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March 3, 2014

Shimkus Releases Discussion Draft of TSCA Reform Legislation

Bergeson & Campbell, P.C.

On February 27, 2014, Representative John Shimkus (R-IL), Chair of the House Energy and Commerce Subcommittee on Environment and the Economy, released a much anticipated discussion draft that would update the Toxic Substances Control Act (TSCA). According to Shimkus’ press release, the Chemicals in Commerce Act (CICA) “keys off” S. 1009, the Chemical Safety Improvement Act (CSIA), which was introduced on May 22, 2013, by the late Senator Frank R. Lautenberg (D-NJ) and Senator David Vitter (R-LA). Under Shimkus, the Subcommittee has held five hearings that reviewed several core sections of Title I of TSCA and proposed Senate amendments to those sections. The discussion draft of CICA is available online. Highlights of the bill, which are discussed below, are available online. Memoranda regarding S. 1009 and on the Congressional hearings held to date are available online.

Section 2: Findings

CICA takes a concise and measured approach and limits provisions in this section to “Findings” and “Purpose.” It does not offer statements of “Intent” or “Policy” as was done in TSCA and CSIA. The findings in CICA generally align with those in CSIA. The Purpose of the Act is to “promote uniform” protection of human health and the environment through regulation while minimizing undue burdens on commerce.

Section 3: Definitions

CICA retains all of TSCA’s definitions and proposes definitions for “(2) best available science,” “(8) intended conditions of use,” “(12) potentially exposed subpopulation,” “(15) publicly available information,” and “(16) safety determination.” Definitions (2), (8), and (16) are somewhat revised from those in CSIA, while the others are new. A change to “intended conditions of use,” which drops a reference to “disposal” among the commercial activities, may be significant and has been carried through other parts of the discussion draft.

Section 4: Testing

CICA revises TSCA Section 4 in several important ways, including by giving the U.S. Environmental Protection Agency (EPA) rule, consent agreement, and order authority to require testing (as did CSIA) and by deleting Section 4(e) on the Interagency Testing Committee (ITC). It differs from CSIA Section 4 by not including that bill’s detailed discussion of a Chemical Assessment Framework and Prioritization Screening elements (although aspects have been moved to a new Section 22) but otherwise generally mirrors the CSIA approach to testing.

Under the CICA discussion draft, EPA would have the authority to require testing in four instances:

  1. To perform a determination about the safety of an existing chemical. Interestingly, the openness of this provision appears to allow chemical testing for purposes of prioritization, or at least does not preclude this as does CSIA;
  2. To ensure compliance with restrictions on new or existing chemicals or significant new uses of a chemical;
  3. To review chemicals intended only for export; or
  4. To help another federal agency with implementing its own statute if the testing is needed to meet a “regulatory testing need” determined by that agency. This last provision may be intended to provide a more focused alternative to the ITC approach in TSCA.

In developing hazard or exposure testing information, EPA is to start with “screening level information” and must require additional information if EPA determines “that additional information development is necessary.” In taking a test action, EPA must issue a statement of need, the elements of which are similar to those in CSIA although there seems to be a somewhat stronger provision concerning vertebrate animal testing. CSIA provides that the statement should “[encourage], to the extent possible, the use of nonanimal test methods,” while CICA requires that EPA “[explain] the basis for a decision that requires the use of vertebrate animals.”

CICA Section 4(g), unlike CSIA, retains a version of TSCA Section 4(f) that would require EPA to undertake expedited consideration of any significant new information concerning “a significant risk of serious or widespread harm to human health.” Under TSCA, the provision was limited to new information on cancer, mutagenicity, and birth defects.

The data compensation provisions in Section 4(d) are slightly different. Under CICA, entities “seeking to use” new hazard and exposure information must provide fair and equitable reimbursement for such information, and absent agreement, the dispute will be resolved by arbitration according to the terms of the contract between or among the parties or by regulations developed by EPA. Under CSIA, EPA action under Section 4 is not conditioned upon resolution of data compensation claims.

Section 5: New Chemicals and Significant New Uses

The highlights of CICA state that the discussion draft “maintains the successful elements of existing requirements on new chemicals and new uses of existing chemicals, while also providing a few improvements to it.” CICA thus takes a generally similar approach to new chemicals and significant new uses as is the case with CSIA with some important differences. As in CSIA, EPA is required to review the Section 5 notice and make a determination although the nature of the determination has been changed. In CSIA, it relates to whether the chemical is “not likely to meet the safety standard,” whereas in CICA, EPA action is dependent on a determination that the chemical “is likely to result in an unreasonable risk of harm.”

CICA gives EPA authorities similar to those in CSIA to regulate new chemicals and significant new uses although in CICA, EPA must implement any testing requirements “subject to Section 4,” which seemingly would require use of processes and procedures found in that section. CICA Section 5(a)(3) would also clarify EPA’s significant new use authority as it related to articles. EPA must “identify” specific types of articles and in taking an action must determine that an unreasonable risk “may result from exposure to a chemical substance in the article” and that “such risk cannot be addressed adequately through requirements placed on the chemical substance.”

CICA Section 5(f), similar to CSIA, retains the TSCA Section 5(h) exemptions for chemicals made in small quantities for experimentation, research, analysis, or test marketing and where there is not human or environmental exposure. Under CICA Section 5(f)(3), EPA, upon request and by “rule or order,” may exempt from notification requirements a new chemical if EPA “under prescribed conditions” determines the chemical “is not likely to result in an unreasonable risk.” The corresponding section in TSCA (Section 5(h)(4)) was limited to rulemaking and its regulatory standard was “will not present an unreasonable risk” and, given the changes proposed, CICA seemingly would provide greater flexibility to EPA concerning such exemptions.

CICA includes a new exemption provision at Section 5(f)(5) that does not have a counterpart in TSCA or CSIA. This provision concerns new chemical obligations for byproduct chemical substances and requires EPA to develop a rule that codifies, with changes, the current exemption provision at 40 C.F.R. Section 710.4(d). The change involves replacing the “extract[ing] component chemical substances” language with “extracting, by reaction or otherwise, [of] a chemical substance to recycle or reclaim.”

Section 6: Existing Chemicals

As noted in the highlights document, the CICA discussion draft “provides a structure to evaluate, prioritize, review, and, if necessary, regulate a chemical that poses an unreasonable risk of harm to human health or the environment under its intended conditions of use.” The discussion draft would require EPA to establish a system to designate and list all “active” chemicals (as identified pursuant to Section 8(b), below) as high or low priority. Consistent with CSIA, CICA does not impose a deadline for completing the prioritization process. Unlike CSIA, CICA does not include an element allowing for an “inactive” chemical to receive a high priority designation, and, concerning the factors to be considered in assigning priorities, it does not include the CSIA factor concerning state government recommendations. Otherwise the approach to determining priorities is similar to that in CSIA:

  • Chemicals with potential for high hazard and high exposure are high priority. Those chemicals with high hazard or high exposure may be assigned as a high priority.
  • Chemicals not likely to result in unreasonable risk of harm to health or the environment under the intended conditions of use are low priority. Low priority chemicals are not subject to further safety review and determination unless redesignated as a high priority.
  • EPA may revise priority assignments based on new information.
  • Priority designations are subject to notice and comment.

In a key change from CSIA, CICA would make low priority designation subject to judicial review as final agency action.

The CICA discussion draft would require EPA to determine whether a high priority substance will result in an unreasonable risk of harm to human health or the environment under its intended conditions of use. EPA would have the authority to require the development of information on hazard, exposures, and uses by promulgating a rule, issuing an order, or entering into a consent agreement. EPA would be required to use “best available science,” analyze the types of exposures (including for subpopulations), incorporate reference parameters, and consider threshold doses.

If EPA determines that a chemical poses an unreasonable risk of harm to health or the environment under its intended conditions of use, EPA would be required to issue a rule on the chemical substance. The regulation “may” apply to mixtures or to articles. In the latter instance, certain requirements must be satisfied in taking the action (EPA must identify specific types of articles, show that adequate mitigation cannot be obtained through restrictions on the chemical or mixture, and “shall exempt” previously manufactured replacement parts). Restrictions can include requirements such as warning labels, use, and exposure monitoring, restrictions, phaseouts, or volume limitations on the use of a chemical substance. In addition, there is a provision at CICA Section 9(b)(2) (see below) concerning certain comparisons that must be prepared by EPA when determining whether to initiate Section 6(f) action.

CICA Section 6(f)(4) states that the restrictions: must be proportional to the risks avoided, result in net benefits, be cost-effective, be imposed only when alternatives that materially reduce risk to health or the environment are unavailable, and provide for a reasonable implementation period. Interestingly, CICA has dropped the CSIA provision at Section 6(c)(10) concerning exemptions from regulation, although some of the terms have seemingly been retained in CICA Section 6(f)(4).

An EPA determination that a chemical does not present an unreasonable risk is a final agency action subject to judicial review. Interestingly, a decision that a chemical does present an unreasonable risk is subject to judicial review as a final agency action when the control rule is promulgated.

Section 8: Information Collection and Reporting

The CICA discussion draft would require EPA to develop guidance concerning the types and detail of information required and to promulgate a rule under Section 8(a) within two years requiring reporting by manufacturers and processors concerning use and exposure information on chemicals that are active in commerce. This deadline did not appear in CSIA. Using the information available to it, EPA would under CICA Section 8(b) delineate between “active” chemicals in commerce and those that are no longer in commerce — or “inactive” — on the TSCA Inventory, using an approach similar to that in CSIA although the “candidate list” step has been removed. The process for changing from “inactive” to “active” is unchanged from that in CSIA.

CICA picks up the nomenclature provisions in CSIA concerning Class 2, statutory mixtures, and related nomenclature systems. CICA would also make Section 8(a) inapplicable to chemical substances “extracted, by reaction or otherwise … for the purpose of recycling or reclaiming such extracted chemical substance.” CICA slightly rewords the Section 8(e) language while also dropping the provision that appeared in CSIA allowing for reporting on “non8(e)” information.

Section 9: Relationship to Other Federal Laws

The approach is similar to that in CSIA although references to disposal that appeared in TSCA have been removed. This section also includes a new provision at Section 9(b)(2) requiring EPA, in determining whether to initiate control action under Section 6(f), to compare costs and efficiency of proceeding under this law with the costs and efficiency of proceeding under another EPA law. The language is similar to that which appeared in TSCA Section 6(c).

Section 12: Exports

The CICA discussion draft somewhat simplifies TSCA’s export provisions. EPA would have the authority to require an exporter to notify EPA annually when intending to export a new or existing chemical substance or mixture that is subject to a rule under Sections 5 or 6. Exporters would be required to notify EPA if exporting a substance or mixture subject to treaty export notification requirements.

Section 13: Imports

The CICA discussion draft would require anyone importing a chemical substance or mixture into the U.S. that EPA has designated as a high priority chemical or regulated under Sections 5 or 6 to certify to the Department of Homeland Security (DHS) that it is included on the Section 8 list or is exempt from inclusion on that list. DHS must refuse entry to a chemical if its importation would violate a restriction on Sections 5 or 6.

Section 14: Confidential Information

The CICA discussion draft, in an approach generally similar to that in CSIA, provides several new categories of persons who may obtain confidential business information (CBI) and the reasons that EPA may disclose protected information to them. CICA Section 14(d) would provide exceptions to EPA’s requirement to protect the information from public disclosure, including sharing protected information with a U.S. employee or contractor carrying out official duties; a state that agrees to protect the information in the same manner as EPA; a health professional who needs the information for diagnostic and treatment purposes and in non-emergency cases, agrees beforehand to protect the information, or, in emergency cases, no advance notice is required and the written agreement to protect the information may follow receipt of the information.

CICA also takes a generally consistent approach to CSIA concerning information that, except as allowed per CICA Section 14(d), shall not be disclosed. This includes:

  • Information exempt as a trade secret under the Freedom of Information Act (FOIA; 5 U.S.C. Section 552(b)(4)); specific information describing manufacturing, processing, or distribution; marketing and sales information; constituents of a mixture; specific information on use, function, or application of a chemical substance or mixture in a process, mixture, or product; or specific production or import volumes.
  • The specific identity of a chemical substance if the person seeking protection from disclosure submits written documentation establishing that:
    • They take measures to protect the confidentiality of the chemical’s identity;
    • Disclosure is not required under another federal law;
    • Disclosure of the chemical’s identity harms a competitive position; and
    • The information is not “reasonably believed to be readily discoverable” though reverse engineering.
  • The applicant seeking information protection must establish the time period for which the applicant claims protection and provide a generic name that may be disclosed.

The CICA discussion draft would prohibit EPA from protecting from disclosure:

  • Health and safety information on a substance offered for commercial distribution, including a notice of substantial risk pose by a chemical;
  • Information required by EPA to be developed pursuant to Sections 4, 5, or 6, unless specific elements of it are protected; and
  • General information describing ranges of volumes in which the chemical is manufactured or other types of information customarily shared with the general public or within the industry.

The CICA discussion draft would allow EPA to disclose confidential information to protect health or the environment or to the extent necessary to avoid impairing a proceeding under TSCA. The use of the information for an unauthorized purpose or forwarding to an unauthorized person would be punishable as a prohibited act under TSCA. EPA would be required to protect the information until it has been publicly disclosed through another means or it no longer meets the criteria in Section 14. An EPA decision to deny or limit a confidentiality claim would be reviewable in federal district court.

Section 16: Penalties

The CICA discussion draft would increase the penalties for violations of TSCA.

  • Civil penalties for violation of TSCA would be increased from $25,000 to $37,500 per day for each violation; and
  • Criminal penalties would be increased from $25,000 to $50,000 per day for each violation.

The discussion draft would create a new penalty for persons who knowingly violate TSCA and know in doing so that they are placing another person in imminent danger. This penalty would be a fine of $250,000, imprisonment for five years, or both.

Section 17: Preemption

The issue of state preemption has been one of the most contentious when considering how to amend TSCA. The CICA discussion draft would preserve the authority of states to ban chemicals until EPA determines that the chemical is not likely to cause an unreasonable risk or promulgates a rule restricting the chemical. The discussion draft would preempt state or local law or regulation:

  • That requires development or submission of information on a chemical substance, mixture, or article, or its intended conditions of use that EPA has required under Sections 4, 5, or 6;
  • That prohibits or restricts a chemical once EPA has determined that a new or existing chemical under its intended conditions of use is not likely to result in an unreasonable risk of harm, has designated the chemical as a low priority under Section 6, or the review period under Section 5 has expired;
  • From requiring use notification for a chemical if EPA has required notification under Section 5; and
  • That includes any requirements imposed on chemicals by EPA under Sections 5 or 6 prior to the enactment of CICA.

The discussion draft would preserve:

  • State or local laws or regulations adopted or authorized pursuant to any other federal law; and
  • Judicial causes of action under state law for personal injury, death, or property damage.

CICA would address the provision in CSIA that invited criticism from the trial attorneys and plaintiffs’ bar by explicitly stating that the preemption provisions of the law do not “preempt any cause of action under State law for damages or equitable relief alleging personal injury, death, or property damages arising from exposure to a chemical substance or mixture.”

Section 18: Judicial Review

To the apparent dismay of TSCA detractors and consistent with the approach in CSIA, under the House discussion draft, the judicial standard of review remains the more stringent “not supported by substantial evidence in the rulemaking record” as opposed to the more forgiving and customary standard in other federal environmental statutes, the arbitrary, capricious, abuse of discretion or otherwise not in accordance with law standard urged by detractors of TSCA, which defers to EPA’s expertise in rulemaking matters.

Section 22: Policies, Procedures, and Guidance

This section consolidates many of the provisions that otherwise appeared in CSIA Section 4 concerning policies, procedures, and guidance. Under the CICA discussion draft, EPA would be required, within one year of enactment, to establish policies, procedures, and guidance needed to implement CICA. CSIA spoke to “promptly developing” these elements, but did not include a deadline. The policies, procedures, and guidance must employ and rely upon best available science and risk assessment principles and methodologies, be of high quality, reliable, and produced according to validated methods and processes, and address strengths and limitations of test design and reliability of test methods. EPA would be required to use “the best available science” (which maximizes quality, objectivity, and integrity of information; uses studies based on sound scientific practices; applies valid, relevant and public information; and enables assessment of risks and uncertainties) in making decisions under Sections 4, 5, and 6.

Next Steps

Shimkus stated that the House Energy and Commerce Subcommittee on Environment and the Economy will hold a hearing on the discussion draft; a hearing has been scheduled for March 12, 2014. A second hearing has been scheduled for March 26, 2014. Shimkus intends to introduce a bill for markup in April 2014, and hopes to take it to the floor in May.

Representative Henry Waxman (D-CA), Ranking Member of the House Energy and Commerce Committee, released a statement on February 27, 2014, that criticizes the discussion draft. According to Waxman, while he “could not support the Republican draft in its current form,” “bipartisan discussions have started, and I’m hopeful that the draft can be significantly modified to provide the kind of reform that American families want.” Similarly, the Environmental Defense Fund issued a release on February 28, 2014, stating that its “preliminary review of the posted draft has identified very serious concerns that, if not addressed, would fail to fix key flaws in TSCA and would weaken current law.”


While fixing some of CSIA’s excesses and unusually detailed and sometimes inconsistent “frameworks” and “methodologies,” the House discussion draft does little to reconcile the widely divergent TSCA stakeholder views on such core issues as the safety standard, preemption, standard for judicial review, and need for deadlines to ensure timely EPA action. In reviewing high priority existing chemicals, the burden of proof, an issue of intense debate, falls squarely on EPA to prove a chemical substance “will result in unreasonable risk of harm to human health or the environment under intended conditions of use.” In imposing limitations on chemicals, EPA must show the restrictions will result in “net benefits,” and the restrictions are “cost-effective” compared to “alternative requirements or restrictions” that EPA may adopt. Requirements for being cost effective when compared to alternatives will alarm some as a new iteration of the dreaded “least burdensome” requirement of current law cited by many as the most glaring failure of the statute. There are a variety of new terms, which, at best, will need thorough legislative vetting before easing concerns of critical stakeholders (for example, the definition of “proportional to the risks” when authorizing EPA to take control actions). In imposing limitations on specific uses of a chemical substance, EPA may only do so when “technologically and economically feasible alternatives that materially reduce risk to human health or the environment compared to the use proposed to be prohibited or substantially prevented are available and likely to be used as a substitute for the use proposed to be prohibited or substantially prevented.” This is a high burden, and likely to invite strenuous opposition.

The good news is the House is plainly engaged. The bad news is that key provisions in CICA are already drawing fierce criticism from stakeholders. Safer Chemicals and Health Families reported on February 28 that the “bill would do nothing whatsoever to protect the public from the health impacts of toxic chemicals and would instead roll back the very limited oversight that we currently have.” While the absence of even a glimmer of receptivity is not necessarily fatal, it obviously does not move the needle and will make the task of compromise all the more difficult.

Even as one speculates about party control resulting in a House bill more favorable to business interests partly to strengthen any eventual conference negotiating position should a bill be approved in the Senate, CICA seems to leave a number of the most difficult issues identified in the Senate bills mostly unaddressed or not offering alternatives likely to be viewed as aggressive attempts to find a middle ground (for example, preemption issues). At the same time, movement of any House bill to some is a surprisingly positive development as many did not expect an independent attempt by the House to move any legislative package. As a result, whether the Senate and House versions, or key parts thereof, can be reconciled is entirely unclear. Shimkus has outlined an aggressive schedule to get the bill to the floor in May. Whether that can happen is another matter. There are a limited number of legislative days available before the mid-term elections will eclipse meaningful bipartisan engagement, assuming it remains an option at all on the Hill, and the House discussion draft would require significant revision before diverse TSCA stakeholders could even begin to find common ground.