EPA Issues First Year Implementation Plan

On June 22, 2016, the Frank R. Lautenberg Chemical Safety for the 21st Century Act was signed into law. This law amends the Toxic Substance Control Act (TSCA) and is the first major environmental legislation passed in the U.S. in decades. TSCA was originally passed in 1976 and is the primary source of authority for the Environmental Protection Agency’s (EPA) regulation of the manufacture, processing, import, and export of chemical substances. After forty years, this law has been updated and the changes are particularly important for chemical manufacturers, processors, importers, exporters, and users. EPA has already begun implementing the new requirements and has issued a First Year Implementation Plan.

Highlights of the new law:

• All chemicals for the first time will be subject to a risk-based safety review.
• EPA will identify whether chemicals are “high” or “low” priority substances, and conduct thorough risk evaluations on all high priority chemicals.
• Risk evaluations will be based solely on risks to human health and the environment, including risks to vulnerable groups, such as children and pregnant women, must be considered.
• No longer will costs be considered when determining a chemical’s risk, and gone is the requirement that EPA must adopt the least burdensome regulatory requirement.
• There will be greater access by the public to chemical, and health and safety information.

Existing Chemicals. EPA is to establish a risk-based process to determine which chemicals it will prioritize for assessment, identifying them as either “high” or low” priority substances. Chemicals are evaluated against a new risk-based safety standard to determine whether a chemical use poses an “unreasonable risk”. Risk evaluation excludes consideration of costs or non-risk factors, but must consider risks to susceptible populations (e.g. children, infants, pregnant women, elderly).

• High priority – the chemical may present an unreasonable risk of injury to health or the environment due to potential hazard and route of exposure, including to susceptible subpopulations. Triggers a requirement and deadline for EPA to complete a risk evaluation to determine its safety.
• Low priority – the chemical use does not meet the standard for high-priority. No further action required, however, a chemical can move to high-priority based on new information.
• Actions to address unreasonable risks. When unreasonable risks are identified, EPA must take final risk management action within two years, or four years if an extension is needed. Costs and availability of alternatives are considered when determining appropriate action to address risks. Actions, including bans and phase-outs, must begin as quickly as possible, but no later than five years after the final regulation. Manufacturers can also request that EPA evaluate specific chemicals and pay the associated costs.
• EPA’s Chemical Testing Authority. The new law expands EPA’s authority to obtain testing information. In addition to requiring testing through rulemaking, the new law allows EPA to expedite the process for prioritizing or conducting risk evaluations with new order and consent agreement authorities. The new law includes a heavy consideration for animal rights. and encourages the use of alternative testing methods whenever possible. Entities engaging in animal testing are given two years to implement a strategy plan to develop alternative testing methods and strategies and must give a report on their progress in 5 years.

New Chemicals. Unlike under TSCA previously, the new law now requires that EPA make an affirmative finding on the safety of a new chemical or significant new use of an existing chemical before it is allowed into the marketplace. EPA can still take a range of actions to address potential concerns including bans, limitations, and additional testing on a chemical.

Confidential Business Information. The new law tries to balance the need for companies to protect their intellectual property, while also promoting transparency to the public. The new law requires confidentiality claims be substantiated upfront and limits claims of confidentiality to 10 years, unless an extension is approved. There is a presumption that public interest in disclosure of the information outweighs the public interest in maintaining protection for the information. That presumption must be overcome to gain protection from disclosure. EPA is also required to review past confidentiality claims for chemicals already on the TSCA Inventory to determine if the claims are still warranted.

Increased Fees and Penalties. The new law allows EPA to collect up to $25 million annually in user fees from chemical manufacturers and processors when they submit test data for EPA review; submit a PMN; manufacture or process a chemical that is the subject of a risk evaluation; or request that EPA conduct a chemical risk evaluation. Civil penalties for a prohibited act are increased to $37,000 while criminal penalties are increased to $50,000. Knowingly conducting a violation in which the violator knows they will place an individual in imminent danger or death or serious bodily injury holds a penalty of $250,000 and up to 15 years imprisonment. Organizations that participate in these intentional violations can be fined up to $1,000,000.

Preemption of State and Local Chemical Regulations. State preemption is another major topic in the new law and is arguably one of the more controversial as it tries to strike a balance between providing chemical manufacturers with a single chemical regulatory program for their products while yielding to State and local interests in providing protections for its citizens. States can continue to act on any chemical, or particular uses or risks from a chemical, that EPA has not yet addressed. Existing state requirements (prior to April 22, 2016) are grandfathered and existing and new state requirements under state laws in effect on August 31, 2003, are preserved (namely, California’s Prop 65). However, State action on a chemical is preempted when EPA finds (through a risk evaluation) that the chemical is safe, or EPA takes final action to address the chemical’s risks. State action on a chemical is temporarily “paused” when EPA’s risk evaluation on the chemical is underway, but lifted when EPA completes the risk evaluation, or misses the deadline to complete the risk evaluation. States can apply for waivers from both general and “pause” preemption.

Investigation of Cancer Clusters. The new law also includes a section known as “Trevor’s Law”, named after Idaho resident, Trevor Schaefer, who survived a diagnosis of brain cancer at age 13. This section creates authority for the US Secretary of Health and Human Services (HHSS) to develop criteria to monitor, track and investigate “cancer clusters”. It also provides authority for HHSS, in consultation with (or at the request of) State and local health officials to investigate cancer clusters. This is a provision to be cognizant of if claims of cancer clusters are identified near chemical plants or hazardous waste disposal sites.

Timeline. The new law sets forth a number of deadlines. In addition, EPA’s First Year Implementation Plan sets forth how EPA plans to manage the requirements in the new law.

• EPA has reset the 90-day clock on PMNs submitted before the law’s enactment, such that the 90 day review periosd begins again on June 22. This raises some legal questions as to whether EPA can retroactively reset the review period for a PMN filed before the law’s enactment.
• Mid-July 2016 – EPA to develop an approach for review of CBI claims.
• Within 180 days – EPA to identify and begin risk evaluations of the first 10 high priority chemicals.
• Within 1 year – Finalize a procedural rule to establish EPA’s process and criteria for identifying high priority chemicals for risk evaluation and low priority chemicals.
• Within 1 year – Chemical manufacturers must report to EPA all chemicals they are currently producing. EPA is planning to publish a proposed rule by mid-December 2016, to be finalized June 2017.
• Within 3.5 years – EPA must have 20 ongoing risk evaluations of high priority chemicals.

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