abt single-sided body template - regulations.gov · photo courtesy of pathtoyourhealth.com . this...

Final version

Economic Analysis for the Reporting Requirements for the TSCA Mercury Inventory

RIN 2070-AK22

June 20, 2018

-- Does not contain TSCA CBI --

Economic and Policy Analysis Branch Chemistry, Economics and Sustainable Strategies Division

Office of Pollution, Prevention and Toxics U.S. Environmental Protection Agency

1200 Pennsylvania Avenue Washington, DC 20460

Photo by Gerhard H Wrodnigg

Photo courtesy of pathtoyourhealth.com

This Page Intentionally Left Blank

CONTRIBUTORS

EA for the Reporting Requirements for the TSCA Mercury Inventory ▌pg. i

Contributors

The EPA analyst responsible for this report is Timothy Lehman of the Economic and Policy Analysis Branch; Chemistry, Economics, and Sustainable Strategies Division; Office of Pollution Prevention and Toxics. Analytical and draft preparation support was provided by Abt Associates Inc. under EPA Contract No. EP-W-16-009.

Notice

This is not an official guidance document and should not be relied upon to determine applicable regulatory requirements. This document was prepared to provide economic information for the rulemaking process, and to meet various administrative and legislative requirements. Due to the nature of the information available to EPA, the document contains various assumptions that may not reflect the regulatory determinations that an individual firm would make were it to apply the rule’s requirements to its specific circumstances. Persons seeking information on regulatory requirements as they would apply to specific facilities should consult the notice of rulemaking.

CONTENTS

EA for the Reporting Requirements for the TSCA Mercury Inventory ▌pg. ii

Contributors ........................................................................................................................................... i Executive Summary ............................................................................................................................ iv 1. Introduction .......................................................................................................................... 1-1

1.1 Statutory Authority ....................................................................................................... 1-1 1.2 Regulatory and Programmatic Background .................................................................. 1-1 1.3 Statement of Need ........................................................................................................ 1-2 1.4 Summary of Methodology ............................................................................................ 1-4 1.5 Organization of This Report ......................................................................................... 1-4

2. Affected Entities ................................................................................................................... 2-1 2.1 Chemicals Subject to this Rule ..................................................................................... 2-1 2.2 Uses of Mercury and Mercury Compounds .................................................................. 2-1

Elemental Mercury .......................................................................................... 2-1 Mercury Compounds ....................................................................................... 2-2

2.3 Regulated Entities ......................................................................................................... 2-2 Data Sources .................................................................................................... 2-3 Reporting Sites ................................................................................................ 2-5 Parent Companies (Firms) ............................................................................... 2-5

3. Industry Compliance Costs ................................................................................................. 3-1 3.1 Wage Rates ................................................................................................................... 3-1 3.2 Unit Industry Compliance Costs ................................................................................... 3-1

Compliance Determination .............................................................................. 3-1 Rule Familiarization ........................................................................................ 3-2 Form Completion – first year .......................................................................... 3-2 Form Completion – subsequent years ........................................................... 3-10 Confidential Business Information (CBI) Claim Substantiation ................... 3-12 Electronic Reporting ...................................................................................... 3-12 Recordkeeping ............................................................................................... 3-16

3.3 Discounting Methods .................................................................................................. 3-17 3.4 Total Industry Compliance Costs ............................................................................... 3-17

4. Agency Costs ......................................................................................................................... 4-1 4.1 Wage Rates ................................................................................................................... 4-1 4.2 Unit Agency Costs ........................................................................................................ 4-1

5. Total Social Costs ................................................................................................................. 5-1 6. Benefits .................................................................................................................................. 6-1

6.1 Benefits of Increased Information ................................................................................ 6-1 6.2 Benefits of Reducing Mercury Use .............................................................................. 6-1

7. Small Entity Impact Analysis .............................................................................................. 7-1 7.1 Select a Relevant Small Business Definition ................................................................ 7-1 7.2 Identify the Small Businesses ....................................................................................... 7-1 7.3 Estimate the Cost-to-Sales Ratio for Small Companies ............................................... 7-2 7.4 SISNOSE Assessment .................................................................................................. 7-3

SISNOSE Screening ........................................................................................ 7-3 Overall SISNOSE Assessment ........................................................................ 7-4

8. Other Impact Analyses ........................................................................................................ 8-1 8.1 Employment Impact Analysis ...................................................................................... 8-1

Theory .............................................................................................................. 8-1 Empirical Findings .......................................................................................... 8-3 Qualitative Assessment: Immediate and Short-term Employment Impacts .... 8-4 Qualitative Assessment: Longer-term Employment Impacts .......................... 8-5 Summary of Qualitatively Assessed Employment Impacts ............................. 8-5

CONTENTS

EA for the Reporting Requirements for the TSCA Mercury Inventory ▌pg. iii

8.2 Paperwork Reduction Act (PRA) ................................................................................. 8-5 8.3 Unfunded Mandates Reform Act (UMRA) .................................................................. 8-6 8.4 Executive Order 13132 – Federalism ........................................................................... 8-6 8.5 Executive Order 13175 – Consultation and Coordination with Indian Tribal

Governments ................................................................................................................ 8-6 8.6 Executive Order 13045 – Children’s Health ................................................................ 8-7 8.7 Executive Order 12898 – Environmental Justice ......................................................... 8-7 8.8 Executive Order 13211 – Energy Supply, Distribution, or Use ................................... 8-7 8.9 National Technology Transfer and Advancement Act ................................................. 8-7

APPENDIX A - NAICS of Regulated Parent Companies ............................................................. A-1 APPENDIX B - Wage Rate Calculations ....................................................................................... B-1 APPENDIX C – References ............................................................................................................. C-1

EXECUTIVE SUMMARY

EA for the Reporting Requirements for the TSCA Mercury Inventory ▌pg. iv

Executive Summary

This economic analysis estimates and evaluates the costs and benefits of collecting information about elemental mercury, mercury compounds, and mercury-added products, through reporting requirements promulgated by the U.S. Environmental Protection Agency (EPA) that provide information to assist in the preparation of an “inventory of mercury supply, use, and trade in the United States,” under the authority granted by Section 8(b) of the Toxic Substances Control Act (TSCA). The rule covers reporting for “mercury,” defined by TSCA section 8(b)(10)(A) to include both “elemental mercury” and “a mercury compound.” The rule requires any person who manufactures (including imports) mercury or mercury-added products or otherwise intentionally uses mercury in a manufacturing process to electronically report certain information to EPA, including: volume of mercury manufactured/imported/used, type of mercury-added products manufactured/imported, type of manufacturing processes and function of mercury. The required reporting information may also include the location where mercury is stored and industries into which mercury and mercury-added products are distributed in commerce.

The rule builds on a history of federal and international oversight of mercury. EPA regulates mercury emissions through several programs and requires reporting of certain data related to mercury manufacture (including import) and release into the environment through the Chemical Data Reporting (CDR) and Toxics Release Inventory (TRI) programs. States have varying levels of restrictions on mercury-added products and reporting requirements. Internationally, the Minamata Convention on Mercury (Minamata Convention), which the United States has joined, is a multilateral environmental agreement to protect human health and the environment from specific human activities that produce mercury emissions and releases to the atmosphere, soil, and water from elemental mercury and mercury compounds. The Minamata Convention addresses the supply, use, and trade of mercury, including prohibiting the introduction of new mercury mining and phasing out existing mercury mines; phasing out and phasing down the use of mercury in a number of products and industrial processes; placing control measures on emissions to air and on releases to land and water; and taking action to reduce the use of mercury in the informal sector of artisanal and small-scale gold mining.

Based on reporting data from the Interstate Mercury Education and Reduction Clearinghouse (IMERC), CDR, and TRI programs, EPA estimates that there are approximately 750 manufacturing/processing sites that would be subject to the rule. These sites are owned by a total of 506 parent companies, classified under 178 different North American Industry Classification System (NAICS) codes. This analysis assumes that the total number of regulated sites remains constant over the 10-year analysis period. Each site will submit one report in response to the rule, every three years.

Under the rule, industry is estimated to incur a burden of 72,569 hours in the first year and 50,197 hours in subsequent reporting years, with costs of approximately $5.83 million and $4.04 million, respectively (see Chapter 2.3.3). The Agency is expected to use approximately 4,785 hours each reporting year, with costs of approximately $0.40 million (see Chapter 4). Discounted over a 10-year period at three and seven percent, total annualized social costs are estimated to be approximately $1.83 million and $1.90 million, respectively.

EXECUTIVE SUMMARY

EA for the Reporting Requirements for the TSCA Mercury Inventory ▌pg. v

As required by the Regulatory Flexibility Act of 1980 and the Small Business Regulatory Enforcement Fairness Act of 1996, the small entity impact analysis conducted in Chapter 7 is based on small business definitions provided by the U.S. Small Business Administration (SBA). EPA found that the costs of the rule did not exceed 3 percent of the value of sales for any small businesses; four small businesses may incur costs at between 1 and 3 percent of the value of sales.

The rule is expected to provide benefits to EPA and the public. Increased and improved data on the manufacture, import, sale, and use of mercury and mercury-added products in the United States will allow EPA to more effectively determine whether additional actions are needed. This information will lead to a reduced cost of decision making and improved decisions concerning mercury. These benefits are discussed qualitatively in Chapter 6 of this report.

1 INTRODUCTION

EA for the Reporting Requirements for the TSCA Mercury Inventory ▌pg. 1-1

1. Introduction

This report estimates and evaluates the costs and benefits expected to result from an information collection rule for manufacturers of mercury, mercury compounds, and mercury-added products finalized by the U.S. Environmental Protection Agency (EPA) under the authority granted by Section 8(b) of the Toxic Substances Control Act (TSCA). The rule requires any person who manufactures (including imports) mercury or mercury-added products, or otherwise intentionally uses mercury in a manufacturing process, to periodically report to EPA certain information, described in detail below. Section 1.1 provides background information on EPA’s statutory authority for the rule; Section 1.2 reviews the regulatory background; Section 1.3 discusses the need for the regulation; Section 1.4 presents a brief summary of the methodology used in the analysis; and Section 1.5 describes the organization of the remainder of this report.

1.1 Statutory Authority

The Frank R. Lautenberg Chemical Safety for the 21st Century Act (enacted on June 22, 2016), amended TSCA to require EPA to develop a mercury inventory. Specifically, 15 USC §2607(b)(10)(C)(i) requires EPA to identify any manufacturing processes or products that intentionally add mercury. To assist in the preparation of this inventory, §2607(b)(10)(D) specifically authorizes EPA to develop this reporting rule, under which manufacturers must make periodic reports to the Administrator. With this information, the EPA must publish in the Federal Register every three years an inventory of mercury supply, use, and trade in the United States (15 USC §2607(b)(10)(B)).

1.2 Regulatory and Programmatic Background

Mercury is a naturally occurring chemical element found in rock in the earth’s crust and can be released into the environment through both industrial and natural (e.g., volcanic) activity. Mercury is a persistent, bioaccumulative neurotoxicant and a major public health threat, particularly to children, women of child-bearing age, and indigenous populations that rely heavily on fish and marine mammals as part of their diet. Mercury warrants global attention due to its long-range atmospheric transport, its persistence in the environment, its ability to bioaccumulate in ecosystems, and its significant negative effect on human health and the environment. According to most estimates, global sources (which include natural and re-emitted mercury) contribute at least 70 percent of total mercury deposition in the United States.

Emissions Regulations. EPA has promulgated several regulations to limit the amount of mercury emitted into the environment: various rules reduce the amount of mercury emitted into the air and discharged into water from certain sources and provide for safe disposal of waste contaminated with mercury (see EPA, 2016a for a list of regulations). Additionally, the Mercury-Containing and Rechargeable Battery Management Act of 1996 phases out the use of mercury in certain batteries. Furthermore, several states restrict the sale or distribution of mercury-added products through product sales bans and/or phase-out regulations (NEWMOA, 2016a).

15 USC §2607(b)(10)(D) (i) IN GENERAL.—To assist in the preparation of the inventory under subparagraph (B), any person who manufactures mercury or mercury-added products or otherwise intentionally uses mercury in a manufacturing process shall make periodic reports to the Administrator, at such time and including such information as the Administrator shall determine by rule promulgated not later than 2 years after the date of enactment of this paragraph.

1 INTRODUCTION


Reporting Requirements. At a Federal level, EPA collects quantity information on certain chemical substances (including elemental mercury and mercury compounds) manufactured/imported or processed in the United States through the Chemical Data Reporting (CDR) program. CDR requirements apply when a site manufactures (including imports), for commercial purposes, in excess of 2,500 pounds of elemental mercury or in excess of 25,000 pounds of a mercury compound in a specific reporting year. The EPA Toxics Release Inventory (TRI) program tracks the quantity of toxic chemicals (including mercury) that is released to the environment and/or managed through recycling, energy recovery, or treatment. TRI reporting requirements apply to companies within certain industries that manufacture, process, or otherwise use any TRI-listed chemical above chemical-specific threshold amounts; for elemental mercury and mercury compounds, this threshold is 10 pounds (EPA, n.d.1). Furthermore, facilities that exceed threshold planning quantities for mercury under the Superfund Amendments and Reauthorization Act Title III regulations must report that quantity to their local emergency planning commission.

Certain states collect information on the amount of mercury in mercury-added products sold in the United States. Laws in eight states (Connecticut, Louisiana, Maine, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont) require manufacturers and importers to identify the mercury-added products they sell and the volume of mercury in them. The volume information is reported at a national level, although only companies selling mercury-added products within those eight states need to report. These data are reported online in the Interstate Mercury Education and Reduction Clearinghouse (IMERC) database, which is managed by the Northeast Waste Management Officials’ Association (NEWMOA). Some states also collect information on mercury in products as part of separate programs. For example, the Washington’s Children’s Safe Product Act2 requires manufacturers of children’s products sold in Washington to report if their product contains a Chemical of High Concern to Children, including mercury. Most states, however, do not collect information about mercury-added products.

Minamata Convention. In 2013, the United States joined the Minamata Convention, a multilateral environmental agreement to protect human health and the environment from mercury in the environment. The Minamata Convention addresses the supply, use, and trade of mercury, including prohibiting the introduction of new mercury mining and phasing out existing mercury mines; phasing out and phasing down the use of mercury in a number of products and industrial processes; placing control measures on emissions to air and on releases to land and water; and taking action to reduce the use of mercury in the informal sector of artisanal and small-scale gold mining. Articles 4 and 5 of the Minamata Convention address mercury-added products and manufacturing processes in which elemental mercury or mercury compounds are used.

1.3 Statement of Need

The results of EPA’s first inventory of mercury supply, use, and trade in the United States as required under TSCA were published in the Federal Register on March 29, 2017 (82 FR 15522). In this inventory report (EPA, 2017), EPA noted data gaps and limitations encountered by the Agency in its reliance on current publicly available data. As stated in the initial inventory report, “[f]uture triennial mercury inventories of supply, use, and trade are expected to include data collected directly from persons who

1 “n.d.” means no date. 2 Wash. Rev. Code § 70.240.

http://www.ecy.wa.gov/programs/hwtr/rtt/cspa/chcc.html

1 INTRODUCTION


manufacture or import mercury or mercury-added products or otherwise intentionally use mercury in a manufacturing process” (EPA, 2017).

Even prior to developing its initial inventory, EPA had investigated Federal and state reports and databases, among other sources, in an attempt to accumulate a comprehensive collection of available information on mercury, as well as on mercury-added products and manufacturing processes. In preparing the inventory report, the Agency found that the data it collected lacks the specificity and level of detail that would be necessary for EPA to develop a complete national mercury inventory. Internet research resulted in mostly anecdotal information. Proprietary databases and that of the U.S. Census Bureau do not distinguish between mercury-added products and non-mercury-added products. EPA’s CDR rule collects quantity information on chemical substances manufactured (includes imported) in the United States, but even in principal reporting years, where CDR reporters are required to provide information on certain use activities, the nature of CDR descriptors is too general for carrying out an inventory to identify manufacturing processes or products where mercury is intentionally added. Although the EPA TRI program requires manufacturers and processors that release ten pounds of mercury or more into the environment to report and to specify whether mercury is manufactured, processed, or otherwise used in activities comparable to the rule (e.g., article component, formulation component, reactant, chemical processing aid, manufacturing aid), it does not require reporting of quantitative data on amounts of mercury used for such activities or the kind of article involved. The IMERC database has been a key source of national data on mercury used in products; however, as reported by IMERC, there are limitations of the use of such data for EPA’s preparation of the mercury inventory and targeting use reduction. For example:

• The data may underestimate the amount of mercury sold in products in the United States. The manufacturers, importers, and distributors in eight IMERC Notification states must report on mercury-added products sold in the United States, so the information is national in scale. However, if a mercury product is only sold in states other than the IMERC Notification states, then the product manufacturer, importer, or distributor is not required to report to IMERC. In addition, IMERC no longer collects data on a significant category of mercury-added products, specifically switches and relays, because these products are banned from sale in each of the eight IMERC Notification states.

• In other instances, the data may overestimate the total amount of mercury sold in products. In some cases, manufacturers supplied data for earlier reporting years but have not since reported. Rather than assuming that this non-reporting is a result of a company having phased-out its mercury-added product, IMERC takes a more conservative approach and assumes that the mercury total for non-reporters for the current reporting period is the same as its most recently reported year.

• IMERC does not cover mercury compounds manufactured or imported for use in manufacturing processes or mercury-added products, with the exception of formulated products. Companies report the amount of mercury in products they sell in the United States, but not the amount in products they manufacture, import, or export (NEWMOA, 2014).

Therefore, the rule will help the Agency to prepare the subsequent, triennial publications of the inventory, as well as execute the mandate to “identify any manufacturing processes or products that intentionally add mercury; and . . . recommend actions, including proposed revisions of Federal law or regulations, to achieve further reductions in mercury use” (15 U.S.C. 2607(b)(10)(C)). In addition, the information

1 INTRODUCTION


gained from this rule will be used by the United States to assist in its implementation of the Minamata Convention.

1.4 Summary of Methodology

This analysis seeks to quantify, to the extent possible, the costs to society of the rule by identifying the costs to industry (and to small entities, in particular) associated with performing the required reporting and recordkeeping, and the costs to EPA of administering the rule. Industry costs consist of the collection, compilation, and submission of required information for the mercury and mercury-added products handled by each reporting firm. Agency costs include reviewing and processing the data received as a result of the rule. Small entity impact is defined as a small business’ estimated cost of compliance with the rule as a percent of sales. Data sources for this analysis include burden estimates derived from information collection requests for similar regulations, compensation data acquired from government publications, and EPA and IMERC databases to identify entities potentially subject to the rule. Given the conservative assumptions used in identifying affected sites and estimating unit costs (as explained in each relevant section), EPA believes the inputs for this analysis are high-end estimates and that the final burden and cost estimates may therefore be overestimated.

This report qualitatively discusses the benefits of the rule based on the value of the information it will provide. The benefits analysis was undertaken to address the implicit call for cost-benefit balancing contained in TSCA, as well as the requirements of Executive Order 12866.

Note that all dollar amounts in this analysis are reported in 2016 dollars.

1.5 Organization of This Report

The remainder of this report provides EPA’s economic analysis in support of the rule. The affected chemicals and companies are characterized in Chapter 2. Chapter 3 estimates industry cost of complying with the rule, and Chapter 4 estimates government costs associated with the administration of the rule. Chapter 5 presents the total social costs. Chapter 6 addresses the benefits of the rule using a “value of information” framework. Chapter 7 provides the small entity impact analysis for the rule, as mandated by the Regulatory Flexibility Act (RFA), and amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA). Several additional impact analyses are presented in Chapter 8, including: an employment impact analysis; a burden hour analysis, which responds to the requirements of the Paperwork Reduction Act (PRA); an unfunded mandates statement, which is required by the Unfunded Mandates Reform Act (UMRA); an environmental justice statement, which addresses the requirements of Executive Order 12898; a children’s health statement, which is mandated by Executive Order 13045; and a regulatory reduction statement, which addresses Executive Order 13771.

2 AFFECTED ENTITIES


2. Affected Entities

This chapter presents information about the manufacturers/importers and uses of mercury and mercury-added products subject to the rule. Section 2.1 describes the chemicals affected by the rule, as well as general exemptions to the rule; Section 2.2 describes the uses for elemental mercury and mercury compounds identified in the United States; and Section 2.3 describes and estimates the population of affected sites under each relevant category.

2.1 Chemicals Subject to this Rule

The rule requires the periodic reporting and maintenance of records by any person who manufactures (including imports) mercury or mercury-added products (manufacturers), or otherwise intentionally uses mercury in a manufacturing process (processors). TSCA section 8(b)(10)(A) states “notwithstanding [TSCA] section 3(2)(B), the term ‘mercury’ means . . . elemental mercury; and . . . a mercury compound” (15 U.S.C. 2607(b)(10)(A)). For purposes of the rule, where EPA distinguishes between elemental mercury and mercury compounds, elemental mercury is limited to elemental mercury (CASRN 7439-97-6) and mercury compounds are inclusive of all instances where elemental mercury or a mercury compound is reacted with another chemical substance. Examples of mercury compounds from the TSCA Chemical Substance Inventory are listed in Table 1 of the rule (in §713.5(b)).

The definition for mercury at TSCA section 8(b)(10)(A) supersedes the exclusions for “chemical substances” described in TSCA section 3(2)(B) that would otherwise apply to mercury, mercury-added products, or intentional uses of mercury in manufacturing processes. Therefore, any “drug, cosmetic, or device” as described in TSCA section 3(2)(B)(vi), should such items contain mercury, would not be excluded from reporting under the rule.

The rule would not require manufacturers (including importers) and processors to report quantitative information that has already been submitted to EPA. Those persons who currently report certain data to CDR and/or IMERC would not be required to provide duplicative information to the rule.

The rule applies only to organizations operating in the United States, and thus under EPA’s jurisdiction, and only to those engaging in importing, manufacturing, or processing of mercury with the purpose of obtaining an immediate or eventual commercial advantage (that is, the rule applies to intentional actions that introduce mercury into supply, use, and trade in the United States).

2.2 Uses of Elemental Mercury and Mercury Compounds Elemental Mercury

Examples of mercury-added products manufactured in the United States are:

• Batteries; • Dental amalgam; • Formulated products; • Lamps/lighting; and • Measuring devices; (IMERC, 2016b)

2 AFFECTED ENTITIES


Examples of products for which mercury use has generally been phased out (at least in IMERC notification states) are gas and electric cooking ranges and other cooking equipment; pumps, and switches and relays.

As regulations and other initiatives around the globe have been promulgated to limit the use of mercury, and in response to consumer preferences for mercury-free alternatives, some uses of mercury have decreased significantly. For many products, there are readily available and effective mercury substitutes: lithium, nickel-cadmium, zinc-air and indium batteries are replacing mercury-based batteries; digital thermometers are being substituted for mercury-based measuring products; and gallium alloys are providing substitutes for mercury in a wide variety of applications (Merchant Research & Consulting Ltd. 2015). Despite the reductions in the major uses of mercury, some uses persist. This includes applications such as large measuring devices or products used in esoteric, traditional or religious applications, such as spiritual cleansing rituals. However, such uses are minimal (Merchant Research & Consulting Ltd. 2015).

Mercury Compounds

Mercury compounds are generally used as reagents, reference materials, or other substances used in a chemical reaction for laboratory analysis, and to produce other mercury compounds. The most recent public information on uses was summarized in EPA’s 2009 Report to Congress and is provided in Table 2-1.

Table 2-1: Uses of Mercury Compounds Compound CASRN Use

Mercury(I) chloride 10112-91-1 Electrochemistry Mercury(II) acetate 1600-27-7 Laboratory chemistry; Production of organomercuric compounds Mercury(II) chloride 7487-94-7 Laboratory chemistry; Waste treatment Mercury(II) iodide 7774-29-0 Laboratory chemistry; Veterinary medicine; Nuclear particle detection Mercury(II) nitrate 10045-94-0 Laboratory chemistry Mercury(II) oxide 21908-53-2 Laboratory chemistry; Batteries Mercury(II) selenide 20601-83-6 Semiconductors Mercury(II) sulfate 7783-35-9 Laboratory chemistry; Gold and silver extraction Mercury(II) thiocyanate 592-85-8 Laboratory chemistry; Photography Phenylmercuric acetate 62-38-4 Pharmaceutical; Production of phenylmercury compounds Thimerosal 54-64-8 Pharmaceutical Source: EPA, 2009

2.3 Regulated Entities

Although not exhaustive, under the rule, persons who engage in the following activities would be required to report to the mercury inventory:

• Mining (including extraction and beneficiation processes) mercury; • Generating or isolating mercury during ore, petroleum, or natural gas refining; • Retorting, recovering, or recycling (including purifying) mercury from waste streams; • Chemical manufacturing of mercury; • Importing mercury; • Capturing mercury using methods to reduce emissions of hazardous air pollutants, unless the

captured mercury is generated, handled, or managed as a waste or is identified as an impurity; • Importing mercury-added products (except the import of a product that contains a component

2 AFFECTED ENTITIES


that is a mercury-added product); or • Producing mercury-added products (i.e., inserting mercury into an article or product). • Intentional use3 of mercury for:

o Chlorine production (e.g., mercury-cell chlor-alkali process); o Polyurethane elastomer production; or o Production of other commercial chemicals (other than mercury compounds).

The rule does not specify whether reporting must be performed at the site- or firm- level. For the purposes of this analysis, EPA assumes that, consistent with IMERC and TRI submissions, companies will generally choose to submit at the site level. A “site” is considered to be an individual business location, whereas the “firm” is the parent-level company. (Several sites may be owned by the same parent company.)

The following sections describe how EPA identified sites that engage in these activities and would be subject to the rule.

Data Sources

To identify the universe of sites potentially subject to the rule, EPA used three sources: the IMERC database, EPA CDR data, and EPA TRI data.

IMERC Database The IMERC Mercury-Added Products Database provides information submitted by companies (e.g., manufacturers, importers, distributors) to comply with notification laws in the IMERC-member states (Connecticut, Louisiana, Maine, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont). The state notification requirements have been in effect for products manufactured or distributed in the participating states beginning in January 2001. The data includes the amount and purpose of mercury in consumer products. Information is collected every three years. The most recent reporting year for which information was publically available at the time this analysis was performed was 2013.

EPA accessed the database online (NEWMOA, 2016c) and obtained a list of all of the submitter companies within the database. For this analysis, EPA used only the companies contained in the database that provided a submission to IMERC in 2013 (the most recent reporting year at the time this analysis was performed). Among the 2013 submissions, companies that indicated that all of their uses of mercury are now phased out were not included. Therefore, the IMERC database yielded a list of companies with mercury-added products that were not phased out as of 2013. To the extent that some of the companies may have since discontinued the manufacture of mercury-added products, this may be an overestimation of the number of regulated entities.

The IMERC database identified 318 relevant companies (considered sites for the purposes of this analysis4). The data does not distinguish between elemental mercury-added and mercury compound-

3 For manufacture of mercury or a mercury-added product, the Agency views such activities to be the intentional addition of mercury where mercury remains present in the final product for a particular purpose. For otherwise intentional use of mercury in a manufacturing process, the Agency views such activities to be the intentional use of mercury, but where no mercury remains or any mercury present in the final product exists only as an impurity.

4 The IMERC database contains individual submissions for site locations of the same parent company.

2 AFFECTED ENTITIES


added products. EPA assumes that all of the reports are associated with elemental mercury rather than mercury compounds.

CDR Data The CDR rule requires manufacturers (including importers) to provide EPA with information on the chemicals they manufacture domestically or import into the United States. The information is collected every four years from manufacturers (including importers) of certain chemicals in commerce generally when production volumes for the chemical are 25,000 pounds or greater for a specific reporting year. In general, CDR reporters do not report information on chemical substances in articles and products, unless they first import or domestically manufacture the chemical substance that they then incorporate into an article or product. The most recent reporting year for which information was publicly available at the time this analysis was performed5 was 2012.

The non-confidential 2012 CDR data revealed only three sites manufacturing mercury compounds (mercury chloride and thimerosal); two of these sites also reported the manufacture of elemental mercury.

TRI Data The TRI program requires reporting on certain toxic chemicals that may pose a threat to human health and the environment. U.S. facilities must report annually how much of each chemical is released to the environment and/or managed through recycling, energy recovery, and treatment, as well as provide information on activities to reduce waste generation. Both “mercury” (elemental mercury) and “mercury compounds” (one broad category for all 69 compounds) are reportable chemicals. The most recent reporting year for which information was publicly available at the time this analysis was performed was 2014.6

For the purpose of this analysis, EPA included TRI reporters of mercury and mercury compounds in the assumed universe of reporters, regardless of their responses as to how the chemical is manufactured, processed, or otherwise used, unless it was indicated that the mercury was manufactured or processed only as an impurity.7 EPA further excluded reporters not generally known to manufacture mercury or mercury-added products or otherwise intentionally use mercury in a manufacturing process.8 To the extent that any other reporters may not “intentionally” use mercury, this may be an overestimation of the number of regulated entities. Thus, TRI data for 2014 yielded a total of 186 reports for mercury, and 380 reports for mercury compounds.

5 This analysis was performed to support the proposed rulemaking (published October 2017). More recent data may now be available.

6 See previous footnote. 7 Under the final rule, mercury or a mercury-containing byproduct manufactured for commercial purposes is subject

to the reporting requirements of the rule. 8 EPA excluded TRI reporters classified under the following NAICS codes: 2211 (electric power generation,

transmission, and distribution), 311 (Food Manufacturing), 312 (Beverage and Tobacco Product Manufacturing), 324110 (Petroleum Refineries), 324191 (Petroleum Lubricating Oil and Grease Manufacturing), 324199 (All Other Petroleum and Coal Products Manufacturing), 325110 (Petrochemical Manufacturing), 3273 (cement and concrete manufacturing), 327410 (Lime Manufacturing), 327420 (Gypsum Product Manufacturing), 3279 (nonmetallic mineral product manufacturing) , 424710 (Petroleum Bulk Stations and Terminals), and 486910 (Pipeline Transportation of Refined Petroleum Products).

2 AFFECTED ENTITIES


Reporting Sites

Using the combined list of sites reporting to IMERC, CDR, and/or TRI, EPA identified any duplicate site listings by identifying 1) sites with identical TRI Facility ID numbers and 2) sites reporting to both TRI and IMERC or CDR with matching facility names and addresses (there were no sites that reported to both IMERC and CDR). Duplicate sites were excluded. This results in a total of 750 unique sites that are potentially regulated under the rule. The sites were categorized as to whether they handle elemental mercury, mercury compounds or both; and their current reporting status. These results are shown in Table 2-2. Table 2-2: Summary of Regulated Sites

Data Source Number of Sites Reporters with only Elemental Mercury CDR (unique sites report only to CDR) 0 IMERC (unique sites report only to IMERC) 318 TRI (unique sites report to neither CDR nor IMERC) 137 Reporters with only Mercury Compounds CDR (unique sites report only to CDR) 1 IMERC (unique sites report only to IMERC) 0 TRI (unique sites report to neither CDR nor IMERC) 278 Reporters with Both Elemental Mercury and Mercury Compounds CDR (unique sites report only to CDR) 2 IMERC (unique sites report only to IMERC) 0 TRI (unique sites report to neither CDR nor IMERC) 14 TOTAL 750 Sources: CDR – 2012 Chemical Data Reporting data (EPA, 2016c. Accessed December 2016) IMERC – 2013 IMERC submissions (NEWMOA, 2016c. Accessed November 2016) TRI – 2014 Toxics Release Inventory data (EPA, 2016d. Accessed November 2016)

Because the uses of mercury are currently in decline, the general trend is for companies to phase out the production of mercury-added products (NEWMOA, 2015). Therefore, EPA assumes no increase in the number of sites in future reporting years. To be conservative, EPA also does not assume a decline in the number of sites in future years. To the extent that there actually is a future decrease in the number of reporting sites, the costs for future years (estimated in Chapter 3) will be overestimates.

Parent Companies (Firms)

For each of the sites identified using the sources described above, EPA determined the ultimate parent company, using Dun & Bradstreet (D&B), a database containing information on the revenue, number of employees, and primary North American Industrial Classification System (NAICS) codes of establishments (Dun & Bradstreet, 2016). For the small fraction of companies where D&B did not provide information, EPA used other online sources such as Manta.com, and companies’ own websites to obtain information about the parent company revenue, employees and NAICS. When sites had the same parent company, duplicate parent companies were removed, and this resulted in a total of 506 parent companies.

Based on this list, firms subject to this rule fall under 178 different NAICS codes; these codes are listed in Appendix A.

3 INDUSTRY COMPLIANCE COSTS


3. Industry Compliance Costs

This chapter presents estimates of the total costs that manufacturers (including importers) of elemental mercury, mercury compounds, and mercury-added products may incur due to the requirements included in the rule and discusses the method used to measure each.

3.1 Wage Rates

The rule involves activities that may require efforts by employees in four labor classifications: attorney, managerial, technical, and clerical. Costs for each activity are calculated by estimating the labor hours required in each labor category and multiplying those burdens by the wage rate for each labor category. This section presents the estimated wage rate in each labor category.

Loaded wage rates for each labor category are derived by combining data on wages and fringe benefits with estimates of overhead rates following the methodology described in Wage Rates for Economic Analysis of the TRI Program (EPA, 2002b). Wage and fringe benefit data for managerial, professional/technical, and clerical labor are calculated using the December 2016 quarterly estimates from the Employer Costs for Employee Compensation (ECEC) Supplemental Tables available on the Bureau of Labor Statistics (BLS) website (BLS, 2017a). For attorney labor, the wage rate was taken from the BLS Occupational Employment Statistics (OES) May 2016 National Industry-Specific Occupational Employment and Wage Estimates (BLS, 2017b). The loaded wage rate for attorney labor is $112.30; managerial labor is $83.15; technical labor is $78.54; and clerical labor is $34.29.

Table 3-1 presents the basic data used to calculate the loaded wage rates for all four categories of labor, and Appendix B provides more detailed information on the estimation of these wage rates.

Table 3-1: Loaded Industry Wage Rates, 2016$ Labor Category Base Wagesa Fringe Benefitsa + Overhead Factorb Loaded Wages

Attorney $67.65 1.66 $112.30 Managerial $50.09 1.66 $83.15 Professional/Technical $45.66 1.72 $78.54 Clerical $20.29 1.69 $34.29 Notes: a Wage rates and fringe benefits are calculated using the December 2016 estimates from BLS (2017a), and May 2016 estimate from BLS (2017b) for Attorney. b An overhead rate of 17% of base wages is used here, based on methodology and assumptions in EPA (2002a) and EPA (2002b).

3.2 Unit Industry Compliance Costs

This section estimates the “unit industry compliance costs,” which are the costs to the individual site that would report under the rule. It is assumed that each site submits one report each reporting year.

Compliance Determination

Site staff must determine whether their company is subject to the rule, based on the identity of chemicals handled at their site and the applicability of certain reporting exemptions.

Compliance determination is estimated to require 2.5 hours of technical labor. This is equivalent to the compliance determination burden associated with the CDR rule, as estimated in the Information Collection Request Supporting Statement for the Final Rule Addendum to Partial Update of the TSCA



Section 8(b) TSCA Inventory Database, Production and Site Reports (EPA, 2012), because the reporting requirements for the information collection rule are similar to those required in the CDR rule.

Table 3-2: Industry Cost Estimate for Compliance Determination (2016$) (per Site)

Reporting Activity

Clerical Labor (at $34.29/hour)

Technical Labor (at $78.54/hour)

Managerial Labor (at $83.15/hour) Total Labor Cost

Burden (hours)

Cost (2016$)

Burden (hours)

Cost (2016$)

Burden (hours)

Cost (2016$)

Burden (hours)

Cost (2016$)

Compliance Determination 0 $0 2.5 $196 0 $0 2.5 $196

Source: BLS, 2017a; EPA, 2012.

Rule Familiarization

The rule requires reporters to become familiar with the 8(b) rule and its various requirements. Rule familiarization is estimated to require 19 hours of technical labor and 9 hours of managerial labor. This burden is equivalent to the rule familiarization burden associated with the Chemical Data Reporting (CDR) rule, as estimated in the Information Collection Request Supporting Statement for the Final Rule Addendum to Partial Update of the TSCA Section 8(b) TSCA Inventory Database, Production and Site Reports (EPA, 2012), because the reporting requirements for the information collection rule are similar to those required under the CDR rule. Rule familiarization costs are generally only incurred in the first year of the rule. However, due to employee turnover, new employees will also need to become familiar with the rule in order to comply with its requirements. It is assumed that each reporting year, 10 percent of reporters will be replaced by new employees, consistent with the assumptions described in section 3.2.6. Therefore, in subsequent reporting years, 10 percent of costs are incurred. As shown in Table 3-3, the labor cost associated with rule familiarization in the first year is $2,241, and in subsequent years is $224.

Table 3-3: Industry Cost Estimate to Familiarize with the Rule (2016$) (per Site)

Reporting Activity




Burden (hours)

Cost (2016$)

Burden (hours)

Cost (2016$)

Burden (hours)

Cost (2016$)

Burden (hours)

Cost (2016$)

Rule Familiarization (first year) 0 $0.00 19 $1,492 9 $748 28 $2,241

Rule Familiarization (subsequent years) 0 $0 1.9 $149 0.9 $75 2.8 $224

Source: BLS, 2017a; EPA, 2012.

Form Completion – first year

The rule requires reporters to gather and submit information about the amount of elemental mercury and mercury compounds manufactured, imported, exported, stored, and distributed into domestic commerce. Questions 1 through 5 of the form ask about elemental mercury, while Questions 6 through 10 are specific to mercury compounds. Reporters are expected to respond only to the set of questions applicable to the chemicals they handle (e.g., either Questions 1 through 5 or 6 through 10, or possibly all). Furthermore, reporters are not required to provide data that they have already provided through other reporting systems (CDR and IMERC). Therefore, the number of applicable reporting questions and the corresponding burden depend on whether or not the respondent is currently a CDR reporter or an IMERC reporter, and,



more so, the respondent’s role in the supply, use, and trade of mercury. Each question, and the burden estimation for each, is described in the subsections below. A summary of the questions required for each type of reporter is found in Table 3-4.

Company Information The first part of the data collection asks the respondent to provide their company name, address, the name(s) and title(s) of the responding and certifying official(s), and the contact information for the certifying official. EPA assumes providing this information will take approximately 0.04 hours of technical labor and 0.02 hours of managerial labor, based on data in EPA, 2012.

Volume manufactured or used (Questions 1A, 3A, 5A, 6A1, 6A2, 8A, 10A) In these questions, for the reporting year, reporters must indicate the total number of pounds of the chemical (elemental mercury or mercury compounds) that the company manufactured, used in manufacturing mercury-added products, or otherwise used in a manufacturing process. EPA assumes that providing this information will take approximately 1.03 technical labor hours and 0.25 managerial labor hours (for each individual question). This is based on the amount of time required to determine the production (including import) volume of a chemical for CDR reporting in 2010 (EPA, 2012).

Volume imported and country of origin (Questions 2A1 and 7A1) In these questions, for the reporting year, reporters must indicate the total number of pounds of the chemical (elemental mercury or mercury compounds) that the company imported, as well as the countries from which the amount was imported. EPA assumes that providing this information will take approximately 2.06 technical labor hours, and 0.5 managerial labor hours (for each individual question). This is based on double the amount of time required to determine the production (including import) volume of a chemical for a specific year for CDR reporting (EPA, 2012).

Country of origin (Questions 2A2 and 7A2) This question applies to reporters who also reported import volumes to CDR. In these questions, for the reporting year, reporters must indicate the countries from which any elemental mercury or mercury compounds were imported. EPA assumes that providing this information will take approximately 1.03 technical labor hours, and 0.25 managerial labor hours (for each individual question). This is based on the amount of time required to determine the production (including import) volume of a chemical for a specific year (2010) for CDR reporting (EPA, 2012).

Volume imported in products and country of origin (Questions 4A and 9A) Reporters must provide the total number of pounds of elemental mercury imported in elemental mercury-added products (4A) and/or of mercury compounds in mercury compound-added products (9A). Reporters must also indicate from which country or countries these products are imported. EPA believes that identifying the amount of mercury in imported products may be more burdensome than identifying it in domestically manufactured products or exports. Therefore, EPA uses the burden estimate for importers to collect information on the chemicals contained in imported articles from their suppliers as presented in the white paper Understanding the Costs Associated with Eliminating Exemptions for Articles in Significant New Use Rules (EPA, 2014a). The white paper estimates that this task will take between 0.08 and 8 hours, therefore, for the purposes of this analysis, EPA used the midpoint estimate of 4.04 hours for each of these questions.



Volume and location stored (Questions 1B, 2B, 5B, 6B, 7B, 10B) These questions require the reporter to indicate the number of pounds of the chemical (elemental mercury and mercury compounds) stored during the reporting year. Reporters must also indicate the location of storage, either/both on- and offsite. EPA assumes that providing this information will take 0.2 technical labor hours and 0.5 managerial hours (for each individual question). This is based on the amount of time required to determine the volume of a chemical substance used on-site for CDR reporting (EPA, 2012).

Volume distributed into domestic commerce and industry of distribution (Questions 1C, 2C, 3C1, 4C, 6C, 7C, 8C1, 9C1)

These questions apply to for IMERC reporters and those that produce end products through otherwise intentional use of mercury in a manufacturing process. Reporters must provide the number of pounds of the chemical (elemental mercury, elemental mercury in elemental mercury-added products, mercury compounds, and/or mercury compounds in mercury compound-added products) that the company distributed into domestic commerce. The reporter must also generally list the industries of distribution by indicating applicable NAICS codes. EPA assumes that providing this information will take 1.26 technical labor hours, and 0.45 hours of managerial time (for each individual question). This is based on the amount of time required to determine the percentage of a chemical’s production volume used in various consumer and commercial use categories for CDR reporting (EPA, 2012).

Industry of distribution (Questions 3C2, 5C, 8C2, 9C2, 10C) Reporters that currently provide sales data to IMERC must list the industries into which they distributed the chemical (elemental mercury in elemental mercury-added products and/or mercury compounds in mercury compound-added products) into domestic commerce. Additionally, users of the chemical (elemental mercury or mercury compounds) in a manufacturing process must list the industries into which they distributed the end product, if any, as applicable. EPA assumes that providing this information will take 0.63 technical labor hours, and 0.23 hours of managerial time (for each individual question). This is based on half of the amount of time required to determine the percentage of a chemical’s production volume used in various consumer and commercial use categories for CDR reporting (EPA, 2012).

Volume exported and destination country (Questions 3D, 4D, 6D, 7D, 8D, 9D) Reporters must provide the number of pounds of the chemical (elemental mercury in elemental mercury-added products, mercury compounds, and/or mercury compounds in mercury compound-added products) exported. Reporters must also list the destination country. EPA assumes that providing this information will take 2.06 technical labor hours, and 0.5 hours of managerial time (for each individual question). This is based on double the amount of time required to determine the volume of a chemical exported for CDR reporting (EPA, 2012).

Destination country (Questions 5D, 6D2, 7D2, 10D) These questions apply to CDR reporters and those that produce end products through otherwise intentional use of mercury in a manufacturing process. Reporters that provide export data to CDR must list the destination country to which they exported the chemical (mercury compounds). Additionally, users of the chemical (elemental mercury or mercury compounds) in a manufacturing process must list the destination country to which they exported the end product, if any, as applicable. EPA assumes that providing this information will take 1.03 technical labor hours, and 0.25 hours of managerial time (for each individual question). This is based on the amount of time required to determine the volume of a chemical exported for CDR reporting (EPA, 2012).



List of manufactured/imported products (Questions 3E, 4E, 8E, 9E) Reporters must identify the elemental mercury-added and/or mercury compound-added products that they manufacture/import. Categories of products are provided for reporters to choose from; they must check all that apply and indicate product subcategories as applicable. EPA assumes that providing this information will take 9.3 hours of technical labor time (for each individual question). This is based on the amount of time required to compile and maintain the list of products in determining exporter costs associated with Significant New Use Rules (EPA, 2014b).

List of mercury compounds (Questions 6E and 7E) Reporters must identify the chemical (mercury compounds) that they manufacture and/or import from a list of the 69 mercury compounds in the TSCA Chemical Substance Inventory; they must check all that apply. EPA assumes that providing this information will take 9.3 hours of technical labor time (for each individual question). This is based on the amount of time required to compile and maintain the list of products in determining exporter costs associated with Significant New Use Rules (EPA, 2014b).

List of purposes for use in a manufacturing process (Questions 5E and 10E) Reporters must provide information about the purposes for which the company used elemental mercury and/or mercury compounds in a manufacturing process. A list of manufacturing processes and chemical functions is provided for the reporters to check all that apply. EPA assumes that providing this information will take 1.68 technical labor hours, and 0.25 hours of managerial time (for each question). This is based on the amount of time required to identify the consumer and commercial use category in CDR reporting (EPA, 2012).

Summary The burden estimates described above are presented in Table 3-4. Total reporting burden and cost for six categories of reporters is calculated: CDR reporters, IMERC reporters, and others, for both elemental mercury and for mercury compounds.

Note that, for the purpose of this analysis, within these categories, costs for all relevant questions are summed. Individual reporters may actually only respond to a smaller set of questions, depending on their activities. However, determining the applicable questions for each reporting site was beyond the scope of this analysis and could change from reporting period to reporting period. To the extent that a question does not apply to an individual reporter, the costs shown here are overestimates.



Table 3-4: Industry Burden Estimate to Complete the Reporting Form, First Year (per Report)

Reporting Element Reporter Category1


Managerial Labor (at $83.15/hour) Total Labor Burden

Data Source Burden

(hours) Cost

(2016$) Burden (hours)

Cost (2016$)

Burden (hours)

Cost (2016$)

All Reporters

Company Information CDR, IMERC, other 0.04 $3.14 0.02 $1.66 0.06 $4.80 EPA, 2012

For Manufacturers (including Importers) / Processors of Elemental Mercury Q1 A Volume of elemental mercury manufactured IMERC, other 1.03 $80.90 0.25 $20.79 1.28 $101.69 EPA, 2012

Q1 B Volume and location of manufactured elemental mercury stored CDR, IMERC, other 0.20 $15.71 0.50 $41.58 0.70 $57.29 EPA, 2012

Q1 C Volume and destination industry of manufactured elemental mercury distributed into domestic commerce

CDR, IMERC, other 1.26 $98.96 0.45 $37.42 1.71 $136.38 EPA, 2012

Q2 A1 Volume and origin of elemental mercury imported IMERC, other 2.06 $161.79 0.50 $41.58 2.56 $203.37 EPA, 2012 Q2 A2 Origin of elemental mercury imported CDR 1.03 $80.90 0.25 $20.79 1.28 $101.69 EPA, 2012

Q2 B Volume and location of imported elemental mercury stored CDR, IMERC, other 0.20 $15.71 0.50 $41.58 0.70 $57.29 EPA, 2012

Q2 C Volume and destination industry of imported elemental mercury distributed into domestic commerce


Q3 A Volume of elemental mercury used in manufacturing mercury-added products CDR, IMERC, other 1.03 $80.90 0.25 $20.79 1.28 $101.69 EPA, 2012

Q3 C1 Volume and destination industry of elemental mercury distributed into domestic commerce CDR, other 1.26 $98.96 0.45 $37.42 1.71 $136.38 EPA, 2012

Q3 C2 Destination industry of elemental mercury distributed into domestic commerce IMERC 0.63 $49.48 0.23 $18.71 0.86 $68.19 EPA, 2012

Q3 D Volume and destination country of elemental mercury exported in mercury-added products CDR, IMERC, other 1.03 $80.90 0.25 $20.79 1.28 $101.69 EPA, 2012

Q3 E List of elemental mercury-added products manufactured CDR, IMERC, other 9.3 $730.42 0 $0.00 9.30 $730.42 EPA, 2014b

Q4 A Volume and origin of elemental mercury imported in elemental mercury-added products CDR, IMERC, other 4.04 $317.30 0 $0.00 4.04 $317.30 EPA, 2014a






Data Source Burden

(hours) Cost


Cost (2016$)

Burden (hours)

Cost (2016$)

Q4 C Volume and destination industry of elemental mercury in imported elemental mercury-added products distributed into domestic commerce


Q4 D Volume and destination country of elemental mercury in imported elemental mercury-added products exported


Q4 E List of elemental mercury-added products imported CDR, IMERC, other 9.30 $730.42 0 $0.00 9.30 $730.42 EPA, 2014b

Q5 A Volume of elemental mercury used in a manufacturing process CDR, IMERC, other 1.03 $80.90 0.25 $20.79 1.28 $101.69 EPA, 2012

Q5 B Volume and location of elemental mercury to be used in a manufacturing process stored CDR, IMERC, other 0.20 $15.71 0.50 $41.58 0.70 $57.29 EPA, 2012

Q5 C Destination industry for domestic distribution of end product CDR, IMERC, other 0.63 $49.48 0.23 $18.71 0.86 $68.19 EPA, 2012

Q5 D Destination country for export of end product CDR, IMERC, other 1.03 $80.90 0.25 $20.79 1.28 $101.69 EPA, 2012

Q5 E List of purposes for which elemental mercury was used in a manufacturing process CDR, IMERC, other 1.68 $131.95 0.25 $20.79 1.93 $152.74 EPA, 2014b

TOTAL BURDEN, CDR reporters 38.9 $3,053 5.8 $482 44.7 $3,535 TOTAL BURDEN, IMERC reporters 40.3 $3,165 6.1 $505 46.4 $3,670 TOTAL BURDEN, other 40.9 $3,215 6.3 $523 47.2 $3,738

For Manufacturers (including Importers) / Processors of Mercury Compounds Q6 A1 Volume of mercury compounds manufactured IMERC, other 1.03 $80.90 0.25 $20.79 1.28 $101.69 EPA, 2012

Q6 A2 Volume of elemental mercury used to manufacture mercury compounds CDR, IMERC, other 1.03 $80.90 0.25 $20.79 1.28 $101.69 EPA, 2012

Q6 B Volume and location of mercury compounds stored CDR, IMERC, other 0.20 $15.71 0.50 $41.58 0.70 $57.29 EPA, 2012

Q6 C Volume and destination industry of mercury compounds distributed into commerce CDR, IMERC, other 1.26 $98.96 0.45 $37.42 1.71 $136.38 EPA, 2012

Q6 D1 Volume and destination country of mercury compounds exported IMERC, other 2.06 $161.79 0.50 $41.58 2.56 $203.37 EPA, 2012

Q6 D2 Destination country of mercury compounds exported CDR 1.03 $80.90 0.25 $20.79 1.28 $101.69 EPA, 2012






Data Source Burden

(hours) Cost


Cost (2016$)

Burden (hours)

Cost (2016$)

Q6 E List of mercury compounds manufactured IMERC, other 9.30 $730.42 0.25 $20.79 9.55 $751.21 EPA, 2014b

Q7 A1 Volume and origin of mercury compounds imported IMERC, other 2.06 $161.79 0.50 $41.58 2.56 $203.37 EPA, 2012

Q7 A2 Origin of mercury compounds imported CDR 1.03 $80.90 0.25 $20.79 1.28 $101.69 EPA, 2012

Q7 B Volume and location of imported mercury compounds stored CDR, IMERC, other 0.20 $15.71 0.50 $41.58 0.70 $57.29 EPA, 2012

Q7 C Volume and destination industry of imported mercury compounds distributed into domestic commerce


Q7 D1 Volume and destination country of imported mercury compounds exported IMERC, other 2.06 $161.79 0.50 $41.58 2.56 $203.37 EPA, 2012

Q7 D2 Destination country of imported mercury compounds exported CDR 1.03 $80.90 0.25 $20.79 1.28 $101.69 EPA, 2012

Q7 E List of mercury compounds imported IMERC, other 9.30 $730.42 0 $0.00 9.30 $730.42 EPA, 2014b

Q8 A Volume of mercury compounds used in manufacturing of mercury compound-added products


Q8 C1 Volume and destination industry of mercury compounds in mercury compound-added products distributed into domestic commerce

CDR, other 1.26 $98.96 0.45 $37.42 1.71 $136.38 EPA, 2012

Q8 C2 Destination industry of mercury compounds in mercury compound-added products distributed into domestic commerce

IMERC 0.63 $49.48 0.23 $18.71 0.855 $68.19 EPA, 2012

Q8 D Volume and destination country of mercury compounds exported in mercury compound-added products


Q8 E List of mercury compound-added products manufactured CDR, IMERC, other 9.30 $730.42 0 $0.00 9.30 $730.42 EPA, 2014b

Q9 A Volume and origin of mercury compounds in mercury compound-added products imported CDR, IMERC, other 4.04 $317.30 0 $0.00 4.04 $317.30 EPA, 2014a

Q9 C1 Volume and destination industry of imported mercury compounds in mercury compound-added products distributed into domestic commerce

CDR, other 1.26 $98.96 0.45 $37.42 1.71 $136.38 EPA, 2012






Data Source Burden

(hours) Cost


Cost (2016$)

Burden (hours)

Cost (2016$)

Q9 C2 Destination industry of imported mercury compounds in mercury compound-added products distributed into domestic commerce

IMERC 0.63 $49.48 0.23 $18.71 0.86 $68.19 EPA, 2012

Q9 D Volume and destination country of imported mercury compounds in mercury compound-added products exported


Q9 E List of mercury compound-added products imported CDR, IMERC, other 9.30 $730.42 0.25 $20.79 9.55 $751.21 EPA, 2014b

Q10 A Volume of mercury compounds used in a manufacturing process CDR, IMERC, other 1.03 $80.90 0.25 $20.79 1.28 $101.69 EPA, 2012

Q10B Volume and location of mercury compounds used in a manufacturing process stored CDR, IMERC, other 0.20 $15.71 0.50 $41.58 0.70 $57.29 EPA, 2012

Q10 C Destination industry for domestic distribution of end product CDR, IMERC, other 0.63 $49.48 0.225 $18.71 0.855 $68.19 EPA, 2012

Q10 D Destination country for export of end product CDR, IMERC, other 1.03 $80.90 0.25 $20.79 1.28 $101.69 EPA, 2012

Q10 E List of purposes for which mercury compounds were used in a manufacturing process CDR, IMERC, other 1.68 $131.95 0.25 $20.79 1.93 $152.74 EPA, 2014b


For Manufacturers/Processors of Both Elemental Mercury and Mercury Compounds (includes all costs as described above)

TOTAL BURDEN, CDR reporters 80.8 $6,345 12.6 $1,045 93.4 $7,391 TOTAL BURDEN, IMERC reporters 103.7 $8,143 13.7 $1,135 117.3 $9,278 TOTAL BURDEN, other 105.6 $8,291 14.3 $1,191 119.9 $9,482

Note: 1 Reporter Category corresponds with the current reporting status of the site: whether the site currently reports to CDR and/or IMERC. Sites that do not report to either are considered “other”. Also see Table 2-2



Form Completion – subsequent years

Certain mercury compounds will be prohibited from export as of January 1, 2020 per 15 U.S.C. 2611(c)(7). However, the mercury inventory rule will require at least one cycle of reporting prior to the effective date of the prohibition for export of these five mercury compounds (mercury (I) chloride or calomel; mercury (II) oxide; mercury (II) sulfate; mercury (II) nitrate; and cinnabar or mercury sulphide). In future reporting cycles, submitters will not need to report export information for these compounds. This implies a reduction, in future reporting cycles, in burden associated with questions related to export of mercury compounds for certain submitters.

As described in Section 2.3.1, the key source of data for affected entities with mercury compounds is the EPA TRI. TRI provides data on “mercury compounds” as a set but not the individual chemical compound. Therefore, EPA does not have data on the number of submitters with the five specific mercury compounds subject to 15 U.S.C. 2611(c)(7). To estimate the reduction in burden in subsequent years, EPA assumes that the percent of reporters who export these five compounds correlates to the percentage of total mercury compounds produced. EPA used data from EPA’s Report to Congress: Potential Export of Mercury Compounds from the United States for Conversion to Elemental Mercury (EPA, 2009, Table ES-1) on volumes of mercury compounds produced in the United States, to determine the ratio of the five banned compounds to all other mercury compounds produced: 74 percent.

EPA assumes that affected submitters (i.e., 74% of those with mercury compounds) will continue to report to the mercury inventory but will no longer respond to certain export-related questions. The affected questions are Q6D1, Q7D1, Q8D, Q9D, and Q10D (see Section 3.2.3 for description of questions). To incorporate this reduction in burden into our analysis, we reduced the burden for these questions by 74 percent. Table 3-5 shows the affected questions and total burdens for subsequent reporting years.



Table 3-5: Industry Burden Estimate to Complete the Reporting Form, Subsequent Years (per Report) [Only Differences from First Year are Shown]




Data Source Burden

(hours) Cost


Cost (2016$)

Burden (hours)

Cost (2016$)

For Manufacturers (including Importers) / Processors of Mercury Compounds

Q6 D1 Volume and destination country of mercury compounds exported IMERC, other 0.54 $42.07 0.13 $10.81 0.67 $52.88 EPA, 2012

EPA, 2009

Q7 D1 Volume and destination country of imported mercury compounds exported IMERC, other 0.54 $42.07 0.13 $10.81 0.67 $52.88 EPA, 2012

EPA, 2009

Q8 D Volume and destination country of mercury compounds exported in mercury compound-added products

CDR, IMERC, other 0.54 $42.07 0.13 $10.81 0.67 $52.88 EPA, 2012 EPA, 2009

Q9 D Volume and destination country of imported mercury compounds in mercury compound-added products exported

CDR, IMERC, other 0.54 $42.07 0.13 $10.81 0.67 $52.88 EPA, 2012 EPA, 2009

Q10 D Destination country for export of end product CDR, IMERC, other 0.27 $21.03 0.07 $5.40 0.33 $26.43 EPA, 2012 EPA, 2009


For Manufacturers/Processors of Both Elemental Mercury and Mercury Compounds (includes all costs as described above)

TOTAL BURDEN, CDR reporters 77.0 $6,046 11.7 $968 88.6 $7,014 TOTAL BURDEN, IMERC reporters 96.8 $7,604 12.0 $996 108.8 $8,601 TOTAL BURDEN, other 98.7 $7,753 12.7 $1,052 111.4 $8,805

Note: 1 Reporter Category corresponds with the current reporting status of the site: whether the site currently reports to CDR and/or IMERC. Sites that do not report to either are considered “other”. Also see Table 2-2



Confidential Business Information (CBI) Claim Substantiation

TSCA requires that anyone seeking protection of confidential business information (CBI) under TSCA must assert a claim, and may be required to substantiate that claim. Reporters may claim information such as production volumes as confidential. TSCA lists information that is not protected from disclosure. This includes “any general description of a process used in the manufacture or processing and industrial, commercial, or consumer functions and uses of a chemical substance, mixture, or article containing a chemical substance or mixture, including information specific to an industry or industry sector that customarily would be shared with the general public or within an industry or industry sector” (15 U.S.C. 2613(b)(3)(B)). Furthermore, TSCA lists information for which a substantiation is generally not required: “(A) Specific information describing the processes used in manufacture or processing of a chemical substance, mixture, or article. (B) Marketing and sales information. (C) Information identifying a supplier or customer. (D) In the case of a mixture, details of the full composition of the mixture and the respective percentages of constituents. (E) Specific information regarding the use, function, or application of a chemical substance or mixture in a process, mixture, or article. (F) Specific production or import volumes of the manufacturer or processor. (G) Prior to the date on which a chemical substance is first offered for commercial distribution, the specific chemical identity of the chemical substance” (15 U.S.C. 2613(c)(2)).

For the purposes of this analysis, based on best professional judgement, EPA assumes that each reporting site will assert one claim of confidentiality. This assumption is based on the number of reportable chemicals each site is likely to handle, and the limitations to substantiation requirements found in TSCA itself, described above.

This analysis assumes that the information that is required for a submitter to substantiate a CBI claim is similar to the information described at 40 CFR 2.204(e)(4). EPA estimates the burden associated with completing substantiations based on information identified at 40 CFR 2.204(e)(4) in EPA ICR No.1665.12 (OMB Control No 2020-0003), Renewal of Existing Information Collection Request for Confidentiality Rules (EPA, 2013). Therefore, this analysis uses burden from that ICR. According to the ICR, submitters spent six hours on each substantiation type reviewing the information, preparing the response, and submitting the response to the Agency (three attorney hours and three manager hours).

As shown in Table 3-6, the labor cost associated with CBI claim substantiation is approximately $586 per report.

Table 3-6: Industry Cost for CBI Claim Substantiation (2016$) (Average per Report)

Reporting Activity

Managerial Labor (at $83.15/hour)

Attorney Labor (at $112.30/hour) Total Labor Cost

Burden (hours)

Cost (2016$)

Burden (hours)

Cost (2016$)

Burden (hours)

Cost (2016$)

CBI Claim Substantiation 3 $249 3 $337 6 $586 Sources: EPA, 2013; BLS, 2017a; BLS, 2017b.

Electronic Reporting

The rule requires submitters to register with EPA’s Central Data Exchange (CDX) and use the Chemical Information Submission System (CISS) to prepare and submit a data file. CDX is EPA’s electronic system for environmental data submission to the Agency. CDX also provides the capability for submitters to access their data through the use of web services. EPA developed CISS for use in submitting data for



TSCA electronically to the Agency. CISS, a web-based reporting tool, provides user-friendly navigation, works with CDX to secure online communication, creates a completed Portable Document Format (PDF) for review prior to submission, and enables data, reports, and other information to be submitted easily.

EPA believes that electronic reporting minimizes the reporting burden for submitters by minimizing the cost and time required to review, edit, and transmit data to the Agency. It also allows submitters to share a draft submission within their organization and easily save a copy for their records for future use.

EPA estimates that affected facilities will incur burden and cost due to the electronic reporting requirements of the rule. This includes costs to complete a subscriber agreement and register with CDX. Some respondents will incur costs associated with using CDX in subsequent years due to employee turnover or compromised electronic signatures. These costs are offset by reductions in reporting and recordkeeping costs due to electronic reporting. Understanding the electronic reporting requirements is expected to be part of rule familiarization discussed in Section 3.2.2 and is not included again in this section.

Some company users who have already registered with CDX to meet other EPA electronic reporting requirements, for example to submit Premanufacture Notices (PMNs) or to report under the CDR rule, will not need to register again as a result of this rule. While EPA expects that some mercury manufacturers (including importers) and processors will have employees who have registered with CDX, there is no way to determine how many new users would need to register as a result of this rule. Therefore, the Agency assumes that all affected submitters would register with CDX and, thus, incur an associated cost. This high-end assumption likely results in an overestimation of the costs associated with the rule.

When registering with CDX, users are assigned to one of two roles in the CDX system, an Authorized Official or a Support Registrant.

Authorized Official (AO): The AO is the person legally responsible for the submission. The AO is typically a senior official for the respondent. The AO is the only user who can start a new form, or reopen a completed form to begin the amendment process and is the only user who can electronically sign and submit a form. AOs can also assign Support Registrants to edit and complete forms on his or her behalf. AOs must submit a subscriber agreement to EPA and register with CDX.

Support Registrant: A Support Registrant is a person designated by an AO to submit supporting documents on his or her behalf. Support Registrants can edit a submission that is created by the AO. Support Registrants are only allowed to edit the submissions to which the AO has granted him or her access. Support Registrants do not have any access rights to create or submit a form. Once the AO creates a form, they will provide the Support Registrant with a passphrase to access the submission and complete all sections of the form. Once the Support Registrant has finished completing the form, the AO will access the document, review it, and then submit it. Support Registrants must register with CDX but do not need to submit a subscriber agreement to EPA.

This analysis uses a simplifying assumption that an average of five employees at each respondent firm will register with CDX: one manager (who will serve as AO) and four technical staff members (who will serve as Support Registrants).



First Year Costs Respondents will incur electronic reporting costs in the first year to register with CDX, submit a subscriber agreement, contact EPA’s CDX Help Desk for assistance and to resolve problems with their certifications or agreements.

Subscriber Agreement/Electronic Signature Agreement. An AO must complete a subscriber agreement in order to establish their identity and their relationship to the entity for which they will submit electronic documents, as well as to document a unique correlation with the device that will be used to create their electronic signature. While users can comply with the subscriber agreement provisions in CDX either by submitting a paper subscriber agreement with a wet-ink signature or by submitting an electronic signature agreement, this analysis assumes that all AOs will submit electronic signature agreements. Preparing, submitting, and filing a subscriber agreement and an electronic signature agreement is estimated to require an average of 15 minutes of time per registrant (EPA, 2011). Because only an AO must complete the subscriber and electronic signature agreement, this is assumed to be managerial time. In addition, the burden estimate is assumed to include identity verification through a third party electronic verification process, which is an available service through CDX.

CDX Registration. CDX users will need to register with CDX. This involves selecting a user name and password, providing contact information, and identifying the facility and the registrant’s role (e.g., AO or Support Registrant) at the facility. This is estimated to take an average of 10 minutes per user (EPA, 2011). Because there are assumed to be one manager and four technical staff registering, this results in an estimate that each respondent (business) will spend 10 minutes of managerial time and 40 minutes of technical time to register with CDX.

Help Desk. CDX users are assumed to spend an average of 4 minutes contacting EPA’s CDX Help Desk for technical support (EPA, 2011), which results in an estimate of 4 minutes of managerial time and 16 minutes of technical time per respondent (business).

Problem Resolution. Three percent of respondents each year are assumed to spend an average of one hour of technical time working with EPA’s CDX Help Desk to resolve problems involving their registrations or agreements (EPA, 2011).

Subsequent Year Costs In subsequent years, respondents may incur electronic reporting costs due to employee turnover and compromised electronic signatures as well as ongoing problem resolution.

Employee Turnover. It is assumed that each reporting year, 10 percent of CDX users will be replaced by new employees, who will have to comply with the subscriber agreement and/or CDX registration requirements (EPA, 2011). Thus, in subsequent years 10 percent of AOs will spend 15 minutes of managerial time to complete a subscriber agreement. In addition, 10 percent of all users (both managerial and technical) will spend 10 minutes to register with CDX.

Report Compromised Signature. Each year, 1 percent of respondents are assumed to report a compromised or surrendered electronic signature, which requires the submittal of a new subscriber agreement (EPA, 2011). This will entail 15 to 20 minutes of managerial time to report



the compromised signature and prepare, submit, and file a new agreement, plus an additional 4 minutes contacting the Help Desk for a total of approximately 24 minutes.

Help Desk. CDX users are assumed to spend an average of 4 minutes contacting EPA’s CDX Help Desk for technical support (EPA, 2011), which results in an estimate of 4 minutes of managerial time and 16 minutes of technical time per respondent (business).

Problem Resolution. Three percent of respondents each year are assumed to spend an average of one hour of technical time with EPA’s CDX Help Desk to resolve problems involving their registrations or agreements (EPA, 2011).

Table 3-7 and Table 3-8 present the first year burden and costs and subsequent year labor burden and costs for electronic reporting.

Table 3-7: Industry Burden and Cost of Electronic Reporting Requirements (First Year, per Site) (2016$)

Reporting Activity



Managerial Labor (at $83.15/hour) Number of

Annual Activities

Total Labor Cost

Burden (hours)

Cost (2016$)

Burden (hours)

Cost (2016$)

Burden (hours)

Cost (2016$)

Burden (hours)

Cost (2016$)

CDX Registration 0.00 $0.00 0.67 $52.62 0.17 $14.14 1 0.84 $66.76

Electronic Subscriber Agreement/ Electronic Signature

0.00 $0.00 0.00 $0.00 0.25 $20.79 1 0.25 $20.79

Help Desk 0.00 $0.00 0.27 $21.21 0.07 $5.82 1 0.34 $27.03 Problem Resolution 0.00 $0.00 1.00 $78.54 0 $0.00 0.03 0.03 $2.36

Totals 1.46 $116.94



Table 3-8: Industry Burden and Cost of Electronic Reporting Requirements (Subsequent Reporting Years, per Site) (2016$)

Reporting Activity



Managerial Labor (at $83.15/hour) Number

of Annual Activities

Total Labor Cost

Burden (hours)

Cost (2016$)

Burden (hours)

Cost (2016$)

Burden (hours)

Cost (2016$)

Burden (hours)

Cost (2016$)

CDX Registration 0.00 $0.00 0.67 $52.62 0.17 $14.14 0.10 0.08 $6.68

Electronic Subscriber Agreement/ Electronic Signature

0.00 $0.00 0.00 $0.00 0.25 $20.79 0.10 0.03 $2.08

Help Desk 0.00 $0.00 0.27 $21.21 0.07 $5.82 0.1 0.03 $2.70 Report Compromised Signature

0.00 $0.00 0.00 $0.00 0.40 $33.26 0.01 0.004 $0.33

Problem Resolution 0.00 $0.00 1.00 $78.54 0.00 $0.00 0.03 0.03 $2.36

Totals 0.17 $14.15

Recordkeeping

Under the rule, reporters are subject to the recordkeeping requirements in §713.19. That is, reporting businesses will be required to compile and maintain records of the collected information. Each person who is subject to the reporting requirements of this part must retain records that document any information reported to EPA. Records relevant to a reporting year must be retained for a period of three years beginning on the last day of the reporting year.

Based on estimates taken from the Regulatory Impact Analysis (RIA)of Amendments to Regulations for TSCA Section 5 Premanufacture Notification (EPA, 1994), which estimates the burden associated with PMN form completion and submission, estimates of recordkeeping of paper records is expected to require one hour of technical labor and one hour of clerical labor per report for all reporters. However, the original PMN burden estimates from the 1994 RIA included recordkeeping costs (EPA, 1994, pages III-13 and III-14). To account for the additional recordkeeping burden not captured by these estimates, EPA used the additional two-hour recordkeeping burden for polymer exception submissions, which have more stringent recordkeeping requirements than PMNs (EPA, 1994, page IV-6). In addition, this two-hour burden is consistent with the estimate of 1 to 3 hours of recordkeeping burden per TSCA 8(a) notice presented in the Information Collection Request for Toxic Substances Control Act Section 8(a) Chemical-Specific Information Gathering Rules (EPA, 2006a).

This rule requires electronic reporting, which is expected to reduce the recordkeeping burden. EPA assumes that the rule will reduce recordkeeping burden by half (0.5 hour clerical, 0.5 hour technical) because of the efficiencies in creating and storing documents electronically. The full recordkeeping burden and associated cost estimates are presented in Table 3-9.



Table 3-9: Industry Cost Estimate to Maintain Records (2016$) (per Site)

Reporting Activity




Burden (hours)

Cost (2016$)

Burden (hours)

Cost (2016$)

Burden (hours)

Cost (2016$)

Burden (hours)

Cost (2016$)

Recordkeeping 0.5 $17.15 0.5 $39.27 0 $0.00 1 $56.42 Source: BLS, 2017a; EPA, 1994.

3.3 Discounting Methods

Discounting refers to the economic conversion of future costs (and benefits) to their present values, accounting for the fact that society tends to value future costs or benefits less than comparable near-term costs or benefits. Discounting is important when the values of costs or benefits occur over a multiple year period and may vary from year to year. Discounting enables the accumulation of the cost and benefit values from multiple years at a single point in time, accounting for the difference in how society values those costs and benefits depending on the year in which the values are estimated to occur.

The rule requires that firms incur costs every three years related to the reporting and maintenance of records pertaining to each regulated substance manufactured or imported.

Using discount rates of three and seven percent9, costs are discounted over a 10-year period (with a three year reporting cycle, this analysis assumes four reporting years). The analysis assumes that first year costs are incurred at the beginning of the period; as a result, costs incurred during the first year do not need to be discounted. Costs accrued in subsequent years are discounted (for the discount rate r = 3 percent and r = 7 percent and t = time in years) back to the beginning of the 10-year period (present value), as follows:

𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃 𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑃𝑃 = �(𝑈𝑈𝑃𝑃𝑈𝑈𝑈𝑈𝑃𝑃𝑈𝑈𝑈𝑈𝑉𝑉𝑃𝑃𝑃𝑃𝑃𝑃𝑈𝑈 𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑃𝑃)𝑡𝑡

(1 + 𝑃𝑃)𝑡𝑡

10

𝑡𝑡=1

This analysis also presents the 10-year annualized costs of the rule. Conceptually, the annualized cost is equivalent to the level annual payment that one would have to make to pay off a debt equal to the net present value of the costs for a given interest rate (the discount rate). The costs are annualized such that the net present value of the costs is equivalent to a stream of 10 equal payments assuming that all costs are incurred at the end of each year.

𝐴𝐴𝑃𝑃𝑃𝑃𝑉𝑉𝑉𝑉𝑉𝑉𝑈𝑈𝐴𝐴𝑃𝑃𝑈𝑈 𝐶𝐶𝑈𝑈𝑃𝑃𝑃𝑃 = (𝑃𝑃𝑉𝑉) ∗𝑃𝑃 ∗ (1 + 𝑃𝑃)10

(1 + 𝑃𝑃)11 − 1

3.4 Total Industry Compliance Costs

EPA summed the burdens and costs per site described in Section 3.2, and using the number of reporters in each reporting category estimated in Section 2.3.2, determined the total burden and cost for reporters

9 These discount rates values reflect guidance from the Office of Management and Budget regulatory analysis guidance

document, Circular A-4 (OMB 2003).



under the rule. First year costs are shown in Table 3-10 and subsequent reporting year costs are shown in Table 3-11.

Given the conservative nature of this analysis, the costs reported in Table 3-10 and Table 3-11 are likely overestimates. As described in the sections above, where uncertainties exist, EPA may have erred on the side of including sites that no longer manufacture or import mercury-added products (see Section 2.3). Similarly, burden estimates may be overestimated as not all sites will answer all questions on the form (see Section 3.2.3).

Table 3-10: Total Cost to Reporters, First Year

Reporter Category Number of Reporters

Burden per Reporter (hours)

Cost per Reporter (2016$)

Total Burden (hours)

Total Cost (2016$)

Reporters with Elemental Mercury CDR reporters 0 83.63 $6,732 0 $0 IMERC reporters 318 85.33 $6,867 27,135 $2,183,706 other reporters 137 86.19 $6,935 11,808 $950,121 Reporters with Mercury Compounds CDR reporters 1 87.72 $7,058 88 $7,058 IMERC reporters 0 109.98 $8,810 0 $0 other reporters 278 111.69 $8,946 31,050 $2,486,999 Reporters with Both Elemental Mercury and Mercury Compounds CDR reporters 2 132.32 $10,588 265 $21,175 IMERC reporters 0 156.29 $12,475 0 $0 other reporters 14 158.85 $12,679 2,224 $177,511 TOTAL Total 750 72,569 $5,826,570

Table 3-11: Reporter Cost, Subsequent Reporting Years

Reporter Category Number of Reporters

Burden per Reporter (hours)

Cost per Reporter (2016$)


Total Cost (2016$)

Reporters with Elemental Mercury CDR reporters 0 57.14 $4,612 0 $0 IMERC reporters 318 58.84 $4,747 18,711 $1,509,613 other reporters 137 59.7 $4,815 8,179 $659,710 Reporters with Mercury Compounds CDR reporters 1 56.49 $4,562 56 $4,562 IMERC reporters 0 74.96 $6,013 0 $0 other reporters 278 76.67 $6,149 21,314 $1,709,430 Reporters with Both Elemental Mercury and Mercury Compounds CDR reporters 2 101.09 $8,092 202 $16,183 IMERC reporters 0 121.27 $9,678 0 $0 other reporters 14 123.84 $9,882 1,734 $138,353 TOTAL Total 750 50,197 $4,037,851

As described in Chapter 2, the total number of reporters is assumed to remain the same during the 10-year analysis period. The rule calls for a data collection every three years and costs are only incurred in reporting years (four reporting years within this 10-year period). As shown in Table 3-12, the annualized



cost of the rule over 10 years is approximately $1.68 million at a three percent discount rate, and $1.75 million at a seven percent discount rate.

Table 3-12: Total Annualized Reporter Costs

Year Number of Sites


Total Cost (2016$)

Discounted Cost (2016$)

3% Discount Rate 7% Discount Rate 1 750 72,569 $5,826,570 $5,826,570 $5,826,570 4 750 50,197 $4,037,851 $3,695,206 $3,296,089 7 750 50,197 $4,037,851 $3,381,637 $2,690,591 10 750 50,197 $4,037,851 $3,094,676 $2,196,323

Total 750 223,159 - - - Annualized $1,678,672 $1,746,050

0 TOTAL SOCIAL Costs


4. Agency Costs

4.1 Wage Rates

EPA assumes that, on average, employees at the level of Federal GS-13, Step 5 will conduct its collection and administrative activities under the rule (that is, the professional/technical labor). The hourly 2016 fully loaded salary for a GS-13, Step 5 full-time equivalent (FTE) is $80.06. This estimate includes a base wage rate of $50.04 per hour plus a 60 percent load increase to account for benefits and overhead.10 EPA assumes that a Federal GS-14, Step 5 FTE will perform attorney activities under the rule. An hourly wage rate of $94.61 was calculated using the same method as for the technical labor. Appendix B provides a detailed description of these calculations.

Table 4-1: Loaded EPA Wage Rates, 2016$ Labor Category Base Wagesa Fringe Benefitsa + Overhead Factorb Loaded Wages

Attorney $59.13 1.6 $94.61 Professional/Technical $50.04 1.6 $80.06 Notes: a Wage rates and fringe benefits are calculated using the January 2016 estimates from OPM (2016) b The 60% fringe-and-overhead rate is from an EPA guide, Instructions for Preparing Information Collection Requests (ICRs) (EPA, 1992, page 30, footnote 9)

4.2 Unit Agency Costs

EPA will incur costs in administering the rule. The rule would require EPA to provide industry and public assistance (e.g., provide guidance and facilitate compliance), process submitted reports, and maintain the information technology systems that support these activities. Based on previous estimates of Agency time used in economic analyses of Preliminary Assessment Information Reporting (PAIR) rules, which require Agency activity similar to that required under the rule, it is estimated to take 1.5 labor hours per report to provide industry and public assistance and 3.75 labor hours per report to provide data processing and systems support for a total of 5.25 labor hours per report (EPA, 2003a) when the reporting is accomplished through non-electronic reporting. However, the electronic reporting required by the rule is expected to result in cost savings to EPA. This analysis used the same methodology as that in the Economic Analysis of the Premanufacture Notification Electronic Reporting Final Rule (EPA, 2009a) to calculate EPA burden savings from electronic reporting. 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 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. Applying the 16.5 percent

10 The base Federal GS-13 Step 5 salary ($102,932, effective January 2015) is from the Office of Personnel Management

salary table for Washington-Baltimore-Northern Virginia (OPM, 2015). The 60 percent fringe benefits-and-overhead rate is from an EPA/OPPE guide (EPA, 1992).



annual savings to the burden estimates described above results in an estimated 1.25 per report for providing industry and public assistance and 3.13 per report for data processing and systems support.

Under TSCA, EPA must review a number of the CBI claims received, including some associated with submissions under this rule, within 90 days after receipt. EPA estimates that it will take 8 hours (6 attorney hours and 2 technical staff hours) to review each CBI claim substantiation submitted and make a confidentiality determination. This is based on the estimate for reviewing CBI substantiation letters and making final confidentiality determinations under 4 CFR part 2, as described in EPA ICR No. 1665.12 (OMB Control No 2020-0003) (EPA, 2013). Under TSCA, EPA must review 100 percent of claims related to chemical identity and at least 25 percent (a representative sample) of all other claims where substantiation is required.11 EPA assumes that there will be no claims for chemical identity, as the materials subject to this rule are existing chemicals and would already either have a non-CBI identity or would have an established generic identity. EPA assumes that each reporter claims CBI, therefore EPA must review 25 percent of reports. Therefore, per report received, the EPA labor is 2 hours (6 x 0.25 = 1.5 attorney hours and 2 x 0.25 = 0.5 technical staff hours).

As shown in Table 4-2, EPA estimated a total cost of approximately $533 to administer and process a chemical report.

Table 4-2: Agency Cost Estimate to Administer the Rule (per report)

EPA Activity


Attorney Labor (at $94.61/ hour) Total Labor Cost

Burden (hours)

Cost (2016$)

Burden (hours)

Cost (2016$)

Burden (hours)

Cost (2016$)

Industry/Public Assistance 1.25 $100 0 $0 1.25 $100 Data Processing and Systems Support 3.13 $251 0 $0 3.13 $251

Review of CBI claim substantiations 0.5 $40 1.5 $142 2 $182 Total 4.88 $391 1.5 $142 6.38 $533 Source: EPA, 2003a; EPA, 2013; OPM, 2016.

As explained in Section 2.3.2, there are approximately 750 reporters subject to the rule, submitting one report each reporting year. As shown in Table 4-3, the total Agency hours and costs for the rule are estimated to be 4,785 hours and $399,465 each reporting year. The annualized costs of the rule over the 10-year analysis period are $147,503 with a three percent discount rate and $150,682 with a seven percent discount rate.

11 In satisfying the obligation to review a representative subset of 25 percent of non-chemical identity CBI claims, EPA reviews every fourth submission received that contains non-chemical identity CBI claims. (https://www.epa.gov/tsca-cbi/epa-review-and-determination-cbi-claims-under-tsca)



Table 4-3: Agency Cost and Burden Hour Estimate for the Rule

Year Hours per report

Agency Cost per Report

(2016$)

Total Number of

Reports

Total Discounted Cost (2016$) Burden (hours)

Cost (2016$)

3% Discount Rate

7% Discount

Rate 1 6.38 $533 750 4,785 $399,465 $399,465 $399,465 4 6.38 $533 750 4,785 $399,465 $365,567 $326,082 7 6.38 $533 750 4,785 $399,465 $334,546 $266,180 10 6.38 $533 750 4,785 $399,465 $306,157 $217,282

Total 25.52 $2,132 3,000 19,140 $1,597,860 - - Annualized Cost $147,503 $150,682



5. Total Social Costs

Table 5-1 presents the total social burden and costs of the rule in the first and subsequent years, and the annualized costs discounted over the 10-year period using three and seven percent discount rates. As indicated, the total burden of the rule is expected to be approximately 243,000 hours over the 10-year analysis period, while the annualized costs are expected to be approximately $1.83 million with a three percent discount rate and approximately $1.90 million with a seven percent discount rate.

Table 5-1: Total Social Burden and Cost of the Rule

Yr Burden (Hours) Discounted Costs (2016$) 3% Discount Rate 7% Discount Rate

Industry Agency Total Industry Agency Total Industry Agency Total 1 72,569 4,785 77,354 $5,826,570 $399,465 $6,226,035 $5,826,570 $399,465 $6,226,035 4 50,197 4,785 54,982 $3,695,206 $365,567 $4,060,773 $3,296,089 $326,082 $3,622,171 7 50,197 4,785 54,982 $3,381,637 $334,546 $3,716,183 $2,690,591 $266,180 $2,956,771 10 50,197 4,785 54,982 $3,094,676 $306,157 $3,400,833 $2,196,323 $217,282 $2,413,605 Tot 223,159 19,140 242,299 -

Annualized Costs $1,678,672 $147,503 $1,826,176 $1,746,050 $150,682 $1,896,732

6 BENEFITS


6. Benefits

TSCA, as amended in 2016, specifically calls for an inventory of mercury supply, use, and trade in the United States, in order to identify any manufacturing processes or products that intentionally add mercury. As noted in Chapter 1, EPA requires additional information to fulfill this mandate. The rule will provide EPA with the necessary data to prepare triennial publications of the inventory, and to fulfill TSCA’s requirement to recommend actions to achieve further reductions in mercury use (15 U.S.C. 2607(b)(10)(C)).

Information collected by the rule will be used by the U.S. Government to assist in its implementation of the Minamata Convention, to which the United States is a Party, in particular with respect to mercury supply sources and trade, mercury-added products, manufacturing processes in which mercury is used, and reporting (UNEP. Minamata Convention on Mercury available at http://www.mercuryconvention.org.). The Minamata Convention is a multilateral environmental agreement that has as its objective the protection of human health and the environment from anthropogenic emissions and releases of elemental mercury and mercury compounds.

This chapter qualitatively discusses two types of benefits resulting from the rule: the benefits achieved from providing increased information on mercury and the benefits of reducing mercury use. The rule is an information-collecting rule and does not attempt to reduce a risk related to mercury at a quantifiable level. Accordingly, this benefits analysis does not seek to quantitatively measure the associated benefits, and does not formally identify or define the universe of recipients of these benefits.

6.1 Benefits of Increased Information

The rule provides information on mercury and mercury-added products to which the Agency (and the public) does not currently have access. By enhancing the data supplied to EPA, the Agency will have an increased ability to anticipate industry trends, and the Agency expects to be able to more effectively and expeditiously evaluate any potential concerns posed by mercury and mercury-added products. The more EPA can base its decisions on actual data rather than on assumptions, the better EPA is able to prioritize and tailor its regulatory decisions. Ultimately, enhancing the decision-making process will have positive consequences for human and ecosystem health and will enable a more efficient allocation of EPA’s and society’s resources – particularly important for this persistent, bioaccumulative neurotoxicant chemical.

Furthermore, increasing and improving the amount of available data serves to reduce inefficiencies arising from market failure or asymmetric information. When buyers or sellers do not have perfect information, such as the mercury content of products, rational decision-making cannot occur and a market failure exists. Increased and improved data on the production, sale, and use of mercury and mercury-added products in the United States would allow EPA and others to use the data more effectively as part of reduction and mitigation programs.

6.2 Benefits of Reducing Mercury Use

In the United States, elemental mercury and mercury compounds are used in the manufacture of mercury-added products and certain manufacturing processes. The typical lifecycle of products includes manufacture, distribution in commerce (including transport and storage), use, recovery, and disposal. At any point in the product lifecycle, there is potential for mercury to be released. Globally, the major anthropogenic sources of released elemental mercury are the combustion of coal and use of elemental

6 BENEFITS


mercury in artisanal gold mining (EPA, 1997). Emitted elemental mercury can be transported in the atmosphere on local, regional, and global scales as it cycles through air, land, and water (EPA, 1997). Some of the emitted elemental mercury following deposition and transformation into divalent mercury can be biotransformed into methylmercury (EPA, 1997). Methylmercury can bioaccumulate in fish and marine mammals, some of which are consumed by humans (EPA, 1997).

Mercury is a persistent and bioaccumulative neurotoxicant. Clinically observable neurotoxicity has been observed following exposure to high amounts of mercury (EPA, 1997). Consumption of highly contaminated food also has led to overt mercury neurotoxic effects (EPA, 1997). Generally, the subtlest indicators of methylmercury toxicity are neurological changes (EPA, 1997). Neurotoxic effects at comparatively low doses include subtle decrements in motor skills and sensory ability, while extremely high exposures can cause tremors, inability to walk, convulsions, and death (EPA, 1997). Exposure to mercury can also cause adverse ecological effects in plants, birds, fish, and mammals (EPA, 1997).

Thus, mercury is public health threat, particularly to children, women of child-bearing age, and indigenous populations that rely heavily on fish and marine mammals as part of their diet. Mercury warrants attention due to its long-range atmospheric transport, persistence in the environment, ability to bioaccumulate in ecosystems, and significant negative effect on human health and the environment. According to the World Health Organization (WHO), mercury is a major public health concern; exposure to mercury, even in small amounts, may cause serious health problems, and mercury is a threat to the development of the child in utero and early in life (WHO, 2016).

To the extent that the information gathered through the rule is used to reduce mercury use, benefits to society will result from a reduction in exposure.

7 SMALL ENTITY IMPACT ANALYSIS


7. Small Entity Impact Analysis

This chapter estimates the impact that the rule may have on small entities by examining the relationship between the compliance costs and company sales for small companies.

The Regulatory Flexibility Act (RFA) of 1980, as 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 also are required to examine regulatory alternatives that may reduce adverse economic effects on significantly impacted small entities. The RFA requires agencies to prepare an initial and final 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 (SISNOSE). 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; and describe the rule requirements to which small entities will be subject and any regulatory alternatives, including exemptions and deferral, that would lessen the rule’s burden on small entities.

This analysis follows EPA guidance on RFA and SBREFA analyses (EPA, 2006b). Per this guidance document, the preferred measure of economic impacts is the “sales test:” annualized compliance costs as a percentage of sales (or revenue or receipts when sales data are not readily available). This measure is termed “cost impact percentage” in the small entity analysis.

The major steps followed in the analysis are described below.

7.1 Select a Relevant Small Business Definition

The RFA relies on the definition of “small business” found in the Small Business Act, which authorizes the Small Business Administration (SBA) to develop definitions for “small business” for industries in each North American Industry Classification System (NAICS) code. These definitions can be based either on a company’s number of employees or its sales, depending on SBA’s criteria for that industry.

For this analysis, the small business thresholds for the 506 parent companies described in Section 2.3 were identified, using the SBA Table of Small Business Size Standards (SBA, 2016) and the parent company’s NAICS code. For companies for which Dun and Bradstreet did not provide a current parent company NAICS code, EPA researched the company website or other market research websites to determine, where possible, the appropriate NAICS code.

7.2 Identify the Small Businesses

To identify the number of firms that are subject to the rule and considered small under SBA size standards, EPA compared the appropriate SBA size definition to the company’s revenue or number of employees, as identified using Dun and Bradstreet or other market research websites.

Of the 506 parent companies that are subject to the rule, 211 companies (42 percent) meet the SBA small business definitions for their respective NAICS classifications. There were 5 companies (0.99 percent) for which not enough information was available to determine whether they meet the small business definition. These results are provided in Table 7-1.



Table 7-1: Percent of SBA-Defined Small and Large Businesses subject to the Rule Population Category Number of Firms Percent

Small Businesses 211 41.70 Large Businesses 290 57.31 Undetermined 5 0.99 Total 506 100%

7.3 Estimate the Cost-to-Sales Ratio for Small Companies

This analysis uses cost impact percentages to measure potential impacts on small parent entities affected by the rule as a percentage of annual revenues or sales, a commonly available and objective measure of a company’s business volume. As is the expected case for this rule, when regulatory costs represent a small fraction of a typical entity’s revenue, the impacts of the regulation are minimal.

To determine the magnitude of any potential adverse impact of the rule on small entities, annualized per-company compliance costs were compared to annual sales. Table 7-2 shows the annualized per company compliance costs for each category of company, at both three and seven percent discount rates.

Table 7-2: Annualized Cost per Reporting Site (2016$)

Year For Elemental Mercury For Mercury Compounds For Both Elemental & Compound

Site reports to: Site reports to: Site reports to: CDR IMERC Neither CDR IMERC Neither CDR IMERC Neither

3 Percent Discount Rate 1 $6,732 $6,867 $6,935 $7,058 $8,810 $8,946 $10,588 $12,475 $12,679 4 $4,612 $4,747 $4,815 $4,562 $6,013 $6,149 $8,092 $9,678 $9,882 7 $4,612 $4,747 $4,815 $4,562 $6,013 $6,149 $8,092 $9,678 $9,882 10 $4,612 $4,747 $4,815 $4,562 $6,013 $6,149 $8,092 $9,678 $9,882

Annual-ized

Costs $2,158 $2,215 $2,244 $2,177 $2,817 $2,874 $3,658 $4,355 $4,441

7 Percent Discount Rate 1 $6,732 $6,867 $6,935 $7,058 $8,810 $8,946 $10,588 $12,475 $12,679 4 $4,612 $4,747 $4,815 $4,562 $6,013 $6,149 $8,092 $9,678 $9,882 7 $4,612 $4,747 $4,815 $4,562 $6,013 $6,149 $8,092 $9,678 $9,882 10 $4,612 $4,747 $4,815 $4,562 $6,013 $6,149 $8,092 $9,678 $9,882

Annual-ized

Costs $2,563 $2,631 $2,665 $2,585 $3,346 $3,414 $4,345 $5,173 $5,275

Source: Costs from Table 3-10 and Table 3-11 of this analysis.

For each of the small or size-undetermined parent companies, EPA took the appropriate annualized cost from Table 7-2 and multiplied it by the number of sites per parent company to determine the total annualized cost per parent company. This cost was compared to the parent’s annual revenue to estimate a percent-of-sales impact. Next, the number and percent of small parent entities incurring cost impact percentages of less than 1%, 1 to 3%, and greater than 3% were calculated. The maximum cost impact percentage was also calculated to illustrate the impact on the “most affected” facility.



As shown in Table 7-2, the highest estimated annualized cost (approximately $5,275) is associated with firms that would report on both elemental mercury and mercury compounds, and who do not report to either CDR or IMERC. In order for that cost to cause a one percent cost-to-sales impact, the company’s revenue would need to be only $527,500. In order for that cost to cause a three percent cost-to-sales impact, the company’s revenue would need to be only $175,800.

Among the companies with available revenue information, this analysis resulted in a finding of no parent companies with an impact of 3 percent or greater, and four parent companies (1.85 percent) with an impact of 1 to 3 percent. This is shown in Table 7-3.

Table 7-3: Summary of Cost-to-Sales Ratios for Parent Companies

Costs at 3 Percent Discount Rate Costs at 7 Percent Discount Rate

Number of Firms

Percent of Small Firms

Number of Firms

Percent of Small Firms

Cost-to-sales ratio of >3% 0 0.00% 0 0.00% Cost-to-sales ratio of 1 to 3% 4 1.85% 4 1.85% Cost-to-sales ratio of <1% 207 95.83% 207 95.83% Undetermined 5 2.31% 5 2.31%

7.4 SISNOSE Assessment SISNOSE Screening

The Regulatory Flexibility Act (RFA) requires an assessment of whether a rule results in “significant (economic) impact on a substantial number of small entities” (SISNOSE) but does not mandate the method to be used for calculating economic impacts nor define the terms “significant” or “substantial.” The EPA guidance document (EPA, 2006b) does not provide a single preferred method for assessing whether the economic impacts are significant or whether the number of entities affected is substantial, but generally recommends setting certain cost impact percentages to determine the significance of the impacts, and a number and/or percentage measure to determine the extent of the impacts. Given that there is no compelling reason to set different thresholds, this analysis uses the thresholds provided in the example matrix from the EPA guidance document as a SISNOSE determination matrix (see Table 7-4).



Table 7-4: SISNOSE Certification Determination Matrix

Economic Impact Number of Small Entities Experiencing Given Impact

Percent of Small Entities Experiencing Given Impact Certification Category

Less than 1% for all small entities Any number Any percent Presume no SISNOSE

certification

1% or greater for one or more small entities

Fewer than 100 Less than 20% Presume no SISNOSE

certification 20% or more Uncertain

100-999 Less than 20% Presume no SISNOSE


1,000 or more Any percent Uncertain

3% or greater for one or more small entities

Fewer than 100 Less than 20% Presume no SISNOSE


100-999 Less than 20% Uncertain

20% or more Presume ineligible for SISNOSE certification

1,000 or more Any percent Presume ineligible for SISNOSE certification

Using this methodology and reading down the rows of the table:

Condition 1: If impacts are less than 1%, a certification that the rule will not result in a significant (economic) impact on a substantial number of small entities can be made no matter the number of small entities affected.

Condition 2: If impacts of greater than or equal to 1% are incurred by some entities, the SISNOSE certification depends on the extent of impacts: if 20% or more of small entities or 1,000 or more small entities incur impacts, the rule may be ineligible for a “no SISNOSE” certification.

Note that the quantitative analysis presented above yields results that meet Condition 2, with some expected impacts of greater than 1% to comply with the mercury reporting requirements under the rule.

Overall SISNOSE Assessment

The small entity analysis above demonstrates that only 4 small entities assessed (1.85%) are expected to incur impacts of one percent or greater. Furthermore, even if the entities whose status is “undetermined” were assumed to be impacted small entities, this would result in only 9 entities (4.17 %). This is well below the thresholds of 1,000 entities and 20% presented in Table 7-4.

In conclusion, in accordance with EPA guidance, the rule is not expected to have a significant (economic) impact on a substantial number of small entities (no SISNOSE). Therefore, EPA certifies that this action will not have a significant economic impact on a substantial number of small entities.

8 OTHER IMPACT Analyses


8. Other Impact Analyses

Several statutes and executive orders (EOs) pertain to the mercury inventory reporting rule. This chapter presents statements discussing paperwork reduction, unfunded mandates, regulatory planning and review, tribal governments, children’s health, and environmental justice, among others.

8.1 Employment Impact Analysis

While a standalone analysis of employment impacts is not included in a standard cost-benefit analysis12, EPA typically examines employment impacts for regulations promulgated under TSCA. Executive Order 13563 states, “[o]ur regulatory system must protect public health, welfare, safety, and our environment while promoting economic growth, innovation, competitiveness, and job creation” (emphasis added). For the rule, EPA presents a qualitative assessment of the potential for employment impacts in the short and long term for firms that might be directly or indirectly affected by the rule.

Regulatory employment impacts are difficult to disentangle from other economic changes affecting employment decisions that occur over the timeframe of analysis and across affected regions and industries. Labor market responses to regulation are complex. They depend on labor demand and supply elasticities and possible labor market imperfections (e.g. wage stickiness, structural unemployment, etc.). The observability of an employment response may depend on the unit of measurement. Possible measured units include the number of jobs, job years, types of job, hours worked, and earnings. Net employment impacts are composed of a mix of potential declines and gains in different areas of the economy including the directly regulated sector, the environmental protection sector, upstream and downstream sectors, and ultimately all affected sectors. In light of these complexities, economic theory provides a constructive framework for analysis. The theory is explained below, followed by a quick summary of empirical findings in the rapidly expanding literature relevant to employment effects of environmental regulation. The final subsections present qualitative assessments of the employment impacts of the current rulemaking.

Theory

Microeconomic theory describes how firms adjust their use of inputs in response to changes in economic conditions.13 Labor is one of many inputs to production, along with capital, energy, and materials. In competitive markets, firms choose inputs and outputs to maximize profit as a function of market prices and technological constraints.14,15 Berman and Bui (2001) adapt this model to analyze how environmental regulations affect the quantity of labor demanded by regulated firms.16 They model environmental regulation as effectively requiring certain factors of production, such as pollution abatement capital, at levels that firms would not otherwise choose. Berman and Bui (2001) model two components that drive changes in firm-level labor demand: output effects and substitution effects.17 Regulation affects the profit-

12 Except to the extent that labor costs are part of total costs in a cost-benefit analysis. 13 See Layard and Walters (1978), a standard microeconomic theory textbook, for a discussion. 14 See Hamermesh (1993), Ch. 2, for a derivation of the firm’s labor demand function from cost-minimization. 15 In this framework, labor demand is a function of quantity of output and prices (of both outputs and inputs). 16 Morgenstern, Pizer et al. (2002) develop a similar model. 17 The authors also discuss a third component, the impact of regulation on factor prices, but conclude that this effect is unlikely to

be important for large competitive factor markets, such as labor and capital. Morgenstern, Pizer et al. (2002) use a very similar model, but they break the employment effect into three parts: 1) a demand effect; 2) a cost effect; and 3) a factor-shift effect.



maximizing quantity of output by changing the marginal cost of production. If a regulation causes marginal cost to increase, it will place upward pressure on output prices, leading to a decrease in demand for output, and resulting in a decrease in production. The output effect describes how, holding labor intensity constant, a decrease in production causes a decrease in labor demand. As noted by Berman and Bui, although many assume that regulations must increase marginal cost, it need not be the case. A regulation could induce a firm to upgrade to less polluting and more efficient equipment or production processes that lower the marginal cost of production.

The substitution effect describes how, holding output constant, regulation affects the labor-intensity of production. Although increased environmental regulation may increase the use of pollution control equipment and energy to operate that equipment, or otherwise change production processes, the impact on labor demand is ambiguous. For example, pollution abatement technologies or materials that alter the production process, requirements for inspection and certification, and required paperwork and recordkeeping may affect the amount of labor necessary to produce a unit of output. Berman and Bui model the substitution effect as the effect of regulation on pollution control equipment and expenditures and the corresponding change in the labor-intensity of production. In summary, as output and substitution effects may be positive or negative, economic theory alone cannot predict the direction of the net effect of environmental regulation on labor demand at the level of the regulated firm. The rule requires manufacturers (including importers) and processors of mercury and mercury-added products to electronically report to EPA certain information. This requirement may impact labor demand at regulated firms through increased labor needs.

In addition to changes to labor demand in the regulated industry, net employment impacts encompass changes in other related sectors throughout the U.S. economy. For example, this rule will increase the amount of data on elemental mercury and mercury compounds available for Federal agency risk management programs, state and local government programs, and private sector and non-governmental organization researchers. As a result, this increased amount of available data may increase labor demand at organizations that analyze the data. Therefore, it is important to consider the net effect of compliance actions on employment across multiple sectors or industries. If the U.S. economy is at full employment, even a large-scale environmental regulation is unlikely to have a noticeable impact on aggregate net employment.18 Instead, labor in affected sectors would primarily be reallocated from one productive use to another, and net national employment effects from environmental regulation would be small and transitory (e.g., as workers move from one job to another).19 Some workers may retrain or relocate in anticipation of new requirements or require time to search for new jobs, while shortages in some sectors or regions could bid up wages to attract workers. These adjustment costs can lead to local labor disruptions. Although the net change in the national workforce is expected to be very small, localized reductions in employment may adversely impact individuals and communities just as localized increases may have positive impacts. If, on the other hand, the economy is operating at less than full employment, economic theory does not clearly indicate the direction or magnitude of the net impact of environmental regulation on employment (Schmalensee and Stavins 2011). For example, the Congressional Budget Office considered EPA’s Mercury Air Toxics Standards and regulations for industrial boilers and process

18 “Full employment describes the level of employment consistent with an economy that is making full use of its productive

resources. It does not mean zero unemployment”, from the Federal Reserve Bank of Chicago: “The Federal Reserve’s Dual Mandate: Frequently Asked Questions”, < https://chicagofed.org/publications/speeches/our-dual-mandate-faqs>.

19 Arrow, Cropper et al. 1996; see discussion on bottom of p. 8. In practice, distributional impacts on individual workers can be important, as discussed in later paragraphs of this section.



heaters as potentially leading to short-run net increases in economic growth and employment, driven by capital investments for compliance with the regulations (Congressional Budget Office, 2011).

Adding to the unknowns and complex movements of labor within the regulated sector and across the larger U.S. economy, effects on employment are also likely to change over time. Employment in some sectors will be affected at the time of promulgation or when a regulation becomes effective, while others may be affected further into the future. In addition, environmental regulation may affect labor supply and productivity. In particular, pollution and other environmental risks may impact labor productivity or employees’ ability to work.20 The empirical findings regarding labor supply are reviewed below.

Empirical Findings

The labor economics literature contains an extensive body of peer-reviewed empirical work analyzing various aspects of labor demand, relying on the theoretical framework discussed in the preceding section.21 This work focuses primarily on effects of employment policies such as labor taxes and minimum wages.22 In contrast, the peer-reviewed empirical literature specifically estimating employment effects of environmental regulations is growing but is more limited. This section presents an overview of the latter.

Empirical studies, such as Berman and Bui (2001) and Ferris, Shadbegian et al. (2014), suggest that regulation-induced net employment impacts may be zero or slightly positive but small in the regulated sector. Gray, Shadbegian et al. (2014) find that pulp mills that had to comply with both the air and water regulations in EPA’s 1998 “Cluster Rule” experienced relatively small, and not always statistically significant, decreases in employment. Other research on regulated sectors suggests that employment growth may be lower in more regulated areas (Greenstone (2002);Walker (2011; 2013); Kahn and Mansur (2013)). However, since these latter studies compare more regulated to less regulated counties this methodological approach likely overstates employment impacts to the extent that regulation causes plants to locate in one area of the country rather than another, which would lead to “double counting” of the employment impacts. List, Millimet et al. (2003) find some evidence that this type of geographic relocation may be occurring.

The empirical literature on environmental regulatory employment impacts focuses primarily on labor demand. However, there is a nascent literature focusing on regulation-induced effects on labor productivity and supply.23 Although this literature faces empirical challenges, researchers have found that air quality improvements lead to reductions in lost work days (e.g., Ostro (1987)). Limited evidence suggests worker productivity may also improve when pollution is reduced. Graff Zivin and Neidell (2012) used detailed worker-level productivity data from 2009 and 2010, paired with local ozone air quality monitoring data for one large California farm growing multiple crops, with a piece-rate payment structure. Their quasi-experimental structure identifies an effect of daily variation in monitored ozone levels on productivity. They find “ozone levels well below federal air quality standards have a significant impact on productivity: a 10 parts per billion (ppb) decreases in ozone concentrations increases worker productivity by 5.5 percent.” (Graff Zivin and Neidell, 2012).

20 E.g. Graff Zivin and Neidell (2012). 21 Again, see Hamermesh (1993) for a detailed treatment. 22 See Ehrenberg and Smith (2000), Chapter 4: “Employment Effects: Empirical Estimates” for a concise overview. 23 For a recent review see Graff Zivin and Neidell (2012).



Conclusions Regarding the Literature. This section has outlined the challenges associated with estimating regulatory effects on both labor demand and supply for specific sectors. These challenges make it difficult to estimate net national employment estimates that would appropriately capture the way in which costs, compliance spending, and environmental benefits propagate through the macro-economy. Overall, the peer-reviewed literature does not contain evidence that environmental regulation has a large impact on net employment (either negative or positive) in the long run across the whole economy.

Section 8.1.3 presents a qualitative assessment of immediate and short term employment impacts of the current rulemaking. Section 8.1.4 describes longer term impacts.

Qualitative Assessment: Immediate and Short-term Employment Impacts

Firms impacted by the rule are manufacturers (including importers) of mercury and mercury-added products, and those that otherwise intentionally use mercury in a manufacturing process. The initial activities that firms may need to perform to comply with the rule are rule familiarization, form completion, electronic reporting, and recordkeeping. The initial year costs per firm is shown in Table 8-1, and costs per firm in the subsequent years of the economic analysis period are shown in Table 8-2. See 2.3.3 for a discussion of how per-firm costs were estimated. The net effect on short-term labor demand in the regulated sector is ambiguous but expected to be small.

Table 8-1: Summary of Costs per Reporter in First Year (2016$) Reporter Category Number of Firms First Year Costs

Reporters with Elemental Mercury IMERC reporters 318 $6,867 Other reporters 137 $6,935 Reporters with Mercury Compounds CDR reporters 1 $7,058 Other reporters 278 $8,946 Reporters with Both Elemental Mercury and Mercury Compounds CDR reporters 2 $10,588 Other reporters 14 $12,679



Table 8-2: Summary of Costs per Reporter in Subsequent Reporting Years (2016$)

Reporter Category Number of Firms Subsequent Year Costs Annualized Costs

3% 7% Reporters with Elemental Mercury IMERC reporters 318 $4,747 $2,215 $2,631 Other reporters 137 $4,815 $2,244 $2,665 Reporters with Mercury Compounds CDR reporters 1 $4,562 $2,177 $2,585 Other reporters 278 $6,149 $2,874 $3,414 Reporters with Both Elemental Mercury and Mercury Compounds CDR reporters 2 $8,092 $3,658 $4,345 Other reporters 14 $9,882 $4,441 $5,275

Qualitative Assessment: Longer-term Employment Impacts

EPA is not anticipating any significant longer term cost impacts on regulated entities, and therefore the rule is not expected to have any significant longer term employment effects.

Summary of Qualitatively Assessed Employment Impacts

The direction of change in employment in the regulated and environmental sectors from the rulemaking is ambiguous. This is true for both the short term or first year employment impacts and the long term or subsequent year employment impacts. However, the increase in total costs, labor costs, and labor hours per firm as a consequence of this rule is reasonably small, thus EPA expects employment impacts to be small as well.

8.2 Paperwork Reduction Act (PRA)

According to the Paperwork Reduction Act (PRA), 44 USC 3501 et seq., an agency may not conduct or sponsor, and a person is not required to respond to, a collection of information that requires Office of Management and Budget (OMB) approval under the PRA, unless it has been approved by OMB and displays a currently valid OMB control number. The information collection requirements related to this action have already been approved by OMB pursuant to the PRA under OMB control number 2070-0207 (EPA ICR No. 2567.02). The rule will impose a burden requiring additional OMB approval.

This section estimates the burden and costs for both the respondents and the Agency associated with the recordkeeping and reporting requirements of the rule. In this context, the term “burden” is interpreted as the total time, effort, or financial resources expended by people to generate, maintain, retain, disclose, or provide information to or for a Federal agency. This includes the time needed by regulated entities to review instructions and to develop, acquire, install, and use technology and systems to collect, validate, verify, and disclose information. Time taken to adjust existing ways to comply with any previously applicable instructions and requirements and to train personnel to respond to the information collection task is also included. In this section, burden hours for both the industry respondents and the government are estimated.

Table 8-3 presents a summary of the total burden and costs to industry associated with the rule over the first three years of its promulgation. Years 2 and 3 are not data collection years, so there is no cost



associated with the rule during these years. The data used to populate this table are explained in greater detail in Chapter 2.3.3.

Table 8-3: Industry Burden Estimates for the Rule

Year Reporting Population

(sites)

Compliance Determ.

(hours per site)

Rule Familiar. Burden (hours

per site)

Form Completion

(average hours per

site)

CBI Substan-

tiation (hours

per site)

Record Keeping Burden

(hours per site)

Electronic Reporting

Burden (hours per

site)


1 750 2.5 28 57.80 6 1 1.46 96.76 2 750 0 0 0 0 0 0 0 3 750 0 0 0 0 0 0 0

Average 750 0.83 9.33 19.27 2 0.33 0.49 32.25

8.3 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 or the private sector. Based on EPA’s experience with similar information collection rules, state, local, and tribal governments have not been affected by the reporting requirement, and EPA does not have any reason to believe that any state, local, or tribal government will be affected by the rulemaking.

8.4 Executive Order 13132 – Federalism

Under Executive Order 13132, “Federalism” (64 FR 43255, August 10, 1999), EPA has determined that the rule does not have “federalism implications” because it will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in the executive order. The rule establishes reporting and recordkeeping requirements that apply to manufacturers (including importers) and processors of certain chemicals. Because EPA has no information to indicate that any state or local government manufactures (including imports) or processes mercury, the rule does not apply directly to states and localities and will not affect state and local governments. Thus, EO 13132 does not apply to the rule.

8.5 Executive Order 13175 – Consultation and Coordination with Indian Tribal Governments

As required by Executive Order 13175, entitled Consultation and Coordination with Indian Tribal Governments (65 FR 67249, November 9, 2000), EPA has determined that the rule does not have tribal implications because it will not have any effect 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. Thus, EO 13175 does not apply to the rule.



8.6 Executive Order 13045 – Children’s Health

Executive Order 13045, “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), requires that Federal agencies examine the impacts of each regulatory action on children for any economically significant regulation (as defined by Executive Order 12866) that the Agency has reason to believe may disproportionately affect children.

EPA interprets EO 13045 as applying only to those regulatory actions that concern health or safety risks, such that the analysis required under section 5-501 of the EO has the potential to influence the regulation. The rule does not establish an environmental standard intended to mitigate health or safety risks and will not have an annual effect on the economy of $100 million or more, nor does it otherwise have a disproportionate effect on children. Nevertheless, the information obtained from the reporting required by this rule will be used to inform the Agency’s decision-making process regarding chemicals to which children may be disproportionately exposed. This information will also assist the Agency and others in determining whether the chemicals in the rule present potential risks, allowing the Agency and others to take appropriate action to investigate and mitigate those risks.

8.7 Executive Order 12898 – Environmental Justice

Executive Order 12898, “Federal Actions to Address Environmental Justice in Minority Populations and Low Income Populations” (59 FR 7629, February 16, 1994), establishes Federal executive policy on environmental justice. Its main provision directs Federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations and low-income populations in the United States.

The Agency believes that the information collected under this rule, if finalized, will assist EPA and others in determining the potential hazards and risks associated with elemental mercury and mercury compounds. Although not directly impacting environmental justice-related concerns, this information will enable the Agency to better protect human health and the environment, including in low-income and minority communities.

The rule is directed at all mercury-added products that are manufactured or imported into the United States. All consumers of these chemicals and the products made from them and all workers who come into contact with these chemicals could benefit if data regarding the chemicals’ health and environmental effects were developed. Therefore, it does not appear that the costs and the benefits of the rule will be disproportionately distributed across different geographic regions or among different categories of individuals.

8.8 Executive Order 13211 – Energy Supply, Distribution, or Use

The rule is not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001), because it is not a significant regulatory action under Executive Order 12866.

8.9 National Technology Transfer and Advancement Act

Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law No. 104-113, 12(d) (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 otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards.

The rule does not involve technical standards. Therefore, EPA is not considering the use of any voluntary consensus standards.

8.10 Executive Order 13771 – Reducing Regulations and Controlling Regulatory Costs

Under Executive Order 13771 (82 FR 9339, February 3, 2017), for each new significant regulatory action that imposes costs, EPA is to also issue two “deregulatory” actions. This action is not expected to be an Executive Order 13771 regulatory action because this action is not significant under Executive Order 12866.

1

APPENDIX A

EA for the Proposed Reporting Requirements for the TSCA Mercury Inventory ▌pg. A-1

APPENDIX A - NAICS of Regulated Parent Companies

NAICS Code NAICS Description Number of Regulated

Parent Companies

112112 Cattle Feedlots 1 113110 Timber Tract Operations 1 212111 Bituminous Coal and Lignite Surface Mining 7 212112 Bituminous Coal Underground Mining 1 212221 Gold Ore Mining 10 212222 Silver Ore Mining 3 212234 Copper Ore and Nickel Ore Mining 2 212299 All Other Metal Ore Mining 1 212312 Crushed and Broken Limestone Mining and Quarrying 1 212391 Potash, Soda, and Borate Mineral Mining 1 212392 Phosphate Rock Mining 1 212399 All Other Nonmetallic Mineral Mining 1 213112 Support Activities for Oil and Gas Operations 1 213113 Support Activities for Coal Mining 3 213114 Support Activities for Metal Mining 5 221118 Other Electric Power Generation 1 236115 New Single-family Housing Construction (Except For-Sale Builders) 2 237110 Water and Sewer Line and Related Structures Construction 1 237990 Other Heavy and Civil Engineering Construction 1 238210 Electrical Contractors and Other Wiring Installation Contractors 1 238990 All Other Specialty Trade Contractors 1 311221 Wet Corn Milling 1 312120 Breweries 1 314999 All Other Miscellaneous Textile Product Mills 1 323113 Commercial Screen Printing 1 324110 Petroleum Refineries 2 325110 Petrochemical Manufacturing 1 325180 Other Basic Inorganic Chemical Manufacturing 16 325194 Cyclic Crude, Intermediate, and Gum and Wood Chemical Manufacturing 1 325199 All Other Basic Organic Chemical Manufacturing 2 325211 Plastics Material and Resin Manufacturing 11 325212 Synthetic Rubber Manufacturing 2 325220 Artificial and Synthetic Fibers and Filaments Manufacturing 1 325311 Nitrogenous Fertilizer Manufacturing 5 325312 Phosphatic Fertilizer Manufacturing 2 325320 Pesticide and Other Agricultural Chemical Manufacturing 3 325412 Pharmaceutical Preparation Manufacturing 12 325414 Biological Product (except Diagnostic) Manufacturing 1 325510 Paint and Coating Manufacturing 2 325520 Adhesive Manufacturing 2 325612 Polish and Other Sanitation Good Manufacturing 1 325620 Toilet Preparation Manufacturing 1 325920 Explosives Manufacturing 1 325991 Custom Compounding of Purchased Resins 1 325992 Photographic Film, Paper, Plate and Chemical Manufacturing 1 325998 All Other Miscellaneous Chemical Product and Preparation Manufacturing 5 326199 All Other Plastics Product Manufacturing 2

APPENDIX A



Parent Companies

326211 Tire Manufacturing (except Retreading) 3 326299 All Other Rubber Product Manufacturing 1 327110 Pottery, Ceramics, and Plumbing Fixture Manufacturing 1 327120 Clay Building Material and Refractories Manufacturing 1 327211 Flat Glass Manufacturing 1 327212 Other Pressed and Blown Glass and Glassware Manufacturing 2 327213 Glass Container Manufacturing 2 327390 Other Concrete Product Manufacturing 1 327410 Lime Manufacturing 1 331110 Iron and Steel Mills and Ferroalloy Manufacturing 18 331210 Iron and Steel Pipe and Tube Manufacturing from Purchased Steel 1 331221 Rolled Steel Shape Manufacturing 2 331313 Alumina Refining and Primary Aluminum Production 2 331410 Nonferrous Metal (except Aluminum) Smelting and Refining 5 331420 Copper Rolling, Drawing, Extruding, and Alloying 2

331492 Secondary Smelting, Refining, and Alloying of Nonferrous Metal (except Copper and Aluminum) 2

331511 Iron Foundries 2 331513 Steel Foundries (except Investment) 1 332119 Metal Crown, Closure, and Other Metal Stamping (except Automotive) 1 332311 Prefabricated Metal Building and Component Manufacturing 1 332312 Fabricated Structural Metal Manufacturing 1 332322 Sheet Metal Work Manufacturing 1 332710 Machine Shops 1 332911 Industrial Valve Manufacturing 2 332999 All Other Miscellaneous Fabricated Metal Product Manufacturing 1 333120 Construction Machinery Manufacturing 1 333132 Oil and Gas Field Machinery and Equipment Manufacturing 1 333242 Semiconductor Machinery Manufacturing 2 333244 Printing Machinery and Equipment Manufacturing 1 333249 Other Industrial Machinery Manufacturing 1 333316 Photographic and Photocopying Equipment Manufacturing 1 333318 Other Commercial and Service Industry Machinery Manufacturing 6

333413 Industrial and Commercial Fan and Blower and Air Purification Equipment Manufacturing 1

333415 Air Conditioning- and Warm Air Heating Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing 3

333611 Turbine and Turbine Generator Set Unit Manufacturing 1 333612 Speed Changer, Industrial High Speed- Drive and Gear Manufacturing 1 333911 Pump and Pumping Equipment Manufacturing 1 333924 Industrial Truck, Tractor, Trailer and Stacker Machinery Manufacturing 1 334111 Electronic Computer Manufacturing 3 334112 Computer Storage Device Manufacturing 1 334118 Computer Terminal and Other Computer Peripheral Equipment Manufacturing 8 334210 Telephone Apparatus Manufacturing 1

334220 Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing 1

334310 Audio and Video Equipment Manufacturing 5 334413 Semiconductor and Related Device Manufacturing 2 334417 Electronic Connector Manufacturing 1

APPENDIX A



Parent Companies

334419 Other Electronic Component Manufacturing 5 334510 Electromedical and Electrotherapeutic Apparatus Manufacturing 3

334511 Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing 2

334512 Automatic Environmental Control Manufacturing for Residential, Commercial and Appliance Use 2

334513 Instruments and Related Products Manufacturing for Measuring, Displaying, and Controlling Industrial Process Variables 6

334515 Instrument Manufacturing for Measuring and Testing Electricity and Electrical Signals 5

334516 Analytical Laboratory Instrument Manufacturing 6 334519 Other Measuring and Controlling Device Manufacturing 3 335110 Electric Lamp Bulb and Part Manufacturing 18 335121 Residential Electric Lighting Fixture Manufacturing 7 335122 Commercial, Industrial and Institutional Electric Lighting Fixture Manufacturing 6 335129 Other Lighting Equipment Manufacturing 7 335221 Household Cooking Appliance Manufacturing 2 335222 Household Refrigerator and Home Freezer Manufacturing 1 335311 Power, Distribution and Specialty Transformer Manufacturing 1 335312 Motor and Generator Manufacturing 1 335313 Switchgear and Switchboard Apparatus Manufacturing 1 335314 Relay and Industrial Control Manufacturing 6 335911 Storage Battery Manufacturing 5 335912 Primary Battery Manufacturing 2 335931 Current Carrying- Wiring Device Manufacturing 2 335999 All Other Miscellaneous Electrical Equipment and Component Manufacturing 1 336111 Automobile Manufacturing 11 336120 Heavy Duty Truck Manufacturing 1 336211 Motor Vehicle Body Manufacturing 1 336213 Motor Home Manufacturing 3 336214 Travel Trailer and Camper Manufacturing 1 336320 Motor Vehicle Electrical and Electronic Equipment Manufacturing 5 336360 Motor Vehicle Seating and Interior Trim Manufacturing 1 336390 Other Motor Vehicle Parts Manufacturing 6 336411 Aircraft Manufacturing 2 336412 Aircraft Engine and Engine Parts Manufacturing 2 336612 Boat Building 1 336999 All Other Transportation Equipment Manufacturing 1 337127 Institutional Furniture Manufacturing 1 337910 Mattress Manufacturing 1 339112 Surgical and Medical Instrument Manufacturing 5 339114 Dental Equipment and Supplies Manufacturing 3 339930 Doll, Toy, and Game Manufacturing 1 339950 Sign Manufacturing 9 339992 Musical Instrument Manufacturing 1

423430 Computer and Computer Peripheral Equipment and Software Merchant Wholesalers 2

423440 Other Commercial Equipment Merchant Wholesalers 1 423450 Medical, Dental, and Hospital Equipment and Supplies Merchant Wholesalers 2 423490 Other Professional Equipment and Supplies Merchant Wholesalers 4

APPENDIX A



Parent Companies

423610 Electrical Apparatus and Equipment, Wiring Supplies, and Related Equipment Merchant Wholesalers 13

423620 Household Appliances, Electric Housewares, and Consumer Electronics Merchant Wholesalers 1

423690 Other Electronic Parts and Equipment Merchant Wholesalers 2

423730 Warm Air Heating and Air Conditioning- Equipment and Supplies Merchant Wholesalers 4

423930 Recyclable Material Merchant Wholesalers 5 423990 Other Miscellaneous Durable Goods Merchant Wholesalers 1 424210 Drugs and Druggists’ Sundries Merchant Wholesalers 2 424410 General Line Grocery Merchant Wholesalers 1 424510 Grain and Field Bean Merchant Wholesalers 1 424690 Other Chemical and Allied Products Merchant Wholesalers 6 424910 Farm Supplies Merchant Wholesalers 1 441110 New Car Dealers 1 443142 Electronics Stores 1 453998 All Other Miscellaneous Store Retailers (except Tobacco Stores) 1 484110 General Freight Trucking, Local 1 511210 Software Publishers 3 517911 Telecommunications Resellers 1 523120 Securities Brokerage 1 523910 Miscellaneous Intermediation 2 525910 Open End- Investment Funds 8 525990 Other Financial Vehicles 3 532490 Other Commercial and Industrial Machinery and Equipment Rental and Leasing 2 541330 Engineering Services 2 541511 Custom Computer Programming Services 1 541512 Computer Systems Design Services 6 541618 Other Management Consulting Services 1 541690 Other Scientific and Technical Consulting Services 1

541712 Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology) 5

541890 Other Services Related to Advertising 1 541990 All Other Professional, Scientific and Technical Services 1 551111 Offices of Bank Holding Companies 2 551112 Offices of Other Holding Companies 17 561499 All Other Business Support Services 3 562112 Hazardous Waste Collection 1 562211 Hazardous Waste Treatment and Disposal 12 562213 Solid Waste Combustors and Incinerators 1 562219 Other Nonhazardous Waste Treatment and Disposal 3 562920 Materials Recovery Facilities 5 621111 Offices of Physicians (except Mental Health Specialists) 1 811211 Consumer Electronics Repair and Maintenance 1

TOTAL 506

APPENDIX B

EA for the Proposed Reporting Requirements for the TSCA Mercury Inventory ▌pg. B-1

APPENDIX B - 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 2016 dollars.

The fully loaded unit labor cost for managerial, professional/technical, and clerical labor in the regulated industry and for EPA staff is 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 employed to estimate the fully loaded unit labor costs for each labor category and presents the results of the analysis.

B.1 Derivation of Industry Unit Wage Rates

Wages and fringe benefit data for managerial, professional/technical, and clerical labor are from the BLS Employer Costs for Employee Compensation (ECEC) historical data for December 2016 (BLS, 2017a).24 For attorney, the wage rate was taken from the BLS Occupational Employment Statistics (OES) May 2016 National Industry-Specific Occupational Employment and Wage Estimates for Sectors 31, 32, and 33 – Manufacturing and SOC Code 23-1011 – Lawyers (BLS, 2017b).

The costs of fringe benefits such as paid leave and insurance, specific to each labor category, are taken from the same BLS report (BLS, 2017a). Fringe benefits as a percentage of wages are calculated separately for each labor category. For example, the wage rate for professional/technical labor in 2016 was $45.66, and the average fringe benefit was $24.98.25 Therefore, fringe benefits as a percentage of wages were $24.98/$45.66 or approximately 54.71 percent (see Exhibit B-1). Since the fringe benefits for attorney were not available from the BLS report, EPA applied the managerial fringe benefit to wage ratio to this wage as well.

An additional loading factor of 17 percent is applied to wages to account for overhead.26 This approach is used for consistency with Office of Pollution Prevention and Toxics (OPPT) economic analyses for two major rulemakings: Wage Rates for Economic Analyses 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 is added to the benefits loading factor, and the total is then applied to the base wage to derive the fully loaded wage. For example, fully loaded wage for professional/technical labor in 2016 is $45.66 × (1+ 0.5471 + 0.17) = $78.54.

24 Past economic analyses used ECEC data series specific to white-collar workers in the manufacturing sector. However, those data sets were discontinued in March 2007, and these historical data were the best alternative. In a phone conversation (February 11, 2009), a BLS employee could not identify a better data set to use.

25 Past economic analyses have used the term “technical” labor. Here the category is called “professional/technical” labor, to make clear how it relates to BLS categories. In 2004, BLS changed from the Occupational Classification System, OCS, to the Standard Occupational Classification system, SOC. In the process, the “Professional specialty and technical” category became the “Professional and related” category. However, the coverage of the old and new occupational groups is approximately the same. See the BLS article, “Comparing Current and Former Industry and Occupation ECEC Series” (Weinstein and Loewenstein, 2004).

26 The change was used in the 2003 PMN Significant New Use Rule (SNUR) economic analysis (EPA, 2003b). In some earlier reports, the 17 percent had been applied to wages-plus-fringe benefits.

APPENDIX B


Fully loaded costs for attorney, managerial, and clerical labor are calculated in a similar manner, as shown in Exhibit B-1.

Exhibit B-1 Derivation of Loaded Industry Wage Rates (2016$)

Labor Category

Data Source for Wage Information Date

Wage Fringe Benefit

Fringes as % wage

Overhead as %

wage1

Fringe + overhead

factor Loaded Wages

(a) (b) (c)=(b)/(a) (d) (e)=(c)+(d)+1 (f)=(a)x(e)

Attorney

Wage: BLS OES, Occupational Employment and Wages, 23-1011 Lawyers2 Fringe: BLS ECEC, Private Manufacturing industries, “Management, business, and financial occupations”3

May 16 $67.65 -- 49.21% 17% 1.66 $112.30

Managerial

BLS ECEC, Private Manufacturing industries, “Management, business, and financial occupations”3

Dec 16 $50.09 $24.65 49.21% 17% 1.66 $83.15

Professional/Technical

BLS ECEC, Private Manufacturing industries, “Professional and related occupations“3

Dec 16 $45.66 $24.98 54.71% 17% 1.72 $78.54

Clerical

BLS ECEC, Private Manufacturing industries, “Office and administrative support occupations”3

Dec 16 $20.29 $10.52 51.85% 17% 1.69 $34.29

Notes: 1 An overhead rate of 17% was used based on assumptions in Rice (2002) and U.S. EPA (2002). Sources: 2 BLS Occupational Employment Statistics (National Industry-Specific Employment and Wage Estimates), May 2016 (BLS, 2017b) 3 Employer Costs for Employee Compensation Supplementary Tables Historical Data December 2006 – December 2016, US Bureau of Labor Statistics, (BLS, 2017a).

B.2 Derivation of Agency Unit Wage Rates

Unit wage rates for EPA staff are calculated based on annual Federal salaries for the Washington-Baltimore area published by the Office of Personnel Management (OPM) and effective January 2016 (OPM, 2016). The average salary for one full-time equivalent (FTE) technical/professional staff member is estimated as the salary for a GS-13 Step 5 employee, which is $50.04 hourly without fringe benefits

APPENDIX B


and overhead costs. In order to derive the fully loaded salary, EPA multiplied the annual salary by an assumed loading factor of 1.6 to reflect Federal fringe benefits and overhead, which results in a fully loaded wage rate of $80.06 (see Exhibit B-2).

The Agency loading factor of 1.6 is from an EPA guide entitled Instructions for Preparing Information Collection Requests (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 document supporting 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 Information Collection Requests (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 are shown in Exhibit B-2.

Exhibit B-2: Derivation of Loaded Agency Wage Rates (2016$)

Labor Category

Data Source for Wage

Information Date

Wage ($ per hour)

Fringe Benefit

Fringes as % wage

Overhead as % wage

Fringe + overhead

factor Loaded Wages

($ per hour)

(a) (b) (c)=(b)/(a) (d) (e)=(c)+(d)+1 (f)=(a)x(e)

EPA technical staff FTE

OPM Washington-Baltimore-

Northern Virginia, DC-MD-PA-VA-

WV, area, GS-13 Step 5 pay rates

Jan-16 $50.04 Included in 60%

overhead N/A 60% a 1.6 $80.06

EPA attorney staff FTE

OPM Washington-Baltimore-

Northern Virginia, DC-MD-PA-VA-

WV, area, GS-14 Step 5 pay rates

Jan-16 $59.13 Included in 60%

overhead N/A 60% a 1.6 $94.61

Notes: a The 60% fringe-and-overhead rate is from an EPA guide, Instructions for Preparing Information Collection Requests (ICRs) (EPA, 1992, page 30, footnote 9). Source: OPM, 2016

APPENDIX C

EA for the Proposed Reporting Requirements for the TSCA Mercury Inventory ▌pg. C-1

APPENDIX C – References

Applegate, J.S. (1991). “The Perils of Unreasonable Risk: Information, Regulatory Policy, and Toxic Substances Control.” Columbia Law Review 91(2): 261-333.

Arrow, K. J., M. L. Cropper, et al. (1996). Benefit-Cost Analysis in Environmental, Health, and Safety Regulation: A Statement of Principles. Available at http://www.hks.harvard.edu/fs/rstavins/Papers/Benefit%20Cost%20Analysis%20in%20Environmental.AEI.1996.pdf. Accessed June 5, 2015.

Berman, E. and L. T. Bui (2001). “Environmental Regulation and Labor Demand: Evidence from the South Coast Air Basin.” Journal of Public Economics, 79, 265 – 295.

Bureau of Labor Statistics (BLS) (2017a). Employer Costs for Employee Compensation (ECEC) Supplemental Tables: December 2016. Available at: http://www.bls.gov/ncs/ect/sp/ecsuptc37.pdf.

Bureau of Labor Statistics (BLS) (2017b). Occupational Employment and Wages, May 2016: 23-1011 Lawyers. Available at http://www.bls.gov/oes/2016/may/oes231011.htm. Accessed April 3, 2017.

Congressional Budget Office (2011). Statement of Douglas W. Elmendorf, Director, before the Senate Budget Committee, “Policies for Increasing Economic Growth and Employment in 2012 and 2013” (November 15). Available at http://www.cbo.gov/sites/default/files/11-15-Outlook_Stimulus_Testimony.pdf.

Dun & Bradstreet (2016). Company Reports. Proprietary Database.

Ehrenberg, R. G. and R. S. Smith (2000). Chapter 4. Modern Labor Economics: Theory and Public Policy, Addison Wesley Longman, Inc.

Ferris, A. E., R. J. Shadbegian, et al. (2014). “The Effect of Environmental Regulation on Power Sector Employment: Phase I of the Title IV SO2 Trading Program.” Journal of the Association of Environmental and Resource Economists 1(4): 521-553.

Graff Zivin, J. and M. Neidell (2012). “The Impact of Pollution on Worker Productivity.” American Economic Review 102(7): 3652-3673.

Gray, W., R. J. Shadbegian, et al. (2014). “Do EPA Regulations Affect Labor Demand? Evidence from the Pulp and Paper Industry.” Journal of Environmental Economics and Management 68: 188-202

Greenstone, M. (2002). “The Impacts of Environmental Regulations on Industrial Activity: Evidence from the 1970 and 1977 Clean Air Act Amendments and the Census of Manufactures.” Journal of Political Economy 110(6): 1175-1219.

Hamermesh, D. S. (1993). Chapter 2. Labor Demand, NJ: Princeton University Press.

Kahn, M. E. and E. T. Mansur (2013). “Do Local Energy Prices and Regulation Affect the Geographic Concentration of Employment?” Journal of Public Economics 101: 105-114.

Konar, S. and M. Cohen. 1997. “Information as Regulation: The Effect of Community Right to Know Laws on Toxic Emissions.” Journal of Environmental Economics and Management 32: 109-124.

Layard, P. R. G. and A. A. Walters (1978). Chapter 9. Microeconomic Theory, McGraw-Hill, Inc.

List, J. A., D. L. Millimet, et al. (2003). “Effects of Environmental Regulations on Manufacturing Plant Births: Evidence from a Propensity Score Matching Estimator.” The Review of Economics and Statistics 85(4): 944-952.

Morgenstern, R. D., W. A. Pizer, et al. (2002). “Jobs Versus the Environment: An Industry-Level Perspective.” Journal of Environmental Economics and Management 43(3):412-436.

Northeast Waste Management Officials’ Association (NEWMOA) (2014). NEWMOA. Mercury-Added Products Database – Caveats & Limitations. Available at

APPENDIX C


http://www.newmoa.org/prevention/mercury/imerc/Notification/caveats.cfm. Last modified on December 19, 2014.

Northeast Waste Management Officials’ Association (NEWMOA) (2015). Multi-State Mercury Products Campaign Summit. December 18, 2015. Available at http://www.newmoa.org/prevention/mercury/imerc/factsheets/MMPC_Summit_2015.pdf

Northeast Waste Management Officials’ Association (NEWMOA) (2016a). State Mercury-added Product Bans & Phase-out Guidance. Available at http://www.newmoa.org/prevention/mercury/imerc/banphaseout.cfm. Last modified on September 12, 2016.

Northeast Waste Management Officials’ Association (NEWMOA) (2016b). Mercury-added Fact Sheets. Available at http://www.newmoa.org/prevention/mercury/imerc/factsheets/ Last modified on January 21, 2016.

Northeast Waste Management Officials’ Association (NEWMOA) (2016c). Mercury-added Products Database. Available at https://imerc.newmoa.org/PublicSearch/NEWMOA_IMERC.aspx#/CustomizedSearch Accessed November, 2016.

Ostro, B. D. (1987). “Air Pollution and Morbidity Revisited: A Specification Test.” Journal of Environmental Economics Management 14: 87-98.

Schmalensee, R. and R. N. Stavins (2011). “A Guide to Economic and Policy Analysis of EPA’s Transport Rule.” White paper commissioned by Excelon Corporation.

United Nations Environment Progamme (UNEP) (2002). Global Mercury Assessment. December 2002. Available at http://www.unep.org/chemicalsandwaste/Portals/9/Mercury/Documents/final-assessment-report-25nov02.pdf

United Nations Environment Progamme (UNEP) (2013). Minamata Convention on Mercury: Text and Annexes. October 2013. Available at http://www.mercuryconvention.org/Portals/11/documents/Booklets/Minamata%20Convention%20on%20Mercury_booklet_English.pdf

U.S. Environmental Protection Agency (EPA) (n.d.) Persistent Bioaccumulative Toxic (PBT) Chemicals Covered by the TRI Program. Available at: https://www.epa.gov/toxics-release-inventory-tri-program/persistent-bioaccumulative-toxic-pbt-chemicals-covered-tri. Accessed December 20, 2016.

U.S. Environmental Protection Agency (EPA). Office of Pollution Prevention and Toxics (1994). Regulatory Impact Analysis of Amendments to Regulations for TSCA Section 5 Premanufacture Notifications.

U.S. Environmental Protection Agency (EPA). Office of Air Quality Planning & Standards and Office of Research and Development (1997). Mercury Study Report to Congress – Volume I: Executive Summary. Available at https://www.epa.gov/sites/production/files/2015-09/documents/volume1.pdf

U.S. Environmental Protection Agency (EPA), Office of Pollution Prevention and Toxics (2006a). Supporting Statement for EPA ICR No. 1198.05: Information Collection Request for Toxic Substances Control Act Section 8(a) Chemical-Specific Information Gathering Rules.

U.S. Environmental Protection Agency (EPA), Office of Pollution Prevention and Toxics (2006b). Final Guidance for EPA Rulewriters: Regulatory Flexibility Act as amended by the Small Business Regulatory Enforcement Fairness Act. Washington, D.C. Available at http://www.epa.gov/rfa/documents/Guidance-RegFlexAct.pdf.

U.S. Environmental Protection Agency (EPA). Office of Pollution Prevention and Toxic Substances. (2009). Report to Congress: Potential Export of Mercury Compounds from the Unites States for Conversion to Elemental Mercury. October 14, 2009. Available at https://www.epa.gov/sites/production/files/2015-10/documents/mercury-rpt-to-congress-export-ban.pdf.

APPENDIX C


U.S. Environmental Protection Agency (EPA) Office of Environmental Information (2011). Supporting Statement for EPA Information Collection Request Number 2002.05, “Cross-Media Electronic Reporting Rule.” June 22, 2011.

U.S. Environmental Protection Agency, (EPA) (2012). Supporting Statement for a Request for OMB Review under the Paperwork Reduction Act: Final Rule Addendum to Partial Update of the TSCA Section 8(b) TSCA Inventory Data Base, Production and Site Reports. EPA ICR No.: 1884.06, OMB Control No 2070-0162. January 27, 2012. Available at http://www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=201108-2070-002.

U.S. Environmental Protection Agency (EPA) (2013). Supporting Statement: renewal of Existing Information Collection request for Confidentiality Rules. EPA ICR No.1665.12, OMB Control No 2020-0003. Available at https://www.regulations.gov/document?D=EPA-HQ-OEI-2013-0565-0003

U.S. Environmental Protection Agency (EPA) (2014a). Understanding the Costs Associated with Eliminating Exemptions for Articles in SNURs. November 20, 2014.

U.S. Environmental Protection Agency (EPA) (2014b). Economic Analysis of the Final Significant New Use Rule for Long-Chain Perfluoroalkyl Carboxylate Chemical Substances and Perfluoroalkyl Sulfonate Chemical Substances. EPA-HQ-OPPT-2013-0225. November 20, 2014. Available at https://www.regulations.gov/#!documentDetail;D=EPA-HQ-OPPT-2013-0225-0034

U.S. Environmental Protection Agency (EPA) (2016a). What EPA is Doing to Reduce Mercury Pollution, and Exposures to Mercury. Available at https://www.epa.gov/mercury/what-epa-doing-reduce-mercury-pollution-and-exposures-mercury. Last updated on April 14, 2016.

U.S. Environmental Protection Agency (EPA) (2016b). Health Effects of Exposures to Mercury. Available at https://www.epa.gov/mercury/health-effects-exposures-mercury. Last updated on May 31, 2016.

U.S. Environmental Protection Agency (EPA) (2016c). Chemical Data Access Tool. Available at https://java.epa.gov/oppt_chemical_search/. Accessed December 5, 2016.

U.S. Environmental Protection Agency (EPA) (2016d). TRI Explorer 2015 National Analysis dataset (released October 2016). Available at https://iaspub.epa.gov/triexplorer/tri_release.chemical. Accessed November 8, 2016.

U.S. Environmental Protection Agency (EPA) (2017). Mercury U.S. Inventory Report: Supply, Use and Trade. March 29, 2017. Available at https://www.regulations.gov/document?D=EPA-HQ-OPPT-2017-0127-0002.

U.S. Geological Survey (USGS) (2000). Mercury in the Environment: Fact Sheet 146-00 (October 2000). Available at https://www2.usgs.gov/themes/factsheet/146-00/. Accessed on December 13, 2016.

U.S. Office of Personnel Management (OPM) (2016). “Salary Table 2015-DCB: for the Locality Pay Area of Washington-Baltimore-Northern Virginia, DC-MD-VA-WV-PA.” Effective January 2016. Available at: https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2016/DCB.pdf. Accessed April 3, 2017.

U.S. Small Business Administration (SBA) (2016). “U. S. Small Business Administration Table of Small Business Size Standards Matched to North American Industry Classification System Codes effective February 26, 2016”. Available at: https://www.sba.gov/content/small-business-size-standards. Accessed April 4, 2017.

Walker, W. R. (2011). “Environmental Regulation and Labor Reallocation.” American Economic Review 101(2): 442-447.

Walker, W. R. (2013). “The Transitional Costs of Sectoral Reallocation: Evidence From the Clean Air Act and the Workforce.” The Quarterly Journal of Economics 128(4): 1787-1835.

Weinstein, Harriet G and Mark A. Loewenstein. U.S. Bureau of Labor Statistics (BLS) (2004). “Comparing Current and Former Industry and Occupation ECEC Series.” Available at: http://www.bls.gov/opub/cwc/cm20040823ar01p1.htm. Accessed October 8, 2009.

APPENDIX C


White House Office of Management and Budget (OMB) (2003). Circular A-4. Available at: http://www.whitehouse.gov/omb/circulars/a004/A-4.html. Accessed October 8, 2009.

World Health Organization (WHO) (2016). Mercury and Health Fact Sheet, January 2016. Available at http://www.who.int/mediacentre/factsheets/fs361/en/. Accessed April 13, 2016.