Regulatory DevelopmentsApril 24, 2014
On April 22, 2014, Representative John Shimkus (R-IL), Chair of the House Energy and Commerce Subcommittee on Environment and the Economy, announced that the Subcommittee will hold a hearing on April 29, 2014, to review a revised draft of the Chemicals in Commerce Act (CICA2). According to Shimkus, the revised draft "reflects suggestions from members on both sides of the aisle, as well as stakeholders and the administration." CICA would reform the Toxic Substances Control Act (TSCA). More information regarding the hearing, as well as both the revised draft CICA and a redline comparison to the March 2014 discussion draft (CICA1), is available online. Memoranda regarding TSCA reform legislation and hearings held to date are available online. Below is a detailed discussion of revisions to the draft CICA2.
Section 2: Findings
Under CICA2, the "findings and purpose" of the draft are unchanged from CICA1.
Section 3: Definitions
Under Section 3, several changes were made. Importantly, definitions found in CICA1 for "best available science," "publicly available information," and "safety determination" were deleted. The following definitions were revised:
"Intended conditions of use" was changed to include consideration of disposal; the result is that CICA2 now tracks with TSCA's inclusion of disposal within its scope. By changing the definition, the concept of disposal was also added back into other sections of the discussion draft, including explicitly in taking restrictions under Sections 5 and 6.
"Potentially exposed subpopulation" was revised to explicitly give the U.S. Environmental Protection Agency (EPA) greater discretion in applying this concept and it was clarified to apply to "adverse" consequences; specifically, the definition was changed to mean a group "who the Administrator has reason to believe may be differentially exposed...or who may be more susceptive to more serious adverse health consequences…" (emphasis added).
- "Risk evaluation" replaces the term "safety determination" and is defined to mean a "risk evaluation conducted under section 6(b)."
Section 4: Development of Information
Section 4 was retitled to clarify that it concerns "development of information" rather than "testing" as it was stated under CICA1. In an important change that addresses a significant criticism of CICA1, Section 4(a)(1)(A) was revised to give explicit authority to EPA to require testing needed to inform prioritization decisions. In addition, EPA was given greater discretion in requiring the development of new hazard and exposure information. Under CICA2, such development can be required if EPA "decides" that the information is needed, whereas EPA was required to make a "determination" under CICA1.
Consistent with CICA1, the revision retains EPA's authority to use rulemaking, consent agreements, or orders to require the development of information. CICA2 Section 4(a)(3) retains the concept of "available information" and that EPA "shall consider" such information.
Section 4(a)(5) on screening level information is revised to clarify that if EPA "finds" that the available information is insufficient to make a determination under Section 4(a)(1), EPA may require the development of screening level information. For reasons that are not clear (although one can surmise the language is vestigial rather than intended), the revision seems to limit the role of screening level testing "to assist the Administrator in planning requirements for additional testing under this subsection" (emphasis added), language that suggests that screening level hazard and exposure information does not play a role in prioritization. This may be a drafting error that neglects to account for EPA's new authority to require testing to inform prioritization, a purpose for which screening level information seems to be particularly valuable. There is also a lack of clarity regarding the draft's use of the terms "determination," "decides," and "finds" in Section 4. The interchangeability of these terms seems to reflect a drafting error rather than a deliberate attempt to revisit the legal burden on EPA to support a decision.
CICA2 retains essentially unchanged the requirements in CICA1 that EPA develop and issue a "statement of need" for any new testing and that EPA "shall minimize the use of vertebrate animal in testing." CICA2 changes the title of Section 4(d) from "Requirement to develop information" to "Fair and equitable reimbursement" and revises the section by deleting CICA's Section 4(d)(1) Limitation. The effect of the latter change is to eliminate the explicit 180-day time period after which new manufacturers or processors would not be subject to reimbursement and seemingly leaves the matter to EPA's discretion.
Section 5: New Chemicals and Significant New Uses
While Section 5, which addresses new chemicals and significant new use rules (SNUR), is largely unchanged in CICA2, there are important revisions:
Section 5(c)(3)(A) is revised to change the EPA determination for regulating a new chemical or a Significant New Use (SNU) from CICA1's "is likely to result in an unreasonable risk" and make it the same as the current TSCA Section 5(e) formulation of "may present an unreasonable risk." Further, at CICA2 Section 5(c)(5), in taking restriction actions on new chemicals or SNUs, EPA is required to impose any of a series of requirements "to the extent necessary to protect adequately against an unreasonable risk." While this may be a useful Congressional guidance and a clarification of EPA's authority, the change can be expected to present future issues reminiscent of the much reviled "least burdensome" requirement in TSCA Section 6.
Section 5(c)(3)(B) is also revised. In CICA1, EPA was to allow the review period to expire if it determined that the chemical "is not likely to result in an unreasonable risk." This provision has been changed in CICA2 to read "does not warrant regulation." The effect of this change may be to increase the discretion available to EPA by focusing the decision not to act on the need for regulation rather than a determination concerning a lack of unreasonable risk. The openness of "does not warrant regulation" also would appear to bear directly on preemption, but the language is sufficiently ambiguous to pose more problems than resolve.
CICA1 Section 5(e), which explicitly recognized that EPA could initiate action under Section 6 with respect to a new chemical once EPA had made certain conclusions, was deleted in CICA2, effectively increasing EPA's discretion to act based on its own judgment.
The exemption provision at CICA2 Section 5(e)(3) (which corresponds to TSCA Section 5(h)(4)) has been retitled "Risk-based exemption." The EPA determination required for an exemption has been changed back to that used in TSCA of "will not present an unreasonable risk." CICA2 also deletes language addressing the promulgation of procedures pertinent to exemptions, which could impact the availability of the exemptions themselves.
- The provision at CICA2 Section 5(e)(5) concerning development by EPA of a rule making Section 5(a) inapplicable to byproducts was changed from a "shall" requirement in CICA1 to a "may" requirement, thus once again providing EPA greater discretion.
Section 6: Existing Chemicals
Section 6 has been substantially revised in CICA2 from the approach outlined in CICA1, including imposing deadlines for various decisions or actions required as discussed below. CICA2 does not, however, impose a specific deadline for completing prioritization of all "active" chemicals, as it retains CICA1's "as soon as feasible" approach. The draft also clarifies that the risk evaluation step does not consider economic costs or benefits, a change effected by dropping the use of "unreasonable risk" at this stage of the process and replacing it with the less TSCA-freighted concept of "significant risk" and by including a new Section 6(b)(3), which at (A) specifies the "Factors to be considered" and at (B) specifies the "Factors not to be considered" (including economic costs or benefits). CICA2 also retains the CICA1 approach that treats risk evaluation as a step in the process that is separate from the risk management stage. CICA2 also has softened the language concerning the role of socioeconomic factors in taking risk management actions by deleting CICA1's requirements that the control action is "proportional" to the risks and that it result in "net benefits." Consistent with deleting the definition of "best available science," CICA2 Section 6 addresses "information," "available information," or "scientific information" in various subsections rather than specifying that it be the "best available science" or that it be in accordance with the "weight of the scientific evidence" as was the CICA1 approach.
CICA2 Section 6(a) on prioritization generally follows the approach in CICA1 with a number of important changes. As noted above, the focus of the prioritization risk evaluation is on determining which chemicals are "likely to present a significant risk" to health or the environment. Section 6(a)(4), on the factors for assigning priorities, has been revised to include consideration of "potentially exposed subpopulation" in evaluating exposures and also specifies that EPA is to consider the "adequacy" of the available information. In an important change, CICA2 has deleted the CICA1 provision "Effect of low priority designation," which seemed to have the effect of making such designations essentially equivalent to a conclusion of safety. As in CICA1, CICA2 states that a high priority designation is not a final agency action.
CICA2 Section 6(b) on risk evaluations has been changed considerably from the approach in CICA1. As noted above, CICA2 takes pains to clarify that socioeconomic factors are not to be considered in evaluating risks. As part of the shift to a "significant risk" approach in the risk evaluation (from the "unreasonable risk" language in CICA1), CICA2 introduces a new concept at Section 6(b)(1)(A) where the following appears:
IN GENERAL. -- The Administrator shall conduct a risk evaluation regarding whether a chemical substance designated as high priority presents or will present, in the absence of regulation under subsection (c), a significant risk of harm to human health or the environment under its intended conditions of use (emphasis added).
The full effect to the italicized language is by no means clear. While it may be a reasonable expression of Congressional expectations, it seems to focus the risk evaluation on the exposure and use conditions that exist at a given point in time. This somewhat narrow focus raises questions about the effect on a risk evaluation on, for example, actions that lead to a shift away from those specific uses that were the subject of the risk evaluation. CICA2 Section 6(b)(1)(B) on "requirements" for the risk evaluation clarifies that EPA is to "integrate and assess information on hazards and exposures for the specific uses that are relevant
significant to the risk of harm and to subsets of exposure..." (emphasis added). The effect of the replacing of "injury" with "harm" is also unclear. Arguably, "harm" is more expansive than "injury," although it is unclear if this broadening was an intentional outcome.
Section 6(b)(1)(C) specifies that EPA has a four-year deadline for completing a risk evaluation on a high priority chemical. CICA2 includes a new Section 6(b)(3), which, as noted above, identifies the factors to be considered and not to be considered in evaluating risk. This important new subsection reads as follows:
(3) FACTORS FOR EVALUATING RISK. -- (A) FACTORS TO BE CONSIDERED. -- In evaluating whether a chemical substance presents or will present, in the absence of regulation under subsection (c), a significant risk of harm to human health or the environment under its intended conditions of use, the Administrator shall consider –
(i) the nature, circumstances, severity, and magnitude of the risk;
(ii) the likely impact of the risk on potentially exposed subpopulations from use of the chemical substance under its intended conditions of use;
(iii) whether harm has occurred from the chemical substance under its intended conditions of use; and
(iv) the probability that harm will occur from use of the chemical substance under its intended conditions of use.
(B) FACTORS NOT TO BE CONSIDERED. -- In evaluating whether a chemical substance presents or will present, in the absence of regulation under subsection (c), a significant risk of harm to human health or the environment under its intended conditions of use, the Administrator may not consider the economic costs or benefits of --
(i) the intended uses of the chemical substance; or
(ii) reducing the exposure to the chemical substance by rule under subsection (c).
CICA2 Section 6(b)(7) specifies that an EPA determination of "no significant risk" is considered a final agency action, while a determination of "significant risk" is considered a final agency action when a final rule is promulgated under Section 6(c). The former is consistent with the approach in CICA1 while the latter clarifies that judicial review is available but delayed.
CICA2 Section 6(c) concerns rules to manage risks and specifies that (emphasis added):
(1) Implementation - Not later than 3 years after determining under subsection (b) that a chemical substance presents or will present, in the absence of regulation under this subsection, a significant risk of harm to human health or the environment under the intended conditions of use, the Administrator shall promulgate a rule, in accordance with this subsection, with requirements or restrictions that the Administrator determines are necessary to protect adequately against an unreasonable risk of harm to human health or the environment for the chemical substance under its intended conditions of use.
CICA2 thus places a three-year deadline on EPA to impose control measures (the deadline can be extended under Section 6(d) "as necessary but not to exceed a cumulative period of 3 years"). In what seems to be a considerable softening of TSCA's "least burdensome" requirement, EPA is to take actions "necessary to protect adequately" against the unreasonable risk (in comparison, the full text of the provision at TSCA Section 6(a) reads "to the extent necessary to protect adequately against such risk using the least burdensome requirements").
CICA2 retains CICA1's limitations on the regulation of articles under this section and expands the provision as it applies to "replacement parts" by specifically including "for use in vehicles."
As discussed above, CICA2 Section 6(c)(4) has simplified and softened the socioeconomic aspects to be "determined" by EPA in imposing restrictions, including deleting the requirements that the restrictions are "proportional to the risks" and that they will result in "net benefits." CICA2 retains the provision that EPA must determine whether the restrictions are "cost-effective in ensuring that the chemical substance will not result in an unreasonable risk" but deletes from this provision the CICA1 language that required EPA to compare its action "to alternative requirements or restrictions that the Administrator may reasonably adapt."
In another important change, CICA2 Section 6(c)(4)(C) revises the approach under CICA1 that had required EPA to restrict a specific use "only when technically and economically feasible alternatives that materially reduce risk...are available and likely to be used as a substitute..." CICA2 also provides helpful consideration of timing issues that are likely to be important in moving away from use of a chemical in a specific use as well as requiring that the proposed alternatives "benefit" health or the environment, which speaks to availability of safer alternatives. The approach under CICA2 Section 6(c)(4)(C) is as follows:
in deciding whether to prohibit or substantially prevent a specific use of a chemical substance and in setting an appropriate transition period for such action, determine whether technically and economically feasible alternatives that benefit human health or the environment, compared to the use proposed to be prohibited or substantially prevented, will be reasonably available as a substitute when the proposed prohibition or restriction takes effect (emphasis added to show important changes compared to CICA1).
CICA2 also includes a new provision in Section 6(e) specifying that EPA "shall...establish guidance regarding how aggregate exposure...will be taken into account in carrying out this section." The concept of "aggregate exposure" did not appear in Section 6 of CICA1 (it was mentioned as a consideration in developing exposure test guidelines under Section 4).
Section 8: Information Collection and Reporting
CICA2 Section 8 largely retains the approach outlined in CICA1, including creation of lists of "active" and "inactive" Inventory chemicals. Among the key changes are the following:
In a useful clarification, CICA2 ties up a loose end concerning the reporting exemption for small businesses that appears at Section 8(a)(3)(A)(ii) by inserting language that conforms this provision with the "rule, consent agreement, or order" authority that appears in CICA Sections 4, 5, and 6.
CICA1 had included a new Section 8(a)(4) concerning a requirement that EPA "shall" within two years promulgate rules establishing reporting requirements for manufacturers and processors as needed to carry out Section 6. CICA2 revises this provision to require that EPA establish "separate reporting requirements for manufacturers and processors as necessary to carry out sections 4 and 6" (emphasis added). The effect of the language is to require that EPA treat reporting by such entities differently (although it may also have an effect of making explicit the requirement to implement reporting by processors) and also usefully extends the requirement to Section 4.
In a change that seems to flow from the change to Section 8(a)(4), CICA2 changes TSCA Section 8(d) by stating that EPA "may promulgate" rather than "shall promulgate" Section 8(d) reporting rules. The change seems to acknowledge that health and safety information needed to support work under Sections 4 and 6 will otherwise be collected under CICA2 Section 8(a), a change that seemingly makes discretionary the need for Section 8(d) rules.
CICA2 Section 8(b)(3)(D), "Nomenclature," revises the approach in CICA1 regarding existing guidance that allowed for "multiple nomenclature conventions" by deleting a provision that would have expressly permitted the continued use of the guidance, while retaining a provision that new guidance "establishes equivalency between the nomenclature conventions." The effect of the change, as for others discussed in this summary, seems to cede greater discretion to EPA.
- Finally, CICA2 Section 8(f) provides administrative guidance to EPA in implementing Section 8 by requiring EPA to take measures to limit the potential for duplicative reporting, minimize the impact on small businesses, and ensure that the rules impose reporting obligations "only on the entities most likely to have information relevant" to the effective enforcement.
Section 9: Relationship with Other Federal Laws
CICA2 makes a useful change to TSCA Section 9(a). This provision addresses TSCA's relationship to other federal laws and had required that EPA consider whether "unreasonable risks" it had identified under TSCA relating to the manufacture, processing, distribution in commerce, or use of a chemical substance might be prevented or reduced by action under another federal law and, if so, EPA was to refer the issue to that other agency. CICA2 has changed the determination that EPA is called upon to make by having it relate to a "chemical substance or mixture" that "presents or will present a significant risk of harm" under the intended conditions of use, and if this determination is supported, EPA is to consider whether action under another law might address that risk.
The change is useful in the way that it removes consideration of aspects unique to TSCA (such as "manufacturing, processing" and "unreasonable risk") in considering referral under Section 9(a), seemingly acknowledging that those TSCA-specific aspects would have little relevance to a regulatory determination made under other federal laws. In other words, that law would not apply a concept such as "unreasonable risk" would and instead focus the referral on chemicals presenting significant risks.
Another change in CICA2 is to clarify and limit the purpose of CICA1 Section 9(b)(2). This provision had required EPA, in determining whether to initiate action under what is now Section 6(c), to consider the costs and benefits of considering action under another EPA administered law. The provision has been clarified in CICA2 to apply "for purposes of this subsection," rather than generally as had been the case in CICA1.
Sections 12 and 13: Exports and Imports
CICA2 largely retains CICA1's approach regarding exports. Section 13 imports, however, was clarified to apply to chemical substances (but not mixtures, as it had in CICA1). Section 13(b) is revised to clarify that articles in addition to chemical substances and mixtures can be denied entry by the U.S. Department of Homeland Security if the article is intended to be imported for a use that would violate an action in effect under CICA2.
Section 14: Confidential Information
CICA2 revises CICA1 Section 14 on confidential information by revising Section 14(a) to make it "subject to subsections (b) and (d)" (the provision had read "except as provided in subsection d" in CICA1). These relate to "requirements for certain confidentiality claims" and "exceptions to protection from disclosure," respectively. CICA2 also includes a new provision in Section 14(d)(5), which "[f]or purposes of this subsection[,]" states that the term "health and safety information" does not include the specific identify of a chemical substance. The other provisions in CICA2 Section 14 are generally unchanged except for clarifying or conforming changes.
Section 17: Preemption
The issue of state preemption has been one of the most contentious when considering how to amend TSCA. CICA2 Section 17 on preemption was revised to a limited extent, seemingly with the effect of somewhat reducing the scope of preemption compared to that in CICA1:
CICA2 Section 18(a)(1)(A) revises the corresponding provision in CICA1 by adding language to narrow the scope of preemption to "the development or submission of information -- (i) that the Administrator has required for the chemical substance under section 4, 5, or 6" (emphasis added). While the original preemption provision might have been read to apply generally to such information, the revision clarifies that the provision applies specifically to information on a chemical.
- CICA2 revises the provision under CICA1 Section 18 that would have preempted state action to "establish or continue in force" a law or regulation on chemicals that were designated by EPA as "low priority." CICA2 limits this provision to "establishing" a law or regulation "on or after the date" on which EPA identifies a chemical as a low priority "to the extent that the law or regulation regulates that chemical substance for intended conditions of use."
Sections 18, 20, and 21: Judicial Review, Citizens Petitions, and National Security
CICA2 retains the approach in CICA1 with regard to judicial review (Section 18), citizens petitions (Section 20), and national security (Section 21) largely without change.
Section 23: Policies, Procedures, and Guidance
Section 23 of CICA2 significantly revises CICA1 to make it less prescriptive. Specifically, CICA2 deletes the requirement that policies, procedures, and guidance "shall employ and rely upon the best available science and the best available risk assessment principles and methodologies." CICA2 also revises and softens the provisions under CICA1 Section 26(h)(i) Scientific Standards by deleting the requirement that EPA "establish scientifically sound criteria for evaluating the quality and reliability" of information and that it establish validation criteria. As revised and softened, CICA2 states that in evaluating information from studies and tests, and in carrying out Sections 4, 5, and 6 to the extent EPA makes a "decision based on science," EPA "shall consider, among other applicable factors":
(1) the extent to which the scientific and technical procedures, measures, methods, or models employed to generate the information are reasonable for and consistent with the intended application;
(2) the extent to which the information is relevant for the Administrator's intended use;
(3) the degree of clarity and completeness with which the data, assumptions methods, quality assurance, sponsoring organizations, and analyses employed to generate the information are documented;
(4) the extent to which the variability and uncertainty in the information or in the procedures, measures, methods, or models are evaluated and characterized; and
(5) the extent of independent verification, validation, and peer review of the information or of the procedures, measures, methods, or models.
Finally, CICA2 Section 26(j) requires that EPA "shall make decisions under sections 4, 5, and 6 based on the weight of the scientific evidence" (emphasis added). These changes in CICA2 are helpful in the way that they provide guidance to EPA concerning the approach it should take in evaluating scientific information while avoiding prescriptive approaches.
CICA2 is a step in the right direction. It addresses better some of the more glaring deficiencies in CICA1 by providing EPA explicit authority to generate data to make prioritization determinations, imposing some hard deadlines on EPA to review and address potential risks from existing chemical substances, revisiting the virtual repurposing under CICA1 of the challenging "least burdensome" requirement under TSCA Section 6 by softening the language considerably, and by somewhat reducing the preemptive effect of TSCA on state and local restrictions on chemical substances. The draft is also notable for the increased discretion EPA is given concerning implementation aspects and decision-making. Earlier drafts of TSCA reform legislation developed by both sides of the aisle seemed to evidence a lack of trust in EPA discretion.
Since CICA1 was circulated, it is evident that Shimkus has been listening to stakeholders. This can be seen particularly in the provisions, including those relating to inclusion of deadlines for action, allowing for testing in support of priority setting, the treatment of potentially exposed subpopulations and aggregate exposure, and the sorting out of socioeconomic considerations to be applied in taking risk management action. The drafting shows a deft touch in a number of areas, particularly with regard to the shift to "significant risk" from "unreasonable risk" in risk evaluations, the return to the familiar risk standards in TSCA Section 5 that most agree have worked well, the role of socioeconomic factors in Section 6 risk management, the changes to Section 9, and elsewhere. At the same time, it is unlikely the approach to preemption in CICA2 will satisfy the states, local governments, and other stakeholders, although this may be an issue where the solution may emerge from the ongoing Senate discussions on the Chemical Safety Improvement Act.
Finally, while the greater flexibility afforded by the revisions in CICA2 has value, a certain degree of prescription, such as was included in CICA1 Section 26(j), also has value, particularly regarding testing that is required to be conducted under TSCA and recognizing the value in maintaining fidelity with U.S. obligations to the Organization for Economic Cooperation and Development's (OECD) Council Decisions concerning Mutual Acceptance of Data (MAD). Under MAD, OECD Member countries, including the U.S., have agreed that test data generated in any Member country in accordance with OECD Test Guidelines and Good Laboratory Practices (GLP) "shall be accepted" in other Member countries for assessment purposes. This avoids the need for duplicate testing in multiple countries and also bringing animal welfare benefits. It has been estimated that governments and industry save over $150 million a year from MAD for pesticides and industrial chemicals alone (online). As noted, this aspect may require additional consideration to ensure that the approach proposed in CICA2 does not present possible future impediments to continued U.S. adherence to and realization of the benefits of MAD.
The new discussion draft also includes a number of new terms and concepts that will require further analysis, and considerably more clarity, to understand how exactly their inclusion in this draft impacts TSCA reform and enable a clearer assessment of whether the changes address TSCA's deficits or add to them.
The forthcoming hearing on CICA2 on April 29, 2014, will be important, as some of the issues and ambiguities noted above may be discussed and clarified.