PB-242 826
DRAFT ECONOMIC IMPACT ASSESSMENT  FOR THE PROPOSED

TOXIC SUBSTANCES CONTROL ACT  (S.776)
ENVIRONMENTAL PROTECTION AGENCY
JUNE 1975
                            DISTRIBUTED BY:
                            National Technical Information Service
                            U. S. DEPARTMENT  OF COMMERCE

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,EPA 560/4-75-002
         DRAFT
     ASSESSMENT
              1     i * •
              TOXIC
242 826
                                fr. .  .- ^ ..'
                                -j:|««, |;r • |w||;
                                •'   ' •J   ' "' '• "
       U.S. ENVIRONMENTAL
               Office of Toxic
                     !U ME 1075

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BIBLIOGRAPHIC DATA
SHEET
1. Report No.
4. Title and Subtitle
    Draft Economic Impact Assessment  for the Proposed Toxic
    Substances  Control Act  S.776
                                                 ~3. Keport Date
                                                    June 1975
                                                 I 6.
7. Author(B)
                                                 I 8. Performing Organization Kept.
                                                   No.
9. Performing Organization Name and Address
    Office of  Toxic Substances
    Environmental  Protection Agency,  401  "M" Street, SW
    Washington,  DC  20460
                                                 [10. Project/Task/Work Unit No.
                                                   _NA	
                                                 111. Contract/Grant No.


                                                    NA
12. Sponsoring Organization Name and Address
    (same  as  No.  9)
                                                 113. Type of Report & Period
                                                    Covered
                                                                      14.
 15. Supplementary Notes
 16. Abstracts
    The draft report estimates the  direct costs  to industry associated  with the
    implementation of  the principal  provisions of the proposed Toxic  Substances  Control
    Act (S.776).   The  annual direct costs are estimated to  be between $78.5
    and 141.5 million.   About two-thirds of these costs are shown to  be attributable
    to the  areas  of premarket screening and regulatory actions, with  about one-third
    attributable  to the  requirements concerning  industrial  testing and  reporting.
 17. Key Words and Document Analysis.  17a. Descriptors

    Economic Analysis,  Chemical  Industry, Federal Regulation
17b. Identifiers/Open-Ended Terms
    Economic Impact,  Toxic Substances Control,  Costs of Regulation  of Chemicals

17c. 07  Chemistry  (Organics and  Inorganics;  chemical industry)
     05-C  Economics  (Impact of Regulation  of Chemicals  on Industry)
     05-D  Law (Toxic  Substances  Control Act)

17c. COSATI Field/Group
18. Availability Statement

    Release  unlimited
FORM NTis-38 (REV. io-73)   ENDORSED BY ANSI AND UNESCO.
                                     19.. Security Class (This    121. No. of Pages
                                        Report)               	
                                          UNCLASSIFIED
                                     20. Security. Class (This
                                        Page
                                          UNCLASSIFIED
                               THIS FORM MAY BE REPRODUCED

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EPA 560/4-75-002
                        DRAFT ECONOMIC IMPACT. ASSESSMENT FOR

                 THE PROPOSED TOXIC SUBSTANCES CONTROL ACT  (S.776)
                             Office of Toxic Substances
                          Environmental Protection Agency
                               Washington, DC  20460"
                                     June  1975

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                                PREFACE

     In recent months many requests have been received from Federal
agencies, Congressional  staffs,  and other organizations for an estimate
of the economic impact of the proposed Toxic Substances Control  Act.
Given the complex structure of the chemical  industry,  the uncertainties
as to the nature of the regulations which would be promulgated to implement
the Act, and the difficulty of predicting the chemical problems of the
future, any such estimate must be very uncertain at best.  Nevertheless,
an attempt has been made to develop an economic assessment which will  be
helpful in identifying the types and severity of the impacts that are
likely to be associated with the legislation.

     This draft Report sets forth very preliminary estimates of the
direct costs to industry that are likely to  result from implementation
of the principal provisions of the legislation.  While S.776 has been
used as the basis for the estimates, many of the observations in the
draft Report should be applicable to other versions of the pending
legislation as well.  However, it must be emphasized that most of the
cost estimates, and particularly the estimates concerning premarket
screening and regulatory actions, are highly speculative. The draft
Report also includes a few observations concerning indirect costs to
industry, the impact of the legislation on employment concerns, the
impact on inflation, and international aspects.

     The Office of Toxic Substances is interested in improving the
preliminary economic impact assessment presented in this draft Report
and would welcome comments on the estimates.

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                           TABLE OF CONTENTS
Preface                                                          i
Summary                                '                          1
The General Framework for-Estimating Economic Impact             4
Testing for Health and Environmental Effects (Section 4)         8
Premarket Screening of New Chemicals and New Uses (Section 5)   10
Regulatory Actions (Section 6 and 7)                            12
Reporting Requirements (Section 8)                              16
Fees for Processing Test Data (Section 26)                      18
Appendix A:  Sections 4, 5, 6, 7, 8, and 26 of S.776            19
                                     ii

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                                SUMMARY

      As  summarized  in Table 1, the direct costs to industry associated
 with  the implementation of the principal provisions of the proposed
 Toxic Substances  Control Act  (S. 776) are estimated to range from about
 $80 to $140 million annually.  On the order of two-thirds of these costs
 are attributable  to the highly speculative areas of premarket screening
 and regulatory  actions, with  almost all of the remainder associated with
.the somewhat more predictable, but still very uncertain, requirements
 concerning industrial testing and reporting.

      As  a perspective for the estimated costs, sales for the sector of
 industry that would be most directly affected by the legislation  (i.e.
 Chemical and Allied Products  less food additives, cosmetics, drugs, and
 pesticides) were  about $72 billion in 1974, profits after taxes exceeded
 $5.5  billion, and R and D expenditures were about $2 billion.  If all
 industrial sectors  which could be affected by the legislation are considered,
 the sales volume  in 1974 was  probably double this level, and the profits
 and R and D expenditures were also much higher.

      The estimated  employment dislocations associated with regulatory
 actions  might result in the loss of one thousand or more jobs annually
 out of the more than one million jobs in the Chemical and Allied Products
 sector and twelve million jobs in the Chemical Processing sector.  The
 bulk  of  these displaced workers should be readily absorbed in the employment
 pool  of  the affected sectors  which has been expanding at a rate of tens
 of thousands of new jobs each year.  However, there will probably be
 localized situations where opportunities for job mobility are limited
 and the  introduction of substitute products is not feasible.

      In  the international area, exports during 1974 of chemical products
 (less food additives, cosmetics, drugs, and pesticides) exceeded  imports
 by $4.8  billion as  the world  demand for chemicals continued to grow and
 tariff protection for the U.S. market remained at a relatively high
 level for most  chemical products.  Given the strong international position
 of U.S.  industry, the costs associated with the legislation should not       °
 seriously affect  the balance  of payments position.  Also, there is a
 reasonable likelihood that some industrial countries will take steps
 similar  to those  of the United States in this area of regulation.

      The impact on  the Wholesale Price Index, Consumer Price Index> and
 the GNP  Deflator  of the costs to industry plus the costs of administering
 the proposed law  should be very small.

      Indirect impacts on industry would include the cumulative effect of
 regulations on  the  climate for innovation, changes in the scope and
 direction of research activities, and possible shifts in production and
 marketing patterns. Predictions in these areas are fraught with  uncertainties
 and have not been attempted.

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     In addition,  quantification of the foregone economic and social
benefits to society resulting from limitations  on chemicals for which
there might not be adequate substitutes does  not seem possible.

     Finally,  meaningful  estimates cannot be  made of the investment
losses and the employment dislocations which  would be prevented through
regulatory actions against new products that  are determined to be environmental
problems early in  their lifetime rather than  after major commercial
investments and the associated labor force are  in place.  Similarly,  it
is not possible to estimate the additional administrative and technical
jobs which would be created by industry to comply with the legislation.

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        Table 1:  Preliminary Estimate of Annual  Direct Costs to Industry


                       No. of Chemicals Affected           Costs to Industry
(Millions of Dollars round*

Section 4 (Testing)
Existing Chemicals
New Chemicals -•

Section 5 (Premarket Screening)
Administrative Costs of Noti-
fication of New Chemicals
Administrative Costs of Noti-
fication of New Uses •
Delays due to Testing Require-
ments
Delays due to Industrial
Uncertainty


200
150



600

400

150

300
to nearest

4.5 -
3



2

1.5 -

7.5 -

2.5 -
$.5M)

8.5
6
.7.5


2.5

3

11.5

8.0
                                                                               -  14.5
                                                                         13.5  -  25

Section 6 (Regulation of Hazardous Chemicals)
   Limitations on Selected Uses of
    Important Chemicals & Restric-
    tions on Minor Use Chemicals      3-4                  23-31
   Minor Actions Involving Labelling,
    Quality Control, and Restric-
    tions on Very Narrow Uses        10-20                  4.5  -   9
                                                                         27.5  -  40

Section 7 (Imminent Hazard)
   Restrictions            1 every 3 years                               TO       20

Section 8 (Reports)
   Annual Reports                1500-2000                  4.0   -  10
   Record Keeping              No estimate                 14     -  27
   Health & Safety Studies
     Preparing Bibliography        400-600                  1         4
     Retrieval of Studies          200-300                        .5
                                                                         19.5  -  41.5

Section 26 (Fees)
   Test Data Submissions               250                                    .5

Total                                          '                          78.5  - 141.5

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         THE GENERAL FRAMEWORK FOR ESTIMATING ECONOMIC IMPACT

     A preliminary estimate of the annual  costs to industry which are
likely to result from compliance with the  anticipated types of regulations
pursuant to the major provisions of the .proposed Toxic Substances Control
Act (S.776) is presented in this draft Report.   Estimates at this time are
critically dependent on the assumption-s as to the nature of the implementing
regulations.  The assumptions used herein  are based on an interpretation
of the explicit legislative requirements in the context of the legislative
history that has been developed during the past four years.  Also, the
following considerations have influenced the assumptions that have been
made:

  -- Frequency and character of toxic chemical  incidents and recent
     trends in this regard.

  -- Two years of intensive staff work by  the Office of Toxic Substances
     to provide a basis for implementation of this type of regulatory
     authority.

  -- Experience in administering reporting, testing, and regulatory
     provisions of other environmental laws, and particularly  .       ;
     the laws concerning pesticides and fuel additives.

  — Recent experience in developing approaches to the anticipation of
     and response to chemical problems.

  -- Advice of the National Academy of Sciences concerning test protocols
     and decision-making related to*toxic  chemicals.

  -- Consultations with a number of chemical manufacturers concerning
     implementation of this type of legislation.

  -- The budgetary authorization level of about $11 million annually
     (section 26a)J

     The analysis centers on the costs to  industry during years two
through six following enactment of Ihe legislation, using the 1975 price
index. In subsequent years the costs associated with some activities
should decline while others should increase.  For example, the number of
     1 While many of the factors bearing on regulatory activities directed
      to pesticides are considerably different from the factors that
      will affect simiTar activities directed to industrial chemicals,
      the annual EPA budget of about $43 million for pesticides activities
      gives some indication of the level of activities that might be
      expected under the proposed legislation.  For example, many
      years have been required to register about 1,800 pesticidal
      chemicals in 35,000 formulations.  More than eight years have "
      jeen required to develop registration guidelines setting forth
      testing requirements.  About two pesticidal chemicals are
      cancelled each year.  Finally, 40 chemicals will receive intensive
      study during FY 1976.

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existing chemicals subjected to testing requirements each year should
decline as the backlog of existing chemicals is reduced.   On the other
hand, the number of new chemicals subjected to test requirements each
year should increase as the number of promulgated standards for test
protocols covering chemical classes increases.

     The costs of the legislation will be distributed across a broad
segment of U.S. industry.  While the sector most directly affected will
be the Chemical and Allied Products sector less food additives, drugs,
cosmetics, and pesticides, a number of other manufacturing and processing
activities also involve chemical activities and could be affected by the
legislation.   A very rough estimate is that the Chemical  and Allied
Products sector less food additives, drugs, cosmetics, and pesticides
represents about one-half (by sales volume) of the total  industrial
activities that could be affected by the legislation.  Sales for the
Chemical and Allied Products sector less food additives,  drugs, cosmetics,
and pesticides were $72 billion in 1974 and profits after taxes were
$5.5 billion. Overall sales in this sector increased by 70 percent from
1970 to 1974, and profit levels doubled.  Continued growth of both sales
and profits are projected for the next decade.2

     The inflationary impact of the legislation should be very small,
taking into account the annual costs to industry of $80 to 140 million,
the projected EPA expenditures of $11 million annually, and the new
costs to other agencies assisting in the administration of the law which
will probably initially be in thejnillions of dollars but could conceivably
reach considerably higher levels.

     Quantification of the foregone economic and social benefits to society
resulting from limitations on chemicals for which there are no adequate
substitutes does not seem possible.

     The complexities of the international chemical market make it very
difficult to quantify the effects of toxic substances regulation on
international commerce.  U.S. chemical exports in 1974 were $8.8 billion
     2
      The estimates of past performance are based on information provided
      by the Federal Trade Commission drawing on Quarterly Financial
      Report for Manufacturing, Mining, and Trade Corporations.  Hith
      regard to future trends for the Chemical and Allied Products
      sector, Chemical Week, January 8, 1975, forecasts an 11 percent
      increase in profits during 1975, and Kline Guide to the Chemical Industry
      (Charles H., Kline and .Company, Inc., Fairfield, New Jersey, 1974)
      estimates an annual average growth rate for sales of 6.2 percent
      through 1985.
          Macroeconomic Aspects of Federal Pollution Control Programs,
      Chase Econometrics, Inc., January 1975, concludes that an average
      annual cost of about $20 billion for water and air pollution
      controls during the 1973-1982 period would result in an average
      annual rate of increase of 0.2 percent for the Wholesale Price
      Index, 0.1 percent for the 6NP deflator, and 0.2 percent for the
      Consumer Price Index.

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while imports were'about $4 billion.^  Given the growing world-wide
demand for chemicals, the current tariff structure for chemical  imports,
and the well established position of U.S.  industry in international
markets, the costs associated with this legislation should not have a
major impact on this currently favorable, balance of payments.  Also,
Sweden and Japan have already enacted toxic substances legislation and
other countries, and particularly Canada,  will probably adopt similar
measures should the United States take steps in this regard.

     While the principal types of costs to industry are covered in the
analysis, some costs such as legal fees associated with court actions
and inconveniences caused by administrative inspections are not included.
Similarly, while the potential adverse impact on employment of regulatory
actions is considered, no attempt has been made to estimate the new
administrative and technical jobs within industry which will be required
to comply with the proposed law.

     A number of potential indirect effects on industry of the legislation
have also not been addressed such as (a) the cumulative effect of regulations
on the climate for innovation, and subsequent changes in the scope,
direction, and payoff of R&D activities, and (b) possible shifts in
production and marketing patterns within U.S. industry resulting from
new regulatory requirements.  Forecasts in these areas are
highly speculative at best.  The regulatory experience in very narrow
industrial sectors, such as foods and drugs, may have some relevance but
does not provide a good basis for reaching sound conclusions when addressing
the entire chemical industry.

     No attempt has been made to estimate what portion of the increased
costs to industry would be passed on to the consumer,! and only for
sections 6 and 7 has the portion that would be absorbed through tax
deductions and other financial arrangements been estimated.

     Finally, the analysis does not address the environmental benefits
that would be derived from regulatory actions taken under the Act nor
the expected improvement in the cost/effectiveness of the regulatory
decisions that would .be taken under other authorities drawing on reporting
and testing information acquired under this Act.  Similarly, no attempt
has been made to estimate the possible cost savings to industry and the
     ^Summary of U.S. Export and Import Merchandise Trade, Bureau of
      Census, Foreign Trade Division, December 1974, tables 4 and 5.
          average tariff for all chemical imports in 1973 was 1.8 percent.
      The tariff for all chemicals less the benzenoid crudes and petroleum
      was 4.6 percent.  The tariff for finished chemicals and benzenoid
      intermediates ranged up to 20 percent and higher, based on 1.7
      rerits per pound plus 12.5 percent of the American selling price.
      These figures were provided by the Chemical Divison of the U.S. ,
      International Trade Commission, based on data from Schedule 4 of
      the Tariff Schedule of the United States.

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prevention-of employment dislocations resulting from interception of
problem chemicals during the premarket phase and appropriate Governmental
action at that time to prevent environmental damage in contrast to the
current approach of taking corrective actions only after large commercial
investments and the associated labor force are in place.

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       TESTING FOR'HEALTH AND ENVIRONMENTAL EFFECTS (Section 4)

           Table 2:   Estimated Costs of Testing Requirements

                             Existing Chemicals          New Chemicals

A,  No. of Chemicals Requiring
     Limited Tests               •      180                  .135

B.  Average Cost per Limited Test
     Requirement                $10-20,000               $10-20,000

C.  No. of Chemicals Requiring
     Major Tests                        20                       15

D.  Average Cost per Major Test
     Requirement              $200-400,000             $200-400,000

E.  Portion of Tests that Would
     Be Done by Industry in Absence
     of Act                            1/4                      1/3
Total Costs                    $4.4 - 8.7M              $2.9 - 5.8M
     [(A X B) + (C X D)] X (1 - E)


     Section 4(a) clearly implies a selective approach in determining
which chemicals should require testing and in determining which tests
should be required.  Test requirements will  undoubtedly vary among
chemical classes and among chemicals of the same class depending on
available data.  Determining factors as to the requirements will probably
include contemplated uses and likely exposure patterns, anticipated
market volume, physical and chemical properties of the chemical, and
existing health and environmental effects data.

     Test requirements for most of the chemicals (estimated to be 90
percent) that will be selected are anticipated to be limited, involving
a mix of modest tests for each cHlmical.   While the costs will vary, the
current estimate is that the average cost will be on the order of $10-
20,000 per chemical.  The physical and chemical properties and chemical
stability of .. compound can frequently be ascertained from simple and
inexpensive tests costing about $500.  Acute animal toxicity tests by
various routes cost on the order of $1,000 each.  Subacute testing, if
required, is considerably more expensive, about $15,000.  Whether
results of certain- mutagenicity tests, which probably will cost about
$2,000 per compound could be a reliable indication of carcinogenicity is
an area of active investigation. Relatively inexpensive environmental
fate tests will also be important in some cases.

     The remaining ten percent will be subjected to more extensive
testing. A typical example might be to require, in addition .to the
limited tests described-above, selected long-term chronic effects tests  .
which could bring the total to $200,000 or more per chemical.  In some
cases the costs would be still higher; in other cases, somewhat lower.

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     The total projected costs of testing range between $7.3 million and
$14.5 million, while the estimated R and D expenditures of the chemical
industry in 1973 were $2.1  billion with R and D expenditures predicted
to be $2.7 billion in 1975.5  Thus, on a national  basis the incremental
costs to industry seem minimal, between 0.3 and 0.5 percent of the
overall  R and D budget.  However, depending on how these costs are
distributed within industry, the cost impact of specific test requirements
could in some cases be quite significant for the affected firms.

     A related concern is the present limitations  on available qualified
scientists and facilities to carry out test requirements.  .As testing
expands, special efforts will be needed to insure  that a high quality
approach to testing is preserved.
     h973 Estimate from "Twenty-percent Increase in Energy Activity
      Paces Industry Research and Development Spending in 1973," Science
      Resource Studies Highlights, National  Science Foundation, NSF 74-
      319, December 4, 1974.   1975 estimate provided by Chemical Meek.

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     PREMARKET SCREENING OF- NEW CHEMICALS AND NEW USES (Section 5)

           Table 3:   Estimated Costs of Premarket Screening

Administrative Costs of Notification of New Commercial Chemicals

   A.   No.  of New Chemicals                                      600
   B.   Average Administrative Cost per Chemical  Notifi-
        cation                                              $3-4,000
   C.   Total  Administrative Costs (A x B)                             $1.8 - 2.4M

Administrative Costs of Notification of New Uses

   A.   No.  of Significant New Uses that Are Reported             400
   B.   Average Number of Reporting Establishments for Each
        New Use during First Year of Use                           4
   C.   Average Administrative Cost per New Use Notification $1-2,000
   D.   Total  Administrative Costs (A x B x C)                         $1.6 - 3.2M

Delays due to Testing Requirements

   A.   No.  of New Chemicals Delayed                              150              .
   B.   Average Delay Time                                     1 Year
   C.   Average R & D Investment in Each Chemical at Time
        of Delay                                           .    $500K
   D.   Cost of Capital                                        10-15%
   E.   Total  Costs (A x B x C x D)                                    $7.5 - 11. 3M

Delays due to Industrial Uncertainties as to Governmental  Actions

   A.   No.  of New Chemicals Delayed                              200
   B.   Average Delay Time                               1/4-1/2 Year
   C.   Average R & D Investment in Each Chemical at Time
        of Delay                                               $500K
   D.   Cost of Capital                                        10-15%
   E.   No.  of Significant New Uses,                              400
   F.   Portion of New Uses Delayed by Industry                   1/4
   G.   Average Delay Time                               1/4-1/2 Year
   H.   Average R & D Investment in Each New Use at Time
        of Del a"                                                $50K
   I.   Total  Costs [(A x B x C) + (E x F x G x H)] x D                $2.6 - 7.9M

Administrative Costs of Notification of New Commercial Chemicals

     It is assumed that firms will spend a considerable amount of time
consulting with EPA concerning new chemicals, and the administrative costs
to industry of these consultations are reflected in Table 3.

Administrative Costs of Notification of New Uses

     it is assumed that firms will expend a smaller, but still significant,
administrative effort in the premarket notification process for each
significant new use.  It is further assumed that on the average four
                                   10

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                       i
manufacturers will  be actively considering each new use during the first
few months and hence involved in the premarket notification process.
After this initial  period, a new use presumably will be picked up in
the annual reporting requirement for all  concerned firms.

Delays due to Testing Requirements

     It is difficult to generalize the delays that are likely to result
from premarket testing requirements, or the costs of the delays.  It
is assumed that a limited test requirement will delay commercialization
of a chemical by nine months, and a major test requirement three years.
Since 90 percent of the affected chemicals will be subjected to limited
test requirements,  the average delay time is estimated to be one year.

     Testing usually is undertaken relatively early in the R & D cycle.
Nevertheless, substantial capital may have already been invested by the
time that testing is undertaken, both to develop the specific chemical
of interest and to rule out other candidate chemicals.  The expenditures
in this regard will vary widely from product to product but should
only-infrequently exceed the $500,000 average investment assumed in
this analysis.

Delays due to Industrial  Uncertainty as to Governmental Actions

     In addition to its concerns over the new chemicals requiring
testing, industry may be hesitant to proceed with commercialization
of some of the other new chemicals until  ascertaining how EPA will
react to the premarket notification.
                                    11

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                 REGULATORY ACTIONS (Sections 6 and 7)

            Table 4:   Estimated Costs of Regulatory Actions

Limitations with Significant Impact (Section 6)

   A.   No.  of New Chemicals Banned                                    2
   B.   R & D Investment for Each Chemical at Time of Ban            $3M
   C.   Percentage of R & D Investment Recoverable                   20%
   D.   Cost of Banning. New Chemicals [A x B x (1 - C)]                        $4.8M
   E.   No.  of Minor Use, Existing Chemicals Banned             .       1
   F.   No.  of Manufacturers Involved with Each Minor-Use Chemical     4
   G.   Investment of Each Manufacturer                              $5M
   H.'  Percentage of Investment Amortized at Time of Ban           , 50%
   I.   Percentage of Remaining Investment Recoverable through
        Recovery of Land, Facilities, and Equipment                 25%
   J.   Percentage of'Remaining Investment Recoverable  through
        Tax and Other Financial Arrangements               .         25%
   K.   Costs to Manufacturers of Banning Existing Chemicals .
        E x F x G x [(1 - H) - (1 - H)(l - I - J)]                  $5M
   L.   Costs to Suppliers (.5 x K)           •                     $2.5M
   M.   Costs to Processors (.5 x K)         .                      $2.5M
   N.   Total Costs of Banning Minor Use, Existing Chemicals
        (K + L + M)                                                           $10M
   0.   No.  of Actions Limiting Uses of More Significant Existing
        Chemicals                  i                                   1
   P.   No.  of Manufacturers Involved in Each Action                   8
   Q.   Investment of Each Manufacturer in Each Chemical            $20M
   R.   Percentage of Overall Investment Affected by Each Action     20%
   S.   Percentage of Investment Amortized at Time of Action         50%
   T.   Percentage of Remaining Investment Recoverable through
        Recovery of Land, Facilities, and Equipment                 25%
   U.   Percentage of Remaining Investment Recoverable through
        Tax and Other Financial Arrangements                        25%
   V.   Costs to Manufacturers of Limiting Uses
        0 x P x Q x R x [(1 - S) - (1 - S)(l - T - U)]               $8M
   W.   Costs to Suppliers (.5 x V)                                  $4M
   X.   Costs to Processors (.5 x V)                                 $4M
   Y.   Total Cosob of Limiting Uses (V + W + X)                               $16M
   Z.   Costs of Limitations on 4 Chemicals
        (D + M + Y)                                      .                   $30.8M
  AA.   Range of Costs for 3 to 4 Chemicals                      •     $23.1 - 30.8M

Limitations with Lesser Impact (Section 6)

   A.   No.  of New Chemicals Banned                                    2
   B.   R & D Investment for Each Chemical at Time of Ban          $500K
   C.   Percentage of R & D Investment Recoverable                   20%
   D.   Cost of Banning New Chemicals [A x B x  (1-C)]              $800K
   E.   No.  of Actions Limiting Uses of Minor Chemicals                2
   F.   No.  of Manufacturers Involved in Each Action                   4
   G.   Investment of Each Manufacturer                              $2M
   H.   Percentage of Overall Investment Affected by Each Action     20%
                                    '?
                                    J2

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   I.   Percentage  of Investment  Amortized  at  Time  of
        Action
   J.   Percentage  of Remaining  Investment  Recoverable  through
        Recovery of Land,  Facilities,  and  Equipment
   K.   Percentage  of Remaining  Investment  Recoverable  through
        Tax and Other Financial  Arrangements
   L.   Costs to Manufacturers of Limiting  Uses
       ' [E x F  x G x H x [(1  -  I)(l  -  J  -  K)]
   M.   Costs to Suppliers  (.5 x  L)
   N.   Costs to Processors (.5  x L)
   0.   Total Costs of Limiting  Uses  (L + M +  N)
   P.   No. of Labelling Actions
   Q.   No. of Manufacturers Affected by  Each  Action
   R.   Cost for Each Manufacturer
   S.   Costs of Labelling  Actions (M x N x 0)
   T.   No. of Quality Control Actions
   U.   No. of Manufacturers Affected by  Each  Action
   V.   Costs for Each Manufacturer
   W.   Costs of Quality Control  Actions  (T x  U  x V)
   X,   Costs of 10 Regulatory Actions  (D + 0  +.S + W)
   Y.   Range of Costs for  10 to  20 Actions
                                                                  50%

                                                                  25%

                                                                  25%

                                                                $800K
                                                                $400K
                                                                $400K

                                                                    5
                                                                   10
                                                                 $20K

                                                                    1
                                                                   10
                                                                $100K
Imminent Hazard (Section 7)
                                                         1  every
A.  No. of Existing Chemicals Banned
B.  No. of Manufacturers Affected by Each Action
C.  Investment of Each Manufacturer
D.  Percentage of Investment Amortized at Time of Ban
E.  Percentage of Remaining Investment Recoverable through
     Recovery of Land, Facilities, and Equipment
F.  Percentage of Remaining Investment Recoverable through
     Tax and other Financial Arrangements
6.  Costs to Manufacturers of Each Ban
     B x C x [(1 - D) - (1 - D)(l - E - F)]
H.  Costs to Suppliers (.5 x G)
I.  Costs to Processors (.5x6)
0.  Costs of Each Action (G + H + I)
K.  Costs per Year (1/3 x 0)
 3 years
       6
 $10-20M
     50%

     25%

     25%

 $15-30M
$7.5.-15M
$7.5-15M
 $30-60M
            $1.6M
              $1M
                                                                           $1M
                                                                         $4.4M
                                                                       ,4-8.8M
                                                                         $10-20M
     The costs of regulatory actions will  vary widely depending on the
chemical and the nature of the limitation.   Conceivably, a single
regulatory action could have serious economic implications.   However,
broad sweeping actions under this legislation are highly unlikely given
the requirements of Sections 6(c) and recent experience in dealing with
chemical problems.  Regulatory actions are more likely to fall  into the
following categories:  restrictions on selected uses of certain existing
chemicals; requirements concerning labelling and quality control to
limit contaminants; and prohibitions on extremely hazardous new chemicals
and existing minor use chemicals that cannot otherwise be contained.

     Judging from the frequency of toxic substance problems that have
arisen during the past decade, and taking into account the sharper
vigilance that will result from the legislation, it is estimated that
                                   13

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there will  be on the'order of three to four actions each year limiting
the uses of important chemicals or sharply restricting minor-use chemicals.
In addition there might be 10 to 20 minor regulatory actions involving
labelling,  quality control requirements,  or very narrow restrictive
uses.  Finally, on rare occasions the use of the imminent hazard provision
might be appropriate.

     The foregoing estimates suggest that on the order of 22 manufacturing
facilities, each representing an investment of from $2 to 20 million,
might be closed each year as the result of regulatory actions.  The
number of employees at each facility will vary widely depending on the
product, the process, and the location and design of the facility.  Most
of the affected facilities will probably be components of larger industrial
complexes with the number of employees ranging from 10 to 30 and in some
cases as high as 40 or 50.  The remaining affected facilities will be at
individual  locations with the labor force per facility somewhat higher
to allow for maintenance, security, and related tasks. .A reasonable
estimate is that .perhaps 500 employees might be employed at the 22
directly affected facilities.  This compares with a total employment of
more than one million for this sector of industry.?

     Estimates are much more speculative concerning the impact of regulatory
actions on the suppliers of raw materials for the affected manufacturers
and on the Chemical Process sector, which employs'more than 12 million
persons, as a result of the "ripple effect."  At the one extreme a
supplier or a processor could be totally dependent on the continued
commercial  viability of a single chemical manufacturing activity, and
regulatory actions affecting this activity could be crucial to his
business   However, given the multiple interests of most suppliers and
processors, the flexibility of our market forces and the experience of
suppliers and processors in adapting to changes in marketing opportunities,
and the high innovative capacity of US industry, such a situation will
probably be unusual.

     Since economic factors must be given appropriate weight in reaching
regulatory decisions under Section 6,* the likelihood that bans would be
promulgated on chemicals for which there are no substitutes does not
seem high.   Also, it is assumed that in many cases the effective dates
of restrictions on chemicals will be set to minimize economic impact by
allowing time foi adjustments.  In most cases, the supplier should be
     ?1970 employment figures show 1.045 million employees in the
      Chemical and Allied Products sector  and 12.659 million employees
      in the Chemical Process sector (Chemical and Allied Products,
      plus Food and Kindred Products, Paper and Allied Products, Petroleum
      and Coal Products, Rubber Products, Stone-Clay-Glass Products,, and
      rn*mary Metal Industries, Ferrous and Nonferrous):  from American
      Chemical Society, Chemistry in the Economy, Washington, DC 1973,.
      page 490.  Information provided by the Bureau of Labor Statistics
      indicates a recent annual employment growth rate of about 1.7
      percent for the Chemical and Allied Products sector and about
      0.6 percent for the Chemical Process sector.

                                   14

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able to sell  his existing stocks and the processor should be able to
adapt his activities to different raw materials.   Thus,  it is estimated
that the principal  impact of regulatory actions on the suppliers and
processors would be the adjustment costs of adapting to  the new market
conditions resulting from regulatory actions,  costs that might equal the
overall costs to the more directly affected manufacturers.   In some
cases this cost estimate may be high; in other, cases, such as,in the
case of an imminent hazard,  the estimate may be low.  In Table 4, these
additional costs have been somewhat arbitrarily divided  equally between
suppliers and distributors.  By analogy with the cost estimates, the
employment dislocations due to the "ripple effect" should affect hundreds,
perhaps 500 or more, rather than thousands, of employees in the Chemical
Process sector.

     The bulk of the workers displaced by regulatory actions should be
absorbed in the employment pool of the affected industrial sectors which
has been expanding at a rate of tens of thousands of new jobs each year.
However, there will probably be localized situations where opportunities
for job mobility are limited and the introduction of substitute products
is not feasible.
                                    15

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                  REPORTING REQUIREMENTS (Section 8)

                Table 5:   Estimated Costs of Reporting

Annual Reports

   A.  Average No. of Chemicals To Be Reported.             1,500-2,000
   B.  Average No. of Reporting Establishments-per Chemical           25
   C.  Total No. of .Reports (A x B)                      - 37,500-50,000
   D.  Average Cost per Report                                 $100-200
   E. .Total Annual Cost of Annual Reports (C x D)                         $3.8-10M

Record Keeping

   A.  No.  of Firms Requiring Major Systems                       20-30
   B.  Average Cost of Installing and Operating a Major
        System for Five Years                                 $350-450K
   C.  No.  of Firms Requiring Medium Systems                      1,000
   D.  Average Cost of Installing and Operating
        a Medium System for Five Years                          $35-55K
   E.  No.  of Firms Requiring Minor Systems                      10,000 ,
   F.  Average Cost of Installing and Operating a
        Minor System for Five Years                             $10-20K
   G.  Portion of Costs which Would be Incurred
        without Act                                                 1/2
   H.  Five-Year Incremental  Costs of Record Keeping
        [(A x B) + (C x D) + (E x F)] x (1 - G)                $71-134M
   I.  Annual Costs of Record Keeping (H x 1/5)                         $14.2-26.8M

Health and Safety Studies

   A.  No.  of Chemicals To Be Searched for Inclusion in
        Bibliography                                    ,        400-600
   B.  Average No. of Firms Searching Each Chemical                  25
   C.  Average Cost per Search                                 $100-250
   D.  No.  of Studies To Be Submitted                           200-300
   E.  Average Cost in Preparing Each Study for Submission       $2,000
   F.  Total Annual Costs [(A x B x C) + (D x E)]                     .    $1.4-4.4M


Annual Reports

     The concept of "inventory reporting" set forth in section 8(a) of
the Conference Committee Working Print of November 25, 1974, has been
dropped.  Thus, the intent of section 8(a) of S.776 appears to be a
selective approach to requiring reports on chemicals of interest. During
the five-year period under consideration, annual reports are envisaged
on about five times the number of chemicals which would be covered by
actions under sections 4, 6, and 7.

     It is assumed that the number of chemicals subjected to annual
reporting requirements will increase from an initial level of 1000
discrete chemicals, including many in the same chemical classes, to a
plateau level of about 3000 chemicals during the sixth year, with the
average between 1500 and 2000.  If ..there are 25 reporting establishments

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for each chemical, then an average of 35-50,000 reports can be expected
annually. ' Also, many reporting establishments will  submit reports on
more than one chemical; thus, perhaps 5000 establishments will be involved
in the submission of the reports.

     A relatively simple two-page Government form, together with appro-
priate instructions, for each chemical to be reported is envisaged.
Most, if not all, of the affected firms currently report related information
to the Tariff Commission.  Thus, most of the required data should be
near at hand, with the estimated costs being $100-200 per report.2  In
some cases, initial costs may be higher as some firms reorient internal
data collection procedures.  The costs may be lower from the outset for
other firms as shown in Dow's estimate.  Also, reporting establishments
preparing a large number of reports at the same time should be able to
cut costs per report.  In any event costs per report should decline as
industry becomes familiar with the requirements and as "no change"
reports begin entering the system.

Record Keeping

     Some of the larger companies with extensive medical and sa-fety
programs may be required to expand current data analysis and retrieval
capabilities on a large scale.  Many other companies may require more
modest investments.  For the bulk of the small companies, a more systematic
use of file cabinets is envisaged.

     The estimates are probably high since most responsible firms presumably
maintain extensive files in the areas of interest.  Nevertheless, there
will be some expense in insuring that the files are centralized and in
an "inspectable" form.

Health and Safety Studies

     Since the mandatory reporting requirements of S.776 appear infeasible,
it is assumed that they will be modified to give the Administrator
discretionary authority in this area.  Based on this assumption, the
number of chemicals of interest is keyed to the number of chemicals
which would be subjected to regulations under sections 4, 6, and 7.
          estimated cost is higher than the $40 estimated by Dow Chemical,
      USA, in its letter of April 1, 1975, to Senator Tunney to take into
      account special problems of small business and of overhead costs
      involved in data compilation.
                                   17

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              FEES FOR PROCESSING TEST DATA (Section 26)

     It is assumed that the fee would be waived for 100 of the 350
submissions of test data in hardship cases, with particular attention to
small  business.   An average fee of $2,000 would be required for the
other 250 submissions.
                                    18

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          APPENDIX A:   Sections 4,  5,  6,  7,  8 and  26 of S.776

Standards for Test Protocols

Section 4:

   .  (a) GENERAL -- If the Administrator  determines  that —   '

          (1) a chemical  substance  may present an  unreasonable risk to
          health or the environment;

          (2) there is insufficient data  upon which  to conclude that
          such a risk does in fact  exist  or not exist; and

          (3) testing of such substance would assist in making such a
          determination,

then he shall, by rule, prescribe standards for a  test protocol  for such
substance.   Whenever such standards are proscribed,  the Administrator
shall require, in accordance with subsection (b)(3)  of this section,
that one or more persons formulate  a test protocol for such substance,
in accordance with such standards,  and perform the tests required by
such protocol.                                                       .

     (b) STANDARDS --

          (1) In prescribing the standards for test  protocols, the
          Administrator shall require that information pertaining to all
          relevant factors with respect to the applicable chemical
          substance be developed.  Such factors include --

               (A) the effects of such substance on  human health, and
               the magnitude of human exposure; and

               (B) the effects of such substance on  the environment, and
               the magnitude of environmental exposure.

          (2) Standards for test protocols shall require that such
          protocols be formulated in accordance with those standards and
          may require that tests be performed, in accordance with those
          protocols, for carcinogenicity, mutagenicity, teratogenicity,
          acute toxicity, subacute toxicity, chronic toxicity, cumulative
          properties, synergistic properties, clinical effects, epidemiological
          effects, ecological effects, and any other effects of such
          substance which might cause unreasonable risk to human health
          or the environment.

          (3) A rule prescribing standards for a test protocol for a
         •chemical substance shall  require that any test contained in a
          test protocol for such substance which is formulated in
                                  19

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     accordance with such standards shall be performed by any
     -person or governmental entity which is a manufacturer, processor,
     or importer of such chemical substance.

(c) PERFORMANCE OK TESTS —

     (1) The Administrator may by rule permit two or more persons,
     who are required -to test under a test protocol formulated in
     accordance with standards prescribed by him, to designate one
     such person or a qualified and independent third party to
     perform such testing pursuant to a cost-sharing arrangement.
     If the persons required to test are not able to agree upon a
     designee within a reasonable time, or if the agreed-upon
     designee is not acceptable to the Administrator, the Administrator
     may order one or more of such persons, or may designate a
     qualified and independent third party, to perform the required
     testing.  If the Administrator issues such an order, he shall
     direct the persons who are thus exempted from the obligation
     to perform tests to provide fair and equitable contribution
     for the full cost of such testing, and of the cost, if any, of
     formulating any test protocol, in an amount determined under
     rules of the Administrator.

     (2) Whenever the Administrator exempts a person from the
     obligation to perform tests, he shall, if such exemption takes
     effect during the reimbursement period for such data, order
     such exempt person to provide reimbursement in the same manner
     as if an exemption had been granted under section 5(f) of this
     Act (unless the parties agree on the amount and method of
     reimbursement).

     (3) In any case in which a person provides contribution or
     reimbursement in accordance with paragraph (1) or (2) of this
     subsection or of section 5(g) of this Act, section 15 of this
     Act shall not be construed to prevent such person from having
     access to any data submitted as a result of the testing as to
     which such contribution or reimbursement was provided.

(d) REPORTING -- A person required to perform any test required by
an applical  ? test protocol shall submit the test data developed
pursuant to such test protocol and such protocol to the Administrator
promptly upon completion of such test.  The Administrator may
provide for the submission of preliminary and other reports during
the course of such testing.

(e) NOTICE — Upon the receipt of test protocol and test data
developed pursuant to it under this section, and subject to section
15 of this Act, the Administrator shall promptly publish a notice
of such receipt in the Federal Register.  Each such notice shall
M) identify the chemical substance for which test data have
                             20

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     been received,  (2)  list  the  uses or  intended  uses  of  such  substance,
     and other information  specified by the  Administrator  by  rule, and
     (3) describe  the  nature  of  the test  performed and  the data which
     were developed.   Such  data  shall be  made  available by the  Administrator
     for examination by  any person, except as  otherwise provided  in
     section 15 of this  Act.

     (f) PROCEDURE --  Rules issued under  this  section  (and amendment
     thereto or repeals  thereof)  shall be promulgated  pursuant  to
     section 553 of title  5,  United States Code.   In promulgating,
     amending, or  repealing any  standard  or  other  rule  under  this
     section, (1)  the  Administrator shall give interested  persons an
     opportunity for the oral  presentation of  data, views, or arguments,
     in addition to an opportunity to make written submissions, and  (2)
     a transcript  shall  be  made  of any oral  presentation.

Prcmarket Screening of Chemical  Substances
                           »
Section 5:

     (a) GENERAL -- Commencing 180 days after  the.date  of  enactment  of
     'this Act, a manufacturer or importer of a new chemical  substance
     (other than a mixture  or a  chemical  substance covered by subsection
     (b) of this section)  shall  notify the Administrator of the planned
     manufacture or importation  of such substance  at least 90 days  in
     advance thereof.  When  providing such notice,  such  manufacturer  or
     importer shall  submit to the Administrator the information referred
     to in section 8 of  this  Act insofar  as  it pertains to such substance.
     If in the judgment  of the Administrator,  such a substance  does  not
     present an unreasonable  environmental or  human health risk,  he  may
     reduce the number of  days after submission of such information
     during which  manufacture or importation may not occur.   The  Administrator
     shall give priority attention to a chemical substance with respect
     to which information  is  received indicating that  serious economic
     or other hardships  are likely to result if there  is any unnecessary
     postponement  of manufacture or  importation.

     (b) SUBMISSION OF DATA —

          (1) After the  effective date of test standards issued under
          section  4 of this Act,  any manufacturer  or  importer of  a  new
          chemical substance  which is covered  by such  standards,  and who
          first manufactures  or  imports  such substance after such date,
          shall submit to  the Administrator  (in lieu of the information
          required in  subsection (a) of  this section),  at  least 90  days
          prior to such  manufacture or  importation, the test data developed
          in accordance  with  such standards, and the applicable information
          referred to  in section 8 of this Act which,pertains to  the
          intended use or  distribution of such substance.
                                  21

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     (2) The Administrator shall  promptly publish (subject to
     section 15 of this Act)  in the Federal  Register the identity
     of each such chemical  substance,  the use or distribution
     intended,  and a statement of the  availability of any test data
     or other information submitted.

(c) RULE -- If warranted by data available to him, o*- by the absence
of data, the Administrator may propose a rule under section 6 of
this Act with respect to a new chemical  substance.  If such rule is
proposed prior to the expiration of the 90-day period referred to
in subsection (a) or.(b) of this section, or during the extension
provided for in subsection (d) of this section, such proposed rule
shall apply (pending the outcome of administrative proceedings on
such proposal)  to any subsequent manufacture or distribution in
commerce of such new chemical  substance as if such proposed rule
were final.

(d) EXTENSION -- The Administrator may extend, for an additional
period beyond the 90-day period from the submission of required
information under this section, the date after which a new chemical
substance may be manufactured  or imported for any particular use or
distribution.  Such additional period  may not exceed 90 days and
shall not be granted except for good cause shown.  Notice of any
such extension, and the reasons therefor, shall be published in the
Federal Register.  Such an extension shall constitute a final
action for purposes of judicial review.

(e) CLEARANCE -- Unless the Administrator proposes a rule with
respect to a new chemical substance, under section 6 of this Act,
within 90 days after the submission of information or data under
subsection (a) or (b) (or in  the case  of information submitted
under subsection (a) within such shorter period as the Administrator
may consider appropriate) or within such period as extended under
subsection (e), manufacture or importation of such new chemical
substance may commence.  Nothing herein shall be construed to
prohibit the Administrator from promulgating a rule pursuant to
section 6 of this Act with respect to  any chemical substance after
manufacture or importation has commenced, or from taking action
against any  'ubstance which is found to be an imminent hazard
pursuant to section 7 of this  Act.

(f) EXEMPTION --

     (1) The Administrator may exempt any person from the obligation
     to submit test data under this section, if he determines that
     the submission of test data by such person would be duplicative
     of data previously received.  Such an exempt person shall not
     manufacture or import such new chemical substance prior to the
     date of termination of the premarket screening period for
                              22

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          which  test  data were  submitted  under this  section.  Any
          chemical  substance, or any manufacturer or  importer thereof
          referred  to under  the preceding  sentence,  shall  be subject
          to  all  the  other provisions of  this Act.

          (2) If the  Administrator, under  paragraph  (1),  exempts any
          person from submitting data under  this section  because of the
          existence of previously  submitted  test data,  and if such
          exemption takes effect during the  reimbursement period for
          such data (defined in paragraph  (3)), then,  unless the. parties
          can agree on the amount  and method of reimbursement,  the Administrator
          shall  order the person granted  the exemption  to provide  fair
          and equitable reimbursement  (in  an amount  and subject
          to  conditions determined under  rules of the Administrator)  --

               (A)  to any person who previously submitted test  data
              on which the  exemption was  based, for a  portion  of  the
              costs  incurred by him in complying with  the requirement
              under  this section  to submit  such data,  and

               (B)  to any other person who has been  required under this
              paragraph to  contribute with  respect  to  such data.

     An order under this paragraph shall  be  considered  final agency
action, for purposes  of judicial review.

          (3) For purposes of paragraph  (2), the reimbursement  period
          for any previously submitted test  data is  a period --

               (A)  beginning on the earliest date  (after  submission
              of such data) on which a person who previously  submitted.
               test data on  which  the exemption was  based was  no longer
               prohibited from  proceeding with the manufacture  and distribution
               in commerce of a chemical  substance to which such data
               applied, and

               (B)  ending  two years after such date  (or,  if later, at
               the expiration of a period after such date equal in
               length to the period which the Administrator determines
              was necessary to develop the  previously submitted test
               data).

     (g) SIGNIFICANT NEW USE --

          (1) A chemical substance may not be manufactured or  imported
          for a  use which  is identified  by the Administrator  in a  rule
          as a significant  new  distribution  in commerce of such substance,
          unless, at least  90 days prior  to  such manufacture or importation,
          the person intending  to  manufacture or  import such substance  for
          such use submits  a notice of  his intention to do so  to the
          Administrator.  Any such substance shall  be subject  to all
          other provisions  of this section.
                                  23

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          (2)  Any manufacturer  or importer  who  proposes  to  distribute
          in commerce a  chemical  substance  for  which  notice may be required
          under this subsection,  shall  attempt  to  ascot-tain from the
          person to whom he distributes such  substance  (hereafter in
          this paragraph referred to as "distributee") whether such
          distributee proposes  to distribute  such  substance for a use'
          which would be a significant  new  use.   If the  distributee .
          refuses or is  unable  to inform such manufacturer  or
          importer whether the  proposed use would  be  a  significant new
          distribution in commerce,  the manufacturer  or  importer shall
          so inform the  Administrator and shall  inform  the  distributee
          that such substance may be subject  to this  section.  Such
          distributee shall  thereafter  be treated,  for  purposes of this
          section (including this paragraph), as the  manufacturer of
          such substance.

Hazardous Chemical  Subst_anc_es_

Section 6:

     (a) GENERAL -- If the Administrator determines.that a  rule with
     respect to a chemical substance is necessary  to  protect against an
     unreasonable risk to human health  or the environment,  he may prescribe
     such a rule under this section.  Such  a  rule  may consist of one or
     more of any of the  following types of  requirements:

          (1)  Requirements (A)  prohibiting  .the  manufacture, processing or
          distribution in commerce of such  chemical  substance or (B)
          limiting the amount of  such chemical  substance which may be
          manufactured or distributed in commerce.

          (2)  Requirements (A)  prohibiting  the  manufacture  or distribution
          in commerce of such chemical  substance for  a  particular use or
          (B)  limiting the amount of such substance which,  or regulating
          the  condition  under which^such substances,  may be manufactured
          or distributed in commerce for such uses.

          (3)  P-quirements mandating that such  chemical  substance, or an
          article containing such substance,  be marked with or accompanied
          by :lear and adequate warnings and  instructions with respect
          to its use or  disposal, in such form  and bearing  such content
          as the administrator  determines to  be appropriate.

          (4)  Requirements (A)  that persons subject to  requirements
          prescribed under paragraphs (1),  (2),  or (3),  make and retain
          records and monitor or  conduct tests  'necessary to assure their
          compliance with such  requirements;  (B) that manufacturers and
          processors of  a chemical substances make and  retain records of
        • the  processes  used to manufacture or  process  such substance;
          and  (C) that manufacturers and processors monitor or conduct
          tests necessary to determine  whether  chemical  substances
          manufactured or processed by  them are adulterated (within the
          meaning of subsection (e)  (2)), and retain  records of such
          tests.  Any records or  data required  under  this paragraph

                                  24

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          shall  not  be considered  research  data  or  process  technology
          for. purposes of section  13(b)  of  this  Act.

     The Administrator shall  select  the  least  stringent  requirement
practicable consistent with  the  protection  of  human health  and  the
environment against  unreasonable risks.

     (b) APPLICABILITY --

          (1) Jhe. applicability  of any rule issued  under this  section
          may be limited to  specified  geographic areas.

          (2) The authority  of the Administrator,, under  subsection  (a)
          (2) of this section, to  prescribe a  rule  prohibiting  the
          manufacture, processing, or  distribution  in commerce  of a
          chemical  substance for a particular  use includes  the  authority
          to prohibit the distribution in commerce  of a  chemical  substance
          for a particular use in  a  concentration in excess of  a  level
          specified  in such  rule.

          (3) Rules  limiting the amount  of a chemical substance which
          may be manufactured, processed or distributed  in  commerce  or
          limiting the quantity  of such  substance which  may be  manufactured,
          processed  or distributed for a particular use, shall  provide
          for assigning production,  processing and  distribution quotas
          to the extent necessary, with  respect to  the chemical substance
          whose manufacture, processing  or distribution  is  limited
          thereby.  The permissible quota for each person who applies to
          manufacture or process such  substance or  to engage in its
          distribution in. commerce shall be determined in accordance
          with criteria which the Administrator shall prescribe by  rule.
          Such criteria shall take into  account all relevant factors,
          including  (A) effects  on competition, (B) the  market shares,
          productive capacity, and product and raw  material inventories
          of the precursors  of the chemical substance of persons  applying
          for quotas, (C) emergency  conditions, such as  fires or  strikes,
          and (D) effects on technological  innovation.

     (c) FACTORS --  In promulgating  rules under subsection  (a)  of this
     section, the Administrator shall  consider all  relevant factors,
     including --

          (1) the effects of the substance on  health and the magnitude
          and duration of human exposure to it;

          (2) the effects of the substance on  the environment and the
          magnitude and duration of environmental exposure to it;
          and

         - (3) the benefits of the substance for a given use or uses
          and the availability of less hazardous substances for the
          same uses.
                                   25

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     (d) EFFECTIVE DAT!! — The Administrator shall  specify the effective
     date ofany rule proposed under subsection (a) of this section.
     Such date shall  be as soon as feasible.

     (e) QUALITY CONTROL —

          (1) If the Administrator has good cause to believe that a
          particular manufacturer, importer, or processor is manufacturing,
          importing,  or processing a chemical substance in a manner
          which permits or causes the adulteration  of such chemical
          substance.                                        '

               (A) he may require such manufacturer or processor to
               submit a description of the relevant quality control
               procedures followed in the manufacturing or processing of
               such chemical  substance and he shall take such other
               actions as authorized by this Act; and

               (B) if he thereafter determines by rule that such quality
               control procedures are inadequate to prevent the adulteration
               of such substance, the Administrator may order the manufacturer,
               importer, or processor to revise such quality control
               procedures to  the extent which the Administrator finds
               necessary to remedy such inadequacy.

          (2) For purposes of this subsection, a cheniical substance is
          adulterated if it or any precursor substance used or produced
          in its manufacture  or processing bears or contains any other
          chemical substance  or contaminant which itself or, in combination
          with the chemical substance, poses or is  likely to pose an
          unreasonable risk to human health or the  environment.

     (f) PROCEDURE -- Rules issued under subsection (a) of this section
     (and amendments  thereto  or repeals thereof) shall be promulgated
     pursuant to section 553  of title 5 of the United States Code;
     except that in promulgating any^such rule, amendment, or repeal  (A)
     the Administrator shall  give interested persons an opportunity for
     the oral presentation of data, views, or arguments, in addition  to
     an opportuni'" to make written submissions; (B) a transcript shall.
     be made of any oral presentation; and (C) the  Administrator shall
     provide foi  cross-examination to such extent and in such manner  as
     in his discretion he determines is necessary and appropriate in
     view of the nature of the issue involved, the  number of the participants
     and the nature of the interests of such participants.

Imminent Hazard

Section 7:

     An imminent hazard shall be considered to exist when the evidence
is sufficient to show that the manufacture, processing, or distribution
in commerce of a chemical substance or product containing such substance
will  result in any unreasonable threat to human health or the environment,
prior to the completion of an administrative hearing or other formal
proceeding held pursuant to this Act;  If the Administrator has reason

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to believe that an imminent hazard  exists  he may petition  an  appropriate
district court of the United States,  or he may request the United  States
attorney for such district to do so,  to restrict the manufacture,
processing,  or distribution in commerce of the chemical  substance  or
product responsible for the hazard, or. to  take such other  action as  is
appropriate. The Administrator shall  simultaneously, if he has  not done
so,  propose any regulation which may be warranted under section 6  of
this Act.

Reports

Section 8:

     (a) GENERAL         '    -

          (1) The Administrator may,  by rule, require any  manufacturer,
          importer, or processor of any chemical substance to maintain
          such records, and to submit such reports to him  annually,  and
          at such more frequent time as he may reasonably  require.
          Reports which the Administrator  by rule requires may include
          the following information:

               (A) the common or trade name, the chemical  identity,  and
               the molecular structure of  each chemical  substance  for
               which such report is required, insofar as known to  the
               person making the report or insofar as reasonably ascertainable;

               (B) the categories or proposed categories of use of each
               such substance, insofar as  known to the person making the
               report, or insofar as such  are reasonably ascertainable;

               (C) reasonable estimates of the amounts of each substance
               manufactured, imported, or  processed for each such  use;
               and

               (D) a description of any byproducts resulting from  the
               manufacture, processing, distribution in commerce of each
               such substance, insofar as  known to the person making the
               report or insofar as reasonably ascertainable.

          (2) For purposes of this subsection, the term "byproduct"
          means a chemical substance which is produced or results  as a
          consequence of the manufacture,  importation, processing* or
          distribution in commerce of some other chemical  substance.

     (b)  INVENTORY -- The Administrator shall compile and publish  a
     listing of each chemical substance which any manufacturer, processor
     or importer reports (under this section) is manufactured, processed
     or imported into the United States.  A chemical substance shall be
     included in such listing as of the earliest date (as determined by
     the Administrator) on which such substance was manufactured in or
     imported into the United States.
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     (c) SUBMISSION --  Any test data or other information required  to  be
     developed pursuant to this Act shall  ha submitted to the Administrator
     promptly.  The Administrator may require the submission of preliminary
     and other reports  during the course of any monitoring or testing.

     (cl) RTCORDS -- Any person who manufactures, processes, or distributes
     in commerce any chemical substance sh^ll maintain records of adverse
     reactions to human health or the environment alleged to have been
     caused by the chemical  substance.   Such records mey consist of,  but
     not be limited to,'consumer allegations of personal injury or  harm
     to health,  reports of occupational disease or injury, and reports
     or complaints of injury to the environment submitted to the manufacturer,
     processor,  or distributor in commerce by individuals or governmental
     agencies.

     (e) HEALTH  AND SAFETY STUDIES — Any person who manufactures,
     processes,  or distributes in commerce any chemical  substance shall
     report to the Administrator --

          (1) all health and safety studies in progress  on or initiated.
          after  the date of enactment of this Act, conducted by or  for
          the person; and                                            .

          (2) a  list of all  health and safety studies conducted by  or
          for such person 40 years prior to the date of  enactment of
          this Act.  Such list shall be submitted to the Administrator
          within 180 days after the date of enactment of this Act.  The
          Administrator, on the basis of the lists submitted, may request
          submission of any study appearing on such list.

     (f) COMMENTS -- Whenever the Administrator determines that such
     action would be necessary to assist him to carry out his responsibilities
     and authorities under this Act, he may, by publishing a notice in
     the Federal Register, invite and afford all interested persons an
     opportunity to provide information and comment in writing respecting
     the health  or environmental effects of a chemical substance.  Such
     an invitation and  opportunity shall not be deemed a proceeding for
     purposes of section 15(a)(2) of this Act.

Authorization for Appropriations

Section 26:

     (a) There is authorized to be appropriated to the Administrator,
     for purposes of carrying out this Act, not to exceed $11,100,000
     for the fiscal year ending June 30, 1976, not to exceed $2,600,000
     for the transitional quarter ending September 30, 1976, and not  to
     exceed $10,100,000 for the fiscal  year ending September 30, 1977.
     No lart of  the funds so authorized ,to be appropriated shall be used
     to construct any research laboratories.
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(b) The Administrator may,  by rule, require the payment of a reasonable
fee from ony person required to submit test data under sections 4
and 5 of this Act to defray the cost of administering this Act.
Such rules shall  not provide for any fee in excess of $2,500.  In
setting such a fee, the Administrator shall take into account the
ability to pay of the person required to submit the data and the
cost of the Administrator of reviewing such data.  Such rules may
provide for sharing such a fee, in any case in which the expenses
of testing are shared under section 4(ci) of this Act.

(c) Whenever the Administrator submits, in connection with this
Act, any budget requests, supplemental budget estimates, legislative
recommendations,  prepared testimony for congressional hearings, or
comments on legislation to the President or to the Office of Management
and Budget, he shall concurrently transmit a copy thereof to the
Congress.  No officer or agency of the United States shall have any
authority to require the Administrator to submit budget requests or
estimates, legislative recommendations, prepared testimony for
congressional hearings, or comments on legislation relating to this
Act to any officer or agency of the United States for approval,
comments, or review, prior to the submission of such recommendations,
testimony, or comments to the Congress.
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