By Sheryl L. Dolan, Kathleen M. Roberts, James 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.

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By Lynn L. Bergeson and Margaret R. Graham

On August 9 and August 10, the U.S. Environmental Protection Agency (EPA) held two public meetings to obtain input prior to development of a proposed rule for chemical risk evaluation (August 9) and a proposed procedural rule regarding prioritization of chemicals for further risk evaluation (August 10) under the new Toxic Substances Control Act (TSCA).  Bergeson & Campbell, P.C.’s (B&C^®) Oscar Hernandez, Ph.D. and Richard E. Engler, Ph.D. were in attendance, and offer the following highlights.

On August 9, many speakers across different stakeholder groups flagged issues in terms of how EPA should conduct the chemical risk evaluation process:

• EPA must determine compatibility of information from third parties, e.g., assessment documents from other groups including within EPA, with TSCA Section 26 standards;
• EPA needs to improve its exposure methodologies, and develop new ones; EPA needs to modify its exposure ranking to acknowledge that chemical intermediates are typically consumed in the manufacture of a product and do not represent a primary source of exposure, especially outside of the production facility;
• Transparency throughout the risk evaluation process is critical;
• EPA is required to use best available science and weight-of-evidence;
• Potentially exposed and susceptible subpopulations should include workers, pregnant women, infants, fence-line populations, and consider the lifestyles (especially diets) of native populations as appropriate under the conditions of use; and
• EPA should undertake a tiered approach to testing, to minimize vertebrate testing and cost, as new TSCA requires.

As for the content of the actual chemical risk evaluation rule, stakeholders made the following comments:

• The rule should include more content beyond procedures by incorporating definitions for key items such as “weight of scientific evidence” and other scientific standards, and codifying criteria for evidence evaluation;
• The final reports should explicitly identify low exposure/low risk uses considered in the development of the Risk Evaluation; and
• Whether legal scientific requirements under TSCA Sections 6 and 26 need to be reflected in the procedural rule, and not be relegated to guidance documents – there was some disagreement on the best course of action on this issue.

A link to the agenda for the August 9, 2016, public meeting is available here.  EPA’s risk evaluation meeting presentation is available here.

On August 10, comments made during the prioritization procedural rule meeting sessions were similar to those made at the August 9 meeting, with an emphasis on the application of Section 26 scientific standards.  A few speakers expressed reservations about the prioritization methodology that EPA currently uses and suggested some alternative approaches.

A link to the agenda for the August 10, 2016, public meeting is available here.  EPA’s prioritization procedural rule meeting presentation is available here.

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By Lynn L. Bergeson and Margaret R. Graham

On July 25, 2016, the U.S. Environmental Protection Agency (EPA) announced its intention to hold two public meetings on August 9, and August 10, 2016, to obtain input on the processes that will be used to prioritize and evaluate chemicals under the Toxic Substances Control Act (TSCA), as amended by the Frank R. Lautenberg Chemical Safety for the 21st Century Act:

• August 9, 2016:  EPA states that this public meeting will inform its proposed rule on conducting risk evaluations to determine whether a chemical presents an unreasonable risk of injury to health or the environment; and
• August 10, 2016:  EPA states that this public meeting will inform its proposed rule to establish a risk-based process for chemical prioritization.

The public meetings are scheduled for 9:30 a.m. to 4:30 p.m., and will be held at the Ronald Reagan Building and International Trade Center, Horizon Ballroom, 1300 Pennsylvania Avenue, N.W., Washington, D.C. EPA states that the input obtained during these meetings will be considered as the EPA develops its proposed procedural regulations for risk evaluation and chemical prioritization.  EPA is recommending that any interested participants register in advance.  

More information concerning EPA’s implementation of the amended TSCA is available in our memorandum EPA Publishes First Year Implementation Plan, as well as on the Bergeson & Campbell, P.C. (B&C^®) website under Regulatory Developments: TSCA.

Commentary

It is critically important that stakeholders attend and participate in these meetings. While the timing is regrettable in light of vacation schedules, EPA is under intense pressure to issue rules later this year and EPA has no choice other than to keep the process moving.  EPA is to be commended for scheduling these opportunities as quickly as it has, and its efforts should be acknowledged by robust stakeholder engagement.

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On July 22, 2016, the U.S. Environmental Protection Agency (EPA) posted on its website the first four Section 5(a)(3) determinations for premanufacture notices (PMN) under the Toxic Substances Control Act (TSCA) as amended by the Frank R. Lautenberg Chemical Safety for the 21st Century Act (Pub. L. No. 114-182) (new TSCA). All four of the new chemicals were determined to satisfy the "not likely to present an unreasonable risk" determination at Section 5(a)(3)(C). It is notable that all four determinations relied on structure activity relationship (SAR) analyses and data on analogs.

In all four cases, EPA found low potential for health hazards and low potential for environmental hazards (low/low). EPA estimated that each substance has some degree of persistence (from limited persistence to very persistent) and that all four have a low potential for bioaccumulation. Based on our experience with the new chemicals program under TSCA prior to new TSCA, when EPA made a low/low hazard call and either a low potential for persistence or a low potential for bioaccumulation, EPA "dropped" the submissions from further review, avoiding the time and expense of performing exposure assessments on substances of low potential hazard.

Under new TSCA, to make a Section 5(a)(3)(C) determination, EPA must identify potentially exposed or susceptible subpopulations (PESS) that are relevant under conditions of use. In these four Section 5(a)(3)(C) determinations, EPA identified known or reasonably foreseeable uses in addition to the uses identified in the PMNs. EPA identified the PESS under the intended use as workers for all four cases. We note that EPA identified consumers as a PESS if the substance notified in P-15-0281 was to be used as a lubricant or lubricant additive (the known or reasonably foreseen use that EPA identified). Even considering the PESS, EPA has concluded that a low hazard finding is sufficient to support a "not likely to present" finding under Section 5(a)(3)(C) and did not perform a formal exposure assessment. Since EPA has published the Section 5(a)(3)(C) findings, per Section 5(g), the submitters of these four PMNs may commence manufacturing without waiting for the remaining portion of the 90-day review period to expire.

Commentary

EPA determined that all four new chemicals satisfy the "not likely to present an unreasonable risk" determination under Section 5(a)(3)(C). The conditions of use for these chemicals indicate industrial scenarios that would point to workers as the PESS. The potential exposure to workers was not estimated. Instead, the determination of not likely to present an unreasonable risk hinges on the low hazard potential for these chemicals. Three of the four chemicals were estimated to be persistent with two categorized as very persistent. The chemicals were estimated to have low potential for bioaccumulation. No information was provided about potential releases to water.

It is reassuring that the SAR was used to reach determinations about persistence, bioaccumulation, and hazard potential, including mention of category analysis. This suggests that EPA intends to maintain SAR as a basic component in its evaluation of new chemicals consistent with the provisions at Section 4(h) to reduce vertebrate animal testing and to maximize the use of existing hazard information.

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On July 18, 2016, Bloomberg BNA’s Daily Environmental Report reported on the U.S. Environmental Protection Agency’s (EPA) new chemical notice process, and included insight from industry leaders at Bergeson & Campbell, P.C.’s (B&C®) July 14, 2016, webinar, The New TSCA: Impacts on New and Existing Chemicals Programs. 

B&C Managing Partner Lynn L. Bergeson was quoted as saying that premanufacture notifications, or PMNs, that chemical manufacturers must submit before they can produce or import a new chemical, and significant new use notifications, which companies must submit before they can make or use certain chemicals in new ways, “need to be much more strategic, thoughtful and detailed.”

Both the old and newly amended TSCA state the EPA's “authority over chemical substances and mixtures should be exercised in such a manner as to not impede unduly or create unnecessary economic barriers to technological innovation,” Bergeson stated, referring to Section 2601(b)(3).  The new law makes “very consequential changes” to the new chemicals provisions of TSCA as EPA will have to balance carefully the requirements imposed by different sections of the law.

Richard A. Denison, Ph.D., Senior Scientist with the Environmental Defense Fund, stated that the changes the amended law makes to EPA's new chemicals program “are not trivial.”  Further, the changes will make it easier for the public to understand why EPA concludes that new chemicals may or may not enter commerce, what restrictions it may impose on the uses of those chemicals, and why.

BNA’s article, “Detailed New Chemical Applications Needed to Boost Market Chances: Attorneys,” is available online, through paid subscription.

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Bergeson & Campbell, P.C. (B&C^®) has learned that the U.S. Environmental Protection Agency (EPA) is planning to convene a stakeholder workshop in Washington, D.C. on August 9-10, 2016, for a public dialogue on prioritization and risk evaluation.  We also understand that EPA may host an industry meeting on August 11-12, 2016, to consult on fees.  The dates and topics will be confirmed when EPA makes announcements in the Federal Register.

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On June 22, 2016, the U.S. Environmental Protection Agency (EPA) rolled out its new Frank R. Lautenberg Chemical Safety for the 21st Century Act Frequent Questions webpage.  This webpage will be a resource for Toxic Substances Control Act (TSCA) reform-related updates and implementation plans.  EPA has also posted a summary of key provisions, its six essential principles for reform of chemicals management legislation, the presentation from its informational webinar on June 30, 2016, in which EPA provided an overview of the new TSCA, and an unofficial version of TSCA as recently amended.

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By Lynn L. Bergeson and Margaret R. Graham

On June 29, 2016, the U.S. Environmental Protection Agency (EPA) posted an Implementation Plan that outlines EPA’s plans for early activities and actions under the Frank R. Lautenberg Chemical Safety for the 21st Century Act, legislation that significantly amends many of the provisions of the Toxic Substances Control Act (TSCA).  The amended TSCA has been identified as Public Law Number (Pub. L. No.) 114-182.  EPA notes that the new law imposes new responsibilities on EPA, while providing “comparatively short” deadlines to implement them.  EPA “takes these responsibilities and deadlines seriously,” and intends for the Implementation Plan to be a roadmap of the major activities on which EPA will focus during the initial year of implementation.  EPA organizes the Implementation Plan by the statutory timeframes during which the activities must be completed, rather than by what is of importance to EPA.  EPA states that the Implementation Plan is a living document, and EPA will further develop it over time.  EPA cautions that the Implementation Plan “is NOT intended to be a comprehensive listing of all requirements in the new law.” 

Bergeson & Campbell, P.C. (B&C^®) is pleased that EPA is making strong early efforts to communicate and engage with stakeholders about its early implementation of the new TSCA and its thinking regarding specific provisions.  Completing the items listed in the Implementation Plan represents a prodigious amount of work for EPA over the coming months and years.  Stakeholders will need to be prepared to respond thoughtfully to rules, lists, and process descriptions as they appear in the Federal Register, or as they are posted.

More information on EPA’s Implementation Plan is available in our memorandum TSCA Reform: EPA Publishes First Year Implementation Plan.

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On June 7, 2016, the Senate passed the Frank R. Lautenberg Chemical Safety for the 21st Century Act (Lautenberg) by voice vote and sent it to President Obama for signature. As reported in our May 26, 2016, memorandum, "An Analysis of Key Provisions and Fundamental Shifts in the Amended TSCA," the Act includes new requirements in Sections 4, 5, 6, and 8 of the Toxic Substances Control Act (TSCA). These new requirements, among others, will need to be met in promulgating currently proposed regulations, as well as in proposing/promulgating future regulations.

One important change in this regard is the way that Lautenberg changes the requirements on the U.S. Environmental Protection Agency (EPA) when it includes articles within the scope of Section 5(a)(2) Significant New Use Rules (SNUR). Several relatively recent SNURs, as proposed, included imported/processed articles within their scope and would be affected by this amendment if the article provisions are retained in a final rule. Examples include proposed SNURs on certain polybrominated diphenylethers (PBDE), toluene diisocyanates (TDI), and long-chain perfluoroalkyl carboxylate (LCPFAC) and perfluoroalkyl sulfonate (PFAS) chemicals.

One interesting question to consider is the need for EPA to re-propose these SNURs if it intends to retain the requirements on imported/processed articles in the final rule. If these provisions are retained, it appears that EPA would need to re-propose the rule at a minimum to satisfy the requirement at Lautenberg Section 5(a)(5) that EPA make an affirmative finding that the reasonable potential for exposure to the chemical through the article or category of articles justifies notification.

In addition, EPA's Spring 2016 Regulatory agenda lists several SNURs under TSCA that are at the proposed rule stage, including SNURs for alkylpyrrolidone products and certain uses of trichloroethylene (TCE). These rulemakings would need to address the Lautenberg changes in the proposal.

The Spring 2016 Regulatory agenda also lists three proposed rulemakings under TSCA Section 6(a), and a TSCA Section 4 test rule. The former will be affected by Lautenberg while the latter may be affected depending on the approach taken as discussed in our memorandum.

Read the full memorandum,  TSCA:  What Effect Will the TSCA Amendments Have on Proposed and Future Rulemakings?, online.

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