Regulatory Developments

TSCA Reform: Detailed Review of the TSCA Modernization Act of 2015 Considered in Markup by the House Energy and Commerce Committee

June 11, 2015

The House Energy and Commerce Committee convened a markup session on June 2 and 3, 2015, to consider a slightly revised version of the TSCA Modernization Act of 2015 as H.R. 2576. As reported in our June 3, 2015, memorandum, the House Committee passed the marked up bill. The House Energy and Commerce Subcommittee on Environment and the Economy had considered and passed an earlier discussion draft version of the TSCA Modernization Act (TMA2 DD) in May 2015, while an initial discussion draft (TMA1) had been considered in April 2015. Our memoranda on these earlier drafts are available at TMA2 DD and TMA1. In the previous Congress, Shimkus introduced first a discussion draft of the Chemicals in Commerce Act (CICA1), and then a revised discussion draft of the bill, CICA2. In addition, Shimkus held "countless" hearings concerning reform of the Toxic Substances Control Act (TSCA). Memoranda summarizing these earlier bills and hearings are available on our website. According to the Subcommittee's May 29, 2015, press release, "H.R. 2576, the TSCA Modernization Act, authored by Environment and the Economy Subcommittee Chairman John Shimkus (R-IL), Subcommittee Ranking Member Paul Tonko (D-NY), full Committee Chairman Fred Upton (R-MI), and Ranking Member Frank Pallone, Jr. (D-NJ). The landmark bill is a bipartisan effort to bring reform to the decades-old Toxic Substances Control Act. The legislation will improve the protection of human health and the environment, help better facilitate interstate and international commerce, and provide the public greater confidence in the safety of American-made chemicals and the products that contain them."

Commentary

The parliamentary situation underlying the TSCA debate for the past year has been seriously interesting. With the House planning to vote on a TSCA bill within the month, it has become interestingly serious. The prospects for enactment remain unclear since the Senate has been relatively silent in the past few months (though importantly adding more bipartisan sponsors), and there the level of animosity between interested parties remains high, at least in public. Last, but certainly not least, the Administration's position on a large number of pivotal issues remains unclear, although compared to current law, the Administration might be expected to accept any package of amendments that successfully makes it through either side of Capitol Hill.

At this point, it seems certain that there will remain many important differences between the House and Senate proposals, and that would require a formal conference committee process to resolve or a more informal convening of interests to come to an agreement.

As days pass, however, the window of opportunity is more rapidly closing than it might appear. Most observers have expected that the opportunity for successful legislation will end before 2016 election year politics dominate Congressional activity, making the window sometime before the end of this year. But Presidential election politics has stymied the Republican leadership in the Senate even when there is "must pass" legislation pending, and it remains to be seen how much time or energy will be allotted for TSCA debate, unless it is clear there are few or no remaining issues to be worked out that need floor time.

The most optimistic scenario may be that with the positive House vote this month, the Administration can emerge from the shadowy world of "technical advice" and provide serious leadership in fashioning "refinements" that address what we believe are serious deficiencies in H.R. 2576 and remaining problematic issues in S. 697 (see our memoranda online). We repeat an observation we made earlier, especially relevant to the House legislation: It is unclear whether the drafters of the legislative compromise have received significant input from U.S. Environmental Protection Agency (EPA) program staff or others experienced in the design and operation of a serious risk management statute. While we hope that our observations would not be seen as insisting on "perfection" at the expense of "good" legislation (and, yes, we believe that H.R. 2576 is better than current law), regardless of origin or motive, there remain significant "holes" and uncertainties in the House legislation, including:

  • An overly broad definition of "potentially exposed subpopulation" that offers little opportunity for EPA discernment. Since workers almost as a general matter have "greater potential exposure" than the general population, based on the definition they are "likely to be at greater risk." While we can see an exception for chemicals that lack any toxicity, the net result of the definition seems to be that essentially all chemicals selected for risk evaluation and risk management would trigger the potentially exposed subpopulation provisions in the bill.
     
  • An inadequate fix to Section 4 on testing. The bill adds new authority to require testing needed for risk evaluations while retaining TSCA's failed Section 4 "findings." In our view, this will not allow EPA to obtain the testing needed to screen the tens of thousands of existing chemicals.
     
  • No guidance or mandate concerning prioritization of existing chemicals. While we can understand the concerns of some stakeholders with S. 697's "high/low" prioritization approach, complete silence on the topic will do little to assist EPA in reversing the fits and starts and overall lack of progress under TSCA.
     
  • A poorly drafted "may present an unreasonable risk" determination for selecting chemicals for Section 6 risk evaluation. In our view, every chemical in commerce has a "potential route of exposure." Do the drafters really intend that all chemicals that are a "potential hazard" would satisfy the "may present" risk determination and be required to undergo a risk evaluation?
     
  • Unrealistic deadlines for Section 6 regulations. While we applaud the deletion of the "least burdensome requirements" phrase in TSCA Section 6, does anyone really believe that EPA can issue a proposed regulation 90 days after completing a risk evaluation and then issue the final rule within 180 days? This timeframe would be a challenge for even the most uncomplicated chemical and literally impossible for chemicals presenting issues as complex as those with asbestos, PFOS/PFOA, methylene chloride, and other chemicals with challenging risk and complex use profiles.
     
  • No improvements to TSCA Section 8 on information gathering/reporting. All stakeholders seem to agree that some type of Inventory reset is needed, and we are concerned that H.R. 2576 is silent on this and any changes to Section 8. TSCA's Section 8 tools have not worked adequately in the past to provide EPA with the information needed to inform its existing chemicals decision-making. Absent some type of mandate or additional authority, Section 8 will continue to plague EPA.

None of this demeans the critically important fact that getting this far remains an astounding, and unpredicted, level of success so far this year. We remain optimistic there is sufficient time, and apparently the will, to achieve ultimate success. Or at least we hope so.

Key Changes in H.R. 2576

This section of the memorandum summarizes and analyzes the key changes made in proposed H.R. 2576. To help the reader keep the various drafts in perspective, the next section of the memorandum consolidates and integrates the changes into a detailed discussion of the entire bill. We also bring in comparisons to the new version of the Senate bill -- S. 697 -- that was passed by the Senate Environment and Public Works (EPW) Committee and favorably reported to the Senate Floor.

Relative to S. 697, H.R. 2576 continues to take an approach that is much narrower, in some cases almost surgical, and limited to substantive changes in a subset of the TSCA sections considered in S. 697. H.R. 2576 proposes no changes relative to TMA2 DD in Section 3 on definitions, Section 4 on testing, Section 9 concerning the relationship to other Federal laws, and Section 14 concerning confidential business information (CBI), while changes are proposed to Section 6 on existing chemicals, Section 18 on preemption, and Section 26 concerning administration of the Act. Although discussion in the TMA2 DD markup hearing indicated an interest in considering changes to TSCA Section 8 on information reporting, H.R. 2576 proposes to retain current TSCA Section 8 without change.

Section 6. H.R. 2576 proposes to delete the "least burdensome requirements" language in TSCA Section 6(a) (as was proposed in TMA2 DD) but has further changed this critical provision as shown below (redlining (underlining/strikeout) shows changes compared to TSCA, with italicized text indicating changes relative to TMA2 DD):

...[EPA] shall by rule apply one or more ...requirements to such substance or mixture to the extent necessary to protect adequately against such risk using the least burdensome requirements so that the chemical substance or mixture no longer presents or will present an unreasonable risk, including an identified unreasonable risk to a potentially exposed subpopulation.

The effect of H.R. 2576's changes appears to sharpen and clarify the requirements on EPA in determining what actions are "necessary." Under TSCA, EPA had discretion to "protect adequately" against the risk whereas under the proposal, EPA is to take actions "so that the chemical...no longer presents or will present an unreasonable risk." This formulation strikes us as one that is somewhat more protective of health and the environment.

H.R. 2576 proposes to strengthen and clarify TMA2 DD Section 6(b)(4) Requirements by creating a new subsection (B) that makes clear that EPA, in conducting a risk evaluation, "shall...(B) not include information on cost and other factors not directly related to health or the environment." This concept had appeared in TMA2 DD at the end of Section 6(b)(4)(A) as a "but not including information on cost and other factors" (emphasis added) phrase. While the effect is clearer, the full effect of "not directly related to health or the environment" is not immediately clear.

H.R. 2576 retains without change the time periods that had appeared in TMA2 DD Section 6(b)(5) Deadlines but has tweaked the language at subsection (A). This provision had proposed that EPA shall conduct and publish a risk evaluation "not later than 3 years after the date" EPA had determined that a chemical "may present an unreasonable risk" under Section 6(b)(3)(A)(i) or a company had requested EPA to conduct a risk evaluation under Section 6(b)(3)(A)(ii). H.R. 2576 has strengthened and clarified the requirement on EPA by stating that the risk evaluation shall be completed "as soon as reasonably possible, subject to the availability of appropriations resources, but not later that than 3 years after the date..." (redlining added to show changes).

H.R. 2576 Section 6(b)(7) Minimum Number, as in TMA2 DD, requires that EPA "shall initiate 10 or more risk evaluations" in each fiscal year but whereas TMA2 DD had limited this to EPA initiated risk evaluations, H.R. 2576 extends this to also include Work Plan chemicals.

TMA2 DD had proposed a new and relatively complicated provision at Section 6(c)(1)(B) regarding control actions in cases where EPA "determines that it is not practicable to protect against the identified risk using cost-effective requirements" (emphasis added). H.R. 2576 proposes to clarify and simplify this provision as follows: EPA is required to impose requirements that are determined to be cost-effective "except where [EPA] determines that additional or different requirements...are necessary to protect against the identified risk" (emphasis added). Relevant to this provision is Section 6(h) Critical Use Exemptions that has been retained in H.R. 2576 without change from the text in TMA2 DD. Under this provision, if certain requirements can be met, EPA can grant exemptions to Section 6(a) control actions.

H.R. 2576 proposes to retain Section 6(i) concerning persistent, bioaccumulative, and toxic (PBT) chemicals as proposed in TMA2 DD.

Section 18. H.R. 2576 clarifies the preemption of State requirements adopted to protect air or water quality or, in relation to waste treatment or waste disposal, applies under Section 6(b) as well as when EPA issues a Section 5 or 6 rule. With regard to the "Savings" provisions, H.R. 2576 includes: (1) a new statement that tort or contract law "requirements" do not include civil tort actions for damages under State law; and (2) a new provision that nothing in the Act "shall be construed as changing the preemptive effect of an action taken by the Administrator prior to the date of enactment of this Act or under section 6(e)."

Section 26. H.R. 2576 retains without change the provisions proposed in TMA2 DD concerning fees and various administrative aspects such as scientific standards and policies, procedures, and guidance, among others. H.R. 2576 proposes a new Section 26(l) Report to Congress that requires that EPA, within six months of enactment, submit a report containing an "estimation" of:

  • EPA's capacity to conduct and publish Section 6 risk evaluations on EPA-initiated cases (includes Section 6(b)(3)(A)(i) "may present" and Section 6(b)(3)(B) Work Plan chemicals) and the resources necessary to initiate the annual minimum number of ten risk evaluations as specified in Section 6(b)(7);
     
  • EPA's capacity to conduct and publish company-requested risk evaluations (Section 6(b)(3)(A)(ii)), the likely demand for such evaluations, and the anticipated schedule for "accommodating" that demand;
     
  • EPA's capacity to promulgate Section 6(a) rules; and
     
  • The actual and anticipated efforts of EPA to increase its capacity to conduct and publish Section 6(b) risk evaluations.

EPA is required to update and resubmit the report once every five years.

Detailed Analysis of H.R. 2576

Section 3: Definitions

H.R. 2576 retains the approach in TMA2 DD and proposes to revise slightly the definitions for "intended conditions of use" and "potentially exposed subpopulation" compared to those in TMA1 and to delete the definition for "weight of the scientific evidence" (although the term is used in Sections 6(b)(4) and 26(i)). It otherwise retains all of TSCA's definitions. The proposed revisions are as follows:

  • "Intended conditions of use" -- "[T]he circumstances under which a chemical substance is intended, known, or reasonably foreseen foreseeable to be manufactured, processed, distributed in commerce, used, and disposed of" (redlining added to show the changes).

The approach in S. 697 is similar to that in H.R. 2576, except that S. 697 also includes a determination by EPA.

  • "Potentially exposed subpopulation" -- "[A] group of individuals within the general population who, due to either greater susceptibility or greater potential exposure, are likely to be at greater risk than the general population of adverse health effects from exposure to a chemical substance" (redlining added to show the changes).

The proposed addition of "likely" broadens the definition. The change causes us to wonder, considering that workers have greater potential exposure to many if not virtually all chemicals, what if anything is being excluded (i.e., given the exposure situation with regard to workers, based on the definition, do not virtually all chemicals have potentially exposed subpopulations and, if so, is this what the drafters intend)? As was the case in TMA1, the definition does not involve an EPA determination nor does it use the term "intended conditions of use." The corresponding definition in S. 697, in comparison, includes an EPA determination and seems to be narrower and more nuanced.

Section 4: Testing of Chemical Substances and Mixtures

As was done in TMA1, H.R. 2576 largely retains TSCA Section 4 with surgical changes. H.R. 2576 would amend TSCA Section 4(a) to give EPA the authority to require testing of a chemical substance if necessary to conduct a risk evaluation under Section 6(b). EPA would be able to do so by order or consent agreement, as well as by rule.

The requirement in TSCA Section 4(a) that EPA make findings in requiring testing is thus retained in H.R. 2576. These include the current TSCA findings for "may present an unreasonable risk" and/or "substantial production/exposure," plus "insufficiency of data" and "testing is necessary," and, as noted above, an additional "or" finding is proposed to allow EPA to require testing if it is necessary to conduct a Section 6(b) risk evaluation. The net effect of the change seems to be that in requiring testing beyond that "necessary to conduct" a Section 6 risk evaluation, EPA would be required to satisfy the current TSCA findings requirements despite the fact that these have proven difficult for EPA to meet and apply over the law's history. In addition, the requirement that EPA make findings under H.R. 2576 would apply to testing obtained by rule, order, and consent agreement (we note in this regard that EPA does not currently make findings in using the Enforceable Consent Agreement procedure to obtain testing). Because H.R. 2576 is silent on concepts such as prioritization (which is included in S. 697), there is no discernible push from Congress for EPA to obtain testing needed to inform its understanding on and to tee up existing chemicals for a possible Section 6 risk evaluation. The changes discussed in this paragraph strike us as steps in the wrong direction at several levels and seem unlikely to help in ensuring that EPA will implement a robust testing program to develop the data needed to inform adequately its screening and prioritization judgments in selecting chemicals for risk evaluation.

H.R. 2576 does not include other provisions found in S. 697 concerning, for example, animal welfare aspects and the need to develop and issue a "statement of need" in requiring testing (perhaps in recognition that the TSCA "findings" requirements have been retained).

Section 6: Regulation of Hazardous Chemical Substances and Mixtures

H.R. 2576 would amend TSCA Section 6(a) by keying action under Section 6(a) to a determination under Section 6(b) or under Section 6(i)(2) (these are discussed more below) and by striking the "least burdensome requirement" in TSCA Section 6(a). Many believe the latter provision had been a key contributor to EPA's inability to regulate asbestos and other existing chemicals. H.R. 2576 would further change this critical provision as shown below, which includes a reference to "potentially exposed subpopulation" (redlining (underlining/strikeout) shows changes compared to TSCA, with italicized text indicating changes in H.R. 2576 relative to TMA2 DD):

...[EPA] shall by rule apply one or more ...requirements to such substance or mixture to the extent necessary to protect adequately against such risk using the least burdensome requirements so that the chemical substance or mixture no longer presents or will present an unreasonable risk, including an identified unreasonable risk to a potentially exposed subpopulation.

The effect of H.R. 2576's changes appears to be one of sharpening and clarifying the requirements on EPA in determining what actions are "necessary" to meet the regulatory requirements of Section 6. Under TSCA, EPA had discretion to "protect adequately" against the risk whereas under H.R. 2576, EPA is to take actions "so that the chemical...no longer presents or will present an unreasonable risk." This formulation strikes us as one that is somewhat more protective of health and the environment, potentially resulting in more or more extensive control actions. At the same time, the effect is somewhat measured and not to the extent that, for example, a "to ensure" requirement would impose.

Consistent with TMA1, H.R. 2576 proposes to delete TSCA Section 6(b) Quality Control and to replace it with Section 6(b) Risk Evaluations. Section 6(b)(3)(A) has been revised from TMA1 in important ways, including no longer requiring EPA to make a finding in order to conduct a risk evaluation (although there is a stray reference to a "finding under subsection (b)(3)(A)(i)" at Section 6(i)(4)). The reworded provision also includes the concept of "may present an unreasonable risk." The changes are shown by redlining:

The Administrator shall conduct and publish the results of a risk evaluation under this subsection for a chemical substance if –
  1. the Administrator determines finds a reasonable basis for concluding that the combination of hazard from and exposure to the chemical substance may present an unreasonable risk of injury to health or the environment because of potential hazard and a potential route of exposure under the intended conditions of use has the potential to be high enough to present an unreasonable risk; or
     
  2. a manufacturer of the chemical substance requests [and per Section 26, pays for] such a risk evaluation.

In addition, EPA can directly initiate a risk evaluation on a Work Plan chemical. While we appreciate the flexibility afforded to EPA by requiring a "determination" rather than a "finding," it is not clear to us that the other changes provide the clarity needed in this critical provision. While we see merit in the general concept of applying a "may present" determination, we would prefer that it be unadorned by the additional hazard and exposure phrase. We believe that after almost 40 years, both EPA and stakeholders have a pretty good idea of what a "may present" determination involves. In particular, we find little comfort in the term "potential route of exposure." Do not most if not all chemicals satisfy the requirement for having a potential route of exposure (dermal or inhalation exposure potential, e.g., during transfer from a reactor after manufacture or during use)? If our reading is correct, then the provision devolves to a hazard-based trigger, which does not seem to be the intent. We do wonder, however, what the effect would be if EPA made a "may present" finding under Section 4 -- would this mean that any time EPA makes a "may present" finding under Section 4, EPA has essentially also satisfied this Section 6 provision?

H.R. 2576 proposes to strengthen and clarify TMA2 DD Section 6(b)(4) Requirements by creating a new subsection (B) that makes clear that EPA, in conducting a risk evaluation, "shall...(B) not include information on cost and other factors not directly related to health or the environment." This concept had appeared in TMA2 DD at the end of Section 6(b)(4)(A) worded as a "but" phrase ("but not including information on cost and other factors" (emphasis added)). While the effect is clearer, the full effect of "not directly related to health or the environment" is not immediately clear. EPA is also required to "integrate and assess information on hazards and exposures for all of the intended conditions of use" (emphasis added). While we appreciate the desire for EPA to prepare a reasonably comprehensive exposure assessment, we wonder about the effect of a "shall" requirement to evaluate exposures from "all of" the intended conditions of use (in some ways it reminds us of the all-encompassing effect of "least burdensome"). Additional provisions in this subsection track with those in TMA1, including to take exposures into account under the intended conditions of use, to describe the weight of the scientific evidence for hazard and exposure, and to "consider whether the weight of the scientific evidence supports the identification of threshold doses of the chemical substance below which no adverse effects can be expected to occur" (redlining shows change from TMA1).

Whereas TMA1 Section 6(b)(5) Deadlines had required that risk evaluations initiated at the request of manufacturers be completed within 180 days, H.R. 2576 (consistent with TMA2 DD) changes this to the same three-year deadline, which otherwise applies to EPA-initiated reviews. H.R. 2576 clarifies and strengthens the requirement in TMA2 DD by stating that EPA's risk evaluation shall be completed "as soon as reasonably possible, subject to the availability of appropriations resources, but not later than 3 years after the date..." (redlining added to show changes). EPA can extend the risk evaluation deadline if EPA determines that additional information is necessary. In this regard, we wonder about the practicality of giving EPA only 90 days after receipt of additional information to complete the risk evaluation, recognizing that the new hazard and/or exposure information could be complex and/or voluminous and would need to be integrated into the risk evaluation.

Per Section 6(b)(5)(B), if EPA determines based on a risk evaluation that a chemical "presents or will present, in the absence of a rule under subsection (a), an unreasonable risk of injury," EPA, after publishing its risk evaluation, has 90 days to propose a Section 6(a) risk management rule with the final rule due within 180 days. These inflexible deadline periods are unchanged from those in TMA1. We question the practical workability of the Section 6(a) rule completion deadlines given the likely complexity of such rules and existing requirements for Office of Management and Budget (OMB) review.

In the case of a determination of no unreasonable risk, H.R. 2576 Section 6(b)(6) requires that EPA publish a preliminary determination and provide at least a 30-day period for notice and comment. H.R. 2576 would prohibit EPA from making such a determination if it determines that the chemical, under the intended conditions of use, poses an unreasonable risk to one or more potentially exposed subpopulations. A final determination that a chemical will not present an unreasonable risk would be considered a final agency action.

TMA2 DD proposes a new Section 6(b)(7) Minimum Number, which states that "[s]ubject to the availability of appropriations," EPA shall initiate "10 or more risk evaluations" in each fiscal year after the enactment of the Act. Whereas TMA2 DD had limited this to EPA risk evaluations on chemicals for which it had made a "may present" determination, H.R. 2576 extends this to also include Work Plan chemicals. While initiating ten or more risk evaluations per year would represent a considerable increase over the number of TSCA risk assessments initiated in the past, depending on the level of appropriations, it might be achievable. Better yet, it seems to us, would be to include these costs within those covered by industry fees under Section 26(b).

H.R. 2576 retains most of TMA1's changes to TSCA Section 6(c) Promulgation of Subsection (a) Rules, including deleting a number of procedural requirements in TSCA that otherwise allowed informal hearings and cross-examination. H.R. 2576 expands (beyond those in TSCA) the points to be considered and published in promulgating a Section 6(a) rule, including important clarifications from TMA2 DD. These additional points include:

  • Whereas TMA2 DD had proposed a new and relatively complicated provision at Section 6(c)(1)(B) regarding control actions in cases where EPA "determines that it is not practicable to protect against the identified risk using cost-effective requirements" (emphasis added), H.R. 2576 proposes to clarify and simplify this provision as follows: EPA is required to impose requirements that are determined to be cost-effective "except where [EPA] determines that additional or different requirements...are necessary to protect against the identified risk" (emphasis added). Relevant to this is new Section 6(h) Critical Use Exemptions, which, if certain requirements can be met as discussed below, can be applied in cases where EPA determines that additional or different requirements are necessary;
     
  • Determining whether technically and economically feasible alternatives "will be" reasonably available when the action takes effect;
     
  • Exempting replacement parts for articles that are "designed prior to the date of publication...of the rule unless [EPA] finds such replacement parts contribute significantly to the identified risk, including identified risk to identified potentially exposed subpopulations" (emphasis added; underlining shows addition to TMA2 DD). While we believe we understand the intent of the change to "designed," we wonder about the clarity of its meaning; and
     
  • In restricting chemicals in articles, limiting such actions to the extent necessary to protect against the identified risk.

Consistent with TMA1, H.R. 2576 Section 6(d) requires that Section 6(a) rules provide for a "reasonable transition period."

H.R. 2576 retains without change three new subsections at the end of Section 6 that were proposed in TMA2 DD. The first, Section 6(g), states that EPA shall not consider costs or other non-risk factors when deciding whether to initiate a Section 6(a) rule.

Section 6(h) Critical Use Exemptions outlines criteria, procedures, duration, and conditions in granting exemptions from a Section 6(a) rule for "a specific use" of the chemical. This exemption is available in cases where EPA determines per Section 6(c)(1)(B) that "additional or different requirements...are necessary to protect against the identified risk." EPA is given discretion to grant an exemption in these cases if EPA can also find that the specific use is a "critical or essential use" (this term is not further defined) or that the requirement regarding the specific use "would significantly disrupt the national economy, national security, or critical infrastructure." The exemption is required to be "supported by clear and convincing evidence" and requires public notice.

If the exemption is granted, EPA is required to notify the public and the manufacturers and processors of the chemical are required to notify known commercial purchasers to which the exemption applies. Such exemptions are limited to five years in duration but may be renewed for additional periods if EPA finds that the requirements continue to be met. Finally, in granting the exemption, EPA is required to impose conditions that reduce risks "to the greatest extent feasible."

The net effect of proposed Sections 6(c)(1)(B) and 6(h) is that EPA is required to impose requirements that are determined to be "cost-effective," except where EPA determines that additional or different requirements are necessary to protect against the identified risks. In these cases, the "additional or different" controls would nonetheless go into effect unless the exemption requirements can be satisfied. If, on the other hand, the exemption requirements can be met (clear and convincing evidence that the specific use is "critical or essential" or the action would cause significant disruption to the national economy, etc.), EPA could grant an exemption under which risks are required to be reduced to the greatest extent feasible. While the exemption procedure may be helpful as a "safety valve" to avoid undue disruption, it is difficult to assess how workable or practicable the exemption may be, particularly when it involves "critical or essential uses" (whatever that covers).

Finally, H.R. 2576 Section 6(i) concerns PBT chemicals. It involves a relatively complicated process wherein EPA identifies PBT chemicals within nine months of enactment and within two years confirms the chemicals that satisfy the criteria specified. In such cases, EPA then has two years to promulgate a Section 6(a) rule to reduce exposure, although, as discussed below, an off-ramp is available. More specifically, the provision requires that:

  • EPA, within nine months, publish a "list of those chemical substances that the Administrator has a reasonable basis to conclude are" PBTs, except that the list cannot include any metal, metal compound, or PCB. The provision appears to give EPA a lot of discretion in whether to consider all non-excluded chemicals on the Inventory versus some smaller subset of the TSCA Inventory for purposes of identifying PBTs. It also appears to be a "one-off" requirement with no need for EPA to undertake additional or on-going efforts to identify PBTs.
     
  • Within two years of enactment, EPA "shall" designate as a "PBT chemical of concern" each chemical on the list:
     
    • That scores "high" for persistence and bioaccumulation, or high for one and moderate for the other; and
       
    • For which exposure is likely to the general population or to a potentially exposed subpopulation identified by EPA.

Similar to the approach in S. 697, H.R. 2576 cites the TSCA Work Plan Methods Document as the source for "high" or "moderate" scoring criteria (these are discussed in our memorandum on the version of S. 697 that was reported out to the Senate Floor). Depending on the size of the list generated in the prior step, two years might or might not be reasonable.

  • Subject to the availability of appropriations, EPA is required to promulgate, within two years after designating a chemical as a PBT, a Section 6(a) rule to "reduce likely exposure to the extent practicable" (emphasis added). Depending on the number of chemicals involved, this requirement could range from difficult to daunting for EPA to achieve.
     
  • Subsection (4) provides a bit of an off-ramp from the PBT procedure. If within 90 days after EPA publishes the list of PBTs, EPA makes the Section 6(b)(3)(A)(i) determination that a risk evaluation is required on such a listed chemical, or a manufacturer requests that EPA conduct a risk evaluation under subsection (ii), such chemical "shall not be subject" to the PBT provision.

Considered within the context of H.R. 2576 Section 6 and assuming that an off-ramp is not used, the effect of this provision seems to involve the following:

  • EPA can initiate control actions on chemicals that are confirmed to be PBTs of concern without conducting a risk evaluation under Section 6(b). Thus, there is no need for EPA to show that the chemical presents an unreasonable risk nor would EPA have to satisfy the Section 6(b)(4) requirements that otherwise apply to a risk evaluation.
     
  • In taking control actions under Section 6(a), EPA would still have to meet the terms of Section 6(c) except that the rule would be required to be promulgated within two years (versus three to five years otherwise) and would need to reduce likely exposure to the extent practicable (versus the requirement that otherwise applies under Section 6(a) that actions be taken "so that the chemical...no longer presents or will present an unreasonable risk").

Given the challenges to EPA in meeting the PBT regulatory deadline, as well as the potential interest of industry in avoiding the designation of chemicals as PBTs of concern, the shorter two-year regulatory deadline, as well as the requirement that control actions reduce likely exposure to the extent practicable, and the absence of a requirement for EPA to conduct a risk evaluation on such chemicals, one wonders how many chemicals would actually be dealt with via this process versus being off-ramped one way or the other.

Regarding PBTs, the approach in S. 697 is somewhat narrower and does not deviate from the standard process that requires development of a safety assessment and safety determination and regulation of PBTs that do not meet the safety standard. It includes provisions that give a preference in the prioritization step to identifying such existing chemicals as high-priority, and, for chemicals that fail to meet the safety standard and that rank high for persistence and bioaccumulation, EPA is required to take control actions that reduce exposure to "the maximum extent practicable."

More generally, the approach to Section 6 in S. 697 is markedly different from that in H.R. 2576.

Section 8: Reporting and Retention of Information

Whereas TMA1 retained TSCA Section 8 with the addition of a new requirement for EPA to implement periodically a "hard" Inventory "reset" to remove from the TSCA Inventory any chemical that, based on reporting, is no longer manufactured or processed, this provision does not appear in H.R. 2576. Section 8 was identified in the mark-up hearing as one of the areas needing additional attention but H.R. 2576 proposes to retain TSCA Section 8 without change.

S. 697 proposes several Section 8 provisions, such as recognizing certain chemical nomenclatures and the Inventory status of "statutory mixtures." It would also create lists of "active" versus "inactive" Inventory chemicals. These provisions, among others, do not appear in H.R. 2576.

Section 9: Relationship to Other Federal Laws

H.R. 2576 would amend Section 9(b) by adding a requirement that EPA, in making a determination that it is in the public interest for EPA to take an action under TSCA "with respect to a chemical substance or mixture" rather than under another EPA administered law, shall consider the relevant risks and compare the estimated costs and efficiencies of the action to be taken under TSCA versus the other law. This provision does not have a counterpart in S. 697.

Section 14: Disclosure of Data

H.R. 2576 retains the approach proposed in TMA2 DD without change. The approach largely retains the approach in TSCA Section 14 but, in an important change from TMA1, would protect from disclosure information on "molecular structures" and require EPA to give notice to companies prior to the expiration of CBI claims. It also includes a new "Savings" provision.

As with TMA1, H.R. 2576 would amend TSCA Section 14(a) to allow the disclosure of CBI to a State, local, or tribal government official upon request of the official for the purpose of administration or enforcement of a law. In addition, CBI would be disclosed, upon request, to a health or environmental professional employed by a Federal or State agency in response to an environmental release, or to a treating physician or other health care professional to assist in the diagnosis or treatment of one or more individuals.

In an important change, H.R. 2576 would amend Section 14(b) to make clear that this subsection "does not authorize the release of any data which discloses that disclose formulas (including molecular structures) of a chemical substance or mixture, processes used in the manufacturing or processing of a chemical substance or mixture, or, in the case of a mixture, the release of data disclosing the portion of a mixture comprised by any of the chemical substances in the mixture" (redlining to show changes from TSCA). Although the term "molecular structures" is not defined in H.R. 2576, it is used in TSCA Section 8(a)(2)(A) (in the phrase "[t]he common or trade name, the chemical identity, and the molecular structure of each chemical substance or mixture...") and Section 26(c) concerning categories of chemical substances. The provision in H.R. 2576 is broader than the corresponding provision at Section 14(b)(7) in S. 697 that explicitly limits protection of chemical identity to the period prior to commercial distribution.

Under H.R. 2576 Section 14(c), in submitting information after the date of enactment, CBI designations would require substantiation, including a "justification" for each CBI claim, and claims would expire after ten years. The CBI would be made public unless the manufacturer, processor, or distributor reasserts the CBI claim. H.R. 2576 adds a provision at Section 14(c)(1)(C), which requires EPA to give 60 days advance notice to companies prior to releasing CBI in the case of expiring claims.

H.R. 2576 Section 14(f) Prohibition states that no person receiving CBI may use or disclose the information except as specified or authorized, respectively. This provision does not have a counterpart in S. 697.

H.R. 2576 includes a new Section 14(g) Savings, which makes clear that Section 14 does not "affect the applicability of State or Federal rules of evidence or procedure in any judicial proceeding." A similar provision appears in the chapeau to S. 697 Section 14(b).

S. 697 Section 14 is much more elaborate than that in H.R. 2576 and includes a number of concepts not appearing in the House bill (such as a requirement to develop a "unique identifier" and a subsection detailing EPA's responsibilities to review CBI claims).

Section 18: Effect on State Law

H.R. 2576 generally provides the same effective date as in TMA1 and TMA2 DD for when preemption takes place regarding safety assessments. This is once EPA makes a final determination under Section 6(b) that a chemical substance does, or does not, present an unreasonable risk of injury to health or the environment under the intended condition of use. Consistent with TMA2 DD, H.R. 2576 clarifies that the preemption applies to a State requirement for a chemical substance under the intended conditions of use "considered by the Administrator in the risk evaluation under section 6(b)" or in the case of a Section 5(a) rule, "from a use identified in a notice received by the Administrator under section 5(a)." H.R. 2576 includes an exemption from preemption when the State requirement is adopted under the authority of Federal law or "is adopted to protect air or water quality or is related to waste treatment or waste disposal, except that this clause does not apply to such a requirement if a provision of this title, or an action or determination made by the Administrator under this title, actually conflicts with the requirement." TMA2 DD included this exemption only in the context when EPA issues a Section 5 or 6 rule (other than a requirement described in Section 6(a)(6)). Finally, as proposed in TMA2 DD, H.R. 2576 clarifies that the exemption from preemption for a State requirement that is "identical" to the EPA requirement does not allow a State to assess a penalty for a violation when EPA has already assessed a penalty, and does not allow EPA to assess a penalty for a violation when a State has already assessed a penalty if the penalty total combined would exceed the maximum amount that EPA could itself assess.

For comparison purposes regarding the effective date, "Lautenberg1" (the bill proposed in the Senate in March 2015) has the effective date as once EPA commences its safety assessment, while Lautenberg 2 (otherwise identifiable as S. 697 proposed in April 2015) has the effective date as once EPA defines the scope of a Section 6(a)(2) safety assessment. Considering the time it is expected to take EPA to complete a Section 6(b) safety assessment, the timing in H.R. 2576 would significantly expand the amount of time until relevant State laws are affected.

H.R. 2576 proposes the following changes to TMA2 DD with regard to its "Savings" provisions: (1) a new statement that tort or contract law "requirements" do not include civil tort actions for damages under State law; and (2) a provision that nothing in the Act "shall be construed as changing the preemptive effect of an action taken by the Administrator prior to the date of enactment of this Act or under section 6(e)."

Section 26: Administration of the Act

H.R. 2576 retains the text proposed in TMA2 DD without changes, including in the fees provisions, and proposes a new Section 26(l) Report to Congress.

H.R. 2576 clarifies TSCA Section 26(b)(1) by somewhat broadening the fees authority and also eliminates TSCA's fee cap of $2,500 (redlining shows the changes from TSCA):

The Administrator may, by rule, require the payment of a reasonable fee from any person required to submit data under section 4 or 5 of a fee that is sufficient and not more than reasonably necessary, or who requests a risk evaluation under section 6(b)(3)(A)(ii), to defray the cost of administering this Act the provision of this title for which such fee is collected. Such rules shall not provide for any fee in excess of $2,500 or, in the case of a small business concern, any fee in excess of $100. Such rules shall provide for lower fees for small business concerns.

Thus, the provision would allow EPA, by rule, to require fees for dealing with data submissions under Sections 4 and 5 and for industry requests for EPA to conduct Section 6 risk evaluations. As worded, the provision seems to cover the costs of reviewing data submissions under Section 4 (but would not cover the costs to EPA in developing rules, orders, or consent agreements to require testing) and for review of new chemical notices and exemption requests, presumably also including the costs associated with EPA's regulatory determinations and actions under Section 5. Regarding Section 6 risk evaluations and control actions, fees are available only for industry-requested risk evaluations and not for EPA-initiated risk evaluations and regulatory actions under this section. This interpretation is reinforced by the inclusion of the phrase "[s]ubject to the availability of appropriations" that appears in Sections 6(b)(7) (concerning the minimum number of risk evaluations initiated by EPA per year) and 6(i)(3) (concerning expedited control actions on PBTs). Under S. 697, the fee provisions are considerably broader and cover EPA costs associated with, among others, Section 4A prioritization decisions and Section 6 safety assessments and determinations and rulemaking actions.

H.R. 2576 Section 26(b)(3) Fund deals with one of the issues identified by EPA in the April 14, 2015, hearing on TMA1 held by the House Energy and Commerce Subcommittee on Environment and the Economy. This new section establishes a fund in the U.S. Treasury to receive fees collected by EPA and to disburse funds to EPA to cover its costs, "including contractor costs," in carrying out the activities noted in the preceding paragraph. The provision goes on to discuss accounting and auditing requirements on EPA.

H.R. 2576 retains the changes proposed in TMA2 DD to clarify several of the provisions found in TMA1 Section 26(h) Scientific Standards. The section (redlining generally shows changes from TMA1) lists the factors to be considered in evaluating information from studies and tests, and in carrying out Sections 4, 5, and 6 to the extent that EPA makes a decision based on science, including: the scientific and technical procedures, measures, methods, or models employed to generate the information are reasonable for and consistent with the intended use of the information; the information is relevant for EPA's intended use "in making a decision about a chemical substance or mixture;" the degree of clarity and completeness by which the data, assumptions, methods, quality assurance, sponsoring organizations, and analyses employed to generate the information are documented; the variability and uncertainty in the information; and the extent of independent verification, validation, and or peer review of the information or the procedures, measures, methods, or models.

H.R. 2576 Section 26(i) Weight of Scientific Evidence states that EPA shall make decisions under Sections 4, 5, and 6 based on the weight of the scientific evidence.

H.R. 2576 Section 26(k) Policies, Procedures, and Guidance imposes deadlines on EPA for development and periodic review of policies, procedures, and guidance. EPA would have two years after enactment of the bill to develop any policies, procedures, and guidance EPA determines are necessary to carry out the amendments made by the bill. Not later than five years after the date of enactment, and not less frequently than once every five years thereafter, EPA would be required to review the adequacy of the policies, procedures, and guidance developed, including with respect to animal, nonanimal, and epidemiological test methods and procedures for assessing and determining risk; and to revise the policies, procedures, and guidance as EPA determines necessary to reflect new scientific developments or understandings.

H.R. 2576, relative to TMA2 DD, proposes a new Section 26(l) Report to Congress that requires that EPA, within six months of enactment, submit a report containing an "estimation" of:

  • EPA's capacity to conduct and publish EPA-initiated Section 6 risk evaluations (these include Section 6(b)(3)(A)(i) "may present" any Section 6(b)(3)(B) Work Plan chemicals) and the resources necessary to initiate the annual minimum number of ten risk evaluations as specified in Section 6(b)(7);
     
  • EPA's capacity to conduct and publish company-requested risk evaluations (Section 6(b)(3)(A)(ii)), the likely demand for such evaluations and the anticipated schedule for "accommodating" that demand;
     
  • EPA's capacity to promulgate Section 6(a) rules; and
     
  • The actual and anticipated efforts of EPA to increase its capacity to conduct and publish Section 6(b) risk evaluations.

EPA is required to update and resubmit the report once every five years.


 
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