California's Green Chemistry Initiative blazes a new trail for consumer products in the United States, establishing a comprehensive approach aimed at reducing — over time — exposures to hazardous chemicals commonly found in a range of products. On August 28, 2013, California adopted the ground-breaking rules, with the Office of Administrative Law's official approval of the Safer Consumer Product (SCP) Regulations submitted by the state's Department of Toxic Substances Control (DTSC). The new SCP regulations — which implement the Green Chemistry statute (AB 1879, codified at California Health & Safety Code Sec. 25252 et seq.) — are set to take effect on October 1, 2013. While other states have adopted or are considering "Green Chemistry" initiatives, California has the only program that extends beyond children's products to the broader universe of any and all consumer products.
"Priority Products" Will Be Identified by April 2014
The SCP regulations are a game-changing new program with broad implications for companies throughout the supply chain for consumer products placed into the stream of commerce in California, including products sold, offered for sale, distributed, supplied, or manufactured in or for use in California as a finished product or as a component in an assembled product. The new regulations require DTSC to identify its initial list of candidate chemicals by October 31, 2013. The next major milestone in the implementation of California's Green Chemistry Initiative will be DTSC's identification of up to five "priority products" (by April 1, 2014) that will be subject to the SCP regulations during the first few years of implementation. The proposed list will be subject to a public review and comment period of at least 45 days. Companies considered "responsible entities" for priority products will be subject to extensive requirements, ranging from submittal of various notifications to the preparation of a detailed evaluation of alternatives. The responsible entity is typically the manufacturer, but the SCP regulations also impose requirements on importers, assemblers and retailers.
DTSC Requires Specific Notifications and Alternatives Analyses for Priority Products
Once DTSC has finalized the list of priority products, responsible entities will have only 60 days to submit between one and three types of notifications to DTSC:
confirmation that the business is a responsible entity for a priority product
notification that the product contains the chemical of concern at a level lower than the specified threshold and thereby eliminating the alternatives analysis requirement for the product
whether the entity intends to remove the product from sale, remove the chemical from the product, or replace the chemical in the product
Within 180 days after the list of priority products is finalized, a responsible entity must submit a detailed alternatives analysis for their product, unless they have certified that their product is below the threshold level. Alternatives analyses are subject to public review and comment, and responsible entities may be required by DTSC to address certain public comments in their final alternatives analysis document. A complex array of information must be submitted by a responsible entity asserting a claim of trade secret protection over any other information contained in documents required by the SCP regulations.
DTSC Determines the Appropriate Regulatory Response
After reviewing the alternatives analysis, DTSC will select a "regulatory response," which may require submittal of additional information to DTSC, notification to the consumer regarding the chemical of concern, restrictions on use, administrative controls, further research regarding alternative ingredients, end-of-life disposal requirements, or even a ban on the product.
DTSC has not yet revealed what products it is considering, but possible candidates include carpet adhesives containing formaldehyde, household cleaning products, personal care products such as nail polish, or products such as furniture containing flame retardants. DTSC will review and revise the priority products list at least every three years.
Companies Should Take Steps Now to Prepare for Compliance
Manufacturers, retailers, importers and assemblers of consumer products for sale or distribution in California should take steps now to prepare themselves for this complex and consequential new regulatory program. These steps include paying attention to and participating in the priority products listing process, as well as examining and restructuring agreements with partners in their supply chain to establish clear allocation of responsibilities and procedures for complying with the SCP regulatory requirements. Even companies with no operations or products sold in California will want to watch what happens, as California's program may well be a harbinger of what will follow in other states.
The Green Chemistry statute and SCP regulations give DTSC broad enforcement authority, including the right to publish a list of non-compliant entities on a public website, and to impose civil and criminal penalties of up to $25,000 per violation.
To ensure compliance with Treasury Regulations (31 CFR Part 10, §10.35), we inform you that any tax advice contained in this correspondence was not intended or written by us to be used, and cannot be used by you or anyone else, for the purpose of avoiding penalties imposed by the Internal Revenue Code.