By Lynn L. Bergeson and Carla N. Hutton
On May 12, 2020, the U.S. Environmental Protection Agency (EPA) released the signed final rule updating the definition of small manufacturers, including a new definition of what is considered a small government, used to determine reporting and recordkeeping requirements under the Toxic Substances Control Act (TSCA). According to EPA, the updated definitions will reduce reporting burdens on chemical manufacturers and small governments while maintaining the agency’s ability to receive the information it needs to understand exposure to chemical substances manufactured in the United States. The final rule makes a technical correction to the small manufacturer reference at 40 C.F.R. Section 704.104 for hexafluoropropylene oxide, which only includes a rule-specific small processor definition and not a small manufacturer definition. When reviewing the small manufacturer size standards, EPA found this to be an “inadvertent error.” The final rule also updates the current small manufacturer definition in the Preliminary Assessment Information Rule (PAIR) at 40 C.F.R. Section 712.25 to align it with the updated small manufacturer definition at 40 C.F.R. Section 704.3.
EPA notes that the updated definitions will apply to the Chemical Data Reporting (CDR) rule reporting period beginning June 1, 2020, and will impact certain reporting and recordkeeping requirements for TSCA Section 8(a) rules. EPA states that the final rule is based on 2018 dollars to ensure that the definition is as up to date as possible at the time of promulgation. The final rule will be effective 30 days after publication in the Federal Register. EPA has posted the pre-publication version of the final rule on its website.
More information on CDR reporting is available in our May 13, 2020, blog item, “New Reporting Procedure for Co-Manufacturers under TSCA CDR Rule May Catch Certain Manufacturers Off Guard,” and our March 19, 2020, memorandum, “EPA Releases Final Amendments to CDR Rule, Extends Reporting Period.”
By Lynn L. Bergeson and Christopher R. Blunck
One of several changes to the Toxic Substance Control Act (TSCA) Chemical Data Reporting (CDR) Rule, issued in final on April 9, 2020, is that in the 2020 cycle, the U.S. Environmental Protection Agency (EPA) has changed the way that toll manufacturing must be reported. In this cycle, EPA will not accept reporting from only the contracting manufacturer in situations where a company contracts with another company (i.e., a toll manufacturer) for the production of chemicals. As in years’ past, EPA states in its final rule that if no report is filed, both the contracting and producing companies will be held liable if no reporting occurs. Under past CDR cycles, EPA would accept reporting from either the contracting manufacturer or the producing (formerly referred to as “toll”) manufacturer. In 2020, EPA has stated in multiple fora that for the 2020 reporting period, EPA will only accept manufacturing details from the actual producers, even if manufacturing was contracted by another company. This change may come as a surprise, especially to producing companies that heretofore may not have reported under the CDR Rule and instead relied on the contracting company to do so.
EPA stated in the preamble to the final CDR rule that it chose to include two different reporting methodologies for a co-manufacturing situation, indicating that the methodologies are based on a desire to reduce reporting burden and maintain flexibility for both the contracting and producing company. EPA noted that the companies must work together to select between the methodologies for preparing their CDR methodologies. The two methodologies for reporting, codified at 40 C.F.R. Section 711.22(c), are:
(1) The contracting company initiates the required report for that site [defined by EPA at 40 C.F.R. §711.3 as the location where the chemical substance is physically manufactured for chemical substances co-manufactured] as the primary submitter. The contracting company must indicate on the report that this is a co-manufacturing situation, notify the producing company, and record the production volume domestically co-manufactured as set forth in §711.15(b)(3) and processing and use information set forth in §711.15(b)(4). Upon notification by the contracting company, the producing company must also record the production volume domestically co-manufactured and complete the rest of the report as prompted by e-CDRweb.
(2) Upon written agreement between the contracting company and the producing company, the producing company completes the full report for the co-manufactured chemical. The contracting company supplies the information not otherwise known to or reasonably ascertainable by the producing company.
In both cases, the producing company (toll manufacturer) must provide the manufacturing details. There is no mechanism for the contracting company to submit the entire Form U.
More information on the final CDR rule is available in our March 19, 2020, memorandum, “EPA Releases Final Amendments to CDR Rule, Extends Reporting Period.”
By Lynn L. Bergeson and Carla N. Hutton
On March 17, 2020, the U.S. Environmental Protection Agency (EPA) announced the availability of a final rule amending the Chemical Data Reporting (CDR) rule. According to EPA, the amendments are intended to reduce the burden for certain CDR reporters, improve the quality of CDR data collected, and align reporting requirements with the Frank R. Lautenberg Chemical Safety for the 21st Century Act’s (Lautenberg Act) amendments to the Toxic Substances Control Act (TSCA). EPA states that some of the key revisions include:
- Simplifying reporting, including allowing manufacturers to use certain processing and use data codes already in use by many chemical manufacturers as part of international codes developed through the Organization for Economic Cooperation and Development (OECD);
- Updating requirements for making confidentiality claims to align with the requirements in amended TSCA; and
- Adding reporting exemptions for specific types of byproducts manufactured in certain equipment.
Additionally, EPA is extending the reporting period for CDR data submitters from September 30, 2020, to November 30, 2020, to provide additional time for the regulated community to familiarize themselves with the amendments and to allow time for reporters to familiarize themselves with an updated public version of the reporting tool. The reporting period will still begin on June 1, 2020. EPA will host a webinar on Tuesday, March 31, 2020, to discuss the revised reporting requirements, provide an overview of the 2020 CDR submission period, and to give an introduction to the updated e-CDRweb reporting tool. EPA has posted pre-publication versions of the final rules amending the CDR rule and extending the reporting period. More information will be available in a forthcoming memorandum that will be posted on our website.
By Lynn L. Bergeson and Carla N. Hutton
On March 5, 2020, the U.S. Environmental Protection Agency (EPA) announced that it issued a final rule to add two strains of microorganisms to the list of microorganisms eligible for an exemption from certain reporting requirements under the Toxic Substances Control Act (TSCA). EPA states that manufacturers of new intergeneric Trichoderma reesei (strain QM6a) and Bacillus amyloliquefaciens (subspecies amyloliquefaciens) may now be eligible to undergo a streamlined review process under TSCA’s new chemicals review program with reduced TSCA fees. The final rule is intended to ensure the safety of human health and the environment while reducing regulatory burden for the biotechnology industry.
EPA states that after reviewing all relevant health and safety data, it determined that the two microorganisms can be added to the list of microorganisms eligible for exemption. Under TSCA, manufacturers of a new intergeneric microorganism may be eligible to submit an exemption request in lieu of a microbial commercial activity notice (MCAN) if the organism is on the list of species eligible for an exemption and meets other criteria. EPA is including these two microorganisms on the list because it determined that the microorganisms “will not present an unreasonable risk of injury to health or the environment provided that the other criteria relating to the introduced genetic material and the physical containment of the new microorganisms have been met.”
According to EPA, both microorganisms have a long history of safe use to produce a variety of commercial enzymes used in industrial and food-related industries. Trichoderma reesei is used by the animal feed, baking, beverages, textile processing, detergent, pulp and paper, industrial chemicals, and biofuels industries. Bacillus amyloliquefaciens has been used to produce commercial enzymes for more than 50 years. It produces carbohydrases, proteases, nucleases, xylanases, and phosphatases that have applications in the food, brewing, distilling, and textile industries.
The final rule will be effective 30 days after publication in the Federal Register.
By Lynn L. Bergeson and Carla N. Hutton
On July 5, 2019, the U.S. Court of Appeals for the District of Columbia Circuit rejected an “invitation” to recognize liability under the False Claims Act (FCA) based on a company’s failure to meet a Toxic Substances Control Act (TSCA) reporting requirement and failure to pay an unassessed TSCA penalty. Kasowitz Benson Torres LLP v. BASF Corp. (No. 1:16-cv-02269). The court states that the FCA imposes civil liability on anyone who defrauds the federal government of money or property. Under the FCA, a third party may file suit on behalf of the government and collect a “substantial” bounty if successful. The law firm Kasowitz Benson Torres LLP (Kasowitz) filed suit in 2016, claiming that several chemical manufacturers violated TSCA by “repeatedly failing to inform” the U.S. Environmental Protection Agency (EPA) of “information regarding the dangers of isocyanate chemicals.” Kasowitz argued that the manufacturers’ failure to disclose this information and their subsequent actions deprived the government of property (substantial risk information) and money (TSCA civil penalties and contract damages). The court noted that Kasowitz demanded “billions of dollars in damages, even though the government openly support[ed] the defendants.” The district court dismissed its lawsuit, and Kasowitz appealed, asking the court “to become the first court to recognize FCA liability based on the defendants’ failure to meet a TSCA reporting requirement and on their failure to pay an unassessed TSCA penalty. We decline the invitation and affirm the dismissal.”
Kasowitz claimed that the defendants -- BASF Corporation, Covestro LLC, Dow Chemical Company, and Huntsman International LLC -- “manufacture isocyanate chemicals, which are used to produce various polyurethane-based materials such as paint, adhesives, rigid foam for insulation, flexible foam for mattresses and cushions, and parts for automotive interiors.” According to Kasowitz, the defendants acquired information as early as the 1970s about the adverse health effects of isocyanate chemicals. The companies failed to disclose this information to EPA, however, despite participating in EPA’s Compliance Audit Program. Kasowitz argued that the companies’ TSCA violations and their failure to pay penalties for those violations deprived the government of its money and property.
In its analysis of Kasowitz’s claims, the court describes the allegation that the companies violated FCA’s reverse false claim provision by “knowingly conceal[ing] or . . . improperly avoid[ing] . . . an obligation to pay” money as a non-starter. The court notes that “[i]t is undisputed that the EPA did not assess TSCA penalties against the defendants for failing to report substantial risk information regarding isocyanate chemicals.” As a result, there was no FCA “obligation” for the companies to conceal or avoid. In its decision, the court states that once EPA has taken successful administrative action, it has discretion to impose an appropriate civil penalty, including no penalty. According to the court, two TSCA provisions make this conclusion “inescapable”: (1) TSCA expressly grants the EPA authority to remit or otherwise decline to impose a civil penalty; and (2) TSCA itself recognizes that not every violation results in a civil penalty. Under EPA’s Compliance Audit Program, the court states that a company that failed to report substantial risk information faced no additional penalty and was in the same position it would have been had it not participated in the Program at all. Kasowitz also argued that the companies violated the reverse false claim provision by “knowingly conceal[ing] or . . . improperly avoid[ing] . . . an obligation to pay or transmit” property in the form of substantial risk information. The court considered whether the TSCA obligation to inform the EPA of substantial risk information qualifies as an obligation to transmit property. The court “conclude[d] that TSCA does not require the transmission of a property interest. TSCA gives the EPA one -- and only one -- interest in substantial risk information: the right to be informed of it.”
By Lynn L. Bergeson and Margaret R. Graham, M.S.
On April 30, 2019, the U.S. Environmental Protection Agency (EPA) announced it would be hosting two webinars for companies, organizations, and individuals required to report under the Mercury Inventory Reporting Rule of the Toxic Substances Control Act (TSCA). The final rule applies to any person who manufactures (including imports) mercury or mercury-added products, or otherwise intentionally uses mercury in a manufacturing process (including processes traditionally not subject to TSCA, such as for the manufacture of pharmaceuticals and pesticides).
The first webinar, Mercury Inventory Reporting Rule, will provide background on reporting requirements under the final rule. It will take place on May 21, 2019, at 2:00 p.m. (EDT). The 2018 reporting year is from January 1, 2018, to December 31, 2018, and the submission deadline for the 2018 reporting year is coming up on July 1, 2019. Reporters are required to submit their information to EPA using the Mercury Electronic Reporting (MER) application for the first time on July 1, 2019, and then every three years thereafter. Based on the information collected, EPA will identify any manufacturing processes or products that intentionally add mercury and recommend actions to achieve further reductions in mercury use. Following EPA’s presentation, webinar participants will have an opportunity to ask questions on reporting requirements under the final rule. Registration is available online.
The second webinar, Mercury Electronic Reporting (MER) Application, will demonstrate how to use the online MER application through EPA’s Central Data Exchange (CDX), which is organized as a fill-in-the-blanks form with drop-down menus and lists of check-box options. It will take place on May 23, 2019, at 2:00 p.m. (EDT). Registration is available online.
More information on the Mercury Inventory Reporting Rule is available in our June 25, 2018, memorandum “EPA Publishes Final Reporting Requirements for TSCA Mercury Inventory,” and in our March 19, 2019, memorandum “EPA Releases New Tools to Help Companies Meet July 1 Mercury Reporting Requirements.”
By Lynn L. Bergeson and Carla N. Hutton
On March 18, 2019, the U.S. Environmental Protection Agency (EPA) released new tools intended to help companies, organizations, and individuals fulfill their reporting requirements under the mercury reporting requirements rule. Those required to report under the mercury rule can now do so online through the Mercury Electronic Reporting (MER) application accessed through EPA’s Central Data Exchange (CDX). EPA states that it designed this reporting tool “to be user-friendly, with drop-down menus and lists of check-box options, to help make reporting easy and efficient.” As reported in our June 25, 2018, memorandum, “EPA Publishes Final Reporting Requirements for TSCA Mercury Inventory,” the mercury rule applies to any person who manufactures (including imports) mercury or mercury-added products, or otherwise intentionally uses mercury in a manufacturing process (including processes traditionally not subject to the Toxic Substances Control Act (TSCA), such as for the manufacture of pharmaceuticals and pesticides). EPA will use data from the 2018 reporting year for the 2020 mercury inventory. The 2018 reporting year is from January 1, 2018, to December 31, 2018, and the submission deadline for the 2018 reporting year is July 1, 2019. Based on the information collected, EPA will identify any manufacturing processes or products that intentionally add mercury and recommend actions to achieve further reductions in mercury use. More information is available in our memorandum.
By Lynn L. Bergeson, Richard E. Engler, Ph.D., and Margaret R. Graham
On January 31, 2019, the U.S. Environmental Protection Agency (EPA) was petitioned by the Attorneys General of 14 states (Massachusetts, Pennsylvania, California, Connecticut, Hawaii, Maine, Maryland, Minnesota, New Jersey, New York, Oregon, Rhode Island, Vermont, and Washington) and the District of Columbia under Toxic Substances Control Act (TSCA) Section 21(a) to issue an asbestos reporting rule to require reporting under TSCA Section 8(a) of information necessary for EPA to administer TSCA as to the manufacture (including importation), processing, distribution in commerce, use, and disposal of asbestos. Specifically, the petition states that the Attorneys General are petitioning EPA’s Administrator to:
- [I]nitiate a rulemaking and issue a new asbestos reporting rule to: (i) eliminate any applicability of the “naturally occurring substance” (NOCS) exemption in the [Chemical Data Reporting (CDR)] for asbestos reporting; (ii) apply the CDR reporting requirements to processors of asbestos, as well as manufacturers, including importers, of the chemical substance; (iii) ensure that the impurities exemption in the CDR does not apply to asbestos; and (iv) require reporting with respect to imported articles that contain asbestos.
In support of their requests in the petition, the Attorneys General state the following:
- NOCS Exemption: “The identified uses of imported raw asbestos represent pathways of exposure that present risks to health and the environment that EPA must consider in conducting its risk evaluation and regulating asbestos, and accordingly EPA should promulgate an asbestos reporting rule to require reporting of such information. Moreover, the required asbestos reporting must capture information with respect to the quantities imported, and these potential exposure pathways so this information can be made available to inform the states’ and the public’s knowledge regarding asbestos exposure risks.”
- Reporting from Processors: “[T]o enable EPA to carry out its responsibility to impose requirements on processors to eliminate unreasonable risks of injury to health or the environment arising from exposures to asbestos, EPA must promulgate new regulations to apply the reporting requirements of the CDR to processors of asbestos notwithstanding that the current CDR does not expressly require such reporting. Should EPA fail to do so, EPA would be violating TSCA, acting arbitrarily and capriciously, and abusing its discretion in implementing TSCA.”
- Exemptions for “Impurities” and “Articles”: “[W]hile the CDR exempts reporting with respect to ‘impurities’ and for chemical substances imported as ‘part of an article,’ neither of these exceptions should be applied to reporting with respect to the presence of asbestos if EPA is to satisfy TSCA’s mandate to prevent unreasonable risks associated with exposures to this highly toxic chemical.”
- Reporting for Asbestos: “EPA must account for the many tons of asbestos that are imported into the U.S., whether as a raw material or processed, to evaluate adequately the current and likely future risks of exposure to asbestos, and must also account for asbestos in consumer products, whether or not the asbestos is intentionally included in those products. These data … are needed for EPA to be able to make informed technically complex decisions regarding the regulation of asbestos. Without these data to rely on, the agency will be unable to meet its obligations under TSCA to make its decisions based on the weight of the scientific evidence and using the best available science …. Accordingly, EPA must issue an asbestos reporting rule to ensure that the NOCS, the impurities, and the articles exemptions do not apply to asbestos, and that processors of asbestos are required to report.”
The petition cites EPA’s denial of a petition submitted by a group of non-governmental organizations (NGO) seeking similar action that the Attorneys General are requesting, but does not address the many reasons that EPA denied the first petition. Why the Attorneys General would follow up EPA’s well-reasoned denial with a petition of their own with very similar requests and only marginal additional facts, is unclear. More information on the NGO petition is available in our blog item "EPA Denies Section 21 Petition Seeking Increased Asbestos Reporting."
By Lynn L. Bergeson and Carla N. Hutton
On June 22, 2018, the U.S. Environmental Protection Agency (EPA) announced that it has met its statutory responsibilities under the Frank R. Lautenberg Chemical Safety for the 21st Century Act (Lautenberg Act) to release guidance and policy on confidential business information (CBI), a strategy to reduce animal testing, and a final mercury reporting rule. As noted in our June 29, 2016, memorandum, “TSCA Reform: EPA Publishes First Year Implementation Plan,” the Lautenberg Act included mandatory actions for EPA to complete by June 22, 2018, two years after former President Barack Obama signed the Act, which significantly amended the Toxic Substances Control Act (TSCA). EPA lists the following milestones that it has completed at the two-year anniversary:
In addition, registration is still available for Bergeson & Campbell, P.C.‘s (B&C®) June 25, 2018, complimentary webinar, “TSCA at 2: An Update on Implementation and Hot Topics.” Speakers will include:
- Nancy B. Beck, Ph.D., DABT®, Deputy Assistant Administrator, Office of Chemical Safety and Pollution Prevention, EPA;
- Misty L. Bogle, Global Product Stewardship Manager, Vertellus;
- Michael Gould, EH&S Committee Chairman, RadTech North America; and
- Lynn L. Bergeson, Managing Partner, Bergeson & Campbell, P.C.
More information on these developments will be available in our forthcoming memorandum and posted to our Recent Regulatory Developments web page, as well as in our subsequent TSCA blog items.
By Lynn L. Bergeson and Carla N. Hutton
The U.S. Environmental Protection Agency’s (EPA) April 2018 Toxic Substances Control Act (TSCA) Chemical Substance Inventory is now available. For the first time, the Inventory includes a field designating substances that are “active” in U.S. commerce based on the following:
- Reporting from the 2012 and 2016 Chemical Data Reporting cycles;
- Notices of Commencement received by EPA since June 21, 2006; and
- Notice of Activity Form A’s received by EPA through the February 7, 2018, deadline, per the TSCA Inventory Notification (Active-Inactive) Rule.
EPA states that it “carefully processed and conducted a quality check of the data to ensure duplicate entries and confidential business information were removed” from the large number of notices received under the Active-Inactive Rule. EPA also posted a list of substances reported in a Notice of Activity Form A from February 8 through March 30, 2018. According to EPA, this list should assist processors in determining which of their substances on the Inventory have not yet been designated as “active” to date. Based on our review, the Inventory lists approximately 38,303 total active substances, or about 44.5 percent. The deadline for voluntary submission of a Notice of Activity Form A by processors is October 5, 2018.
If your company is having trouble reporting through EPA’s Central Data Exchange (CDX), please contact Richard E. Engler, Ph.D. or Lynn L. Bergeson to obtain a copy of our comprehensive Guidance Materials for TSCA Inventory Notification Rulemaking. Our TSCA experts would be pleased to assist you with the reporting process!
More information on the TSCA Inventory rulemaking and TSCA Inventory issues is available on our blog under the key phrase TSCA Inventory and on our TSCA Reform News & Information web page. More information on EPA’s Final TSCA Inventory Notification (Active-Inactive) Rule is available in our memorandum, “EPA Issues Final TSCA Framework Rules.” Specific information on changes in the CDX system is available in our blog item, “EPA Updates eNOA Template in CDX System.”