Beveridge & Diamond
 

Formal Rulemaking Begins for California’s “Green Chemistry” Regulations on Safer Alternatives for Priority Consumer Products

Beveridge & Diamond, P.C., September 23, 2010

After nearly two years in development, the California Department of Toxic Substances Control (“DTSC” or “Department”) released its Proposed Regulation for Safer Consumer Products (“Proposed Regulations”) on September 14, 2010, initiating the formal rulemaking that will implement California’s foundational Green Chemistry legislation.  The Proposed Regulations, if adopted, could significantly impact any manufacturer, importer, distributor, or retailer of consumer products in California.  Further, these regulations may also affect how other states regulate consumer products in the future.  Stakeholders have until November 1, 2010 to comment on the Proposed Regulations.  Final adoption of regulations is expected by January 2011.

Background

The Proposed Regulations embody California’s aim to reduce or eliminate adverse public health and environmental impacts that may result from the production, use or end-of-life management of consumer products containing hazardous chemicals.   DTSC’s recently released proposal pursues these objectives using the same regulatory structure as the draft regulations released in June 2010, which were the subject of a previous client alert that provided a detailed outline of the regulatory scheme.  With the Proposed Regulations, DTSC has sought to simplify the process and to provide more specific performance targets and timelines to move regulated entities through the process.  Given the potential reach of these regulations, a detailed overview of the Proposed Regulations is set forth below, with particular attention to those areas DTSC has amended or supplemented since its June 2010 draft and those provisions which would have the most significant impact to product manufacturers, distributors, and retailers.

Summary of Proposed Regulations

As an initial matter, the Proposed Regulations potentially reach all consumer products in California, and all hazardous chemicals that are contained in these products (with some exceptions for certain categories of products such as food, medical devices, prescription drugs, etc.)  Moreover, under the Proposed Regulations, the “responsible entity” that is charged with ensuring that a consumer product meets the requirements imposed by the regulations includes (i) the owner of the product brand name or trademark; (ii) California importers of the products; (iii) California distributors of the products; (iv) retailers who sell the product in California, and (v) any entity with a contractual agreement with any of these other entities concerning the product.  This presumably could include entities elsewhere in the U.S. or anywhere in the world.  DTSC recognizes that multiple entities would be “responsible” for each consumer product, and acknowledges that only one would have to fulfill the requirements for a given product.  DTSC expects that the requirements would be fulfilled by the product manufacturer, a trade association or consortium, or a public-private partnership, but nowhere is this mandated in the Proposed Regulations.

The Proposed Regulations are broadly organized into a three-step process:

  • Prioritization of Chemical and Products

Using a structured screening process, the Proposed Regulations would require DTSC first to evaluate and prioritize chemicals and consumer products of concern to develop a list of “Priority Products” containing “Priority Chemicals” that would be targeted for increased regulatory oversight.  The Priority Chemicals and Priority Products to be identified by DTSC would be those which pose the greatest public health and environmental threats, are most prevalently distributed in commerce and contained in products used by consumers, and for which there is the greatest potential for harmful exposure to humans or the environment. 

While DTSC is expected to obtain most of the information it needs for this prioritization process from the public domain, under the Proposed Regulations, it can request information from product manufacturers or other responsible entities.  Such information could encompass chemical and product data pertinent to public health; types, categories, and classes of products that contain certain chemicals; or chemical ingredients, including the quantities of chemicals in products.  Such requests could potentially implicate a company’s confidential business information (discussed below).  DTSC would use this data to prepare its formal lists of Priority Chemicals and Priority Products.

Product manufacturers or other responsible entities would then be required to notify DTSC if they produce a Priority Product, and such information would be made publicly available by DTSC.

The Proposed Regulations now add deadlines for DTSC’s listing of Priority Chemicals and Priority Products.  These deadline were not included in prior drafts.  By July 1, 2012 and September 1, 2013, DTSC anticipates issuing a proposed initial list of Priority Chemicals and Priority Products, respectively.  By December 1, 2013, the Department expects to release its final list of Priority Products.  Under the Proposed Regulations, stakeholders would be able to review and comment on these lists before finalization.

  • Alternatives Assessment

The Proposed Regulations would mandate any product manufacturer or other responsible entity perform an “Alternatives Assessment” (“AA”) for any of its Priority Products, an analysis which DTSC expects will result in the selection of safer alternatives with more favorable impacts than the Priority Product under review.  The AA could lead to a decision to redesign or reformulate a consumer product, substitute a different consumer product for an existing product, or a decision not to alter or replace the product.  In a marked difference from the prior draft, the Proposed Regulations now add a tiered AA process:

AA Notifications & Tier I AA:  In the event a product manufacturer elects to make an early chemical substitution or reduction or an early product replacement following DTSC’s listing of Priority Chemicals or Priority Products, it would only be required to provide an “AA Notification” and “Tier I AA” Report to DTSC before returning the redesigned or replacement product to the market.  Among other data, the AA Notification would provide information on the chemical reduced or removed from the product, and the Tier I AA Report would provide an analysis equivalent to the method established by the Green Screen for Safer Chemicals.

Tier II-A AA:  For any Priority Product containing a Priority Chemical for which no early changes are made, a product manufacturer or other responsible entity would be required to conduct a “Tier II-A AA,” which has two components:  a Chemical Hazard Assessment and an Exposure Potential Assessment.  The Chemical Hazard Assessment would be conducted first to assess and compare chemical information, among other factors, between a Priority Product and all alternatives initially identified for consideration.  If any of the alternatives under consideration exhibits a hazard trait, an Exposure Potential Assessment would be required to evaluate and compare factors such as exposure potential, consumer uses, and environmental releases between the Priority Product and the possible alternatives.  Possible alternatives demonstrating less favorable hazard traits or more harmful exposure potential would be screened out following these analyses.

Tier II-B AA:  A Multimedia Life Cycle Evaluation would then consider the economic and environmental impacts arising from a Priority Product and any of the remaining possible alternatives.  This evaluation would also compare the product functions, performance and material and resource consumption impacts between the Priority Product and the possible alternatives.

Following these assessments, a product manufacturer would be required to provide an AA Report that includes a host of information detailed in the Proposed Regulations.  (The Proposed Regulations also contain extensive detail on accreditation and qualification requirements for those entities conducting an AA as well as timelines for the process.)  Such AA Reports would also identify and describe any of the selected alternatives and the rational for the selection or decision.  The manufacturer would also be able to propose in its AA Report any regulatory response it recommends to best limit the exposure or reduce the hazard level posed by any Priority Chemical still contained in a Priority Product or its selected alternative.

In certain instances, a product manufacturer may be exempted from conducting these Assessments for products containing “de minimis” levels of a chemical.  The Proposed Regulations measure de minimis levels in a number of ways, including by weight (concentration of chemical is less than or equal to 0.1%) or by reference to the lowest federal or state public health or environmental regulatory thresholds applicable to a chemical (e.g., Maximum Contaminant Levels, Public Health Goals, Maximum Allowable Dose Levels).

  • Regulatory Response

Finally, the Proposed Regulations would require a product manufacturer or other responsible entity to comply with any number of regulatory responses the Department may impose depending on the outcome of the AA for a given Priority Product, and the subsequent decisions made by a product manufacturer in response to that AA (e.g., whether the manufacturer decides to select an alternative or retain the Priority Product).  Some of these compliance requirements would be self-implementing, while others will follow notice from DTSC and will be based on certain findings made by the Department.

At the most extreme level, under the Proposed Regulations, DTSC could prohibit the sale of a Priority Product.  This would occur in instances where a product manufacturer retains its product as is or selects an alternative which still contains a Priority Chemical and DTSC determines that a functionally equivalent, technologically and economically feasible, safer alternative exists.  

Product manufacturers or other responsible entities could also be subject to other, less restrictive, regulatory responses.  They could be required to disclose certain information to consumers, if DTSC determines such disclosures would promote significantly safer uses and would reduce any threats posed by the product or chemical.  If DTSC determines that there is a significant potential for end-of-life mismanagement of a product, the Department could also require a manufacturer or other responsible entity to establish, maintain and fund an end-of-life product stewardship program.

The Proposed Regulations also contemplate instances where DTSC would require no regulatory response.  These include cases where a manufacturer or other responsible entity selects an alternative product and that alternative contains no Priority Chemicals above de minimis levels or does not pose a significant public health or environmental threat.  DTSC could also require no regulatory response for Priority Products slated to be completely removed from commerce in California.

Generally, the Proposed Regulations would provide DTSC with a great deal of latitude in formulating its regulatory response, allowing for  “any other regulatory response [the Department] determines is necessary.”

In a change from the June 2010 draft, any of the regulatory requirements triggered by a DTSC finding and imposed upon a product manufacturer would now be subject to public comment and review before being finalized.  In addition, for any challenge to a regulatory response required by DTSC, a manufacturer would utilize the formal petition for review process that would last between two to nine months.  The manufacturer would have to exhaust this process before being able to seek judicial review of the Department’s decision.

In the event DTSC were to determine any requirement of the Proposed Regulations had not been fulfilled, it would issue a notice of non-compliance to known responsible entities.  If there is continued non-compliance, the product would be placed on a “Failure to Comply List” maintained by DTSC.  DTSC could also institute enforcement actions, including impositions of fines and penalties against responsible entities for failure to comply. 

Areas of Particular Importance

Prior B&D alerts (issued on May 5, 2010 and July 8, 2010)  related to earlier drafts of California’s Green Chemistry regulations raised concerns with respect to two particular provisions that are of particular importance to the regulated community:

  • Dispute Resolution Related to DTSC Determinations For Non-Regulatory Response Matters

For any dispute that does not involve a regulatory response, such as DTSC’s listing of certain Priority Products or Priority Chemicals, the Proposed Regulations would provide for a two-tier informal dispute resolution process.  However, the Proposed Regulations still do not clearly identify any recourse or opportunity to comment afforded to a manufacturer or responsible entity whose product may be subject to the public petition process for the listing of chemicals or products.  The Proposed Regulations would not affirmatively obligate DTSC to make publicly available such petitions or the Department’s technical review or notice of decision with respect to them.  Thus, a product manufacturer could be left with no formal role in the petition process until after a chemical or product is given a priority designation.

  • Confidential Business Information

The Proposed Regulations include provisions for the treatment of confidential business information.  They specify procedures for a product manufacturer to follow in asserting a confidentiality or trade secret claim and identify the circumstances in which additional documentation to support such claims would be required.  Generally, DTSC personnel would be prohibited from disclosing any confidential information submitted to the Department.  However, the Proposed Regulations also outline the evaluation process for DTSC to follow in the event DTSC receives a request for disclosure of information designated as confidential or a trade secret.  Should DTSC determine that any designation of confidentiality is not justified, it may publicly release such information unless the manufacturer or responsible entity initiates a lawsuit to protect the information from disclosure.

Next Steps

The Proposed Regulations are now subject to the formal rulemaking procedures established by the Office of Administrative Law (“OAL”).  A 45-day public review and comment process is currently underway and is scheduled to conclude on November 1, 2010, by which time all comments are due.  DTSC also plans to take comments at a public hearing in Sacramento, California on November 1, 2010.  DTSC will review comments and consider further changes to the Proposed Regulations.  Afterwards, DTSC will submit a final regulatory package to OAL and post the final regulations on DTSC’s website.  The formal process to adopt the regulations is expected to be complete by the end of the year.

For additional information on California’s Green Chemistry Initiative, please contact Kenneth Finney at kfinney@bdlaw.com, Laura Duncan at lduncan@bdlaw.com, or Ryan Tacorda at rtacorda@bdlaw.com

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