Bergeson & Campbell, P.C. (B&C®) is a Washington, D.C. law firm providing chemical and chemical product stakeholders unparalleled experience, judgment, and excellence in matters relating to TSCA, and other global chemical management programs.

By Zameer Qureshi

On October 4, 2016, Bergeson & Campbell, P.C. (B&C®) hosted its fourth and final webinar in its series of webinars on the new Toxic Substances Control Act (TSCA) in collaboration with Chemical Watch.  The webinar addressed numerous important issues for a wide array of stakeholders.  The webinar was moderated by Lynn L. Bergeson, Managing Partner at B&C, and the expert panel included Charles M. Auer, Richard E. Engler, Ph.D., Lisa R. Burchi, and Sheryl L. Dolan.

Mr. Auer, Senior Regulatory and Policy Advisor at B&C, addressed “Administration of the Act” and described important changes between old and new TSCA.  Mr. Auer’s presentation consisted of three segments:  (1) “Section 26 Science Requirements”; (2) “Section 26 Information and Guidance”; and (3) “Section 26 ‘Savings’ Provision.”  

Mr. Auer addressed the “Scientific Standards” requirements of new TSCA Section 26(h), the “Weight of Scientific Evidence” requirements of Section 26(i), and the Section 26(o) provisions of new TSCA relating to Consultation with the Science Advisory Committee on Chemicals (SACC).  Mr. Auer addressed a number of additional rules and requirements in Section 26, including the U.S. Environmental Protection Agency’s (EPA) obligation to submit a report to Congress and issue an Annual Plan under Sections 26(m)-(n).

Ms. Burchi, Of Counsel at B&C, discussed “Preemption” under Section 18 of new TSCA. Ms. Burchi described preemption as “one of the most debated subjects in [the TSCA reform] debate” and stated that she had heard it referred to as a “linchpin” in terms of reaching agreement on provisions for TSCA reform to occur.  Ms. Burchi stated “Everything in the new Section 18 is new or very significantly changed from what we were used to with regard to preemption … The final provisions are fairly complicated … It will remain to be seen whether states continue to act with regard to chemical substances in the way that they have been.”

Ms. Burchi addressed the three “main” provisions related to preemption under new TSCA Sections 18(a)(1)(A)-(C), and analyzed more specific issues (e.g., pause preemption) and the related exceptions.  Ms. Burchi described the TSCA Section 18(d)-(e) provisions relating to “Exceptions” and “Preservation of Certain Laws.”  Ms. Burchi also addressed new TSCA’s Section 18(f) “Waivers” provisions and concluded her segment of the presentation with the following statement:  “It remains to be seen whether states are going to be jumping in to [take action] when EPA has already identified a chemical for prioritization and review … [There will be some interesting provisions and interplay] to be seen as we move forward under new TSCA.” 

Ms. Dolan, Senior Regulatory Consultant at B&C, analyzed “Fees” under new TSCA and addressed EPA’s obligations to:  (1) set lower fees for small business concerns; (2) consider balance between manufacturers and processors; and (3) consult with the regulated community.  Ms. Dolan stated “new TSCA directs EPA to review its fee program on a three-year cycle and revise it as needed to raise the target fees … While new TSCA did not set a deadline for developing the fees program, it really didn’t have to -- EPA, of course, has every incentive to knock this rulemaking out quickly.” 

Ms. Dolan indicated that a final rule is expected on fees under new TSCA by June 2017, and provided an overview of comments received on the proposed rule.  Ms. Dolan stated that “overarching themes” in the comments included that:  (1) fees should be tied to the level of required effort; (2) fees should encourage innovation; and (3) fees should not be overly complex or difficult to administer.  In relation to (3), Ms. Dolan quoted a commenter that stated “don’t give us the [Internal Revenue Service (IRS)] Code.” 

Ms. Dolan stated “everyone seems to want to know how much will a [pre-manufacture notice (PMN)] cost in the future … I think the answer to that [will come with a big red bow] in December.  Specifically, EPA states that it will send a proposal to [the Office of Management and Budget (OMB)] in mid-October … EPA may well set a comment period of at least 60 days for this proposed rule.”

Dr. Engler, Senior Chemist at B&C, discussed Sustainable Chemistry (i.e., Green Chemistry) under new TSCA.  Dr. Engler stated “new TSCA is largely silent on sustainability” and indicated that the “primary benefit” to Sustainable Chemistry under new TSCA is the abbreviated review period when EPA determines that a new chemical is “not likely to present” an unreasonable risk (i.e., 90-day period waived and manufacturers can commence manufacturing immediately).  Dr. Engler addressed chemicals that EPA considers to present low hazard for health and ecotoxicity (“low/low” chemicals) and stated that new TSCA could be “more of a driver for Sustainable Chemistry,” if only low/low chemicals escape regulation.

Dr. Engler addressed “Relative Risk under New TSCA” and EPA’s “Safer Choice Program” (SCP).  Dr. Engler discussed the Senate Report on S. 697, which suggested that EPA should consider “private sector voluntary consensus standards as an alternative” to SCP.  Dr. Engler indicated that as the relevant section of the Senate report concerns Section 23, the Sustainable Chemistry Section that was not included in the enacted new TSCA, it is unclear how it applies to new TSCA as enacted.  Dr. Engler stated that EPA is proceeding with SCP and hosting a summit in November on this topic.

The webinar concluded with a Questions and Discussion (Q&D) session, and B&C’s expert panel provided useful answers and analyses in response to attendees’ questions.  Ms. Bergeson moderated the Q&D session, which was organized by topic. 

In the Q&D session, Ms. Bergeson stated and asked Ms. Dolan: “Fees are super important … [small businesses and startups] might have a hard time mustering any type of financial liquidity to get their notifications through the gauntlet of EPA -- so how would you expect EPA to be defining lower fees for purposes of small business provision?”

Ms. Dolan responded by stating “[currently, the ratio is $2,500 and $100 for small businesses.  I would imagine there will be some kind of comparable proportionality and currently there are other submissions (e.g., Low Volume Exemptions) that don’t require any fees.  EPA has got to raise the money somewhere -- the more they put it on something else or the more they try to avoid charging fees for things, the more it’s going to jack up the cost and other things.  I would imagine that they are going to charge something for everything.  Whether they maintain that proportionality of 100:2500 remains to be seen.  Another consideration is what constitutes a small business.  There is a lot of conversation about that and the fact that definition hasn’t been updated in quite a while … This might be something that is the focus of a lot of attention in the proposed rule.]”

Ms. Bergeson drew on Mr. Auer’s extensive experience with EPA on several occasions during the Q&D session, starting questions with “If you were back at EPA,” and Mr. Auer’s responses were comprehensive.   Dr. Engler responded to questions regarding Green Chemistry and discussed Persistent, Bioaccumulative, and Toxic (PBT) substances under new TSCA, and Ms. Burchi answered questions on California’s Safer Consumer Products Regulation (SCPR) and preemption under new TSCA.

More information on TSCA reform and B&C’s “The New TSCA: What You Need to Know” webinar series is available online.


 

By Sheryl L. Dolan, Kathleen M. RobertsJames V. Aidala, and Lynn L. Bergeson

On August 11, 2016, the U.S. Environmental Protection Agency (EPA) convened a public meeting to solicit comments prior to development of a proposed rule to implement the revised Section 26 fees provision under the new Toxic Substances Control Act (TSCA).  Public comments may be submitted through regulations.gov in docket EPA-HQ-OPPT-2016-0401 until August 24, 2016.

During the meeting, EPA solicited public comment in particular on the following five issues:

  1. To be able to defray 25 percent of costs of administering Sections 4, 5 and 6, and Confidential Business Information (CBI), does industry have considerations of weight amongst the three areas of fee collection?
  2. Does industry have thoughts on the types of factors (types of submissions, numbers of submissions, level of difficulty, etc.) that EPA should consider when structuring the fees?
  3. Has industry considered how to distribute payment amongst multiple manufacturers and/or processors?
  4. Does industry have thoughts on how to identify the whole universe of manufacturers, including importers and processors affected?
  5. Does industry have thoughts on how to arrive at an appropriate balance between manufacturers and processors?

In its presentation, EPA stated that it intends to publish a proposed rule by mid-December 2016, and a final rule in time for its statutory June 22, 2017, deadline.

Four industry trade associations gave prepared remarks during the meeting:  the American Chemistry Council; the American Petroleum Institute; the Society of Chemical Manufacturers and Affiliates; and the American Fuel & Petrochemical Manufacturers.  Their comments reflected several common but competing themes, including:

  • EPA needs to share its expectations of internal costs as a starting point for discussions of the fee structure.
  • The fee system should be straightforward to implement.
  • EPA should be mindful in developing a fee structure so as not to stifle innovation; for example, placing too high of fees for review of new chemistries under Section 5 or confidentiality claims under Section 14.
  • Not all sections should be given equal weight; in particular, as industry will pay for Section 4 data development, it should not be double-charged by assessing a fee for EPA’s review of these data.
  • EPA must provide adequate consideration for the effect on small businesses.
  • Consideration should be given to incremental fees, tied to EPA milestones.
  • A business should have a way to exit from a Section 6 risk evaluation process if it elects to exit the market.

Commentary

Congress recognized that the new TSCA tasks EPA with significant additional responsibilities, and included Section 26 as a venue to ensure adequate resources would be available to develop the infrastructure to meet these responsibilities according to the specified timelines and in conformity with sound science.  Input from all affected stakeholders will be needed to devise a workable TSCA fee system, particularly in the compressed timeframe for rule development. 

EPA and industry stakeholders are supportive of a simple framework, but the complexities and current unknowns of how new TSCA will operate will make this goal challenging.  Many questions exist that will not be answered before next week’s comment deadline:

  1. Should a company have to pay fees for a Section 6 risk evaluation on uses that it does not support? 
  2. Should there be fees associated with Section 6 prioritization actions?  If not, does that mean that only high priority chemicals will have Section 6 fees assessed on them? 
  3. Given the new threshold for affirmative findings under Section 5, will EPA complete the same number of new chemical notifications that it has in the past?  If not, should that anticipated reduction in notification reviews be reflected in the fees proposal? 
  4. Most industry stakeholders recognize that the current PMN fee of $2,500 will be increased, but how much is too much?   
  5. As previously noted, is it appropriate to require industry to pay for testing under Section 4, and then charge for EPA review of that test data? 
  6. To ensure that sufficient funds are raised, will we need to assess a fee for every “touch” that EPA has within Sections 4, 5, and 6?  How can that cost be fairly allocated among all industry players, including small businesses?

While EPA did not offer to share information on budgets at the August 11, 2016, meeting, the Office of Pollution Prevention and Toxics (OPPT) presumably has pertinent information supporting its annual budgets that must be shared in the near term if it hopes to receive any meaningful ideas on a proposed fee structure.  Although past program outputs done under old TSCA may bear little resemblance to the duties EPA now has under new TSCA, EPA’s new policies and responsibilities will be some scale of past program capabilities and budget.

Of more relevance will be the experience of OPPT’s sister program, the Office of Pesticide Programs (OPP).  OPP has had a dedicated stream of user fees since the 1988 amendments to the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), and additional fees were imposed in 2004 with enactment of the Pesticide Registration Improvement Act (PRIA) fee-for-service program.  While the FIFRA product licensing program is different in many respects from TSCA, there are relevant commonalities that OPPT should find helpful.  OPP has a time accounting system, for example, that provides a principled basis on which to estimate the time required for study report review and risk evaluation. 

With estimates derived from the time accounting system, OPP (and presumably OPPT) can estimate how much it costs EPA to review toxicity studies individually.  For example, there is an estimate of how much it costs EPA to review a 90-day subchronic study, or how much to review a genotoxicity study. These calculations form the basis of the PRIA fee scheme, as PRIA is designed to generate one-third of the program costs involved.  The “simple” general rule underlying a now elaborate fee schedule with almost 200 categories is that the more science review involved, the greater the required fee.  The new law may not need or want to have so many different categories, but the operating principle can remain the same.

For OPPT, the dollar amounts could vary from OPP given the statutory limitation of the maximum amount to be generated, but the more difficult question will be how OPPT calculates its expected workload under the new law.  Given the wealth of information available through OPP’s experience, sharing this information would further inform the public about what to expect in, or options for how to fashion, a fee scheme.