPA
could
not
rule
out
the
possibility
that
some
or
all
affected
businesses
are
small
under
the
NAICS­
based
system.
Accordingly,
there
are
two
additional
businesses
classified
as
small
(
or
potentially
small)
under
the
NAICS­
based
system
(
i.
e.,
32
businesses
as
opposed
to
30
businesses
under
the
SIC­
based
size
standards).

The
final
column
of
Table
6
indicates
the
number
of
small
entities
that
would
be
impacted
by
testing
costs
that
represent
more
than
1.0
percent
of
annual
revenues.
EPA
assessed
these
impacts
by
calculating
the
annualized
testing
costs
as
a
percent
of
business
revenues
(
regardless
of
whether
the
size
standard
was
in
terms
of
receipts,
employment,
or
some
other
size
indicator).
As
seen,
none
of
the
25
confirmed
small
businesses
under
the
NAICS
system
(
30
percent
of
the84
UCEs)
would
be
impacted
by
testing
costs
that
exceed
1.0
percent
of
revenues.
For
the
seven
businesses
whose
size
could
not
be
verified,
however,
EPA
could
not
rule
out
the
possibility
these
would
be
impacted
by
costs
in
excess
of
1.0
percent
of
revenues.
These
impacts
are
discussed
in
Section
4.1.3
below.

4.1.2.2
Affected
Small
Businesses
Under
the
TSCA
Definition
As
with
the
SBA
small
business
definitions,
under
the
TSCA
small
manufacturer/
importer
definition
it
is
the
size
of
the
ultimate
parent
company
that
is
relevant
in
determining
the
size
of
each
affected
entity.
Thus,
for
each
manufacturer/
importer,
EPA
began
by
identifying
the
UCEs
that
own
or
control
facilities
that
manufacture
or
import
chemicals
subject
to
the
rulemaking.
18
Of
the
84
businesses
subject
to
the
rule,
a
total
of
nine
meet
one
or
both
of
the
TSCA
criteria
for
a
small
manufacturer/
importer.
Three
of
these
are
small
based
on
meeting
the
first
criteria
alone,
i.
e.,
total
annual
sales
below
$
40
million
and
annual
production
or
importation
volume
less
than
or
equal
to
100,000
pounds,
while
two
are
small
based
on
meeting
the
second
criteria
alone,
i.
e.
total
annual
sales
below
$
4
million.
Four
are
small
based
on
both
the
first
and
second
criteria.

4.1.3
Calculate
the
Magnitude
of
the
Economic
Impact
Historically,
cost
sharing
arrangements
for
chemical­
specific
testing
have
generally
been
worked
out
independently
by
industry
groups
based
on
production/
import
volume
shares.
For
purposes
of
this
analysis,
EPA
assumes
that
the
costs
of
performing
chemical­
specific
testing
will
be
borne
by
manufacturers/
importers
in
proportion
to
their
production/
import
volume.
The
costs
for
each
parent
company
are
obtained
by
aggregating
cost
shares
across
all
chemicals
and
all
manufacturers
and
importers
over
which
each
particular
parent
company
has
control.

Table
7
illustrates
the
cost
sharing
assumptions
using
a
simplified
example.
Parent
Company
A
controls
two
sites
that
manufacture
Chemical
X.
The
combined
share
of
total
production
of
Chemical
X
for
these
two
sites
is
30
percent.
Parent
Company
A
thus
bears
30
percent
of
the
$
1,000
testing
and
administrative
cost
for
Chemical
X.
Likewise,
Parent
Company
A
controls
one
site
that
manufactures
Chemical
Y,
and
this
site
accounts
for
10
percent
of
the
total
production
of
Chemical
Y.
This
site,
and
Parent
Company
A,
would
thus
bear
10
percent
of
the
$
1,000
testing
and
administrative
cost
for
Chemical
Y.
In
total,
Parent
Company
A
would
be
responsible
for
$
400
in
annual
testing
and
administrative
costs,
$
300
attributable
to
Chemical
X
and
$
100
attributable
to
Chemical
Y.
19
Table
6.
Estimated
Number
of
Small
Businesses
Based
on
SIC
and
NAICS
Size
Standards
SIC
Industry
No.
of
Affected
Businesses
Size
Std.
a
Estimated
No.
of
Small
Businesses
NAICS
Industry
Size
Std.
a
Estimated
No.
of
Small
Businesses
No.
of
Small
Businesses
Impacted
at
1.0%

Single
NAICS
corresponding
to
each
SIC;
NAICS
has
same
or
larger
size
standard
1311
Crude
Petroleum
and
Natural
Gas
4
500
2
211111
Crude
Petroleum
and
Natural
Gas
Extraction
500
2
0
2672
Coated
and
Laminated
Paper,
NEC
1
500
0
322222
Coated
and
Laminated
Paper
Manufacturing
500
0
0
2812
Alkalies
and
Chlorine
5
1,000
0
325181
Alkalis
and
Chlorine
Manufacturing
1,000
0
0
2813
Industrial
Gases
1
1,000
0
325120
Industrial
Gas
Manufacturing
1000
0
0
2821
Plastics
Materials,
Synthetic
Resins,
and
Nonvulcanizable
Elastomers
9
750
3
325211
Plastics
Material
and
Resin
Manufacturing
750
3
0
2823
Cellulosic
Manmade
Fibers
1
1,000
0
325221
Cellulosic
Organic
Fiber
Manufacturing
1000
0
0
2834
Pharmaceutical
Preparations
4
750
2
325412
Pharmaceutical
Preparation
Manufacturing
750
2
0
2851
Paints,
Varnishes,
Lacquers,

Enamels,
and
Allied
Products
2
500
0
325510
Paint
and
Coating
Manufacturing
500
0
0
2873
Nitrogenous
Fertilizers
1
1,000
1
325311
Nitrogenous
Fertilizer
Manufacturing
1,000
1
0
2879
Pesticides
and
Agricultural
Chemicals,
NEC
2
500
0
325320
Pesticide
and
Other
Agricultural
Chemical
Manufacturing
500
0
0
2911
Petroleum
Refining
8
1,500
1
324110
Petroleum
Refineries
1,500
1
0
3669
Communications
Equipment,
NEC
1
750
0
334290
Other
Communications
Equipment
Manufacturing
750
0
0
3674
Semiconductors
and
Related
Devices
1
500
1
334413
Semiconductor
and
Related
Device
Manufacturing
500
1
0
3724
Aircraft
Engines
and
Engine
Parts
1
1,000
0
336412
Aircraft
Engine
and
Engine
Parts
Manufacturing
1,000
0
0
3841
Surgical
and
Medical
Instruments
and
Apparatus
1
500
0
339112
Surgical
and
Medical
Instrument
Manufacturing
500
0
0
4922
Natural
Gas
Transmission
1
$
5.0b
0
486210
Pipeline
Transportation
of
Natural
Gas
$
6.0b
0
0
4924
Natural
Gas
Distribution
1
500
0
221210
Natural
Gas
Distribution
500
0
0
5051
Metals
Service
Centers
and
Offices
3
100
0
423510
Metal
Service
Centers
and
Other
Metal
Merchant
Wholesalers
100
0
0
Table
6.
Estimated
Number
of
Small
Businesses
Based
on
SIC
and
NAICS
Size
Standards
SIC
Industry
No.
of
Affected
Businesses
Size
Std.
a
Estimated
No.
of
Small
Businesses
NAICS
Industry
Size
Std.
a
Estimated
No.
of
Small
Businesses
No.
of
Small
Businesses
Impacted
at
1.0%

20
Multiple
NAICS
corresponding
to
single
SIC;
all
NAICS
have
same
or
larger
size
standard
2077
Animal
and
Marine
Fats
and
Oils
1
500
1
All
corresponding
NAICS

500
1
0
2865
Cyclic
Organic
Crudes
and
Intermediates,
and
Organic
Dyes
and
Pigments
3
750
1

750
1
0
2869
Industrial
Organic
Chemicals,
NEC
7
1,000
3

1,000
3
0
2899
Chemicals
and
Chemical
Preparations,
NEC
2
500
0

500
0
0
3272
Concrete
Products,
Except
Block
and
Brick
1
500
0

500
0
0
3861
Photographic
Equipment
and
Supplies
1
500
0

500
0
0
4911
Electric
Services
1
4c
0

4c
0
0
5169
Chemical
and
Allied
Products,
NEC
5
100
4

100
4
0
5198
Paints,
Varnishes,
and
Supplies
1
100
1

100
1
0
6021
National
Commercial
Banks
1
$
100d
0

$
100d
0
0
6141
Personal
Credit
Institutions
1
$
5.0b
0

$
5.0b
0
0
7363
Help
Supply
Services
1
$
5.0b
1

$
5.0b
1
0
Multiple
NAICS
corresponding
to
single
SIC;
high
percentage
of
establishments
fall
in
NAICS
with
same
or
larger
size
standard
2819
Industrial
Organic
Chemicals,
NEC
2
1,000
1
325131
Inorganic
Dye
and
Pigment
Manufacturing
(
95.6%
of
estabs)
1,000
1
0
Multiple
NAICS
corresponding
to
single
SIC;
no
distribution
of
establishments
available,
more
than
one
possible
NAICS
size
standard
3728
Aircraft
Parts
and
Auxiliary
Equipment,
NEC
1
1,000
0
4
corresponding
NAICS
500­
1,500
1
0
5122
Drugs,
Drug
Proprietaries,
and
Druggists'
Sundries
1
100
1
6
corresponding
NAICS
100
or
$
6.0b
1
0
5191
Farm
Supplies
1
100
0
4
corresponding
NAICS
100
or
$
6.0b
1
0
Subtotal
77
23
25
0
SIC
not
available
7
7
7
7
TOTAL
84
30
32
7
a
Size
standards
are
in
terms
of
number
of
employees,
unless
otherwise
noted.

b
Millions
of
dollars
in
receipts.

c
Millions
of
megawatt
hours
of
electric
power
generation.
Table
6.
Estimated
Number
of
Small
Businesses
Based
on
SIC
and
NAICS
Size
Standards
SIC
Industry
No.
of
Affected
Businesses
Size
Std.
a
Estimated
No.
of
Small
Businesses
NAICS
Industry
21
d
Millions
of
dollars
of
assets
owned.

Table
7.
Testing
and
Administrative
Cost
Share
Assumptions
Chemical
X
Chemical
Y
Testing
and
Administrative
Cost,
by
Chemical
(
Annualized)
$
1,000
$
1,000
Manufacturing
Sites
Controlled
by
Parent
Company
A
Site
1
25%
of
production
Site
1
10%
of
production
Site
2
5%
of
production
Share
of
Costs
Borne
by
Parent
Company
A,
by
Chemical
30%
10%

Costs
Borne
by
Parent
Company
A
By
Chemical
$
300
$
100
All
Chemicals
$
400
Following
this
approach,
EPA
calculated
the
size
of
the
impact
for
each
affected
UCE
by
comparing
the
annualized
testing
costs
($
3,732
per
chemical,
from
Table
2)
to
the
annual
revenues
of
each
UCE.
The
magnitude
of
these
impacts
on
small
businesses,
expressed
in
terms
of
the
percent
of
annual
revenues
represented
by
the
annualized
testing
costs,
is
discussed
in
the
section
below.

4.1.4
Evaluate
the
Economic
Impacts
on
Small
Entities
at
the
Level
of
1.0
Percent
or
Greater
EPA
next
compared
each
small
UCE's
share
of
testing
costs,
on
a
chemical
by
chemical
basis,
to
its
revenues.
For
this
report,
the
revenue
measure
used
is
the
total
revenues
for
the
UCE
as
reported
in
its
D&
B
report.
The
number
of
UCEs
impacted,
and
the
level
of
impact,
are
discussed
below.
The
economic
impact
measure
is
calculated
by
dividing
the
annualized
testing
costs
by
the
annual
revenues
of
the
UCE,
and
is
expressed
as
a
percentage.

The
next
step
involves
an
assessment
of
the
number
of
small
entities
impacted
at
the
level
of
1.0
percent
or
greater.
The
results
are
summarized
as
follows:
22
#
Using
the
SBA
NAICS­
based
size
standards,
the
maximum
number
of
small
entities
affected
by
the
rule
is
32
(
38.1
percent
of
the
total).
For
the
25
entities
that
are
confirmed
to
be
small,
the
number
affected
at
the
1.0
percent
or
greater
level
is
0
(
0.0
percent
of
the
total).
This
excludes
seven
businesses
for
which
revenue
or
employment
data
(
or
both)
were
not
available.
For
these,
EPA
could
not
determine
whether
they
are
a
small
business
and
therefore
could
not
determine
whether
they
are
impacted
at
the
level
of
1.0
percent
or
greater.

#
Using
the
TSCA
definition,
the
maximum
number
of
small
entities
covered
by
the
rule
is
16
(
19.0
percent
of
the
total).
For
the
nine
entities
known
to
be
small,
the
maximum
number
affected
at
the
level
of
1.0
percent
or
greater
is
0
(
0
percent
of
the
total).
This
excludes
seven
businesses
for
which
revenue
or
employment
data
(
or
both)
were
not
available.
For
these,
EPA
could
not
determine
whether
they
are
a
small
business
and
therefore
could
not
determine
whether
they
are
impacted
at
the
level
of
1.0
percent
or
greater.

4.2
Summary
of
Small
Entity
Impact
Analysis
Table
8
summarizes
the
analysis
presented
above
for
manufacturers,
including
importers,
affected
by
the
TSCA
section
4(
a)
test
rule.
Step
1
shows
the
number
of
businesses
affected.
These
represent
all
of
the
ultimate
corporate
entities
that
control
facilities
that
manufacture
or
import
chemicals
subject
to
the
rule.
Step
2
shows
the
number
of
small
businesses
affected,
and
this
number
as
a
percent
of
the
total
number
of
businesses
affected.
As
shown,
using
the
SBA's
NAICS­
based
small
business
size
standards
there
are
32
small
businesses
affected
(
or
potentially
affected),
and
these
represent
38.0
percent
of
the
total
number
of
businesses
affected.
Under
the
TSCA
small
business
definition
16
small
businesses
are
affected
(
or
potentially
affected)
and
these
represent
19.0
percent
of
the
total
number
of
businesses
affected.

Step
3
indicates
the
number
of
small
businesses
affected
by
annualized
testing
costs
that
represent
1.0
percent
or
more
of
their
annual
revenues.
As
shown,
under
both
the
SBA
and
TSCA
small
business
definitions,
there
are
no
small
businesses
conclusively
determined
to
be
affected
at
the
level
of
1.0
percent
or
greater.

As
noted
in
the
table,
EPA
was
unable
to
ascertain
the
small
business
status
of
seven
additional
entities
due
to
a
lack
of
data
on
either
their
SIC
or
NAICS
code,
employment,
or
revenue.
EPA
was
unable,
therefore,
to
estimate
the
magnitude
of
the
impact
on
these
entities.
23
Table
8.
Summary
of
Results
from
Small
Entity
Analysis
Step
in
Small
Entity
Analysis
Number
of
Entities
and
Number
of
Small
Entities
SBA
Definition
TSCA
Definition
1
Number
of
businesses
affected
84
2
Number
of
small
businesses
affecteda
25
9
Percent
of
all
businesses
affecteda
29.8%
10.7%

3
Number
of
small
businesses
affected
at

1%
b
0
0
a
Excludes
seven
businesses
for
which
EPA
was
unable
to
obtain
either
SIC
code,
employment,
revenues
or
other
indicator
upon
which
to
base
a
small
business
determination.
When
those
seven
businesses
are
assumed
to
be
small,
the
totals
change
to:
SBA
definition,
32
businesses,
or
38.1%
affected,
and
TSCA
definition,
16
businesses,
or
19.0%
affected.
b
Annualized
testing
costs
that
exceed
1.0
percent
of
annual
revenues.

4.3
Impacts
on
Small
Exporters
As
discussed
in
Section
3.2.1,
the
rule
would
trigger
additional
reporting
requirements
under
TSCA
section
12(
b).
All
exporters
of
chemicals
for
which
the
submission
of
data
is
required
under
TSCA
section
4(
a)
must
notify
EPA
of
each
country
to
which
a
subject
chemical
is
shipped.
For
chemicals
subject
to
TSCA
section
4(
a),
this
is
a
one­
time
notification
requirement,
i.
e.,
the
exporter
only
submits
the
notification
when
it
is
exporting
a
particular
chemical
for
the
first
time
to
a
country
for
which
it
has
not
previously
submitted
a
notification.

Assuming
for
the
moment
that
all
notices
for
a
small
exporter
would
be
initial
notices
(
costing
manufacturers
$
61.31
to
prepare),
a
small
exporter
would
have
to
have
annual
revenues
below
$
6,131
per
chemical/
country
combination
in
order
to
be
impacted
at
a
1.0
percent
or
greater
level.
For
example,
a
small
exporter
filing
three
notifications
per
year
would
have
to
have
annual
revenues
below
$
18,393
(
3
x
$
6,131)
in
order
to
be
classified
as
impacted
at
the
1.0
percent
or
greater
level.
EPA
believes
that,
based
on
the
modest
costs
associated
with
export
notification
it
is
reasonable
to
assume
that
few,
if
any,
small
exporters
would
file
sufficient
export
notifications
to
be
impacted
at
or
above
the
1.0
percent
level.

5.0
UNFUNDED
MANDATES
REFORM
ACT
AND
EXECUTIVE
ORDERS
12875
AND
13084
Title
II
of
the
Unfunded
Mandates
Reform
Act
of
1995
(
UMRA),
P.
L.
104­
4,
establishes
requirements
for
Federal
agencies
to
assess
the
effects
of
certain
regulatory
actions
on
State,
local,
or
tribal
governments
or
the
private
sector.
Under
section
202
of
UMRA,
EPA
must
generally
24
prepare
a
written
statement
that
includes
a
cost­
benefit
analysis
for
proposed
and
final
rules
with
"
Federal
mandates"
that
may
result
in
expenditures
to
State,
local,
and
tribal
governments,
in
the
aggregate,
or
to
the
private
sector,
of
$
100
million
or
more
in
any
one
year.
EPA
has
determined
that
no
State,
local,
or
tribal
governments
would
be
affected
by
this
rule.
In
addition,
costs
to
the
private
sector
(
those
companies
subject
to
the
rule)
are
estimated
to
be
well
below
$
100
million
in
any
one
year.

Executive
Order
12875,
Enhancing
the
Intergovernmental
Partnership
(
58
FR
58093,
Oct.
28,
1993),
requires
Federal
agencies
to
determine
whether
certain
regulatory
actions
create
unfunded
Federal
mandates
on
State,
local,
or
tribal
governments.
Executive
Order
13084,
Consultation
and
Coordination
with
Indian
Tribal
Governments
(
63
FR
27655,
May
19,
1998),
requires
Federal
agencies
to
determine
whether
certain
regulatory
actions
significantly
or
uniquely
affect
the
communities
of
Indian
tribal
governments.

EPA's
determination
under
UMRA
and
Executive
Orders
12875
and
13084
that
no
State,
local,
or
tribal
governments
would
be
affected
by
this
rule
is
based
on
a
search
conducted
in
March
1999
on
past
submissions
to
EPA.
This
search
demonstrated
that
State,
local,
or
tribal
governments
have
never
submitted
letters
of
intent
to
test,
exemption
applications,
or
export
notifications
to
EPA.

6.0
ENVIRONMENTAL
JUSTICE
EPA
is
concerned
about
environmental
equity
and
in
the
case
of
regulatory
actions,
the
potential
for
regulations
to
impose
an
undue
burden
on
low
income
or
minority
households,
business
operators,
workers,
or
other
socioeconomic
groups.
As
directed
in
Executive
Order
12898
and
EPA's
own
draft
implementation
strategy,
the
Agency
is
directed
to
address
and
identify
"
disproportionately
high
and
adverse
human
health
or
environmental
effects
of
its
programs,
policies,
and
activities
on
minority
and
low­
income
populations"
(
Section
1.1).
This
section
reviews
the
TSCA
section
4
test
rule
in
an
effort
to
identify
any
environmental
equity
implications.

The
primary
impact
of
the
rule
would
be
to
require
manufacturers
and
importers
to
perform
further
testing
of
chemicals,
and
to
make
information
about
the
results
of
such
a
testing
program
readily
available
to
the
public.
The
costs
associated
with
the
rule
would
be
borne
by
chemical
manufacturers
and
importers.
The
benefits
associated
with
the
rule
would
accrue
to
broad
groups
within
society,
but
especially
to:
employers
and
employees;
members
of
the
health
and
scientific
community;
and
State,
local
and
tribal
governments.

The
precise
nature
of
the
benefits
of
the
rule
will
be
known
only
after
the
required
testing
is
completed
and
information
from
the
testing
program
is
made
available
to
the
public.
Benefits
will
begin
to
accrue
as
individuals
and
firms
process
the
information
from
the
testing
program,
and
modify
their
behavior
and
decisions
in
such
a
way
as
to
reduce
exposures
to
harmful
chemicals.
The
types
of
exposures
mitigated
will
thus
depend
on
the
information
that
is
produced
by
the
testing
program,
whether
and
how
that
information
is
acted
upon,
and
by
whom.
EPA
has
no
reason
to
believe,
however,
that
the
benefits
of
the
rule
would
be
distributed
unevenly
across
different
geographic
25
regions,
or
among
different
socioeconomic
groups
within
society.
Therefore,
EPA
concludes
that
there
are
no
particular
environmental
equity
implications
associated
with
this
rule.

7.0
CHILDREN'S
HEALTH
AND
EXECUTIVE
ORDER
13045
Executive
Order
13045,
entitled
Protection
of
Children
from
Environmental
Health
Risks
and
Safety
Risks
(
62
FR
19885,
April
23,
1997),
does
not
apply
to
this
final
rule,
because
it
is
not
designated
as
an
"
economically
significant"
regulatory
action
as
defined
under
E.
O
12866,
and
it
does
not
establish
an
environmental
standard
that
is
intended
to
mitigate
environmental
health
or
safety
risks
that
EPA
has
reason
to
believe
may
have
a
disproportionate
effect
on
children.
EPA
interprets
E.
O.
13045
as
applying
only
to
those
regulatory
actions
that
establish
an
environmental
standard
intended
to
mitigate
health
or
safety
risks,
such
that
the
analysis
required
under
section
5­
501
of
the
Order
has
the
potential
to
influence
the
regulation
Although
this
final
rule
is
not
subject
to
this
Executive
Order,
information
obtained
by
the
testing
required
under
this
rule
will
be
used
to
inform
the
Agency's
decision
making
process
regarding
chemicals
to
which
children
may
be
disproportionately
exposed.
This
information
will
also
assist
the
Agency
and
others
in
evaluating
these
chemical
substances
for
potential
health
or
safety
risk
concerns,
and
will
serve
to
further
the
Agency's
goal
of
identifying
and
controlling
human
and
environmental
risks,
as
well
as
provide
greater
protection
and
knowledge
to
the
public.

8.0
CONCLUSIONS
The
economic
analysis
calculated
the
economic
impact
of
the
in
vitro
dermal
absorption
rate
testing
rule
by
comparing
the
testing
cost
per
pound
of
production
to
each
chemical's
sales
price
per
pound.
On
this
basis,
for
26
of
the
34
chemicals
for
which
prices
were
available,
the
potential
impact
of
the
testing
costs
was
confirmed
to
be
well
below
1.0
percent
for
all
but
five
chemicals,
assuming
the
minimum
production
of
1.0
million
pounds
per
year.
For
the
five
chemicals
impacted
at
the
level
of
1.0
percent
or
greater,
EPA
confirmed
their
actual
production
exceeds
10
million
pounds,
making
it
possible
to
conclude
that
the
price
impact
for
these
chemicals
is
also
below
1.0
percent.
Thus,
for
all
26
chemicals
for
which
prices
were
available,
EPA
concluded
the
impact
of
the
testing
requirements
is
below
1.0
percent.

For
the
remaining
eight
chemicals
without
price
data,
the
1.0
percent
impact
threshold
would
be
met
only
if
the
price
were
below
$
0.37
per
pound.
Because
the
average
price
for
chemicals
with
price
data
is
$
0.88
per
pound,
the
potential
for
any
chemicals
to
be
impacted
at
the
1.0
percent
or
greater
level
appears
unlikely,
unless
their
value
is
very
low.
Furthermore,
this
"
critical"
price
was
calculated
by
assuming
that
the
annual
production
volume
for
each
chemical
is
one
million
pounds,
when
in
fact
this
represents
the
minimum
for
all
chemicals
subject
to
this
test
rule.
When
calculated
using
actual
production,
any
impacts
over
1.0
percent
would
be
further
reduced.
26
The
small
business
impact
analysis
analyzed
the
potential
for
the
rule
to
impose
annualized
costs
that
exceed
1.0
percent
of
any
small
entity's
annual
revenues.
Using
the
SBA's
industry­
specific
small
business
size
standards
(
for
both
NAICS
and
SIC),
the
analysis
shows
that
no
small
entities
would
be
affected
by
impacts
that
exceed
1.0
percent
of
their
revenues.
Analysis
based
on
the
TSCA
regulatory
definition
produced
the
same
result.
There
are
seven
firms
whose
size
could
not
be
determined
because
data
on
their
SIC
code
(
and
therefore,
NAICS
code),
employment,
or
other
size
indicator,
could
not
be
located.
For
those
firms,
it
can
not
be
shown
conclusively
that
no
impacts
would
occur.

A
further
conclusion
of
the
small
entity
analysis
is
that
the
export
notification
requirements
triggered
by
the
rule
would
be
unlikely
to
burden
small
exporters
by
a
cost
that
exceeds
1.0
percent
of
their
annual
sales
revenue.

In
accordance
with
the
requirements
of
the
Unfunded
Mandates
Reform
Act,
EPA
has
also
concluded
that
no
non­
federal
governmental
entities
will
be
burdened
by
the
testing
requirements
in
this
rule.
In
addition,
because
costs
to
the
private
sector
are
estimated
to
be
well
below
$
100
million
in
any
one
year,
EPA
finds
no
significant
impacts
on
the
private
sector.
EPA
also
finds
no
impacts
on
state,
local,
or
tribal
governments
under
E.
O.'
s
12875
and
13084,
and
concludes
that
there
are
no
particular
environmental
equity
or
children's
health
implications
associated
with
this
rule.
27
9.0
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2003.
U.
S.
Department
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gov/
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March
2003.

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1999.
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29,
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J.
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A
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of
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the
Final
Comprehensive
Assessment
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prepared
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the
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Manufacturers
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December
14,
1989.
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2002b.

SBA
2003.
Small
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Available
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site
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http://
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sba.
gov/
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indextableofsize.
html.
Accessed
March
2003.

USEPA
1989.
"
Administrative
costs
and
burden
hours
for
test
rule."
Note
from
Dan
Axelrad
to
Bob
Lee
and
Libby
Parker,
Regulatory
Impacts
Branch,
Office
of
Pollution
Prevention
and
Toxics,
U.
S.
EPA.
October
26,
1989.

USEPA
1992.
Economic
Analysis
in
Support
of
the
Final
Rule
to
Amend
TSCA
Section
12(
b).
William
Silagi,
Regulatory
Impacts
Branch,
Office
of
Pollution
Prevention
and
Toxics,
U.
S.
EPA.
June
1992.

USEPA
1997a.
EPA
Interim
Guidance
for
Implementing
the
Small
Business
Regulatory
Enforcement
Fairness
Act
and
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Provisions
of
the
Regulatory
Flexibility
Act.
U.
S.
EPA
SBREFA
Task
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U.
S.
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February
5,
1997.
pp.
1­
14.
28
USEPA
1997b.
Additional
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on
Small
Entity
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of
Proposed
TSCA
Section
4(
a)
Test
Rule
For
21
Hazardous
Air
Pollutants,
Appendix
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Cody
Rice,
Economic
and
Policy
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Branch,
Office
of
Pollution
Prevention
and
Toxics,
U.
S.
EPA.
November
14,
1997.

USEPA
1998.
Economic
Analysis
in
Support
of
the
TSCA
Section
12(
b)
Information
Collection
Request.
Joe
Callahan,
Economic
and
Policy
Analysis
Branch,
Office
of
Pollution
Prevention
and
Toxics,
U.
S.
EPA.
October
20,
1998.

USEPA
2002a.
Chemical
Update
System
Database.
Office
of
Pollution
Prevention
and
Toxics,
U.
S.
EPA.

USEPA
2002b.
"
Wage
Rates
for
Economic
Analysis
of
the
Toxics
Release
Inventory
Program."
Memorandum
from
Cody
Rice,
Analytical
Support
Branch,
Environmental
Analysis
Division,
Office
of
Environmental
Information,
U.
S.
EPA.
April
11,
2002.

USEPA
2003a.
"
Laboratory
Cost
Estimate
for
In
Vitro
Dermal
Absorption
Rate
TestingCShort
Term
Absorption
Rate"
Economic
and
Policy
Analysis
Branch,
Office
of
Pollution
Prevention
and
Toxics,
U.
S.
EPA.
February
20,
2003.

USEPA
2003b.
"
Laboratory
Cost
Estimate
for
In
Vitro
Dermal
Absorption
Rate
Testing
CPermeability
Constant
(
Kp)"
Economic
and
Policy
Analysis
Branch,
Office
of
Pollution
Prevention
and
Toxics,
U.
S.
EPA.
March
26,
2003.
