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December 15, 2016

EPA To Establish Negotiated Rulemaking Committee Under Amended TSCA

Lynn L. Bergeson

On December 15, 2016, the U.S. Environmental Protection Agency (EPA) published a notice in the Federal Register of its intention to establish a Negotiated Rulemaking Committee (NRC) under the Federal Advisory Committee Act (FACA) and the Negotiated Rulemaking Act.  81 Fed. Reg. 90843.  The NRC will implement the amended Toxic Substances Control Act (TSCA) Section 8(a)(6) requirement that EPA “enter into a negotiated rulemaking … to develop and publish, not later than 3 years after the date of enactment … a proposed rule providing for limiting the reporting requirements under this subsection for manufacturers of any inorganic byproducts, if the byproducts, whether by the byproduct manufacturer or by any other person, are subsequently recycled, reused, or reprocessed.”

In a webinar presented by Bergeson & Campbell, P.C. (B&C®) earlier this fall, we noted the significance of this rulemaking for many entities subject to reporting requirements under TSCA’s Chemical Data Reporting (CDR) provisions under Section 8(a).  A “byproduct” is defined as a chemical substance produced without a separate commercial intent during the manufacture, processing, use, or disposal of another chemical substance or mixture.  EPA is of the view that byproducts without a separate commercial value are nonetheless produced for the purpose of obtaining commercial advantage since they are part of the manufacture of a chemical substance produced for commercial purpose.  Accordingly, byproducts are considered manufactured substances under TSCA and must be listed on the TSCA Inventory and, therefore, reportable under the CDR — unless they are exempt.  Byproducts are exempt from Inventory listing and CDR reporting if their only commercial purpose is use by public or private organizations that burn it as a fuel, dispose of it as a waste, or extract component chemical substances from it for commercial purposes.

EPA has interpreted “extract component chemical substances from it” narrowly and has determined the exemption is voided if an extraction process involves a chemical reaction.  Stakeholders have long asserted that this interpretation discourages recycling programs that necessarily involve a chemical reaction, processes that are frequently used to extract commercially valuable metals or other materials from byproducts that would otherwise be destined for disposal.  The speed with which EPA has moved to implement this provision reflects EPA’s interest in ensuring this regulatory disconnect is addressed before the next CDR reporting cycle in 2020.

The notice states that the main purpose of the NRC is to conduct discussions in a good faith attempt to reach consensus on proposed regulatory language.  The notice provides a clear and comprehensive discussion of the negotiated rulemaking process and procedures, initially identifies specific parties that may be interested in participation, and requests comment on the extent to which the approaches described in the notice are adequate and appropriate.  The notice should be carefully reviewed by any entity having an interest in this issue.  Comments are due by January 17, 2017

We note in addition that the notice specifically discusses the Section 8(a) CDR rule as being relevant to the negotiation.  While we agree that the CDR is clearly of interest, we note that the negotiation as structured applies to any rule under Section 8(a), such as the Preliminary Assessment Information Rule (PAIR) (40 C.F.R. Part 712) and any chemical-specific Section 8(a) rules (40 C.F.R. Part 711).  At the same time, the negotiation as described in new TSCA is limited to Section 8(a) and does not address the issues of Inventory listing and potentially associated Section 5 notification requirements for inorganic byproducts.  We note also that as a FACA Committee, the NRC can consider and, by consensus, determine its interest in also picking up these closely related issues for discussion and attempt to develop a consensus approach.