WSR 13-15-129 PROPOSED RULES DEPARTMENT OF ECOLOGY [Order 12-02—Filed July 22, 2013, 4:43 p.m.]
Original Notice.
Preproposal statement of inquiry was filed as WSR 12-15-045.
Title of Rule and Other Identifying Information: This rule making would amend chapter 173-334 WAC, Children's safe products—Reporting rule, to add Tris(1,3-dichloro-2-propyl)phosphate (TDCPP) (CAS # 13674-87-8) to the reporting list of chemicals, and to remove n-Butanol (CAS # 71-36-3) from the reporting list of chemicals. This rule making is in response to new information associated with petitions to the agency. The Washington department of health has also confirmed that TDCPP meets the toxicity and exposure criteria to be included on the chemicals of high concern for children (CHCC) list.
Hearing Location(s): Washington State Department of Ecology Headquarters, 300 Desmond Drive, Lacey, WA, on August 27, 2013, at 6:00 p.m.
Date of Intended Adoption: October 16, 2013.
Submit Written Comments to: Josh Grice, Department of Ecology, P.O. Box 47600, Olympia, WA 98504-7600, e-mail csparule@ecy.wa.gov, fax (360) 407-6102, must be received by 12:00 midnight on September 6, 2013.
Assistance for Persons with Disabilities: Contact waste 2 resources reception at (360) 407-6900, by August 20, 2013. Persons with hearing loss, call 711 for Washington relay service. Persons with a speech disability, call 877-833-6341.
Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The purpose of this rule making is to add Tris(1,3-dichloro-2-propyl)phosphate (TDCPP) (CAS # 13674-87-8) to the current list of reporting chemicals in chapter 173-334 WAC, Children's safe products—Reporting rule. As a result manufacturers of children's products will be required to report the presence of this chemical when the product is being offered for sale in Washington.
Reasons Supporting Proposal: This rule making is in response to new information associated with petitions ecology received from the Washington Toxics Coalition (WTC) and the American Chemistry Council (ACC). The WTC petition demonstrated that TDCPP met the criteria that are required to add a chemical to the reporting list of chemicals. Additional information has also indicated that there is a need to better understand the use of flame retardants in children's products. The ACC information demonstrated that n-Butanol no longer meets the criteria used to put a chemical on the reporting list of chemicals.
Statutory Authority for Adoption: Chapter 70.240 RCW, Children's safe products.
Statute Being Implemented: Chapter 70.240 RCW, Children's safe products.
Rule is not necessitated by federal law, federal or state court decision.
Name of Proponent: Department of ecology, governmental.
Name of Agency Personnel Responsible for Drafting: John Williams Jr., Ecology Headquarters, Lacey, Washington, (360) 407-6940; Implementation and Enforcement: Josh Grice, Ecology Headquarters, Lacey, Washington, (360) 407-6786.
A small business economic impact statement has been prepared under chapter 19.85 RCW.
Small Business Economic Impact Statement
Executive Summary: Ecology first adopted the rule called the Children's safe products—Reporting rule (CSP-RR) in July 2011, as a result of the Children's Safe Products Act (CSPA) chapter 70.240 RCW passage in 2008. This law specifically allows ecology to "adopt rules as necessary for the purpose of implementing, administering, and enforcing" chapter 70.240 RCW.
Ecology created a CHCC list in 2009 to meet these requirements. Ecology selected chemicals to be placed on the CHCC list that met both the following criteria:
TDCPP: The CSPA requires ecology to identify high priority chemicals that are of high concern for children. When creating the CHCC list in 2009, ecology considered and researched thousands of chemicals, including TDCPP. Taking a conservative approach, even if a chemical met the toxicity and exposure criteria, ecology decided to prioritize the list of potential CHCCs to a manageable number of chemicals. Ecology contracted with Dr. Catherine Karr (University of Washington Pediatric Environmental Health Specialty Unit) to provide scientific and technical advice regarding the development of the process for prioritizing CHCCs. Dr. Karr developed a framework that allowed us to quickly assess and prioritize chemicals. This framework considered both toxicity and potential for exposure. Ecology used this framework to rank the chemicals.
This rule making would amend chapter 173-334 WAC, Children's safe products—Reporting rule to add Tris(1,3-dichloro-2-propyl)phosphate (TDCPP, CAS # 13674-87-8) to the reporting list of chemicals, and to remove n-Butanol (CAS # 71-36-3) from the reporting list of chemicals. This rule making is in response to new information associated with petitions to ecology. If ecology would have had this new information when it originally created the reporting list of chemicals, n-Butanol would not have been on the list, but TDCPP would have been. The Washington state department of health has also confirmed that TDCPP meets both the criteria for exposure and toxicity as defined in RCW 70.240.030(1) and 70.240.010(6) respectively.
TDCPP is a flame retardant used mostly in flexible polyurethane foam, found in upholstered furniture and automotive products such as seat cushions and headrests. This includes foam baby products such as car seats and changing table pads. TDCPP has also been detected in dust and air samples of indoor environments such as homes and day care centers, and in human adipose tissue and the lipids of human milk.
There is scientific evidence showing TDCPP has a potential impact to children's health, and the chemical was eliminated for use in children's pajamas in the 1970s. TDCPP is associated with increased incidence of cancer, nervous system harm, and hormone disruption. Ecology also notes that risk is a function of the level of exposure. The presence of a chemical in a children's product does not necessarily mean that the product is harmful to human health or that there is any violation of existing safety standards or laws.
These proposed rule amendments contain three changes:
The small business economic impact statement (SBEIS) only estimates expected compliance costs incurred by small businesses. The removal of the chemical n-Butanol only results in avoided testing costs, and forgone benefits from information. Please see the cost-benefit analysis for information pertaining to the costs and benefits from removing n-Butanol; businesses are not expected to incur compliance costs as a result of the removal of n-Butanol.
Ecology's analysis is based on the best available information at the time of this analysis. Ecology welcomes public comments, data, and information during the public comment period that could improve the quality of this analysis.
Section 1: Background: CSPA is a law comprised mostly of specific requirements for manufacturers and importers of children's products, including:
CSP-RR, in chapter 173-334 WAC contains the list of chemicals that are considered a priority because they are of high concern for children. Many reporting requirements, definitions, civil penalties, and notification requirements are explicitly defined in the CSPA law, as illustrated below.
The baseline for comparison is the current CSP-RR, the CSPA law, as well as a number of partially overlapping requirements and mitigating factors, including:
Changes under ecology's proposed rule amendments: These proposed rule amendments contain three changes:
We only address the first two changes in this analysis. The SBEIS only estimates expected compliance costs incurred by small businesses. The removal of the chemical n-Butanol only results in avoided testing costs, and forgone benefits from information. Please see the cost-benefit analysis for information pertaining to the costs and benefits from removing n-Butanol; businesses are not expected to incur compliance costs as a result of the removal of n-Butanol.
Changes ecology does not have discretion over are not analyzed. Requirements already in the current CSP-RR (such as all other chemicals on the CHCC list, reporting ranges, etc.) are also not analyzed, as they are a part of the baseline; regardless of whether these proposed amendments are adopted, parties will need to comply with the existing CSP-RR. The effect of these rule amendments is that to the extent necessary, manufacturers or importers may report on the presence of TDCPP, which may result in additional testing.
Analytical exemptions: We also note that certain relevant elements have already been explicitly dictated or defined in the existing CSPA law, including:
For this rule making, ecology only has discretion on the phasing-in of first reporting time (ecology is not changing reporting ranges in these rule amendments). The inclusion of TDCPP on the reporting list meets the standards set by the authorizing law. If ecology is petitioned to add a chemical to, or remove a chemical from, the list, and the chemical meets the requirements, ecology must consider entering into rule making to include it.
Section 2: Analysis of Compliance Costs for Washington Businesses: Ecology quantitatively assessed the likely compliance costs of the proposed rule, and developed appropriate quantitative estimates of the value of those compliance costs for which it was possible. Ecology expects the elements of the proposed rule over which ecology had discretion to result in compliance costs related to:
Phase-in reporting: The authorizing law allows ecology to phase-in first reporting, but it does not explicitly dictate the degree of phasing. Ecology's choice of the degree of phasing-in the reporting schedule only acts to mitigate the costs of reporting on the initial date specified in the law (parties do not need to begin reporting until after August of 2014). Ecology, therefore, does not believe the choice of longer times before first reporting will impose additional costs.
Quantified costs of ecology's proposed rule: Ecology estimated the quantitative costs of complying with the proposed rule, including those elements dictated by the authorizing law, based on:
Costs of testing for TDCPP: There is a high degree of uncertainty inherent in this estimation given the purpose of the rule amendments - to learn the presence of the chemicals on the CHCC list in children's products. If ecology already had this knowledge there would be no need for the amendments to the reporting rule. Ecology would already have the information the amendments to the reporting rule seek to provide.
Ecology's analysis is based on the best available information at the time of this analysis. Ecology welcomes public comments, data, and information during the public comment period that could improve the quality of this analysis.
Ecology also notes that testing is not specifically required by the proposed rule or the CSPA. Other means of estimating TDCPP content include supply-chain knowledge and knowledge of the manufacturing process.
These estimates also do not account for economies of scale, non-reporters, or interstate/international regulatory consistency. For example, TDCPP was recently added to California's Proposition 65 list, which requires labeling of products that contain chemicals on the list at the risk of facing civil lawsuits if labeling is not done. Because California is a relatively larger market than Washington state, to some extent we expect companies may already test for TDCPP to meet the reporting requirements of Proposition 65.
Some retailers who act as importers or distributors for products made by companies with no presence in the United States may also need to report, but ecology assumed the number of importing companies will be minimal. Costs also depend on the extent of process knowledge businesses have. Responsible businesses will have some (if not complete) control or knowledge of the manufacturing process and content of their children's products. This is achieved through direct control or contracting. Ecology also expects that some businesses will already have process knowledge to mitigate liability in the event of product recall.
Ecology uses a few different estimates to provide a range of possible costs, particularly given the uncertainty outlined above.
Estimates based on existing reporting: We note that from June 1, 2012, to April 8, 2013, there have been eight reports of four different chemicals whose function was listed as flame retardants (these are the only chemicals with the function flame retardant reported since the adoption of the CSPA-RR). Based on this data it appears a single chemical averages two reports in approximately one year. We also note however that not all businesses are required to report certain chemicals on the CHCC list yet (as a function of business size and product tier), as reporting requirements are being phased-in. As businesses are phased-in we might expect a greater number of reports in the future. As a result, we counterbalance this low estimate with a high estimate illustrated below. We note that reports do not necessarily imply testing, and we control for this distinction below.
Table 1: Chemicals with flame retardant as a function reported to ecology from June 1, 2012, to April 8, 2013
Under the existing rule parties do not need to report based on an individual product, but rather by product category (specifically by "brick" levels of the GS1 Global Product Classification standard). Children's products containing TDCPP will likely fall in segment codes 75000000 or 54000000; baby care and household/office furniture/furnishings respectively.
From the Washington state employment security department we find all employers in Washington state with North American Industry Classification System (NAICS) codes that correspond with GS1 brick 75000000 or 54000000:
These codes were chosen because they include ottomans, upholstered juvenile furniture, cots, cribs, high chairs, dressing tables, nursery furniture, playpens, and car seats. For example, NAICS code "337122 Nonupholstered Wood Household Furniture Manufacturing" includes high chairs, dressing tables, and playpens. TDCPP is a flame retardant used mostly in flexible polyurethane foam, found in upholstered furniture and automotive products such as seat cushions and headrests. This includes foam baby products such as car seats and changing table pads. These codes also likely include businesses not expected to be affected by the rule amendments, as the codes also include bookcases, cabinets, bed frames, and sofas, for example, which are not children's products and not product categories that need to be reported. Further stratification is not possible with the NAICS codes.
There are eighty-four businesses for the NAICS codes identified above.1 In a given year, some businesses may need to report in more than one product category, and some businesses may not need to report any (for example if they've already reported in previous years). We note that there were fifty-nine businesses total that reported any one of sixty-six chemicals between June 1, 2012, to April 8, 2013. A given chemical had 7.89 businesses report, on average, and we assume that in a given year 13.4 percent of businesses will need to report for a single given chemical.
Given a business needed to report for a chemical, a business averaged 9.038 reports per chemical. Our universe of total businesses, multiplied by the expected percentage of businesses that would report for a single chemical, multiplied by the average reports per chemical for a business, gives us the expected number of reports for a single chemical. This is our medium estimate. We note that reports do not necessarily imply testing, and we control for this distinction below.
Our high estimate is derived from the average number of reports for a given chemical from June 1, 2012, to April 8, 2013, and there were 116.41 reports on average for a single chemical. We note that reports do not necessarily imply testing, and we control for this distinction below.
We note that there may be minimal time costs associated with reporting separate from the testing. We have omitted them here because ecology believes them to be negligible, and consists of using a web form with drop-down fields to report information on product brick, component, chemical, concentration, and the chemical function. Ecology does not believe this will take more than a few seconds.
No businesses are required to test for any of the chemicals, but some may elect to test for TDCPP: For businesses currently required to report, we assume 62.8 percent of these businesses will need to test their products. We derive this estimate from historical reporting data that identified the presence of a CHCC in a product as "no function - contaminant," across all reported products. Ecology's assumption is that reports that are able to identify the use of a chemical imply the chemical was used as part of the product design, and businesses are likely to know of the chemical in the product without testing (as it is designed to be there). If a business already knows the product contains TDCPP (for example because they have knowledge of the manufacturing process or already tested for compliance with other regulations such as California's Proposition 65), they will not need to test. For example, a business with many potential products to report may hire a product design engineer to evaluate the product design cycle and identify the likelihood of a CHCC's presence in the product. Then, if a report was submitted to ecology it would be submitted without testing any of the products, but instead be based on that engineer's knowledge of the product design.
We also note that in ecology's experience this is likely a high estimate of the percentage of historical reports that incurred testing costs, because even if businesses report a chemical as a "no function - contaminant," it is possible the chemical is part of the product design. For example, chemicals purposefully used as part of the manufacturing process that no longer serve a use after production may be reported as a "no function - contaminant." We are unable to discern which products reported as a "no function - contaminant" actually required testing. As a result, we believe the estimated 62.8 percent used above is likely an upper bound, and a smaller percentage of businesses will actually test. We emphasize again that no businesses are required to test for any of the chemicals, and the percentage of businesses that will elect to test for TDCPP will likely be much smaller, because ecology believes most businesses know what is in their product.
Testing costs: From ecology's experience testing for TDCPP we estimate $500 per sample tested. This does not take into any economies of scale, and ecology emphasizes that no testing is required. If they already know the product contains TDCPP (for example because they have knowledge of the manufacturing process or already tested the product to comply with other regulations such as California's Proposition 65), they will not need to test and the compliance costs estimated below will be smaller. If a business has multiple products falling in multiple product categories that might need to be tested, the compliance costs estimated below will be larger. Similarly, businesses only need to report per product category or brick, so if multiple products fall in a single product category they only need to report once.
Table 2: Expected testing costs over 20 years
Section 3: Quantification of Costs and Ratios: Ecology assumed that known businesses operating in Washington state manufacture [manufacturing] or importing children's products may have to comply with this proposed rule. These businesses fall into multiple NAICS2 categories. We use the eighty-four businesses mentioned above, from the NAICS codes 337121, 337122, 337124, 337125.
These codes were chosen because they include ottomans, upholstered juvenile furniture, cots, cribs, high chairs, dressing tables, nursery furniture, playpens, and car seats. TDCPP is a flame retardant used mostly in flexible polyurethane foam, found in upholstered furniture and automotive products such as seat cushions and headrests. This includes foam baby products such as car seats and changing table pads. These codes also likely include businesses not expected to be affected by the rule amendments, as the codes also include bookcases, cabinets, bed frames, and sofas, for example, which are not children's products and not product categories that need to be reported. Further stratification is not possible with the NAICS codes.
Table 3: Employee distribution from NAICS codes
Small businesses are defined as businesses with fewer than fifty employees, compared to the largest ten percent of all businesses, as required under the Regulatory Fairness Act (RCW 19.85.070). Because we assume that the probability of needing to test for TDCPP is not a function of the size of the business, specifically the number of employees a business has, the smallest businesses will experience the greatest per-employee costs on average. However, we might expect that smaller businesses may have fewer products they would potentially need to test for.
Ecology calculates cost-to-employment ratios examining the relative impacts of the proposed rule on small versus large businesses. Ecology also considers the impacts of the proposed rule on local governments and other small public entities. Other measures of business ability to cope with compliance costs (sales, hours of labor) are not sufficiently available for the representative set of affected businesses.
Using the NAICS codes of eighty-four businesses, the weighted average of employment sizes for businesses with less than fifty employees is equal to approximately 3.81 employees per business. We then expect the smallest businesses to experience compliance costs of approximately $33.86 - $1,970.57 per employee over twenty years, or $1.69 - $98.53 per year. The average employment size of businesses with greater than fifty employees is equal to 74.5 employees. We then expect the largest businesses to experience compliance costs of approximately $1.73 - $100.78 over twenty years, or $0.09 - $5.04 per year.
We note again the SBEIS only estimates expected compliance costs incurred by small businesses. The removal of the chemical n-Butanol only results in avoided testing costs, and forgone benefits from information. Please see the cost-benefit analysis for information pertaining to the costs and benefits from removing n-Butanol; businesses are not expected to incur compliance costs as a result of the removal of n-Butanol.
As a result, ecology believes the proposed rule imposes disproportionate costs on small businesses. We note however that this relies on the assumption that smaller businesses are just as likely to incur testing costs as larger businesses. We might expect that smaller businesses may have fewer products they would potentially need to test for. We might also expect however that smaller businesses will have less process knowledge than larger ones.
Section 4: Actions Taken to Reduce the Impact of the Rule on Small Business: Based on the statutory authority created by the law, ecology could have done the following:
Instead, ecology chose options, within the scope of the authorizing statute, to reduce this disproportionate burden, including:
Section 5: The Involvement of Small Business in the Development of the Proposed Rule Amendments: Ecology uses several techniques to involve small business and other interested parties in the rule-making process. The publication of the rule proposal documents includes rule language available for comments, a press release, notice, a public hearing and comment period. Ecology also uses a listserv (which has over five hundred members) to provide the public and small businesses, among others, with regular updates and information related to the proposed rule amendments. Ecology also maintains a web site dedicated to the rule-making effort, that includes a timeline of the rule-making schedule. Ecology has also kept in contact with the Association of Washington Businesses, the American Chemistry Council, Walmart, and Johnson and Johnson and trade associations such as the American Apparel and Footwear Association, about the proposed rule making.
Section 6: The SIC Codes of Impacted Industries: Ecology assumed that known businesses operating in Washington state manufacture [manufacturing] or import children's products may have to comply with the law. These businesses fall into multiple NAICS categories:
These codes were chosen because they include ottomans, upholstered juvenile furniture, cots, cribs, high chairs, dressing tables, nursery furniture, playpens, and car seats. For example, NAICS code "337122 Nonupholstered Wood Household Furniture Manufacturing" includes high chairs, dressing tables, and playpens. TDCPP is a flame retardant used mostly in flexible polyurethane foam, found in upholstered furniture and automotive products such as seat cushions and headrests. This includes foam baby products such as car seats and changing table pads. These codes also likely include businesses not expected to be affected by the rule amendments, as the codes also include bookcases, cabinets, bed frames, and sofas, for example, which are not children's products and not product categories that need to be reported. Further stratification is not possible with the NAICS codes.
Section 7: Impacts on Jobs: Ecology used the Washington state office of financial management's 2002 Washington input-output model (I-O model) to estimate the proposed rule's first-round impact on jobs across the state. This methodology estimates how the impact of reductions or increases in spending in certain sectors of the state economy flow through to purchases, suppliers, and demand for other goods. Compliance costs incurred by an industry, or industries, are entered in the I-O model as decreases in spending and investment.
Given the above costs of compliance, ecology expects approximately 0.17 - 9.87 jobs lost over twenty years, or 0.009 - 0.493 ongoing positions. We note that these result from the additional compliance costs expected due to the proposed rule amendments. Across Washington state, net compliance costs have actually decreased because of the removal of n-Butanol (please see the cost-benefit analysis for information pertaining to the removal of n-Butanol), and we therefore expect job increases due to the rule amendments as a whole. Given net compliance cost decreases of $54,176 to $443,2053 due to the removal of n-Butanol, ecology would expect approximately 0.55 - 2.06 additional jobs over twenty years or 0.03 - 0.10 ongoing positions.
We note there is likely a subset of businesses that are better off and as well as businesses that are worse off (because some businesses only deal with products with TDCPP and not n-Butanol, and vice versa), so these impacts are likely spread across disparate businesses.
These are jobs directly lost within impacted industries, plus jobs lost in supporting industries (wholesale goods, energy, support services, transportation) and industries where labor income would be spent (retail, services, energy, housing, transportation).
Works Cited:
Gregoire, C. (2010). Executive Order 10-06: Suspending Non-Critical Rule Development and Adoption.
Patora, K. (July 2011). Final Cost-Benefit and Least Burdensome Alternative Analyses: Chapter 173-334 WAC.
Reproductive and Cancer Hazard Assessment Branch Office of Environmental Health Hazard Assessment California Environmental Protection Agency. (July 2011). Evidence on the Carcinogenicity of Tris(1,3-Dichloro-2-Proply)Pphosphate [phosphate].
Stapleton, K. K. (2011). Identification of Flame Retardants in Polyurethane Foam Collected from Baby Products. Environmental Science and Technology.
United States. (2008). The Consumer Product Safety Improvement Act.
US Treasury Department. (2013).
http://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_iratesandterms.htm.
Retrieved from Rates and Inflation for I-Bonds, 1998-2012.
WA State. (2011). Chapter 173-334 WAC: Children's Safe Products - Reporting Rule.
WA State. (2008). Chapter 70.240 RCW: Children's Safe Products.
WA State Employment Security Department. (2012). Workforce Explorer. Retrieved from www.workforceexplorer.com
WA State. (2011). RCW 34.05: Administrative Procedure Act.
A copy of the statement may be obtained by contacting Josh Grice, Department of Ecology, P.O. Box 47600, Olympia, WA 98504-7600, phone (360) 407-6786, fax (360) 407-6102, e-mail joshua.grice@ecy.wa.gov, downloaded at https://fortress.wa.gov/ecy/publications/SummaryPages/1307030.html.
A cost-benefit analysis is required under RCW 34.05.328. A preliminary cost-benefit analysis may be obtained by contacting Josh Grice, Department of Ecology, P.O. Box 47600, Olympia, WA 98504-7600, phone (360) 407-6786, fax (360) 407-6102, e-mail joshua.grice@ecy.wa.gov, downloaded at https://fortress.wa.gov/ecy/publications/SummaryPages/1307029.html.
July 22, 2013
Polly Zehm
Deputy Director
AMENDATORY SECTION (Amending WSR 11-16-008, filed 7/21/11, effective 8/21/11)
WAC 173-334-130 The reporting list of chemicals of high concern to children (CHCC list).
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