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House Discusses Potential Dramatic Changes to U.S. Chemicals Law

Beveridge & Diamond, P.C., August 5, 2010

This article was originally published on August 3, 2010 by Portfolio Media, Inc. in Environmental Law360, International Trade Law360 and Product Liability Law360 (subscription required).

The Toxic Chemicals Safety Act of 2010, H.R. 5820, introduced July 22 by Rep. Bobby Rush, D-Ill., and others, would dramatically alter chemicals management in the United States. Responding to calls for reform from the U.S. Environmental Protection Agency, nongovernmental organizations and even industry, the bill proposes fundamental changes to the Toxic Substances Control Act.

Under H.R. 5820, new burdens would be placed on chemical manufacturers and product importers to demonstrate to EPA that new chemicals, new uses of existing chemicals and mixtures, existing chemicals determined to be priorities for evaluation, and eventually all chemicals in commerce meet a high standard of safety. The bill also proposes substantial changes to TSCA’s overall scope and its frameworks for risk management, data gathering, and confidentiality claims.

The ambitious 166-page bill reflects a number of changes since a discussion draft was released on April 15, 2010. Congressional staff subsequently held a series of discussion sessions on the draft that engaged both industry and NGO stakeholders. However, NGOs generally remain more pleased with the revised proposal than chemical manufacturers and other industry sectors.

A contentious hearing on the bill held July 29 by the House Energy and Commerce Committee’s subcommittee on commerce, trade and consumer protection strengthened expectations that more changes will yet be made.

At the hearing, most industry witnesses and Republican members challenged the bill’s weighing of tradeoffs, stating that the increased regulatory burdens were unworkable and would drive jobs and innovation overseas. NGO witnesses and most Democratic Members, on the other hand, argued that the bill could actually create jobs and drive innovation by restoring public confidence in the chemical industry and promoting green chemistry.

Key differences of opinion have arisen not only regarding the scope and nature of the bill’s likely impacts on jobs, the economy, and public health, but also regarding basic questions of how the bill would be interpreted and implemented in practice.

Expanded Scope of TSCA Application: Mixtures and Articles

The inclusion of mixtures, as well as individual chemical substances, in the discussion draft has been narrowed and somewhat clarified in the bill, but still represents an expansion of TSCA application. Under H.R. 5820, notifications, minimum data sets, and safety standard determinations would be required for those mixtures that EPA determined to have substance characteristics different from their constituent chemical substances. Notifications would also be required for uses of mixtures determined by EPA to be new uses.

The discussion draft’s provisions on articles (i.e., manufactured products whose function depends on their shape) have been significantly broadened. EPA’s current exemptions from various requirements for chemicals in articles would be removed. In order to ensure that imported products are as safe as products made in the United States, H.R. 5820 would require that importers, such as retailers, satisfy all reporting, testing, and new chemical notification rules and risk management measures for the chemicals in their products.

These proposed expansions of EPA authority were criticized at the hearing on the bill. Witness Cal Dooley, president and CEO of the American Chemistry Council, acknowledged in his testimony that the imposition of TSCA burdens on importers of articles aimed to avoid a double standard in which overseas manufacturers not subject to TSCA would gain a competitive advantage.

However, he stated that the proposed import requirements were unworkable and not in compliance with trade laws. Witness Beth Bosley, on behalf of the Society of Chemical Manufacturers and Affiliates, also observed that despite lingering confusion regarding the application of the bill to mixtures, it was clear that the provisions on mixtures would impose new burdens on chemical distributors.

Safety Standard Determinations

One of the recurring criticisms of TSCA has been that EPA has assessed and regulated only five chemicals under TSCA’s “unreasonable risk” standard. H.R. 5820 would overhaul TSCA to mandate an ambitious timetable of assessments, change the risk standard to a safety standard, and give EPA far more authority to impose restrictions on chemicals and mixtures.

The bill would require EPA to maintain a priority list of at least 300 chemicals and mixtures and to provide safety standard determinations for them within 30 months of listing. Certain market restrictions would be imposed on any chemical or mixture for which EPA failed to meet this ambitious deadline, regardless of the ultimate conclusion regarding safety.

The bill dropped the discussion draft’s list of chemicals for expedited risk management action, instead listing 19 chemicals for which safety standard determinations would be required within 18 months of the bill’s enactment. Except for those 19 chemicals, listing would be at EPA’s discretion. The bill would also require expedited risk management for chemicals identified as persistent, bioaccumulative, and toxic.

Similar (but not identical) to the discussion draft, the bill would replace TSCA’s “unreasonable risk” standard with a requirement that intended uses of chemicals present a reasonable certainty of no harm to public health, including vulnerable populations, and protect the public welfare. The safety standard would have to consider aggregate and cumulative exposures for the whole chemical life cycle.

The appropriateness of this safety standard for industrial chemicals is hotly disputed. At the hearing, witnesses Richard Denison, senior scientist at the Environmental Defense Fund and Ken Cook, president of the Environmental Working Group, argued that this proposed safety standard appropriately draws from an existing standard for pesticide tolerances.

Steve Owens, assistant EPA administrator and head of its Office of Chemical Safety and Pollution Prevention, testified only that the proposed standard “appears to be based on sound science and reflects risk-based criteria protective of human health and the environment” but said that EPA was still analyzing the bill.

Cal Dooley, however, argued that because the bill would place the burden on manufacturers to prove that their chemicals were safe, and because EPA could consider known or foreseeable uses other than intended uses, a chemical manufacturer would in practice have to show not just that the company’s own use of the chemical poses no harm, but also that all other aggregated exposures from all other possible uses of the chemical pose no harm.

Dooley argued that for the wide universe of industrial chemicals, unlike for pesticides, this would be unworkable and inappropriate. Richard Denison disputed Dooley’s interpretation of the bill text.

The bill would provide EPA wide latitude to impose conditions in the safety standard determinations to ensure that the safety standard is met. The current TSCA provision mandating that restrictions be the “least burdensome” would be dropped. Regardless of conditions, only uses considered and approved in the safety standard determinations would be permissible; other uses would be considered “new” and would require notification and approval.

New Hurdles for New Chemicals and New Uses

Under current TSCA, manufacturers or processors of new chemicals must submit to EPA 90 days prior to commercialization a premanufacture notice including certain information about the chemical to the extent available. H.R. 5820, like the discussion draft, would for the first time require the PMN to include a minimum data set established by EPA, and would require EPA to determine that the new chemical met the stringent safety standard discussed above, with or without conditions.

The bill would also require PMNs for certain new uses of existing chemicals and mixtures. Unlike the discussion draft, the bill would not require notifications for new uses of chemicals that had not received safety standard determinations.

The discussion draft’s option for EPA to instead find that a chemical was not reasonably anticipated to present a risk was removed from the bill. However, as an alternative, a manufacturer of a new chemical could submit to EPA evidence that a chemical was a “safer alternative.”

While the safer alternative standard would be even higher than the usual safety standard, specific uses of chemicals approved as safer alternatives would be exempt from other testing and new chemical notification requirements. Richard Denison argued that these green chemistry provisions would spur innovation.

The bill would also delete TSCA authority to exempt polymers, low volume chemicals, and other low risk chemicals from PMN requirements. Current exemptions under that authority would be reviewed and could be remain in effect if EPA found them still appropriate, but no additional or expanded exemptions would be authorized. EPA could, however, exempt chemicals and mixtures based on “scientific consensus” that their “intrinsic properties” are such that they would pose no risk.

Information Gathering and Confidentiality

Another recurring criticism of TSCA from NGOs has been that EPA lacks authority to acquire sufficient data to analyze chemical risks, especially for existing chemicals. Under H.R. 5820, EPA would be deluged with data.

The bill would require minimum data sets to be submitted for all existing chemicals in commerce, under even tighter schedules than in the discussion draft: within 18 months after priority listing, or within three years after enactment for high volume chemicals (as determined by EPA), four years for medium volume chemicals, and five years for all other chemicals.

If EPA required more data development by chemical manufacturers or processors or any recordkeeping and reporting by chemical or article manufacturers, processors, distributors, users, repackagers, or disposers, it could require it by order without going through full rulemaking procedures.

As in the discussion draft, manufacturers and processors would be required to declare to EPA what chemicals (and certain mixtures designated by EPA) they manufacture or process. These declarations would be submitted one year after enactment, again every three years, and upon any significant change, so that EPA could maintain an updated and categorized chemical inventory.

The bill also adds a requirement that manufacturers disclose chemical identity and safety information down the supply chain, a provision promoted in recent months by the Business-NGO Working Group (BizNGO) and at the hearing by BizNGO participant Howard Williams of Construction Specialties Inc.

Some of the most controversial proposals in the bill relate to manufacturers’ ability to keep some of this voluminous information confidential to avoid losing valuable trade secrets.

The bill would require submitters to justify and potentially pay fees for confidentiality claims, which would expire after five years (the bill, unlike the discussion draft, has a provision for renewal). Confidentiality protection could not extend to chemical identities and ingredients of mixtures to the extent they appear in health and safety studies, safety standard determinations, or information indicating the presence of the chemical or mixture in a children’s product or indicating exposure by children. EPA would have to audit a fraction of the confidentiality requests, and submitters whose requests did not meet the criteria for protection could be subject to civil or even criminal penalties.

While NGOs hailed these provisions of the bill as advancements in transparency, industry and Republican representatives worried that the protections would be too narrow and intellectual property, like jobs, would end up overseas.

Prospects

While the controversies regarding the bill’s scope, safety standard, data requirements, procedural hurdles, and confidentiality protections took center stage at the hearing, still more provisions have sparked strong differences of opinion among stakeholders. The bill’s removal of state preemption, provisions on animal testing, requirements for biomonitoring, interactions with other agencies’ mandates, and other aspects will be targets for discussion and review as the United States’ management of chemicals continues to be debated.

Despite the significant changes made to the discussion draft, legislators and most stakeholders agree that there remains much work to be done, and reintroduction in the next session of Congress is likely. The House of Representatives began a weeks-long recess on July 30, and there are few days left on the legislative calendar before the midterm elections in 2010. In apparent acknowledgement of this timeline, at the close of the July 29 hearing, Rush remarked about the possibility of another hearing and a markup at “some time in the future.”

In the meantime, stakeholders of all stripes — chemical manufacturers, downstream users, retailers, NGOs and others — would be well advised to closely monitor developments in the high-stakes debate over the Toxic Chemicals Safety Act.

* * *

Mark Duvall is a principal of Beveridge & Diamond, P.C. in the firm’s Washington office. Alexandra Wyatt is an associate of Beveridge & Diamond, P.C. also in the firm’s Washington office.  For a PDF version of this article, click here.

The opinions expressed are those of the authors and do not necessarily reflect the views of the firm, its clients or Portfolio Media, publisher of Law360.

Copyright © Portfolio Media, Inc. Content may not be shared or redistributed in any fashion without the express permission of Portfolio Media. For inquiries regarding rights and reprints, please contact reprints@portfoliomedia.com.

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