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Statement of Need: Formaldehyde is a colorless, flammable gas at room temperature that has a strong odor. It is found in resins used in the manufacture of composite wood products (i.e., hardwood plywood, particleboard and medium-density fiberboard). It is also found in household products such as glues, permanent press fabrics, carpets, antiseptics, medicines, cosmetics, dishwashing liquids, fabric softeners, shoe care agents, lacquers, plastics and paper product coatings. It is a by-product of combustion and certain other natural processes. Examples of sources of formaldehyde gas inside homes include cigarette smoke, unvented, fuel-burning appliances (gas stoves, kerosene space heaters), and composite wood products made using formaldehyde-based resins.

Summary of the Legal Basis: The Formaldehyde Standards for Composite Wood Products Act, which created Title VI of the Toxic Substances Control Act (TSCA), established formaldehyde emission standards for composite wood products (hardwood plywood, medium-density fiberboard (MDF), and particleboard) sold, supplied, offered for sale or manufactured in the United States. Under TSCA Title VI, manufacturers of composite wood products must comply with specific formaldehyde emission standards, and their compliance must be verified by a third-party certifier (TPC). TSCA Title VI requires EPA to promulgate implementing regulations by January 1, 2013.

Alternatives: TSCA Title VI establishes national formaldehyde emission limits for hardwood plywood, particleboard, and medium-density fiberboard and EPA has not been given the authority to change the limits. However, EPA will evaluate various implementation alternatives during the course of this rulemaking.

Anticipated Costs and Benefits: EPA prepared an analysis of the potential impacts associated with the proposed rulemaking. This analysis is summarized in greater detail in Unit VI.A. of the preamble for the proposed rule, and is briefly summarized here. Costs: EPA estimates the annualized costs of this proposed rule to be approximately $34,000 per year using either a 3% discount rate or a 7% discount rate. Small Entity Impacts: This rule would impact an estimated 9 small entities, of which 8 are expected to have impacts of less than 1% of revenues or expenses, and 1 is expected to have impacts between 1% and 3%. Effects on State, Local, and Tribal Governments: Government entities are not expected to be subject to the rule's requirements, which apply to third-party certifiers and accreditation bodies. The rule does not have a significant intergovernmental mandate, significant or unique effect on small governments, or have Federalism implications.

Risks: Formaldehyde is both an irritant and a known human carcinogen. Depending on concentration, formaldehyde can cause eye, nose, and throat irritation, even when exposure is of relatively short duration. In the indoor environment, sensory reactions and various symptoms as a result of mucous membrane irritation are some potential effects from exposure. There is also evidence that formaldehyde may be associated with changes in pulmonary function and respiratory related effects. In addition, formaldehyde is a by-product of human metabolism; therefore, endogenous levels are present in the body.