Proposal Features Expanded Exemptions and Revised Fee Allocation Approach

On January 11, 2021, EPA published proposed revisions to the Toxic Substances Control Act (TSCA) fees rule that would create several exemptions and revise implementation procedures. 86 Fed. Reg. 1890 (Jan. 11, 2021).

PROPOSED EXEMPTIONS

In March 2020, EPA issued a No Action Assurance that effectively excused three categories of manufacturers and importers from inclusion in the list of entities subject to fee obligations for the twenty chemical substances undergoing the Section 6 risk assessment process. In the No Action Assurance, EPA also indicated that it would launch a rulemaking process to promulgate exemptions for the excused groups of manufacturers and importers. The proposed amendments follow through and propose to exempt from fee obligations for Section 6 risk evaluations:

• Importers of articles containing a chemical substance,
• Companies that produce a chemical as a byproduct, and
• Companies that manufacture or import as an impurity.

However, the proposed changes are more expansive than the no action assurance. The proposed changes would also exempt:

• Companies that use chemicals solely for research and development purposes,
• Companies that annually produce or import less than 2,500 pounds of a chemical (unless all manufacturers and importers of the chemical are below the 2,500-pound threshold), and
• Companies that manufacture a chemical that is produced as a non-isolated intermediate form.

FEE ALLOCATION CHANGES

EPA also proposes to modify the allocation scheme for companies subject to fee obligations for Section 6 risk evaluations to:

• Change the fee allocation from a per capita to a production-volume based approach,
• Ensure accuracy of the fee-payer lists by permitting corrections to be made to the list of manufacturers subject to fees for EPA-initiated risk evaluations after the final list is published,
• Extend the amount of time to form consortia to share in fee payments, and
• Allow payments in installments for EPA-initiated and manufacturer-requested risk evaluations.

OTHER PROPOSED CHANGES AND 2022-2024 FEES

The proposed rule includes one new group of fee payers. Export-only manufacturers would be subject to fee obligations if any other entity manufactures, processes, or distributes the chemical substance in the U.S.

The proposed rule also uses actual cost data gathered over the last two years to propose TSCA fee amounts for 2022-2024, resulting in increased fees for several fee categories, including new fee categories for Section 5 notice of commencement and bona fide notice submissions. In particular, the fee amount for Section 6 risk evaluations will increase from the current $1.35 million per chemical to $2.56 million per chemical for non-small businesses.

Comments on the proposed rule are due on or before February 25, 2021. Companies that will benefit from the exemptions or have concerns about the production-volume confidentiality implications should consider submitting comments.