TSCA Reform: House Subcommittee Discusses Revised Draft of Chemicals in Commerce Act

On April 29, 2014, the House Energy and Commerce Subcommittee on Environment and the Economy held a hearing to review a revised draft of the Chemicals in Commerce Act (CICA2). Representative John Shimkus (R-IL), Chair of the Subcommittee, released CICA2 on April 22, 2014. According to Shimkus, since he first released the discussion draft in March 2014 (CICA1), he has been working on a bipartisan basis to find common ground to reform the Toxic Substances Control Act (TSCA). More information regarding the hearing, as well as both the revised draft CICA2 and a redline comparison to the March 2014 discussion draft, is available online.

In his opening statement, Shimkus highlighted the following changes from CICA1:

• Section 4 adds new authority for the U.S. Environmental Protection Agency (EPA) to require the development of new hazard and exposure information for priority designation purposes;
   
• Under Section 5, instead of requiring EPA to grant exemptions for byproducts from notice requirements, CICA2 gives EPA discretion to decide whether to grant such an exemption;
   
• Section 6 requires EPA to evaluate the risk of harm a chemical substance poses to human health or the environment based upon four specific factors: nature and magnitude of the risk; impact on potentially exposed subpopulations; whether harm has occurred; and probability that harm will occur from use of a chemical substance;
   
• CICA2 Section 6 makes it explicit that in making such risk evaluations EPA is not to consider economic costs or benefits;
   
• Section 6 includes a new Alternative Risk Evaluation option for EPA to determine at any time that a chemical not designated as a high priority will not present a risk of harm in the absence of Section 6 restrictions;
   
• CICA2 includes deadlines for EPA to take action on existing individual chemicals;
   
• With respect to pre-emption, under CICA2, the effect of an EPA designation of a chemical substance as low priority has been changed. In CICA1, a low-priority designation would have pre-empted any state regulation of a chemical substance. CICA2 limits the pre-emptive effect of a low-priority designation to state regulations established after the low-priority designation, leaving in state regulations in effect when the low-priority designation is made;
   
• CICA2 streamlines the science and information quality provisions of the bill, replacing specific details about science, including a definition of best available science and some details on information quality requirements, with a codification of five science assessment factors currently used administratively by EPA; and
   
• CICA2 clarifies which decisions under TSCA must be made based on the weight of such scientific evidence.

Bergeson & Campbell, P.C.’s in-depth analysis of CICA2 is available online.

Representative Paul Tonko (D-NY), Ranking Member, noted that CICA2 does not incorporate revisions sought by Democrats. Tonko stated that he is willing to continue working on TSCA reform legislation, but called for a more productive process. According to Tonko, in some cases, CICA2 weakens the current law. Representative Fred Upton (R-MI), Chair of the Committee, expressed his desire to obtain constructive input from the Obama Administration and work with EPA in developing TSCA reform legislation. Representative Henry Waxman (D-CA), Ranking Member of the Committee, stated that while six additional industry associations have expressed support for CICA2, public health groups, key unions, environmental groups, and states remain opposed to the bill. Waxman called the cost/benefit analysis of CICA2 as unworkable, and criticized what he described as the sweeping state pre-emption provisions. According to Waxman, Congress should consider going back to the drawing board and coming up with a streamlined bill.

Oral and Written Testimony

The Subcommittee heard from the following witnesses, whose written testimony is available online:

• The Honorable Jim Jones, Assistant Administrator, Office of Chemical Safety and Pollution Prevention (OCSPP), EPA;
   
• The Honorable Calvin Dooley, President and Chief Executive Officer, American Chemistry Council (ACC);
   
• Dr. Beth Bosley, President, Boron Specialties, LLC, on behalf of the Society of Chemical Manufacturers and Affiliates (SOCMA);
   
• Mark Greenwood, Principal, Greenwood Environmental Counsel, PLLC;
   
• Dr. Len Sauers, Vice President, Global Sustainability, Proctor & Gamble Company;
   
• Steven Goldberg, BASF;
   
• The Honorable Michael Moore, on behalf of the National Conference of State Legislatures; and
   
• Andy Igrejas, Campaign Director, Safer Chemicals and Healthy Families.

Jones testified that EPA is committed to working to reform TSCA and briefly reviewed the September 2009 EPA principles to update and strengthen TSCA. According to Jones, while the Obama Administration has not yet developed a formal position on CICA2, TSCA reform legislation must include certain components that are included in a set of Administration principles. He claimed in his written testimony that CICA2 “does not include a mechanism that would provide for the timely review of existing chemicals that may pose a concern.” He also stated that “y including a standard very similar to the current TSCA section 6 authorities, the draft bill fails to address another key element of meaningful chemical safety reform” and also criticized CICA2 for including a consideration of costs or the availability of substitutes in risk management. Finally, Jones stated that CICA2 does not require EPA to determine that new chemicals are safe. Nowhere in his written testimony did he acknowledge the important changes from CICA1 that have been made in CICA2.

Shimkus opened the questioning of Jones by asking a series of points about the new draft and got Jones to agree that there were some positive changes in the new draft, including that cost/benefit was not included in the Section 6(b) risk evaluation and that CICA2 provided greater authority (rules, orders, and consent agreements) to require testing, including for prioritization purposes. Regarding his new chemical issues, Jones agreed that the Section 5 “may present” authority was the same as in TSCA but he claimed it was less flexible as formulated in CICA2.

Tonko pointed out what he saw as continuing problems with the pre-emption approach in CICA2.

Waxman probed the role of cost/benefit in risk assessment and risk management and advocated for a safety standard that did not consider costs/benefits. This was part of an on-going discussion among Subcommittee members that regularly confused hazard assessment, risk assessment, and the appropriate role of cost/benefit analysis. Jones indicated that cost has a role and should be considered but should not be part of a decision balancing risks and benefits. The exchange was important in that it suggested a different perspective between Jones and Representative John Dingell (D-MI) on a key issue, but at the same time the exchange was a bit muddled.

Dingell asked a series of questions concerning the resources needed for EPA to do the work envisioned in CICA2 and Jones agreed that current resources are inadequate. Dingell asked Jones to provide written estimates for the record of the resources needed to do 20 or more risk assessments/year. It is not clear how easy it will be for EPA to make such estimates of how many chemicals will need priority assessments over a given time period, but to the extent that OCSPP is able to provide clear answers in responding to the questions, that would prove helpful in clarifying the kinds of resources that would be needed. The question of fees came up in other questioning, in particular by Representative Phil Gingrey (R-GA) who asked Jones several questions about resources and how EPA would use fee authority. In response to the last point, Jones recounted the experience under the Pesticide Registration Improvement Act (PRIA) where the formulation that was applied in that legislation was developed by industry and non-governmental organization (NGO) stakeholders. Jones noted that whether the legislation applied an approach developed by stakeholders or told EPA to develop the approach, EPA would work with the stakeholders to develop an approach that was fair and equitable. The latter point may be seen as an invitation to stakeholders to take the issue on as part of developing the legislation. Furthermore, the fact that resource and fee-related questions were raised by senior officials from both parties is indicative of a clear recognition of the issue and perhaps of a willingness to take it on, which would be a very significant development that is critical to the successful implementation of whatever legislation is ultimately agreed.

Representative Frank Pallone (D-NJ) questioned Jones about “least burdensome” and the changes in this regard in CICA2. Jones responded by saying that the legislation should be clearer about how expansive cost/benefit analysis needs to be.

Representative Joe Pitts (R-PA) asked and obtained responses to a series of questions:

• Do you want licensing of new chemicals? No, but it should speak to safety.
   
• Is the currently available information adequate to do prioritization? Yes, for the first groups but CICA2 lacks a deadline for the number of prioritizations/year.
   
• Is four years sufficient to complete a risk assessment? Yes.
   
• Does CICA2 provide flexibility to consider a range of considerations in Section 6 risk management? It requires cost/benefit balancing and will not be as protective for health as required by the Administration principles.

Representative Jerry McNerney (D-CA) asked if basic testing was needed for all new chemicals and Jones responded that he did not believe it was needed for all new or existing chemicals.

Representative Gene Green (D-TX) asked Jones if CICA2 represented an improvement and if it gave full and complete authority to EPA to require testing. Jones agreed to both, albeit indicating the improvement was somewhat limited.

Dooley testified that some of the revisions to CICA2 responded to concerns expressed regarding state pre-emption in that, unlike CICA1, under CICA2, a low-priority designation no longer pre-empts state laws. According to Dooley, CICA2 greatly strengthens EPA’s ability to request more data under Section 4 and ACC supports these improvements. Dooley expressed support for the way CICA2 makes clear that cost and benefit consideration apply only after EPA has determined significant risk and that the focus of the assessments and risk management is on “intended conditions of use.”

Bosley thanked Shimkus for recognizing that TSCA is as much about products as it is about health and the environment. According to Bosley, timely approval of new chemicals and reliable protection of trade secrets are SOCMA’s two top priorities. While CICA2 would revise the TSCA provisions regarding new chemicals and confidential business information (CBI), these sections remain “very workable.” Bosley suggested that CICA2 be revised to include language specifically authorizing EPA to require processors to report use and exposure data for particular product categories, especially where commercial or consumer uses can be significant. She suggested that the deadlines under CICA2 may be too generous in the aggregate. Rather than allow four years for a risk evaluation of a high priority chemical, Bosley recommended that a much shorter period, such as 18-24 months, would be appropriate.

Greenwood testified on the strengths and important improvements of CICA2 compared to current law. CICA2 would remove the “least burdensome” requirement provision, which has proven to be a stumbling block for EPA using its Section 6 authority. Creating a prioritization framework would allow EPA to establish a long-term agenda, and correct a defect under TSCA, which gave EPA the ability to do anything, but the mandate to do nothing on existing chemicals. CICA2 would clarify the standard for risk evaluation and risk management, specifically separating these steps and identifying different factors to be considered at the two stages in the process. Regarding Section 14 on CBI, Greenwood testified that CICA2 contains a significant rewrite that captures what he claims were “principles of historic compromise” between industry and environmental groups on the issue. He concluded his written testimony by noting that CICA2 offered an “opportunity for substantial improvement in EPA’s chemical management program.” He opened his oral testimony by noting that if, when he directed the TSCA program in the 1990s, he had been given the choice of applying CICA2 or TSCA, he would have selected CICA2. In his response to questions about cost/benefit, he supported their role in risk management and that they should be considered.

According to Sauers, CICA2 would improve TSCA by requiring EPA to identify and account for active chemicals in U.S. commerce and then apply transparent criteria to prioritize them. CICA2 has been revised and expressly prohibits EPA from considering economic costs and benefits in the risk evaluation for priority chemicals. CICA2 would provide EPA new authority to collect information on chemicals in commerce. Sauers stated that CICA2 supports innovation through protection of CBI. Sauers expressed support for the provisions of CICA2 that provide adequate protection for confidential chemical identities, even when associated with a health and safety study. According to Sauers’ written testimony, “[a] specific, confidential chemical identity is not needed to conduct a health and safety study, interpret its results, or communicate the study’s observed health effects and conclusions.”

Goldberg testified that substantial progress has been made towards TSCA reform under CICA2. According to Goldberg, areas of agreement include providing EPA additional authority to review and manage risks from existing chemicals; creating a prioritization process for EPA to review existing chemicals; and giving EPA the authority to call for testing of chemicals where existing data are insufficient. A risk-based standard, which takes into account hazards and exposure, is the appropriate approach for safety assessment. Finally, benefit and cost considerations are not appropriate when making a risk assessment, but are necessary when determining risk management provisions. He also discussed the issue of resources and fees in his written testimony and, citing his involvement in the development and implementation of pesticide fees under PRIA, indicated that it “may be appropriate to consider a ‘user fee’ system…[and that] certain principles are critical in reaching an acceptable fee approach.” Importantly, he also noted in his oral testimony that industry is prepared to discuss fees as long as it meets certain principles, which, along with Jones’ discussion on PRIA as noted earlier, may be seen as additional encouragement for such discussions to be pursued. In this regard, we draw your attention to a recent ELI Forum discussion on TSCA reform including Shimkus and Senator Tom Udall (D-NM). Lynn Bergeson’s essay specifically notes the need to focus more attention on resourcing EPA and consideration of a PRIA-type mechanism. The article can be viewed here.

Moore testified that any revisions to TSCA should not eliminate states’ abilities to protect their citizens. According to Moore, CICA2 would strip states of their authority to regulate chemicals at state levels. Moore noted that approximately half of the states have enacted legislation to regulate individual chemicals.

Igrejas in his written testimony stated that while the revision “has some improvements…they do not…alter the bottom line,” as CICA2 “as drafted, would represent a significant step backwards from the status quo.” According to Igrejas, EPA would still be unable to impose risk management measures, its authority over new chemicals would be reduced, and states’ rights to implement their own regulations “are unduly violated.” Igrejas suggested that, alternatively, the Committee could focus on fixing TSCA’s existing chemicals program. He asked whether there was a definition of safety that all stakeholders support, and agreement regarding the authority that EPA needs to regulate chemicals. If so, then perhaps that would be an alternative approach. In his oral testimony, Igrejas seemed to take a softer approach in his criticisms while reiterating that more revision was needed to meet the needs of his coalition.

Commentary

Our first impression, as outlined in our in-depth analysis of CICA2, was that “CICA2 is a step in the right direction. It addresses better some of the more glaring deficiencies in CICA1…” Movement towards the center is typically a result of bipartisan discussion and compromise. Now it appears less clear what process was used to make the changes that were made. Shimkus stated that he had been asking his Democratic colleagues for language for weeks but that none had been forthcoming. (His point was not directly disputed and it may have been validated when Representative DeGette (D-CO) indicated that she would be willing to provide language regarding some issues that she had with Section 14 on CBI.)

At various points in the hearing, Shimkus chided his Democratic colleagues for not cooperating with what he described as his attempt to find compromise positions. He appeared especially frustrated by remarks generally summed up as characterizing the new draft as “worse than current law” and/or making no substantial improvements to current law. Democrats on the Subcommittee at various points responded that they have not been invited “to sit down and negotiate” compromise and continued to level criticism of and shortcomings at the revised draft.

Besides the indication of now-routine partisan bickering, the lack of acknowledgement of how the drafts have at least attempted to respond to past criticism of the earlier proposal indicates the prospects for successful legislation are slim. It was hard to discern even begrudging acknowledgement that for this Republican House bill the revisions were an attempt at compromise on some of the key issues. This is not to evaluate who is right or wrong about any particular issue, but rather that the spirit of compromise is not in evidence whatsoever. Given the relative lateness of this session of Congress, and the expectation that compromise solutions from the Senate are even less likely to be forthcoming, the tone of yesterday’s hearing does not bode well for successful legislation this year.

The continued absence of Administration language on the key issues has in large measure created the vacuum where opposing stakeholders can abstractly offer their ideal solutions but also continue to grouse that more needs to be done (on any given issue) — seemingly capturing the definition of “letting the perfect be the enemy of the good.” At yesterday’s hearing, this would more appropriately characterize the NGOs’ positions as they roundly condemned the Shimkus proposal as “worse than current law” and, falling back to their prior positions, seemed loathe to acknowledge even some minimal movement on any of the key issues. Others might draw somewhat more optimistic conclusions about the dynamic at the hearing, but regardless, the prospects of legislation this session were little advanced by the rhetoric used at the hearing. The new draft reflects changes clearly designed to respond to environmental and other critics of the earlier draft — Shimkus spent considerable effort to get Jones to concede as much on the record. As a result, it is a bit puzzling why the tone used by Democratic members was so uniformly negative, as we continue to believe, as we stated, that CICA2 is a step in the right direction.

More information regarding TSCA reform legislation and hearings is available online.