ISSAlert June 3, 2016

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House Passes TSCA Reform Legislation

June 3, 2016                                       Contact: Bill Balek

With a 403-12 vote, the House approved legislation that would substantially reform the Toxic Substances Control Act (TSCA) on May 24, giving the U.S. Environmental Protection Agency more authority to evaluate and control the nation’s commercial chemicals.  The legislation (HR 2576 now goes to the Senate for consideration. 

The White House has expressed its support for the legislation, which would give the EPA more authority to obtain toxicity, exposure and other information about chemicals, eliminate some of the Toxic Substances Control Act’s requirements that make it hard for the EPA to regulate chemicals in commerce, and require the agency to assess the risks of the chemicals of greatest concern that are in commerce.  In its current form, TSCA has no such mandate.

Background.  Under the current TSCA, EPA has broad authority to regulate importers, manufacturers, and processors of chemical substances, including authority to regulate commercial and consumer use products into which substances are blended. Since its enactment in 1976, TSCA has required EPA to be notified of, and to review (but not to specifically “approve”), “new” chemical substances before they enter U.S. commerce. EPA also must be notified of certain significant new uses of a chemical substance. EPA has been permitted to collect modest fees for processing such notifications.

TSCA has been rightfully criticized as outdated and out of step with the current state of knowledge regarding the regulation of chemical substances.  The recently passed House legislation revises TSCA in several major areas.

Summary of House Passed TSCA Legislation.  Although it will take years for EPA to fully implement the amended law’s numerous new requirements, it is important that companies doing business in the U.S. understand the key features of the final legislation, and take certain simple steps to prepare.  With this in mind, the following provides a brief overview of some of the most important provisions of the TSCA legislation recently passed by the House.

1. Revises the threshold for regulating chemical substances and separates consideration of costs and other non-risk factors from the risk assessment process. When performing risk assessments for chemical substances, EPA will be limited to considering human health and environmental effects, including risks to vulnerable population subgroups that may be uniquely susceptible.  If EPA’s risk evaluation determines that a substance will, under its intended or reasonably foreseeable conditions of use, present an unreasonable risk, the agency must issue a regulation to manage those risks. Costs, benefits, and other non-risk factors will be considered by EPA only in the context of reaching risk management determinations.  EPA’s decisions will be expected to reflect the “best available” science and to be based on the “weight of the evidence.”

2. Requires EPA to make a determination for all new chemicals.  New chemical substances will not be able to enter commerce until EPA makes an affirmative determination concerning whether the new chemical substance may present an unreasonable risk to human health or the environment, including risks to vulnerable subpopulations.  The same standard which will apply to premanufacture notifications (PMNs) also will apply to EPA’s review of notices it receives concerning proposed uses of a substance that EPA has defined to be significant new uses.

3. Expands EPA’s authority to compel chemical testing. The agency gains authority to issue administrative orders to direct that test data be generated on certain substances, in addition to using its existing rulemaking authority.

4. Directs EPA to prioritize chemical substances in commerce for review and management and establishes deadlines.  EPA will be required to prioritize chemical substances that are already in commerce for risk assessment and risk management determinations.  EPA must establish its risk evaluation process by rule within one year of enactment of the final amendments.  However, within six months of enactment, the agency is required to rapidly identify an initial cluster of 10 “high priority” chemical substances for risk evaluations and gradually to expand that list.  Three years later, EPA must have identified at least 20 substances as high priorities for assessment and 20 as “low-priority” substances—half of the prioritized chemicals must be drawn from EPA’s roster of Work Plan chemicals issued in 2014.

A manufacturer (but not a processor or formulator) of a chemical substance may request a risk evaluation provided the manufacturer pays a service fee to offset the agency’s cost to perform the assessment.  EPA will be expected to give preference in the risk evaluation process to chemicals listed on its Work Plan that are persistent and bioaccumulative as well as known human carcinogens with both acute and chronic toxicity.  Persistent and bioaccumulative substances to which the general population is exposed will be subject to expedited regulatory actions for which no risk assessments are required and which are intended to reduce exposures to the “extent practicable.”

Risk evaluations must be completed within three years of initiation, and if EPA determines that the substance “presents” an unreasonable risk, the agency must propose a risk management (Section 6) rule not later than one year from the determination, with the final rule to be issued a year later. If extensions to EPA’s deadlines become necessary, they may not exceed two years in the aggregate.

5. Updates the TSCA Inventory. Pursuant to TSCA, EPA maintains an inventory of chemical substances that establishes the dividing line between “existing” and “new” chemicals.  The amendments direct EPA to issue a new rule within one year to require reports to update the inventory to get a better understanding of which substances are currently being commercially manufactured, processed or imported into the U.S., and to designate other listed substances as “inactive.”  EPA is to retain the chemical nomenclature conventions it followed when the initial inventory was created.

6. Improves transparency.   The TSCA amendments require EPA to review existing confidential business information (CBI) claims masking the specific identities of chemical substances in commerce and a sampling of at least 25 percent of other CBI claims. Substantiated claims will be protected for an initial 10-year period, subject to renewals. EPA is granted authority to share CBI with state and tribal governments, health and environmental professionals, and first responders.

7. Increases fees. The amended law authorizes EPA to collect considerably higher fees than the current law authorizes. The fees are intended to defray up to 25 percent of EPA’s costs of implementing the new chemical notification, risk evaluation, and confidential information review programs. When a manufacturer requests an EPA review of an existing chemical, it must pay as much as 100 percent, depending on the chemical, of EPA’s costs for conducting the review.

8. Partial preemption of state chemical-regulatory actions.  Final EPA regulatory actions on chemical substances will preempt state regulation of such substances, subject to various exceptions and opportunities for state requests for waivers.  States will still be permitted to adopt regulations identical to federal standards issued pursuant to TSCA.  Both EPA and the states will continue to enforce their respective regulations if the state rule is identical, but penalties will be capped at the federal statutory maximum.  

Preemption—albeit temporary—also will arise when EPA formally announces the scope of the risk evaluation the agency is undertaking for an existing chemical substance. Following such an announcement, the states may not impose new regulatory requirements that affect activities within the scope of the agency’s assessment until EPA completes its review, or 30 months have elapsed (whichever is sooner).  When this temporary preemption period concludes, a state may impose a new chemical-regulatory requirement unless EPA has determined that the substance does not present an unreasonable risk to human health or the environment (including to susceptible subpopulations) under the intended and foreseeable conditions of use. 

Moreover, if EPA issues a final risk management rule which limits or prohibits a chemical substance under certain intended or foreseeable uses, state actions would again be preempted. State statutory and regulatory actions taken prior to April 22, 2016, are not preempted and new actions taken under an existing state law that was in effect on August 31, 2003, are not preempted. States may seek waivers from the preemptive effect of an EPA decision under certain conditions. The compromise bill clarifies that common law rights of action are not affected.

9. “Hot Spots” to be identified. The legislation amends the Public Health Service Act to encourage the identification and investigation of potential cancer clusters.

Senate Action.  The House TSCA legislation now goes to the U.S. Senate for consideration where Capitol Hill insiders had predicted quick and easy passage.  However Sen. Rand Paul (R-KY blocked an anticipated May 26 Senate vote on the TSCA bill making it uncertain when the Senate will vote on the bill.