                              
                                       
Economic Analysis for the Electronic Reporting under the Toxic Substances Control Act (TSCA) Proposed Rule
                               February 21, 2011

                                 RIN 2070-AJ75

                        -- 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 Avenue
                             Washington, DC 20460


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                                 Contributors

The EPA analyst responsible for this report is Stephanie Suazo of the Economic and Policy Analysis Branch; Economics, Exposure and Technology Division; Office of Pollution Prevention and Toxics. Analytical and draft preparation support was provided by Abt Associates, Inc. under EPA Contract No. EP-W-08-010.

















Table of Contents
Contributors	1-1
Chapter 1  -  Introduction	1-1
1.1	Purpose of Proposed Rule	1-1
1.2	TSCA Submission Background for Electronic Reporting	1-1
1.3	Methodology	1-1
1.4	Organization of the Report	1-2
Chapter 2  -  Affected Entities	2-1
2.1	Scope of Proposed Rule and Affected Entities	2-1
2.2	Estimating the Universe of Submissions	2-2
Chapter 3  -  Industry Burdens and Costs	3-1
3.1	Baseline Burden and Cost	3-1
3.1.1	Reporting and Recordkeeping Burden	3-1
3.1.2	Reporting and Recordkeeping Costs	3-2
3.1.3	Material Costs	3-3
3.1.4	Per Submission Industry Cost	3-3
3.2	Additional Rule Burden and Cost	3-4
3.2.1	One-Time CDX Burden and Cost	3-4
3.2.2	Recurring CDX Burden and Cost	3-6
3.3	Industry Burden and Cost Savings	3-7
3.3.1	Reporting and Recordkeeping Burden Savings	3-8
3.3.2	Material Burden Savings	3-9
3.3.3	Reporting and Recordkeeping Cost Savings	3-9
3.3.4	Material Cost Savings	3-9
3.4	Final Cost per Submission	3-9
3.5	Cost Savings per Submission	3-10
3.6	Total Cost Savings	3-10
3.7	Overall Change in Burden	3-12
Chapter 4  -  Agency Burdens and Costs	4-1
4.1	Agency Total Costs	4-1
4.2	Agency Burden Savings	4-1
4.3	Agency Cost Savings	4-3
Chapter 5  -  Benefits of Electronic Reporting	5-1
5.1	Industry Benefits	5-1
5.2	Agency Benefits	5-2
Chapter 6 - Additional Analyses	6-1
6.1	Executive Order 12866	6-1
6.2	Regulatory Flexibility Act (RFA)	6-1
6.2.1	Introduction	6-1
6.2.2	Definition of Small Entities	6-2
6.2.3	Methods	6-2
6.2.4	Estimating the Universe of Affected Entities	6-3
6.2.5	Estimating Annual Revenue for Affected Parent Companies	6-6
6.2.6	Estimating Compliance Cost for Affected Parent Companies	6-6
6.2.7	Estimating Cost Impact Ratios	6-7
6.3	Unfunded Mandates Reform Act (UMRA)	6-8
6.4	Executive Order 13132	6-8
6.5	Executive Order 12898	6-8
6.6	Executive Order 13045	6-8
6.7	Paperwork Reduction Act (PRA)	6-9
6.7.1	Industry Burden	6-9
6.7.2	Agency Burden	6-9
6.8	Executive Order 13175	6-9
6.9	Executive Order 13211	6-10
6.10	National Technology Transfer and Advancement Act	6-10

Table of Figures
Table 2-1: TSCA Submission Summary	2-4
Table 3-1: Loaded Hourly Wage Rates by Labor Category, December 2010	3-3
Table 3-2: TSCA Submission Summary	3-4
Table 3-3: One-Time CDX Labor Burden	3-6
Table 3-4: One-Time CDX Cost	3-6
Table 3-5: Recurring CDX Submission Cost (per Submission)	3-7
Table 3-6: Final Industry Costs per Submission (2010$)	3-10
Table 3-7: Industry Cost Savings per Submission (2010$)	3-10
Table 3-8: Annual Cost Savings per Company	3-11
Table 3-9: Annual Industry Cost Savings	3-12
Table 3-10: Estimated Burden Comparison	3-12
Table 4-1: Annual Change in Agency Burden	4-2
Table 4-2: Annual Agency Cost Savings	4-4
Table 6-1: Affected NAICS Industries and Corresponding SBA Thresholds	6-5
Table 6-2: Estimated Impacts of Proposed Rule on Potentially Affected Companies	6-8

Executive Summary
This economic analysis estimates the cost impact of the proposed rule that would require electronic reporting for submission of health and safety data under the Toxic Substances Control Act (TSCA) sections 4, 5, 8(a) Preliminary Assessment Information Rule (PAIR), and 8(d).

The proposed rule would streamline the submission process by establishing standards and requirements for the use of EPA's electronic Central Data Exchange (CDX) system. As a result, the rule would reduce the administrative costs and burdens of the TSCA section submissions for both industry and EPA. 

EPA estimated that this proposed rule would result in cost savings to the affected companies because the time required to enter, review, edit, and submit their reports using CDX would be reduced compared to the existing paper-based process. This economic analysis presents estimated incremental changes in burdens and costs as a result of switching from a paper-based process to an electronic system.

EPA estimated that this rule would result in total cost to the industry of approximately $14,061 in Year 1 and a cost savings of $66,834 in each subsequent year. The cost savings in subsequent years are greater than those in Year 1 because of the one-time CDX registration costs incurred at the initial submission. EPA assumed that industry would continue to realize cost savings each additional year. 

In addition to the quantifiable cost savings, EPA believes that this rule would result in other benefits. For example, electronic reporting would allow for faster review and transmission of submissions to EPA. For studies containing CBI, electronic reporting would also improve security and transmission of CBI data to EPA. Additionally, all information submitted electronically could be linked in a tracking system, which would facilitate document management efforts. This would allow companies to manage past and future submissions easier. 



  -  Introduction
Purpose of Proposed Rule
EPA is proposing to require electronic reporting for submission of health and safety data under the Toxic Substances Control Act (TSCA). This action is intended to streamline the reporting process, and reduce the administrative costs associated with submission and recordkeeping of health and safety data for both industry and EPA. Additionally, this proposed rule establishes standards and requirements using EPA's Central Data Exchange (CDX) enabling electronic submission of health and safety data to the Agency. EPA is proposing to promulgate regulations concerning electronic reporting for TSCA sections 4, section 5 NOC reports not previously submitted online, 8(a) Preliminary Assessment Information Rule (PAIR), and 8(d).

TSCA Submission Background for Electronic Reporting
      Starting in 2006, under the TSCA section 8(a) Inventory Update Reporting rule (IUR), manufacturers (including importers) were able to submit IUR information electronically to the EPA through CDX. EPA is building on the success of the 2006 IUR electronic reporting software by making electronic reporting easier and more accessible to potential reporters, including non-U.S. companies and those submitters filing jointly. On August 16, 2011, the Agency published a final rule for the Chemical Data Reporting (CDR) rule, formerly the IUR that delineates a number of improvements for 2011 reporting, including requiring electronic reporting via the e-CDRweb of all CDR data, improving reporting software and accessibility for all potential reporters. In addition, on January 6, 2010, EPA published the e-PMN final rule, which phased-in electronic reporting requirements for section 5 notices and other related documents over a two-year period.  After the two-year phase-in period ends on April 6, 2012, the final rule mandates electronic reporting for these documents.

Methodology
To estimate costs and cost savings associated with the proposed rule requiring that TSCA sections 4, section 5 Notice of Commencement (NOC) reports not previously submitted online, 8(a) PAIR, and 8(d) submissions be reported electronically via EPA's Central Data Exchange (CDX), EPA used the per-submission cost as a basis for the analysis.  

The relationship between the number of chemicals, the number of submissions, and the number of companies is complex. A company reporting required information may submit reports for multiple TSCA sections or multiple chemicals in one year. Therefore, the unit cost is estimated for a submission of each TSCA section. 

The main steps of the analysis are as follows:
   1. Number of affected companies: Estimate the number of companies that submit reports for each TSCA section on an annual basis. 
   2. Number of submissions: Estimate the number of submissions for each TSCA section annually.
   3. Baseline cost: Estimate the baseline per-submission cost associated with submitting hard-copy reports. 
   4. Cost reduction: Estimate the per-submission reduction in the baseline cost as a result of the electronic reporting rule. 
   5. Additional cost: Estimate additional per-submission cost associated with the CDX registration and rule familiarization. 
   6. Net cost savings: Estimate net per-submission cost savings as a net difference between baseline costs, cost reduction and additional costs as a result of the rule, separately for the first and additional submission. 
   7. Total cost savings: Multiply the net per-submission cost savings by the corresponding number of first and additional submissions to estimate the total cost savings resulting from the rule. 

Organization of the Report

The remainder of this report is organized as follows:
            Chapter 2 describes the estimation of the affected universe.
            Chapter 3 discusses the estimated industry burden and cost as a result of the proposed rule.
            Chapter 4 presents the estimated burden and cost to EPA associated with this proposed rule.
            Chapter 5 analyzes benefits associated with this proposed rule.
            Chapter 6 presents additional analyses, including the analysis of the impacts of the proposed rule on small businesses.

  -  Affected Entities
This chapter outlines the requirements for each type of report required for submission and presents the estimated number of annual submissions for each TSCA section.

Scope of Proposed Rule and Affected Entities
The proposed electronic reporting rule would affect all facilities required to submit reports, studies, or data to EPA under TSCA sections 4, 5 NOC (not previously submitted online), 8(a), and 8(d). The requirements for each type of report are described below.

Section 4

Section 4 of TSCA authorizes EPA to issue rules requiring chemical manufacturers and processors to test existing chemicals and develop sufficient data on health and environmental effects in order to determine unreasonable risk. Under section 4, EPA can require testing after finding that (1) a chemical may present an unreasonable risk of injury to human health or the environment, and/or the chemical is produced in substantial quantities that could result in significant or substantial human or environmental exposure, (2) the available data to evaluate the chemical are inadequate, and (3) testing is needed to develop the needed data (EPA, 2010b).

EPA often uses information obtained from section 8 reporting rules to determine if a chemical poses a risk and if manufacturers and/or processors should conduct chemical testing and report the results to EPA. Since the 1970s, EPA has collected data on over 200 chemicals under TSCA section 4 (40 CFR Parts 716 and 799). Reports include studies performed by the company on specific chemicals, which are sent directly to EPA.
Section 5 Notice of Commencement (NOC) (not previously submitted online)

Notice of Commencement (NOC) reports under TSCA section 5 are submitted when "any person who commences the manufacture or import of a new chemical substance for a nonexempt commercial purpose for which that person previously submitted a section 5(a) notice." 

For section 5 NOC reporting, producers and importers of a new chemical must submit a one page report that includes:

   * The specific chemical identity of the PMN substance
   * A generic chemical name
   * The premanufacture notice (PMN) number assigned by EPA
   * The date of commencement for the submitter's manufacture or import for a non-exempt commercial purpose (indicating whether the substance was initially manufactured in the United States or imported)
   * The name and address of the submitter
   * The name of the authorized official
   * The name and telephone number of a technical contact in the United States
   * The address of the site where commencement of manufacture occurred
   * Clear indications of whether the chemical identity, submitter identity, and/or other information are claimed as confidential by the submitter
   
If a section 5 Premanufacture Notice (PMN) or a Significant New Use Notice (SNUN) was submitted after the effective date (April 6, 2010) of the electronic-PMN ("e-PMN") final rule (75 FR 773), it would be subject to the e-PMN final rule and is required to be submitted electronically online. However, if a section 5 PMN or SNUN was submitted prior to the effective date of the e-PMN final rule (April 2010), it must be printed and mailed as hard copy to the Agency. This proposed rule would require all NOC reports and supporting documents whose original notices were submitted on paper before the new system was implemented to now be submitted electronically via the CDX system.
   
Section 8(a)

Under TSCA section 8(a), EPA has the broad authority to require manufacturers (including importers) and processors of chemical substances to maintain records and/or report data that EPA may require to carry out TSCA mandates. However, this analysis focuses on the PAIR report.

For PAIR reporting, producers and importers of a listed chemical are required to report the following site-specific information on a two page form:

   * Quantity of chemical produced and/or imported
   * Amount of chemical lost to the environment during production or importation
   * Quantity of enclosed, controlled and open releases of the chemical
   * Per release, the number of workers exposed and the number of hours exposed
   
Section 8(d)

Under TSCA section 8(d), EPA issues reporting rules that require "manufacturers, importers, processors, or distributors in commerce of any chemical substance or mixture" covered by the rule to submit unpublished "health and safety studies conducted by, known to, or ascertainable by that person" to EPA (40 CFR Part 716; 15 USC 2607). Reporting rules are not issued on a regular basis. For example, there were 47 chemicals added to the section 8(d) Health and Safety Reporting Rule in 1996, 15 chemicals in 2004, and 208 chemicals in 2006, with none added in between those years (EPA, 2007c). Industry entities may submit multiple reports per chemical per year and are required to report on that chemical no later than two years after the effective listing date of the chemical (EPA, 2010d).

Estimating the Universe of Submissions
In order to estimate the number of affected facilities and the number of submissions per facility for each section, EPA used information on the number of annual submissions across all affected entities and the number of companies submitting reports for each section annually.

Average Number of Annual Submissions

To estimate the average number of annual submissions sent to EPA under each TSCA section affected by this rule, EPA used submission statistics from the Office of Pollution, Prevention and Toxics (OPPT). The total number of submissions recorded for each section was divided by the number of reporting years to estimate the average number of submissions each year. 

Average Number of Pages Submitted

EPA estimated the average number of pages submitted for each section as follows:

   * Section 4  -  EPA used the HPV Test Rule Docket (#00274D) as a representative sample of section 4 test rule submissions. The page length of each document in the HPV Test Rule Docket was averaged. The average page length of the HPV Test Rule Docket was assumed to be equivalent to the average page length of a section 4 test rule submission, at 35 pages.
   * Section 5 NOC (not previously submitted online)  -  Since section 5 NOC reporting only involves a one-page form, EPA assumed that the average page length for a section 5 NOC submission was one-page.
   * Section 8(a) PAIR  -  Since section 8(a) PAIR reporting only involves a two-page form (EPA, 2007b), EPA assumed that the average page length for section 8(a) PAIR submissions was two pages.
   * Section 8(d)  -  The average number of pages submitted for section 8(d) reports is 20 pages, which was taken directly from the latest version of the ICR (EPA, 2007c). 
   
Average Number of Submitters

To estimate the average number of annual submitters under each type of TSCA section affected by this rule, EPA used statistics on the total number of submitters for each type of TSCA report divided by the number of reporting years. The average annual number of submitters under each TSCA section is presented in Table 2-1.

Average Number of Submissions per Submitter

EPA estimated the average number of annual submissions per submitter by dividing the average number of annual submissions derived in Section 2.2 by the average number of annual submitters for each type of TSCA section derived in Section 2.2. The average number of submissions per submitter was rounded to the nearest integer and is reported in Table 2-1.

Table 2-1 presents the submission statistics for each TSCA section covered in this analysis.

Table 2-1: TSCA Submission Summary
                                 TSCA Section
                    Average Number of Annual Submissions[1]
                       Average Number of Pages Submitted
                         Average Number of Submitters
                Average Number of Submissions per Submitter[2]
Section 4
                                      67
                                      35
                                      24
                                       3
Section 5 NOC
                                      364
                                       1
                                      305
                                       1
Section 8(a) PAIR
                                      33
                                       2
                                      15
                                       2
Section 8(d)
                                      33
                                      20
                                       9
                                       4
Notes:
1 Although EPA estimated that 364 NOC submissions would be received each year, there is only a finite number of PMNs submitted before April 2010. Therefore, after all of these PMNs have commenced, there will be no NOC submissions subject to this rule anymore. EPA estimated the total outstanding NOC submissions from PMNs submitted before April 2010 at 10,027 at the start date of this rule (May 2012). Therefore, EPA only expects to receive the average number of annual NOC submissions (364) for approximately 28 more years (10,027 total submissions divided by 364 annual submissions roughly equals 28 years).
[2] The average number of submissions per submitter is rounded to the nearest integer.


  -  Industry Burdens and Costs
This chapter first presents the estimates for the baseline industry burden and cost, then the estimates for the additional costs due to the one-time CDX registration and cost savings as a result of this rule. Finally, this chapter presents the estimated net cost savings associated with the reduced burden for the affected facilities. 

Baseline Burden and Cost
This chapter presents the labor burden and unit costs associated with submitting TSCA reports to EPA using hard copies, which reflects the state of the world before the proposed rule. However, EPA only evaluated the burdens and costs for each type of TSCA report that would potentially change with promulgation of this rule. These affected costs include clerical/administrative labor costs and recordkeeping costs associated with preparing a study for submission and maintaining records of the information submitted to EPA. In addition, material costs that include cost of paper and postage used for submitting studies would also be affected. While each type of TSCA report requires other burdens and costs not mentioned in this report, including technical and management labor costs to review and certify submissions, EPA did not include these costs in this analysis because the Agency assumed that they would not be affected by this proposed rule.

Reporting and Recordkeeping Burden
Section 4

According to the latest TSCA section 4 Test Rules, Consent Orders, Test Rule Exemptions, and
Voluntary Data Submission ICR (EPA, 2007a), companies incur a reporting burden (for clerical/administrative staff) of 20 hours for short-term studies and 40 hours for long-term studies. This burden is associated with typing and printing the study results. The weighted average of the two types of studies submitted resulted in a burden of 26 hours, based on the annual number of studies from the ICR (35 short-term studies and 15 long-term studies each year). The weighted average was used as the average reporting burden (for clerical/administrative staff) for all section 4 studies submitted. 

Facilities must also maintain records of the information submitted to EPA. As a result, a company incurs a baseline one-hour recordkeeping burden under the current reporting system.

Section 5 NOC (not previously submitted online)

Since this proposed rule evaluates the reporting burden (for clerical/administrative staff) and recordkeeping burden of section 5 NOC reports that were submitted before the e-PMN final rule (April 2010), the latest ICR before the e-PMN rule was implemented was used to determine the industry burden. According to the latest ICR before the e-PMN rule was implemented, companies incur a reporting burden (for clerical/administrative staff) of 0.25 hours. This burden is associated with filling out the one-page NOC form.

Facilities must also maintain records of the information submitted to EPA. As a result, a company incurs a baseline 0.25 hour recordkeeping burden under the current reporting system.

Section 8(a) PAIR

Based on the latest TSCA section 8(a) PAIR ICR (EPA, 2007b), companies incur a reporting burden (for clerical/administrative staff) associated with submitting a section 8(a) PAIR form of 0.5 hours. This burden includes the time required to type the transmittal letter, photocopy the report, and mail the report package to EPA following management review and approval.

Companies must also maintain records of the information submitted to EPA. These records are used for compliance monitoring and enforcement purposes. A company incurs a baseline two-hour recordkeeping burden with the current reporting system.

Section 8(d)

According to the latest Health and Safety Data Reporting, Submission of Lists and Copies of Health and Safety Studies ICR (EPA, 2007c), companies incur a reporting burden (for clerical/administrative staff) of 0.12 hours per submission. This burden is associated with the time it takes a clerical/administrative employee to photocopy one submission.

There is no recordkeeping burden for section 8(d). 

Reporting and Recordkeeping Costs 
Reporting (for clerical/administrative staff) and recordkeeping labor costs were quantified by multiplying the respective burden presented in Section 3.1.1 by the loaded hourly wage rate for clerical staff presented in Table 3-1. 

Loaded hourly rates consist of wages, benefits, and overhead. Hourly wage rates for the following three categories were used in the analysis: managerial, technical, and clerical. Average wage and salary data for these categories were obtained from the Employer Costs for Employee Compensation (ECEC) report from the Bureau of Labor Statistics (BLS) for all goods-producing, private industries. The additional cost of benefits, such as paid leave and insurance, were also derived from information provided in the ECEC report. Loading factors for benefits were calculated separately for managerial, technical, and clerical labor by dividing the benefits percentage of total compensation by the wage percentage of total compensation. Based on estimates from the Economic Analysis of the Premanufacture Notification Electronic Reporting Final Rule, EPA applied an additional loading factor of 17 percent to account for overhead. This loading factor was added to the benefits and then applied to the base wage. The wage rates were calculated using the latest data on salaries and benefits for these three labor categories from December 2010. The fully loaded 2010 hourly wage rates are shown in Table 3-1.











Table 3-1: Loaded Hourly Wage Rates by Labor Category, December 2010
                                Labor Category
                                       
                             Wage Rate ($/hour)[1]
                          Fringe Benefits ($/hour)[1]
                               Fringes as % Wage
                              Overhead % Wage[2]
                           Fringe + Overhead Factor
                                 Loaded Wages
                                   ($/hour)
                                       
                                      (a)
                                      (b)
                                 (c) = (b)/(a)
                                      (d)
                                (e)=(1)+(c)+(d)
                                (f) = (a) x (e)
Managerial
                                    $42.82
                                    $19.64
                                    45.87%
                                      17%
                                     1.63
                                    $69.74
Technical
                                    $36.93
                                    $18.50
                                    50.09%
                                      17%
                                     1.67
                                    $61.71
Clerical
                                    $17.36
                                     $8.67
                                    49.94%
                                      17%
                                     1.67
                                    $28.98
Notes:
[1]Employer Costs for Employee Compensation Supplementary Tables: December 2010, US Bureau of Labor Statistics, March 9, 2011 (BLS, 2011a)
[2]An overhead rate of 17 percent was estimated based on industry data gathered for the Revised Economic Analysis for the Amended Inventory Update Rule: Final Report (EPA, 2002a)

Material Costs 
Paper Costs 

To determine the overall paper cost per submission, EPA multiplied the average page length for each type of submission by $0.008, an estimated cost of one 8 1/2" x 11" sheet of copy paper, from a case with 5,000 sheets (Staples, 2010). These paper costs are presented in Table 3-2.

Postage Costs 

Using Staples(R) Copy Paper, 8 1/2" x 11", 20 lbs per ream, 500 sheets per ream, EPA assumed the average weight of one sheet of paper at 0.04 pounds (Staples, 2010). This average weight was multiplied by the average number of pages submitted for each type of TSCA report to determine the weight of a package being sent to EPA. Postage costs were based on the average weight of a submission for each type of TSCA report and FedEx 2-day shipment from Kansas City, MO to Washington DC. Kansas City, MO was selected as the standard location because it is located in the geographic center of the country. Postage rates for each type of TSCA report are presented in Table 3-2.

Per Submission Industry Cost
Table 3-2 presents the individual and total baseline industry cost per submission.

Postage costs were estimated using an average weight of 0.04 pounds per sheet of paper as described in Section 3.1.3, multiplied by the average number of pages per submission presented in Table 2-1. This postal weight was entered into a FedEx Rate calculator (FedEx, 2010) for FedEx 2-day shipping from Kansas City, MO to Washington, DC, as described in Section 3.1.3 using the recommended packaging for each type of submission. For example, according to Table 2-1, an average section 4 submission is 35 pages, which was multiplied by 0.04 pounds yielding an average postal weight of 1.4 pounds. Entering this weight into a FedEx Rate calculator for FedEx 2-day shipping from Kansas City, MO to Washington, DC produced a postage cost of $17.90.

Paper costs were estimated using an average price for a sheet of paper of $0.008 as described in Section 3.1.3, multiplied by the average number of pages per submission presented in Table 2-1. For example, an average section 4 submission is 35 pages long, which was multiplied by $0.008 to arrive at an average paper cost of $0.27 per submission.

Baseline labor costs were estimated by multiplying the total baseline labor burdens for each TSCA report described in Section 3.1.1 by the clerical/administrative hourly wage (Table 3-1). For example, the total baseline labor burden for a section 4 submission is 27 hours (26 hours for the reporting burden (for clerical/administrative staff) and one hour for recordkeeping). The labor burden was then multiplied by an hourly clerical/administrative wage (Table 3-1) to arrive at the total labor cost of $800.66. The baseline labor costs are presented in Table 3-2.

Table 3-2: TSCA Submission Summary
                                 TSCA Section
                     Baseline Cost Per Submission (2010$)

                                 Postage Cost
                                  Paper Cost
                                  Labor Cost
                           Total Cost per Submission
Section 4
                                    $17.90
                                     $0.27
                                    $764.25
                                    $800.66
Section 5 NOC
                                    $16.82
                                     $0.01
                                    $14.49
                                    $31.32
Section 8(a) PAIR
                                    $16.82
                                     $0.02
                                    $70.76
                                    $89.29
Section 8(d)
                                    $16.82
                                     $0.15
                                     $3.46
                                    $20.51

Additional Rule Burden and Cost+
EPA estimated that affected facilities would incur additional burden and cost due to the proposed electronic reporting rule for TSCA section 4, section 5 NOC (not previously submitted online), 8(a) PAIR, and 8(d). This includes the one-time burden and cost that companies would incur while registering, setting-up and familiarizing users with the Central Data Exchange (CDX) system. Additionally, affected facilities would incur a recurring burden and cost associated with the time it takes to submit a report via the CDX system. These costs would be incurred in addition to the recordkeeping costs associated with maintaining records of the information submitted to EPA. However, EPA assumed that this recurring burden would be much less than the baseline time it takes to submit a report without electronic reporting. These one-time and recurring costs are presented in this chapter.

One-Time CDX Burden and Cost
EPA estimated that management, technical and clerical staff at companies submitting section 4, section 5 NOC (not previously submitted online), 8(a) PAIR, and 8(d) would incur the following one-time burden under the proposed electronic reporting rule. EPA used a simplifying assumption that an average of five users within each of the affected companies would need to register with CDX.

However, some company users who had already registered with CDX through other rules such as e-PMN or e-CDR will not need to register again as a result of this rule. There was no way to determine how many new users would need to register as a result of this rule for the following reasons: 1) different individuals within a company need to register with CDX separately with their own username and password; 2) while some users within a company who are already registered with CDX for some rules will not need to re-register as a result of this rule, there are other individuals within the same company who will need to register with CDX as a result of this rule and it is impossible to predict what the number of new users will be. Therefore, the Agency used the most conservative assumption that all affected submitters would register with CDX and, thus, incur an associated cost. This assumption would result in overestimating the costs associated with the proposed rule.

The one-time CDX burden includes the following:

   * CDX Registration  -  Based on the CROMERR Cost Benefit Analysis, EPA assumed that companies would spend eleven minutes per employee to register with CDX (EPA, 2004). Furthermore, EPA assumed that an average of four technical staff members and one manager would need to register for each company, resulting in 55 minutes of burden per company.
   * CDX electronic signature (labor burden)  -  Based on the CROMERR Cost Benefit Analysis, EPA assumed that companies would spend 15 minutes preparing, submitting, and filing an electronic signature agreement (Authentication of Identity) form to EPA per employee (EPA, 2004). One manager and four technical staff members per company would incur this burden, totaling 75 minutes of burden per company. In addition, EPA used its best professional judgment to estimate that a manager would spend an additional 30 minutes accessing, preparing, and submitting verification forms (Verification of Authorization) for all authorized submitters to EPA. The total burden incurred by companies submitting and then verifying electronic signature agreements would be 105 minutes. It should be noted that the burden associated with CDX Electronic Signatures does not include costs associated with contacting EPA's CDX help desk to notify a change of submitter status, should one occur.
   * CDX electronic signature (non-labor costs)  -  Non-labor costs include a $0.44 stamp and a $0.02 standard business envelope for each of five signature agreements. The total non-labor cost for electronic signature agreements equals $2.30. 
   * Rule Familiarization  -  Management and technical staff would spend some time familiarizing themselves with the new requirements for electronic submission of their company's section 4, and 8(d). Based on the time required to read and comprehend supporting electronic reporting regulatory documentation, EPA estimated that one manager would spend 33 minutes and one technical staff member would spend 16 minutes per company on rule familiarization (EPA, 2009).

EPA estimated the per-company one-time cost associated with CDX registration, set-up, and familiarization by multiplying the unit burden hour estimates by fully loaded hourly rates for workers of appropriate labor categories. 

For each labor category, the one-time CDX cost was estimated by:

   1. Multiplying the amount of time staff from each labor category spends on an activity by the loaded hourly wage rate for each labor category;
   2. Multiplying the labor cost derived in Step 1 by the number of employees that incur this burden;
   3. Adding any non-labor costs associated with the activity.

Table 3-3 and Table 3-4 present the one-time labor burden and the one-time cost for CDX registration, set-up and familiarization, respectively.






Table 3-3: One-Time CDX Labor Burden
                                Burden Category
                              Managerial (Hours)
                               Technical (Hours)
                                   Clerical
                                    (Hours)
CDX Registration
                                     0.18
                                     0.73
                                     0.00
CDX Electronic Signature
                                     0.75
                                     1.00
                                     0.00
Rule Familiarization
                                     0.55
                                     0.27
                                     0.00
Total
                                     1.48
                                     2.00
                                     0.00










Table 3-4: One-Time CDX Cost
                                 Cost Category
                                 Total Burden
                                    (Hours)
                              Total Cost (2010$)
Labor Costs
Managerial Labor
                                     1.48
                                    $103.45
Technical Labor
                                     2.00
                                    $123.42
Clerical Labor
                                     0.00
                                     $0.00
Non-Labor Cost
CDX Electronic Signature 
                                       -
                                     $2.30
Total One-Time Cost
                                       -
                                    $229.16
Notes: Burden hours are taken from Table 3-3.

As shown in Table 3-4, facilities would incur a $229.16 one-time cost when registering, setting-up and familiarizing users with the CDX system. EPA calculated the net cost savings per submission for each type of report in Section 3.5. EPA included the one-time CDX cost as part of the net cost and cost savings of a company's first submission for each type of report, as presented in Table 3-7. 

Recurring CDX Burden and Cost
In addition to the one-time CDX registration and familiarization cost, a company would incur recurring burden associated with the time it takes to submit reports via CDX. However, EPA assumed that this burden would be less than the reporting cost currently incurred by industry for submitting hard-copy reports.

EPA estimated the time it would take to prepare and submit a report electronically by conducting a simulation of this process for each of the TSCA sections. The electronic reporting simulation was created using a Microsoft Word document EPA created as a mock-up of the CDX electronic reporting system. The simulation document displayed the interface and drop-down menus of the actual CDX reporting system. Hyperlinks within the document were added in order to simulate the actual electronic reporting process. Five junior staff participated in this simulation to estimate the time required of an industry clerical employee to submit an electronic report. Each participant was given detailed instructions of how to navigate the simulation document in order to mimic the actual electronic reporting process. Each participant was timed while conducting the simulation, after which all times were averaged for each section. 

There was little deviation in the amount of time recorded by the five individuals who completed the simulation for each type of report. However, participants tended to spend more time on the first section of the simulation than other sections due to initial familiarization with the process. Each individual completed the report simulations in a different order to reduce bias associated with the additional time required for familiarization. Since representatives were not actually uploading documents to a CDX server, an additional ten seconds was added to each time estimate to account for the lag time on a computer. The average estimate for the electronic submitting burden for each section was multiplied by the loaded hourly wage for clerical workers estimated above to determine the recurring cost associated with submitting a report via CDX. This recurring cost per submission was used when estimating the total cost savings (Section 3.5) and is presented below in Table 3-5.
 
Table 3-5: Recurring CDX Submission Cost (per Submission)
                                 TSCA Section
                        Recurring Burden per Submission
                                    (hours)
                         Recurring Cost per Submission
                                    (2010$)
Section 4
                                     0.06
                                     $1.75
Section 5 NOC
                                     0.05
                                     $1.33
Section 8(a) PAIR
                                     0.05
                                     $1.33
Section 8(d)
                                     0.06
                                     $1.78

Industry Burden and Cost Savings
EPA estimated that the proposed e-reporting rule would result in cost savings associated with electronic submission of each TSCA section 4, section 5 NOC (not previously submitted online), 8(a) PAIR, and 8(d). These burden and cost savings result from reduced time spent on reporting (by clerical/administrative staff) and recordkeeping tasks. Elimination of paper submissions also results in cost savings associated with paper use and postage for affected companies. These cost savings were estimated based on the baseline costs.

EPA estimated that companies submitting section 4, section 5 NOC (not previously submitted online), 8(a) PAIR, and 8(d) reports would realize the following burden savings from the baseline costs:

   * Reduction in reporting burden (for clerical/administrative staff)
   * Reduction in recordkeeping burden
   * Elimination of material costs including paper and postage costs

These estimates were taken from the Economic Analysis of the Premanufacture Notification Electronic Reporting Final Rule (July 13, 2009). Baseline clerical/administrative labor required for reporting and recordkeeping burden estimates were taken from the most recent versions of the ICRs for TSCA section 4, section 5 NOC, 8(a), and 8(d) reporting. These burden changes are presented in the following subsections. The recurring CDX burden and cost discussed in Section 3.2.2 was considered an additional cost of the rule and was added to the final cost per submission in Table 3-6 in order to calculate burden changes.

Reporting and Recordkeeping Burden Savings
Section 4

In consistency with the Economic Analysis of the Premanufacture Notification Electronic Reporting Final Rule (July 13, 2009), EPA assumed that the entire reporting burden for clerical/administrative staff associated with typing and printing the study results would be eliminated with electronic reporting.

EPA assumed that the recordkeeping burden associated with maintaining records of the information submitted to EPA would be reduced by 50 percent,[1] resulting in an overall recordkeeping burden for section 4 reporting of 0.5 hours.

Section 5 NOC

In consistency with the Economic Analysis of the Premanufacture Notification Electronic Reporting Final Rule (July 13, 2009), EPA assumed that the entire reporting burden for clerical/administrative staff associated with a Section 5 NOC form would be eliminated with electronic reporting.

EPA assumed that the recordkeeping burden associated with maintaining records of section 5 NOC forms submitted would be reduced by 50 percent,[1] resulting in an overall recordkeeping burden for section 5 NOC reporting of 0.125 hours.

Section 8(a) PAIR

In consistency with the Economic Analysis of the Premanufacture Notification Electronic Reporting Final Rule (July 13, 2009), EPA assumed that the entire reporting burden for clerical/administrative staff associated with submitting Section 8(a) PAIR would be eliminated with electronic reporting.

EPA assumed that the recordkeeping burden associated with maintaining records of the information submitted to EPA would be reduced by 50 percent, making the overall recordkeeping burden for section 8(a) PAIR forms one hour.

Section 8(d)

In consistency with the Economic Analysis of the Premanufacture Notification Electronic Reporting Final Rule (July 13, 2009), EPA assumed that the entire reporting burden for clerical/administrative staff associated with photocopying a submission would be eliminated with electronic reporting.

Since according to the latest ICR, there is no recordkeeping burden for section 8(d), there would be no burden reduction associated with recordkeeping.
Material Burden Savings
EPA assumed that electronic reporting would eliminate the need for postage and paper for reports, initially required for submitting hard copies. The cost savings associated with these burdens are presented in Section 3.3.4.

Reporting and Recordkeeping Cost Savings
Reporting (for clerical/administrative staff) and recordkeeping labor cost savings were quantified by multiplying the respective burden savings presented in Section 3.3.1 by the loaded hourly wage rate for clerical staff presented in Table 3-1.

Material Cost Savings
Paper Cost Savings

EPA assumed that the entire paper cost would be eliminated with electronic reporting, as presented in Table 3-6.

Postage Cost Savings

EPA assumed that the entire postage cost per submission would be eliminated with electronic reporting, as presented in Table 3-6.

Final Cost per Submission
Table 3-6 presents the estimated final industry cost per submission using the electronic reporting. 

Final labor costs were estimated by multiplying the total final labor burden for each TSCA report described in Section 3.3.1 by the clerical/administrative hourly wage (Table 3-1). For example, the total final labor burden for a section 4 submission is 0.5 hours. The labor burden was then multiplied by an hourly clerical/administrative wage of $28.98 (Table 3-1) yielding the total labor cost of $14.49.

The CDX Submission Labor Cost is the cost of labor associated with the time it takes to submit a report through the CDX system. This cost is further explained in Section 3.2.2. This cost was estimated by multiplying the burden associated with submitting a report electronically presented in Table 3-5 by the clerical/administrative hourly wage in Table 3-1. For example, the burden associated with submitting a section 4 report via CDX is 0.06 hours, which was multiplied by an hourly clerical/administrative wage of $28.98 from Table 3-1 yielding a CDX Submission Labor Cost of $1.75.

The total cost per submission is calculated as a sum of cost components such as labor and CDX submission costs (zero postage and paper costs). The cost for additional submissions was estimated in the "Total Cost per Submission" column. The one-time CDX cost was applied to the first submission only and should be added to the total cost per submission. The one-time CDX registration, set-up and familiarization cost is described further in Section 3.2.1. 



Table 3-6: Final Industry Costs per Submission (2010$)
                                 TSCA Section
                                 Postage Cost
                                  Paper Cost
                           Recordkeeping Labor Cost
                           CDX Submission Labor Cost
                           Total Cost per Submission
                               One-Time CDX Cost
Section 4
                                       -
                                       -
                                    $14.49
                                     $1.75
                                    $16.24
                                    $229.16
Section 5 NOC
                                       -
                                       -
                                     $3.62
                                     $1.75
                                     $5.38
                                    $229.16
Section 8(a) PAIR
                                       -
                                       -
                                    $28.98
                                     $1.33
                                    $30.31
                                    $229.16
Section 8(d)
                                       -
                                       -
                                       -
                                     $1.78
                                     $1.78
                                    $229.16
Note: The one-time CDX cost was added to the total cost for the first submission only. The cost for additional submissions is presented in the "Total Cost per Submission" column. 

Cost Savings per Submission
Table 3-7 presents the cost savings per submission for industry entities. The changes in industry cost per submission were calculated as the difference between the baseline cost (Table 3-2) and the final cost (Table 3-6). The one-time CDX cost is the same for all TSCA reports and was only applied to the cost savings for the first submission from each company.

Table 3-7: Industry Cost Savings per Submission (2010$)
                                 TSCA Section
                         Costs Savings per Submission
                                      (a)
                               One-Time CDX Cost
                                      (b)
                        Cost Savings - First Submission
                                   (a  -  b)
                     Cost Savings - Additional Submissions
                                      (a)
Section 4
                                    $784.41
                                    $229.16
                                    $555.25
                                    $784.41
Section 5 NOC
                                    $25.94
                                    $229.16
                                   $(203.22)
                                    $25.94
Section 8(a) PAIR
                                    $58.98
                                    $229.16
                                   $(170.18)
                                    $58.98
Section 8(d)
                                    $18.74
                                    $229.16
                                   $(210.43)
                                    $18.74

As presented in Table 3-7, the electronic rule would result in cost savings to the industry for each additional submission of each report. However, due to the one-time CDX registration, set-up and familiarization cost, the first submission would result in additional costs for all reports except for section 4. 

Total Cost Savings
The analysis of per-company submissions showed that the number of submissions varied significantly across companies. The only year when a company might incur costs as a result of this proposed rule is Year 1 due to the one-time CDX costs associated with the first submission. In subsequent years, all companies would experience cost savings. 

In Year 1, some companies would incur costs as a result of this rule. The impact of the rule depends on the number of submissions per company and the particular sections for which the company submitted reports. Companies would incur costs if they submitted one report only (thus, incurring the one-time CDX cost) or several reports, where cost savings associated with burden reduction for additional submissions do not outweigh the cost of CDX registration at the initial submission. In general, a company must submit enough reports for one section or enough reports for various sections in Year 1 to realize cost savings in that year. For example, if a company submitted only two section 8(a) PAIR reports, it would still incur a cost of approximately $111. In order to realize cost savings in Year 1, the company would need to submit at least four section 8(a) PAIR reports in that year. Alternatively, if the company only submitted one section 8(a) PAIR report, but a variety of other reports, such as two section 8(d) reports and a section 4 submission, the company would realize cost savings in Year 1. Eventually, a company would realize cost savings in all future years as it continues to submit reports for various sections.  Therefore on average, across companies, this proposed rule would result in cost savings. The total annual cost savings per company, on average, are presented in Table 3-8. 

Table 3-8 presents the estimated annual cost savings per company. The "Additional Submissions" column presents the number of additional submissions per company for each type of TSCA report in Year 1. The first submission in Year 1 would be subject to the cost savings presented in the column "Cost Savings  -  First Submission" in Table 3-7, while the additional submissions would be subject to the full cost savings presented in the column "Cost Savings  -  Additional Submissions" in Table 3-7. Therefore, figures for Year 1 represent a mix of first-time costs incurred due to the one-time CDX registration and cost savings associated with additional submissions in the same year. In subsequent years, facilities would only realize cost savings.

Table 3-8: Annual Cost Savings per Company 
                                 TSCA Section
                  Number of Annual Submissions per Submitter
                    Annual Cost Savings per Company ($2010)
                                       
                               Total Submissions
                          Additional Submissions[1] 
                                    Year 1
                               Subsequent Years
Section 4
                                       3
                                       2
                                                                      $2,124.08
                                                                      $2,353.24
Section 5 NOC
                                       1
                                       0
                                                                      $(203.22)
                                                                         $25.94
Section 8(a) PAIR
                                       2
                                       1
                                                                      $(111.21)
                                                                        $117.96
Section 8(d)
                                       4
                                       3
                                                                      $(154.22)
                                                                         $74.95
Note: 
[1] The number of additional submissions is calculated as the number of total submissions minus the initial submission in Year 1. Only the first submission in Year 1 is subject to a one-time CDX cost presented in Table 3-7.
The average number of submissions per submitter is from Table 2-1. Costs per submission are from Table 3-7.

Table 3-9 presents the total cost savings for the affected companies. EPA estimated the total cost savings by multiplying per-company annual cost savings with the average number of submitters per year for each section. EPA estimated that this rule would result in a total cost to the industry of approximately $14,061 in Year 1 and a cost savings of $66,834 in each subsequent year. The cost savings in subsequent years are greater than those in Year 1 because of the one-time CDX registration costs incurred at the initial submission. EPA assumed that industry would continue to realize cost savings each additional year.





Table 3-9: Annual Industry Cost Savings
                                 TSCA Section
                             Number of Submitters
                     Annual Industry Cost Savings ($2010)
                                       
                                       
                                    Year 1
                               Subsequent Years
Section 4
                                      24
                                                                     $50,977.92
                                                                     $56,477.83
Section 5 NOC
                                      305
                                                                   $(61,982.83)
                                                                      $7,911.88
Section 8(a) PAIR
                                      15
                                                                    $(1,688.08)
                                                                      $1,769.36
Section 8(d)
                                       9
                                                                    $(1,387.95)
                                                                        $674.52
Total
                                       -
                                                                  $(14,060.94) 
                                                                     $66,833.59
Note:
The average number of submitters is from Table 2-1. Annual company cost savings are from Table 3-7.

Overall Change in Burden
Table 3-10 presents the overall estimated changes in annual industry burden for each section. The burden hours presented in the table reflect the overall burden hours for each section, as opposed to the burden hours for the requirements affected by the proposed rule as presented earlier in this analysis. 
Table 3-10: Estimated Burden Comparison
                                 TSCA Section
                       Current Inventory Burden (hours)
                          New Burden Estimate (hours)
                               Change in Burden
                                    (hours)
Section 4
                                    34,233
                                     4,962
                                    -29,271
Section 5 NOC
                                      443
                                      249
                                     -194
Section 8(a) PAIR
                                     1,568
                                      907
                                     -661
Section 8(d)
                                      456
                                      441
                                      -15
TOTAL
                                    36,700
                                     6,559
                                    -30,142



  -  Agency Burdens and Costs 
The conversion to an electronic reporting system as well as the adoption of CDX to facilitate form submission and processing is expected to create long term burden reductions and efficiencies for EPA. For example, when data are submitted electronically, the time required for EPA staff to review and process the information would be reduced because manual data entry or processing would be eliminated. Use of CDX would enable EPA to notify the submitter that the Agency has received the submission and would lead to higher quality data being available to EPA more quickly. Because companies would register with EPA to submit their data electronically via CDX, the Agency in turn would be able to communicate electronically with submitters via CDX. Electronic communication should provide significant time and resource savings for both parties.

Agency Total Costs
EPA would first need to convert to an electronic reporting system. This analysis follows the methodology used in the Economic Analysis of the Premanufacture Notification Electronic Reporting Final Rule to estimate EPA costs associated with conversion to an electronic reporting system. Based on conversion costs developed in the Cross-Media Electronic Reporting Rule (CROMERR) Cost Benefit Analysis, EPA estimated incurring a one-time cost of $200,000 to convert the study and test data reporting of TSCA section 4, section 5 NOC (not previously submitted online), 8(a) PAIR, and 8(d) submissions to an electronic system (EPA, 2004). Based on the methodology in the CROMERR Cost Benefit Analysis, EPA distributed this cost over all applicable TSCA reports in the first year.

In addition to the cost of converting to an electronic reporting system, EPA would incur additional annual costs associated with the operation and maintenance (O&M) of CDX for the electronic reporting of TSCA section 4, section 5 NOC (not previously submitted online), 8(a) PAIR, and 8(d) submissions. EPA developed an estimate of CDX O&M costs attributable to the electronic reporting of TSCA section 4, 8(a) PAIR, and 8(d) submissions using the same methodology as that in the Economic Analysis of the Premanufacture Notification Electronic Reporting Final Rule by apportioning the overall CDX maintenance cost estimated in the CROMERR Cost Benefit Analysis to individual systems. This approach yields an estimate of $57,353 annual maintenance cost per data flow system (i.e., program).

The Agency would also incur costs associated with providing technical assistance to submitters, including conducting a beta or pilot test of the final submission process, conducting approximately three trainings sessions via webinar to demonstrate the electronic reporting software, operating a telephone hotline, and other outreach activities. Although not quantified at this time, these activities are likely to require both labor and non-labor resources.

Agency Burden Savings
EPA is expected to realize burden savings attributable to the eventual elimination of its current systems of processing paper section 4, section 5 NOC (not previously submitted online), 8(a) PAIR, and 8(d) submissions once the electronic reporting CDX system is fully implemented. These savings would stem from eliminating photocopying time and charges, facilitating document management efforts, permitting easier review, allowing for easier and faster transfer to end users as well as potential real time assessment of submissions, allowing for the ability to upload submissions to existing databases, and permitting the data to be made publicly available through existing and new information dissemination vehicles.

Baseline Agency burden associated with section 4, section 5 NOC (not previously submitted online), 8(a) PAIR, and 8(d) submissions were taken from the most recent version of each section's respective ICR. This analysis used the same methodology as that in the Economic Analysis of the Premanufacture Notification Electronic Reporting Final Rule to calculate EPA burden savings. Potential Agency burden savings associated with the electronic reporting of the respective TSCA reports were characterized based on information in the CDX Business Case Analysis regarding the estimated monetary benefit from using CDX. Of the six Program Data Flows studied in the CDX Business Case Analysis, monetary benefits from using CDX as compared to a paper submission baseline were quantified for two flows: TRI (Toxic Release Inventory) and e-NOI (electronic Notice of Intent under the National Pollution Discharge Elimination System). Benefits ranged from eleven percent savings (e-NOI) to 22 percent savings (TRI) compared to the cost of the baseline process. For this analysis, EPA assumed an average annual savings of 16.5 percent.

This saving of 16.5 percent was applied to a baseline burden derived from the latest ICR for each TSCA report. The following table presents the baseline and estimated final Agency burden for each TSCA report.

Table 4-1 presents an overview of the baseline, final, and change in Agency burden on an annual basis.

Table 4-1: Annual Change in Agency Burden
                                 TSCA Section
                            Agency Baseline Burden
                                    (Hours)
                                      (a)
                             Agency Burden Savings
                                      (b)
                        Change in Agency Burden (Hours)
                                  (c)=(a)*(b)
                          Final Agency Burden (Hours)
                                (d)=(a)  -  (c)
Section 4
                                     2,249
                                     0.165
                                      371
                                     1,878
Section 5 NOC
                                      364
                                     0.165
                                      60
                                      304
Section 8(a) PAIR
                                     2,995
                                     0.165
                                      494
                                     2,501
Section 8(d)
                                      70
                                     0.165
                                      12
                                      58
Total
                                     5,678
                                       -
                                      937
                                     4,741

Annual baseline burden and the reduction in Agency burden are described in detail in the following subsections.

 Section 4

The annual baseline Agency burden for section 4 reporting was taken from the ICR: TSCA Section 4 Test Rules, Consent Orders, Test Rule Exemptions, and Voluntary Data Submission (EPA ICR No. 1139.08, OMB Control No.: 2070-0033). The ICR has an Agency burden of 2,249 hours each year for receiving section 4 reports. This burden is broken down as follows:

   * Letter of intent and study plan collection  -  24 hours
   * Progress report collection  -  75 hours
   * Final report collection  -  2,150 hours
   * Total  -  2,249 hours

EPA assumed a 16.5 percent burden reduction due to electronic reporting. After this burden reduction, the final annual Agency burden would be 1,878 hours. This reflects a burden savings of 371 hours per year for the electronic reporting of section 4 submissions.

Section 5 NOC

The annual Agency baseline burden was taken from the Premanufacture Review Reporting and Exemption Requirements for New Chemical Substances and Significant New Use Reporting Requirements for Chemical Substances ICR. The ICR reports an overall Agency burden of 1.0 hour for each NOC form received. Since there are an estimated 364 NOC forms received each year, EPA estimated the annual Agency burden to be 364 hours.

EPA assumed a 16.5 percent burden reduction due to electronic reporting. After this burden reduction, the final annual Agency burden would be 304 hours. This reflects a burden savings of 60 hours per year for the electronic reporting of NOC submissions for PMN reports submitted before April 2010.

Section 8(a) PAIR

The annual Agency baseline burden was taken from the TSCA Section 8(a) PAIR ICR (EPA, 2007b). The ICR reports an overall Agency burden of 2,995 hours each year for receiving section 8(a) PAIR forms. This burden includes chemical nomination, review and selection, rule development, evaluation of the rule, industry/public assistance, compliance monitoring, and data processing and system support personnel.

EPA assumed a 16.5 percent burden reduction due to electronic reporting. After this burden reduction, the final annual Agency burden would be 2,501 hours. This reflects a burden savings of 494 hours per year for the electronic reporting of section 8(a) PAIR form submissions.

Section 8(d)

The overall annual baseline Agency burden was taken from the Health and Safety Data Reporting, Submission of Lists and Copies of Health and Safety Studies ICR (EPA, 2007c). The ICR reports an overall Agency burden of 70 hours each year for received section 8(d) reports. This burden is broken down as follows:
   
      * Data processing and systems report  -  50 hours
      * Storage and distribution  -  20 hours
      * Total  -  70 hours

EPA assumed a 16.5 percent burden reduction due to electronic reporting. After this burden reduction, the final annual Agency burden would be 58 hours. This reflects a burden savings of 12 hours per year for the electronic reporting of section 8(d) submissions.

Agency Cost Savings
In order to calculate the annual Agency cost savings associated with electronic reporting, EPA multiplied the change in burden outlined in Section 4.2 by an hourly Agency wage, using corresponding salary levels. The following Agency salaries are taken from the January 2010 U.S. Office of Personnel Management (OPM) salary table for the Washington-Baltimore-Northern Virginia Locality Pay Area:

   * Section 4  -  GS-13 Step 1
   * Section 5 NOC  -  GS-13 Step 5
   * Section 8(a) PAIR  -  GS-12 Step 1
   * Section 8(d)  -  GS-13 Step 5

Agency personnel and salaries differ for each section since each type of report is handled and processed differently by EPA. Agency salaries used for each section are taken from the respective ICR. Table 4-2 presents the annual Agency cost savings for the electronic reporting of TSCA section 4, section 5 NOC (not previously submitted online), 8(a) PAIR, and 8(d):


Table 4-2: Annual Agency Cost Savings
                            Cost/ Cost Savings Item
                            Change in Agency Burden
                                    (hours)
                                  Savings in
                                Year 1 (2010$)
                      Savings in Subsequent Years (2010$)
Section 4
                                      371
                                    $25,412
                                    $25,412
Section 5 NOC
                                      60
                                    $4,662
                                    $4,662
Section 8(a) PAIR
                                      494
                                    $28,464
                                    $28,464
Section 8(d)
                                      12
                                     $897
                                     $897
Total Savings
                                      937
                                    $59,435
                                    $59,435
CDX One-time Cost
                                       
                                  ($200,000)
                                      --
Annual CDX O&M Cost
                                       
                                   ($57,353)
                                   ($57,353)
Total Costs
                                       
                                  ($257,353) 
                                   ($57,353)
Net Savings
                                       
                                  ($197,918)
                                    $2,082

As shown in Table 4-2, due to the one-time development cost of CDX in Year 1 and the annual CDX Operations and Maintenance (O&M) cost, EPA would incur an additional cost of $197,918 in Year 1. However, in subsequent years, EPA would incur $57,353 annually in O&M costs, resulting in the Agency savings of $2,082 annually.
 -  Benefits of Electronic Reporting
Industry Benefits
Industry submitters would experience a reporting burden reduction for TSCA sections 4, section 5 NOC (not previously submitted online), 8(a) PAIR, and 8(d) submissions as a result of this electronic reporting rule. Electronic reporting would allow for faster review and transmission of these submissions to EPA. 

With respect to studies containing Confidential Business Information (CBI), companies would be able to electronically submit both sanitized and un-sanitized reports that contain CBI. Currently, companies need to mail two hard copy versions of their CBI reports (one sanitized, one un-sanitized) to EPA, which results in additional material costs and burden. Due to the proposed rule, submitters would upload the two versions of their report on the CDX system, thus reducing reporting burden. On the other hand, both pre- and post- rulemaking, company personnel would incur the same burden to identify the CBI information in the report and also to mask it. Therefore, EPA assumed that electronic reporting would not reduce the burden of determining which information is CBI in each submission because this burden would be incurred regardless of how the report is submitted. 

In addition to decreased reporting burden for studies containing CBI, electronic reporting would also improve security and transmission of CBI data to EPA. Transmitting CBI data electronically is much faster and more secure, reducing the overall burden of companies required to submit reports under TSCA sections 4, section 5 NOC (not previously submitted online), 8(a) PAIR, and 8(d). However, this potential benefit of electronic reporting associated with safer transmission of the reports containing CBI information could not be quantified.

Since many submissions are complex and lengthy, the use of electronic reporting would ultimately reduce the overall organizational burden on companies submitting reports. Currently, there is no form or standardized submission entry (except for the two-page section 8(a) PAIR form and the one-page NOC form), which may impose a burden on companies attempting to determine the type of report they need to include and the mechanisms by which these forms should be sent to EPA. Companies have several options for mailing submissions and there is little formality in reporting structure. Electronic reporting would provide a framework that would reduce the uncertainty in the reporting process.

Additionally, all information submitted electronically could be linked in a tracking system, which would facilitate document management efforts. Such linking would allow companies to manage past and future submissions more easily.

Electronic reporting would also reduce the time associated with communication between EPA and submitters. Because companies would be registered with EPA to submit their data via CDX, communication between the Agency and submitters that is currently conducted via regular mail would occur electronically. Electronic communication would provide significant time and resource savings for both the affected companies and EPA.

A certain amount of communication between EPA and submitters occurs after a report is submitted. Before this proposed rule, EPA often mailed reports back to submitters due to missing or erroneous information. The new electronic submission system would streamline this process by allowing submitters to log into the system and modify the information on the electronic reports. EPA did not have quantitative data on the frequency of submissions that occur after the initial report is sent. Therefore, the Agency did not quantify the benefits associated with the streamlined communication process after the initial submission. 

Agency Benefits
EPA expects that the conversion to an electronic reporting system would decrease the Agency review time of each submission. Electronic reports would be easier to search, which would make the review process more straightforward. Since reporting under TSCA sections 4, section 5 NOC, 8(a) PAIR, and 8(d) submissions often provides the Agency with important data for future rulemaking, a more efficient reporting system would result in additional benefits to other aspects of EPA rulemaking. Some examples of those benefits are described below.

Currently, EPA personnel must scan hard copy submissions before they can be uploaded to existing databases. Additionally, EPA staff needs to photo copy all hard copy submissions before they can be made readily available to the public through dissemination vehicles. With electronic reporting, EPA would be able to receive submissions electronically and upload the reports immediately. 

Another major benefit of the electronic reporting rule is that the information contained in the studies can be easily and readily transferred to end users. Electronic transfer of information would increase transparency to the public and allow for a more efficient dissemination of information to consumers. With electronic reporting, the Agency would be able to easily upload reports to existing databases without having to scan or photocopy reports.

Ultimately, the proposed rule would result in a faster and lower cost data flow. EPA would strengthen its ties with the private sector by reducing their reporting burden, as well as decreasing the time required to present that information to the public.

 - Additional Analyses
Several statutes and Executive Orders (EOs) pertain to the proposed rule. This chapter presents statements discussing paperwork reduction, unfunded mandates, regulatory planning and review, tribal governments, children's health, and environmental justice, among others.
Executive Order 12866
On December 23, 2011, OMB determined that this notice of proposed rulemaking is not a significant regulatory action under Executive Order 12866, entitled Regulatory Planning and Review (58 FR 51735, October 4, 1993) and therefore was not subject to review under the Order. EPA briefed OMB in advance of this determination on December 5, 2011 and subsequently responded to various follow-up questions.

Regulatory Flexibility Act (RFA)
Introduction
This section addresses the potential impacts of the proposed rule on small entities. The Regulatory Flexibility Act (RFA) of 1980, amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996, requires regulators to assess the effects of regulations on small entities including businesses, nonprofit organizations, and governments. In some instances, agencies are also required to examine regulatory alternatives that may reduce adverse economic effects on significantly impacted small entities. The RFA requires agencies to prepare a regulatory flexibility analysis for each rule unless the Agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. The RFA, however, does not specifically define "a significant economic impact on a substantial number" of small entities. Sections 603 and 604 of the RFA require that regulatory flexibility analyses identify the types and estimate the numbers of small entities to which the rule will apply. It also requires a description of the rule requirements to which small entities will be subject and any regulatory alternatives, including exemptions and deferral, which would lessen the rule's burden on small entities.
This analysis considers the incremental impacts of the proposed electronic reporting rule on small entities in the affected industry sectors. As described in previous chapters, affected companies would experience both costs and savings as a result of this proposed rule. Companies would incur a cost of CDX registration associated with the first submission (occurs in Year 1) and savings due to burden reduction for additional submissions (could occur in Year 1 and subsequent years). The impact of the rule depends on the number of submissions per company and the particular sections for which the company submitted reports. Companies would incur net costs if they submitted one report only (thus, incurring the one-time CDX cost) or several reports, where cost savings associated with burden reduction for additional submissions does not outweigh the cost of CDX registration at the initial submission. The more reports a company submits, the greater the cost savings it experiences. Therefore, it is likely that this proposed rule would have a greater impact on smaller companies that tend to submit fewer reports as compared to larger companies that are more likely to submit a greater number of reports.
The small entity analysis assesses the impact of the net costs associated with the proposed rule and determines whether the rule represents a disproportionate burden on small entities. This chapter is structured as follows:
   > Section 6.2.2 discusses the definition of small entities used in this analysis. 
   > Section 6.2.3 describes the methodology used to determine whether the proposed rule would result in significant economic impacts on a substantial number of small entities. 
   > Section 6.2.4 presents the estimation of the universe of affected small entities. 
   > Section 6.2.5 outlines the process of obtaining the revenue data for affected companies. 
   > Section 6.2.6 describes the estimation of the compliance cost. 
   > Section 6.2.7 presents the estimated impact on small entities and summarizes the results of the analysis. 
Definition of Small Entities
Small entities include small businesses, small organizations, and small governmental jurisdictions. For the purposes of assessing the impacts of this rule on small entities, small entity is defined as: (1) a small business as defined by the Small Business Administration's (SBA) regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.
The RFA uses the definition of "small business" found in the Small Business Act. SBA's definitions of "small business" vary by industry. This analysis uses the SBA's definitions of small businesses for each industry that will likely be affected by the proposed rule.     
To establish what constitutes a small business, SBA considers a number of economic and market characteristics that may allow a business of concern to exercise dominance in an industry. Size standards are based on criteria such as annual receipts or number of employees that represent a measure of these characteristics. These standards represent the largest size that a for-profit enterprise (together with its affiliates) may be and still qualify as a small business. 
The SBA small business size standards are expansive, classifying most businesses as "small."  For example, for most manufacturing industries the SBA size standard is 500 employees (for some manufacturing industries, it is 750 or 1,000 employees). According to SBA, small firms with fewer than 500 employees represent 99.9 percent of the total businesses. Therefore, at least 99.9 percent of all businesses in the U.S. would be classified as small businesses according to the SBA definition.   
Methods
As mentioned above, the RFA considers whether a rule would have a significant economic impact on a substantial number of small entities. This analysis uses annual cost impact percentages to measure potential impacts on small entities. The cost impact percentage is defined as annual compliance costs resulting from the proposed rule as a percentage of annual revenue or sales. For the purposes of determining small entity impacts, comparing annual compliance costs to annual revenue provides a reasonable indication of the magnitude of the regulatory burden relative to a commonly available and objective measure of a parent entity's income. Where regulatory costs represent a small fraction of a typical parent entity's revenue (i.e., less than one percent), the impacts of the regulation are likely to be minimal.  
The SBA size standards are measured at the firm or parent company level. This analysis estimates a potential impact on small businesses at the highest level of corporate structure, known as a parent company, which incorporates the enterprise with its affiliates. The cost impact is assessed at the parent company level rather than at the facility level because parent companies are ultimately responsible for the compliance costs of individual facilities. Therefore, both costs and revenue figures are estimated at the parent company level. To estimate parent entity annual cost, EPA did not have to aggregate costs of individual facilities to their parent companies because data used in the analysis presented company-level submissions. Similarly, the revenue data reported by Census were obtained at the firm level, which is an equivalent of a parent company.

EPA considered conducting a detailed small entity analysis at the company level as follows: 

   1) Identify parent companies (and their revenues) of affected entities using databases such as Dun & Bradstreet (D&B);
   2) Estimate compliance costs at the parent company level; 
   3) Estimate cost impacts for individual parent companies. 

While EPA had a list of names of companies submitting TSCA sections reports in 2007 and 2008, it was not possible to identify precise names and addresses for these companies to be able to locate them in D&B.

As a result, the Agency conducted a small entity analysis at the industry sector level as follows:

   1. Identify NAICS codes for the affected companies (20 six-digit NAICS codes).
   2. Obtain annual revenue for parent entities in the affected NAICS codes using U.S. Census data (revenue data at the firm level were used as an equivalent for parent-level data). 
   3. In the affected NAICS codes, identify small parent entities based on SBA definitions.
   4. Estimate parent entity annual compliance cost.
   5. Calculate the parent entity cost impact ratio, defined as compliance costs as a percentage of annual revenue. 
   6. Estimate the number and percentage of small parent companies with company-level impact percentages in each of three categories: (1) less than one percent of annual revenue; (2) between one and three percent of annual revenue; and (3) greater than or equal to three percent of annual revenue. 

Estimating the Universe of Affected Entities
EPA did not have data on the full universe of affected companies that might submit a report. As a result, the Agency used two years of data containing company names to identify NAICS codes of potentially affected firms. EPA analyzed reporting data for 2007 and 2008 that identify individual companies submitting a report for TSCA sections 4, 8(a) PAIR, and 8(d). Since EPA did not have the data showing the number of reports submitted for TSCA sections addressed in this rule in combination with section 5 NOC reports, the small business analysis does not incorporate the data on NOCs.  EPA assumed that only companies that incurred a net cost as a result of this proposed rule would be subject to the small business analysis. The Agency assigned a NAICS code to each company using the Enforcement and Compliance History Online (ECHO) database that tracks reporting companies under various statutory programs. The Agency identified a total of 34 individual companies that are estimated to incur a cost in Year 1 due to electronic reporting. These 34 companies fall into 20 unique six-digit NAICS codes.

EPA used these 20 NAICS categories as a basis for the universe of potentially affected companies. Because the data cover two years only, the set of affected companies is likely to change from year to year and new firms are likely to enter the universe in the future. However, EPA believes that the core industries of companies reporting under one of the TSCA sections affected by this rule are likely to stay the same. Therefore, the number of firms within identified NAICS would serve as an appropriate measure of the affected universe. It is important to note that not all companies within the affected NAICS codes would submit reports under one of the TSCA sections subject to this rule. As a result, the total number of firms in those NAICS is likely to be an overestimate. 

EPA used the U.S. SBA Table of Small Business Size Standards by NAICS code to identify the threshold for small businesses within each NAICS category. For all industries affected by this rule, the SBA classifies a small business by the average employment of the firm. For this proposed rule, the employment thresholds that classify small businesses range from 500 to 1,500 employees, depending on the industry. While for most NAICS categories in this analysis, the SBA size threshold is 500 employees, for some NAICS codes, the "small business" size standard is 750 or 1,000 employees. For one industry sector, "Petroleum Refineries", the threshold is 1,500 employees. Table 6-1 presents the six-digit NAICS codes of the companies potentially affected by this rule and their corresponding SBA thresholds. 

The industry sector primarily affected by this proposed rule is Chemical Manufacturing. As shown in Table 6-1, the proposed rule would also affect the following industry sectors:

   > Paper Manufacturing 
   > Petroleum and Coal Products Manufacturing
   > Plastics and Rubber Products Manufacturing
   > Primary Metal Manufacturing 
   > Computer and Electronic Product Manufacturing
   
To estimate the number of small parent companies in the universe, EPA used the total number of firms with fewer than 500 employees reported by Census within the NAICS categories identified as potentially affected. Since for some NAICS sectors analyzed in this impact assessment, the SBA threshold is greater than 500 employees (e.g., 750, 1,000, or 1,500), not all small businesses are captured in this analysis. Therefore, the estimated figure of small entities presents an underestimate. The total number of companies potentially affected by this proposed rule that qualify for the small business status is estimated at 6,621.

Table 6-1: Affected NAICS Industries and Corresponding SBA Thresholds
                                  NAICS Code
                                  NAICS Name
                Small Business Threshold (Number of Employees)
                                    322223
Plastics, Foil, and Coated Paper Bag Manufacturing
                                     500 
                                    322231
Die-cut paper and paperboard office supplies manufacturing
                                     500 
                                    322291
Sanitary Paper Product Manufacturing
                                     500 
                                    324110
Petroleum Refineries
                                    1,500 
                                    324199
All other petroleum and coal products manufacturing
                                     500 
                                    325110
Petrochemical manufacturing
                                    1,000 
                                    325188
All other basic inorganic chemical manufacturing
                                    1,000 
                                    325192
Cyclic Crude and Intermediate Manufacturing
                                     750 
                                    325199
All other basic organic chemical manufacturing
                                    1,000 
                                    325211
Plastics Material and Resin manufacturing
                                    1,000 
                                    325411
Medicinal and Botanical Manufacturing
                                     750 
                                    325520
Adhesive Manufacturing
                                     500 
                                    325992
Photographic film, paper, plate, and chemical manufacturing
                                     500 
                                    325998
All other miscellaneous chemical product and preparation manufacturing
                                     500 
                                    326121
Un-laminated Plastics Profile Shape Manufacturing
                                     500 
                                    326299
All other rubber product manufacturing
                                     500 
                                    331111
Iron and Steel Mills
                                    1,000 
                                    331221
Rolled Steel Shape Manufacturing
                                    1,000 
                                    334413
Semiconductor and Related Device manufacturing
                                     500 


Estimating Annual Revenue for Affected Parent Companies
EPA used U.S. Census data at the firm level to obtain revenue figures for parent entities in the potentially affected universe. The U.S. Census Statistics of U.S. Business (SUSB) data include the total annual receipts (defined as the revenue for goods produced, distributed, or services provided) for each NAICS/employment size class combination. The Agency divided total annual revenue reported in SUSB for each NAICS/employment size category by the number of firms to determine the average revenue for each NAICS/employment size class combination.

In some instances (15 NAICS/employment size class combinations), total revenue for specific employment sizes was not reported by the SUSB because it would disclose the operations of individual firms within the NAICS category. EPA estimated average revenue figures for those NAICS/employment size class combinations based on the available data. The following method was used to estimate average revenue:

 Calculate the percent difference between the average revenue figures in adjacent employment size classes based on all NAICS codes affected by this rule that are populated with revenue information.
 For the NAICS/employment size class combination with missing revenue data, multiply the average revenue of the adjacent employment size class in that NAICS code by the average percent difference between the two employment size classes, estimated in Step 1.
 Where the revenue figures are available for both adjacent employment size classes, Step 2 is performed twice: (1) using the revenue figure from the employment category on one side of the missing value multiplied by the corresponding percent difference and (2) using the revenue figure from the employment category on the other side of the missing value multiplied by the corresponding percent difference. The average between the two is the estimated revenue for the missing value for a NAICS/employment size class combination.

Because the latest available SUSB data reflect 2007 annual revenues, EPA inflated the revenue figures from 2007 dollars to 2009 dollars using the Industrial Production Index (IPI). The IPI measures the amount of industrial output from certain industries.

Estimating Compliance Cost for Affected Parent Companies
The costs associated with this proposed rule stem from using the CDX system for submitting reports. These costs include one-time costs of registration, set-up and familiarization with the CDX system and recurring costs associated with submitting a report via the system. Because the largest cost component of this rule is the initial cost of registering with CDX, some companies incur costs in Year 1 but not in any subsequent years. 

Therefore, for the purpose of the small business analysis, EPA only analyzed the companies that incurred a net cost as a result of this proposed rule. To assess the impact of this proposed rule on small businesses, EPA analyzed a range of costs for companies that submitted reports in 2007 and 2008 and whose savings from recurring submissions do not outweigh the initial cost of CDX registration. EPA estimated the net cost for those companies as follows:


   1) Assigned the one-time CDX cost of $210.42 to the first submission for a company.
   2) Estimated the number of additional submissions by the company in the same year. 
   3) Multiplied the per submission cost savings (see Table 3-7) by the number of submissions each company sent to EPA for each specific TSCA section subject to this proposed rule.
   4) Calculated the net cost as the difference between the one-time cost of the initial submission and the cost savings resulting from additional submissions for each company.

EPA estimated the average net cost for the companies estimated to incur a net cost in Year 1 at $162.86. The maximum net cost for those companies was estimated at $210.42. When constructing a cost-to-revenue ratio, EPA used the maximum net cost estimate to show the greatest possible impact of the rule on small businesses. Therefore, the resulting cost-to-revenue ratio presents the most conservative scenario for the analysis. This maximum cost would be incurred in the following scenario: if a company only submitted one section 8(d) report, it would realize the lowest cost savings of $18.74. The company would also incur the one-time CDX cost of $229.16, resulting in a net cost of $210.42 to the company. EPA assumed that a company would not incur the one-time CDX cost unless the company actually submitted a report.

As described above, as a result of this rule, some companies would incur costs in Year 1 and would always realize savings in each consecutive year. Since the initial CDX registration costs are incurred only once, comparing them to annual revenue figures would exaggerate the economic impact. These one-time costs should be annualized over a certain projected time period, using a discount rate. The annualized cost should represent the amount of an annuity that would have to be paid over a specific period of time that makes a company indifferent between paying either the stream of payments or the up-front costs in one lump-sum. As a result, by annualizing the one-time cost, the cost would be the same for each year of the analysis period.

Since the frequency and the number of submissions under the TSCA sections affected by this rule are sporadic and inconsistent across companies, there is no distinct time interval that could be chosen as a time period for annualization during which firms would recoup the initial costs. EPA annualized the estimated costs over ten years, using the three and seven percent discount rates. Ten years is a commonly used time period for cost annualization, assuming most facilities stay in business for more than ten years. Therefore, the estimated cost-to-revenue ratio is based on the maximum cost annualized over a ten-year period. 

On an annualized basis, the average cost for the companies estimated to incur a net cost in Year 1 is $18.54 and $21.67, using the three and seven percent discount rate, respectively. The maximum annualized cost is $23.95 and $28.00, using the three and seven percent discount rate, respectively. Cost-to-revenue ratios, using the seven percent discount rate for each NAICS code and employment size category are presented in Appendix A.

Estimating Cost Impact Ratios
The cost impact ratios for small parent entities potentially affected by this proposed rule are estimated by dividing the maximum annualized cost for those companies by the parent entity average annual revenue for the NAICS code and employment size category. This analysis estimates cost impact ratios in 2010 dollars and assumes the relationship between compliance costs and annual revenue in 2010 would be the same in the year the companies actually incur the compliance cost.
As shown in Table 6-2, all small parent entities potentially affected by this proposed rule are estimated to have a cost impact of less than one percent of their annual revenue. The estimated ratios range from less than 0.0001 percent to 0.015 percent, depending on the NAICS sector and employment size category, with an average of 0.001 percent. No small parent entities are expected to have a cost impact of greater than one percent of annual revenue. Since the estimated regulatory costs represent a small fraction of a typical parent entity's revenue (i.e., less than one percent), the impacts of this regulation are likely to be minimal.  
Table 6-2: Estimated Impacts of Proposed Rule on Potentially Affected Companies
Cost Impact Ratio Percentage
Number of Companies
Percent of Companies
                                    >3%
                                       0
                                       0
                                     1%-3%
                                       0
                                       0
                                    <1%
                                     6,621
                                     100%


Unfunded Mandates Reform Act (UMRA)
This action contains no Federal mandates under the provisions of Title II of the Unfunded Mandates Reform Act of 1995 (UMRA, Public Law 104-4), 2 U.S.C. 1531-1538 for State, local, or tribal governments. Based on EPA's experience with previous electronic reporting rules, State, local, and tribal governments have not been affected by this type of reporting, and EPA does not have any reason to believe that any State, local, or tribal government would be affected by this rule. Therefore, this proposed rule does not impose any enforceable duty, contain any unfunded mandate, or otherwise have any effect on small governments subject to the requirements of sections 202 or 205 of the UMRA.
Executive Order 13132
Executive Order 13132, Federalism (64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure "meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications."  This action does not have federalism implications because it would not have substantial direct effects on the States, on the relationship between the national government and the States, nor on the distribution of power and responsibilities among the various levels of government.

Executive Order 12898
This proposed rule does not involve special considerations of environmental justice related issues as required by Executive Order 12898, Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations (59 FR 7629, February 16, 1994). 
Executive Order 13045
Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997), requires EPA to identify and assess environmental health and safety risks that may disproportionately affect children. This final rule does not require special consideration pursuant to the terms of Executive Order 13045 because it is not economically significant nor does it establish an environmental standard intended to mitigate health or safety risks, or otherwise have a disproportionate effect on children. 
Paperwork Reduction Act (PRA)
The information collection requirements contained in this proposed rule have been submitted for approval to the Office of Management and Budget (OMB) under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq. The Information Collection Request (ICR) document prepared by EPA has been assigned EPA ICR number 2412.01 (OMB Control No. 2070-NEW), a copy of which has also been placed in the docket for the proposed rule. This rule-related ICR addresses the incremental paperwork activities related to submitting section 4, section 5 NOC and Supporting Documents, 8(a) Preliminary Assessment Information Rule (PAIR), and 8(d) submissions information to EPA electronically. 

The amended information collection activities contained in this proposed rule are designed to assist the Agency in meeting its responsibility under TSCA to receive, process, and review the TSCA reporting sections subject to this rule in a timely manner and further the proper performance of the functions of the Agency. Information collection for review of these TSCA sections is authorized by TSCA section 5 and confidentially of submitted information is protected under TSCA section 14.

The ICR supporting statement for this proposed rule provides a detailed discussion of the estimated annual industry and Agency burden and costs associated with the rule-related changes to the requirements. 

Industry Burden
The incremental rule-related burden and costs to manufacturers, importers, and processers that submit reports under the affected TSCA sections for review are summarized here. The estimated annual burden to industry is 6,558.73 hours for section 4, section 5 NOC and Supporting Documents, 8(a) Preliminary Assessment Information Rule (PAIR), and 8(d) submissions combined. The estimated annual cost to industry is $407,404 for all sections affected by the proposed rule.
Agency Burden
Agency burden savings are expected due to the elimination of the need to process paper forms, reduced quality assurance/quality control (QA/QC) and O&M costs for the existing system. The incremental rule-related Agency burden and costs for review of the affected TSCA sections are summarized here. The estimated annual Agency burden is 3,212 hours for review of section 4, section 5 NOC and Supporting Documents, 8(a) Preliminary Assessment Information Rule (PAIR), and 8(d) submissions combined. Since the Agency would incur a $200,000 one-time cost to convert the reporting for the respective TSCA sections to an electronic system, the Year 1 cost is higher than that in subsequent years. The estimated annual Agency cost for Year 1 is $466,758. The estimated annual Agency cost for subsequent years is $266,758 for all sections affected by the proposed rule.
Executive Order 13175
Under Executive Order 13175, entitled Consultation and Coordination with Indian Tribal Governments (65 FR 67249, November 6, 2000), EPA has determined that this rule would not have tribal implications because it would not have substantial direct effects on tribal governments, on the relationship between the Federal Government and the Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified in the Order. EPA has no information to indicate that any tribal government submits reports covered by this action. Thus, Executive Order 13175 does not apply to this proposed rule.

Executive Order 13211
This proposed rule is not subject to Executive Order 13211, entitled Actions Concerning Regulations that Significantly Affect Energy Supply, Distribution, or Use (66 FR 28355, -38- May 22, 2001), because this rulemaking would not have any significant adverse effect on the supply, distribution, or use of energy.

National Technology Transfer and Advancement Act
Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), 15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, etc.) that are developed or adopted by voluntary consensus standards bodies. This proposed rule would not impose any technical standards that would require EPA to consider any voluntary consensus standards.


  -  Additional Tables
Exhibit 1: 7% Annualized Cost-to-Revenue Ratio (Percent) by Employment Class
                                  NAICS Code
                  Employment Size Class (Number of Employees)
                                       
                                     0 - 4
                                     5 - 9
                                    10 - 19
                                    20 - 99
                                   100 - 499
                                     500+
                                    322223
                                    0.007%
                                    0.003%
                                    0.001%
                                    0.000%
                                    0.000%
                                    0.000%
                                    322231
                                    0.009%
                                    0.003%
                                    0.002%
                                    0.000%
                                    0.000%
                                    0.000%
                                    322291
                                    0.003%
                                    0.002%
                                    0.001%
                                    0.000%
                                    0.000%
                                    0.000%
                                    324110
                                    0.001%
                                    0.001%
                                    0.000%
                                    0.000%
                                    0.000%
                                    0.000%
                                    324199
                                    0.004%
                                    0.001%
                                    0.001%
                                    0.000%
                                    0.000%
                                    0.000%
                                    325110
                                    0.003%
                                    0.001%
                                    0.001%
                                    0.000%
                                    0.000%
                                    0.000%
                                    325120
                                    0.003%
                                    0.002%
                                    0.001%
                                    0.000%
                                    0.000%
                                    0.000%
                                    325188
                                    0.003%
                                    0.001%
                                    0.001%
                                    0.000%
                                    0.000%
                                    0.000%
                                    325192
                                    0.003%
                                    0.001%
                                    0.000%
                                    0.000%
                                    0.000%
                                    0.000%
                                    325199
                                    0.002%
                                    0.001%
                                    0.000%
                                    0.000%
                                    0.000%
                                    0.000%
                                    325211
                                    0.001%
                                    0.001%
                                    0.001%
                                    0.000%
                                    0.000%
                                    0.000%
                                    325411
                                    0.003%
                                    0.002%
                                    0.001%
                                    0.000%
                                    0.000%
                                    0.000%
                                    325520
                                    0.004%
                                    0.002%
                                    0.001%
                                    0.000%
                                    0.000%
                                    0.000%
                                    325992
                                    0.015%
                                    0.005%
                                    0.002%
                                    0.000%
                                    0.000%
                                    0.000%
                                    325998
                                    0.004%
                                    0.002%
                                    0.001%
                                    0.000%
                                    0.000%
                                    0.000%
                                    326121
                                    0.007%
                                    0.003%
                                    0.001%
                                    0.000%
                                    0.000%
                                    0.000%
                                    326299
                                    0.007%
                                    0.003%
                                    0.002%
                                    0.000%
                                    0.000%
                                    0.000%
                                    331111
                                    0.001%
                                    0.002%
                                    0.001%
                                    0.000%
                                    0.000%
                                    0.000%
                                    331221
                                    0.003%
                                    0.001%
                                    0.000%
                                    0.000%
                                    0.000%
                                    0.000%
                                    334413
                                    0.005%
                                    0.002%
                                    0.001%
                                    0.000%
                                    0.000%
                                    0.000%
                                    322223
                                    0.007%
                                    0.003%
                                    0.001%
                                    0.000%
                                    0.000%
                                    0.000%
Notes: 
The cost estimate used to generate the cost-to-revenue ratio presents a maximum cost a company might incur as a result of this proposed rule (as opposed to an average cost).
Percentages are rounded to three significant figures. Values that appear as 0.000% do not actually indicate a cost-to-revenue ratio of zero, but rather indicate the cost of the proposed rule is less than 0.001% of an average firm's revenue.

  -  Wage Rate Calculations
This appendix describes the derivation of the fully loaded wage rates and inflation factors used in calculating costs of labor, materials, and other inputs. All cost estimates are presented in fourth quarter, calendar year 2010 (Q4 2010) dollars, representing the most recent full year of data available.
The fully loaded unit labor cost for managerial, professional/technical, and clerical labor in the regulated industry and for EPA staff was estimated by adding fringe benefits and overhead costs to the hourly wage or annual salary for each category following the method described in Wage Rates for Economic Analysis of the Toxics Release Inventory Program (EPA, 2002b). This appendix describes the method used to estimate the fully loaded unit labor costs for each labor category and presents the results of the analysis.
Labor categories used in the analysis correspond to the U.S. Bureau of Labor Statistics (BLS) Standard Occupational Classification (SOC) system. In March 2004, BLS began using the North American Industry Classification System (NAICS) instead of the Standard Industrial Classification (SIC) System, and the Standard Occupational Classification (SOC) system instead of the Occupational Classification System (OCS). Exhibit 2 summarizes the crosswalk between old and new occupational titles, and lists the SOC titles that correspond to the managerial, professional/technical, and clerical labor categories used in this analysis (Weinstein and Loewenstein, 2004).
Exhibit 2: Crosswalk between Old and New Labor Categories
Labor Category Used in the Analysis
BLS Old Title (OCS)
BLS New Title (SOC)
Managerial
Executive, administrative, and managerial 
Management, business, and financial
Professional/Technical
Professional specialty and technical
Professional and related
Clerical
Administrative support, including clerical 
Office and administrative support
Source: BLS (2009); Weinstein and Loewenstein (2004).

Derivation of Industry Unit Wage Rates
Wages and fringe benefit data for managerial, professional/technical, and clerical labor were taken from the BLS Employer Costs for Employee Compensation (ECEC) historical data for December 2010 (BLS, 2011).






The costs of fringe benefits such as paid leave and insurance, specific to each labor category, were taken from the same BLS report (BLS, 2010). Fringe benefits as a percentage of wages were calculated separately for each labor category. For example, for December 2010, the average wage rate for professional/ technical labor was $36.93, and the average fringe benefit was $18.50. Therefore, fringe benefits as a percentage of wages were $18.50/$36.93, or approximately 50 percent (see Exhibit 3).
An additional loading factor of 17 percent was applied to wages to account for overhead. This approach was used for consistency with Office of Pollution Prevention and Toxics (OPPT) economic analyses for two major rulemakings: Economic Analysis of the Toxics Release Inventory Program, June 2002 (EPA, 2002b), and the Revised Economic Analysis for the Amended Inventory Update Rule: Final Report, August 2002 (EPA, 2002a). This overhead loading factor was added to the benefits loading factor, and the total was then applied to the base wage to derive the fully loaded wage. For example, the December 2009 fully loaded wage for professional/technical labor is $36.93 x (1+ 0.50 + 0.17) = $61.71. 
Fully loaded costs for managerial and clerical labor are calculated in a similar manner, as shown in Exhibit 3.
Exhibit 3: Industry Wage Rates (December 2010)
                                Labor Category
                                       
                               Wage ($/hour)[1]
                          Fringe Benefits ($/hour)[1]
                               Fringes as % Wage
                              Overhead % Wage[2]
                           Fringe + Overhead Factor
                             Loaded Wages ($/hour)
                                       
                                      (a)
                                      (b)
                                 (c) = (b)/(a)
                                      (d)
                                (e)=(1)+(c)+(d)
                                (f) = (a) x (e)
Managerial
                                    $42.82 
                                    $19.64 
                                    45.87%
                                      17%
                                     1.63
                                    $69.74 
Technical
                                    $36.93 
                                    $18.50 
                                    50.09%
                                      17%
                                     1.67
                                    $61.71 
Clerical
                                    $17.36 
                                     $8.67
                                    49.94%
                                      17%
                                     1.67
                                   $28. 98 
Notes:
[1]Employer Costs for Employee Compensation Supplementary Tables: December 2010, US Bureau of Labor Statistics, March 9, 2011 (BLS, 2011a)
[2]An overhead rate of 17 percent was estimated based on industry data gathered for the Revised Economic Analysis for the Amended Inventory Update Rule: Final Report (EPA, 2002a)


Derivation of Agency Unit Wage Rates
Unit wage rates for EPA staff were calculated based on annual federal salaries for the Washington-Baltimore area published by the Office of Personnel Management (OPM). The Agency loading factor of 1.6 is from an EPA guide entitled Instructions for Preparing ICRs (EPA, 1992, page 30, footnote 9). The 60 percent assumption was labeled "the benefits multiplication factor" in the EPA guide, but has been used in many EPA OPPT ICRs to reflect both fringe benefits and overhead for federal staff. For example, it was used in a supporting statement document for EPA ICR No. 1139.06 (EPA, 2000), with the following explanation:
      The annual costs per FTE are derived by multiplying the annual pay rate by 1.6 (the benefits multiplication factor). The multiplication factor used is recommended in EPA's Office of Policy, Planning, and Evaluation's Instructions for Preparing ICRs (June 1, 1992). An EPA internal phone call between Carol Rawie (OPPT/EETD/RIB) and Carl Koch (OPPE/RMD/IMB) on May 3, 1994, indicated that the 1.6 factor included not only benefits but also overhead.
Fully loaded costs for Agency labor for of the sections are shown below:
Exhibit 4: Agency Wage Rate for GS-13 Step 1 (Section 4) (January 2010)
                                Labor Category
                       Data Source for Wage Information
                                     Date
                                   Wage ($)
                                Fringe Benefit
                               Fringes as % wage
                              Overhead as % wage
                           Fringe + overhead factor
                                Loaded Wage ($)
                                       
                                       
                                       
                                      (a)
                                      (b)
                                (c) = (b) / (a)
                                      (d)
                              (e) = (c) + (d) + 1
                                (f) = (a) * (e)
EPA staff FTE
Annual federal staff cost: OPM Washington-Baltimore-Northern Virginia, DC-MD-PA-VA-WV area, GS-14 Step 5 pay rates [a]
Jan-10
$89,033 (annual)
--
[Included in 60% overhead]
60% [b]
1.6
$142,453 (annual)



$42.80 (hourly)




$68.48 (hourly)
Notes:
[a]The Agency salary is the unloaded federal GS-13 Step 1 salary ($89,033 for 2010), from the OPM salary table for the Washington-Baltimore-Northern Virginia Locality Pay Area (OPM, 2010). Hourly rates are based on annual salary divided by 2,080 hours.
[b]The 60 percent fringes-and-overhead rate is from an EPA guide, Instructions for Preparing ICRs (EPA, 1992).






Exhibit 5: Agency Wage Rate for GS-12 Step 1 (Section 8(a) PAIR) (January 2010)
                                Labor Category
                       Data Source for Wage Information
                                     Date
                                   Wage ($)
                                Fringe Benefit
                               Fringes as % wage
                              Overhead as % wage
                           Fringe + overhead factor
                                Loaded Wage ($)
                                       
                                       
                                       
                                      (a)
                                      (b)
                                (c) = (b) / (a)
                                      (d)
                              (e) = (c) + (d) + 1
                                (f) = (a) * (e)
EPA staff FTE
Annual federal staff cost: OPM Washington-Baltimore-Northern Virginia, DC-MD-PA-VA-WV area, GS-14 Step 5 pay rates [a]
Jan-10
$74,872 (annual)
--
[Included in 60% overhead]
60% [b]
1.6
$119,795 (annual)



$36.00 (hourly)




$57.60 (hourly)
Notes:
[a]The Agency salary is the unloaded federal GS-12 Step 1 salary ($74,872 for 2010), from the OPM salary table for the Washington-Baltimore-Northern Virginia Locality Pay Area (OPM, 2010). Hourly rates are based on annual salary divided by 2,080 hours.
[b]The 60 percent fringes-and-overhead rate is from the EPA guide, Instructions for Preparing ICRs (EPA, 1992).

Exhibit 6: Agency Wage Rate for GS-13 Step 5 (Section 8(d)) (January 2010)
                                Labor Category
                       Data Source for Wage Information
                                     Date
                                   Wage ($)
                                Fringe Benefit
                               Fringes as % wage
                              Overhead as % wage
                           Fringe + overhead factor
                                Loaded Wage ($)
                                       
                                       
                                       
                                      (a)
                                      (b)
                                (c) = (b) / (a)
                                      (d)
                              (e) = (c) + (d) + 1
                                (f) = (a) * (e)
                                 EPA staff FTE
Annual federal staff cost: OPM Washington-Baltimore-Northern Virginia, DC-MD-PA-VA-WV area, GS-14 Step 5 pay rates [a]
                                    Jan-10
                               $100,904 (annual)
                                      --
                          [Included in 60% overhead]
                                    60% [b]
                                      1.6
                               $161,446 (annual)
                                       
                                       
                                       
                                $48.51 (hourly)
                                       
                                       
                                       
                                       
                                $77.62 (hourly)
Notes:
[a]The Agency salary is the unloaded federal GS-13 Step 5 salary ($100,904 for 2010), from the OPM salary table for the Washington-Baltimore-Northern Virginia Locality Pay Area (OPM, 2010). Hourly rates are based on annual salary divided by 2,080 hours.
[b]The 60 percent fringes-and-overhead rate is from an EPA guide, Instructions for ICRs (EPA, 1992).

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U.S. Office of Personnel Management (OPM). 2009. "Salary Table 2009 for the Locality Pay Area of Washington-Baltimore-Northern Virginia, DC-MD-VA-WV-PA." Effective January 2009. Available at: http://www.opm.gov/oca/09tables/pdf/DCB.pdf. Accessed October 08, 2009.
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