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California Revises Proposed Green Chemistry Safer Alternatives Regulations for Consumer Products; State on Track to Finalize Regulations By Year End

Beveridge & Diamond, P.C., November 19, 2010

On November 16, 2010, the California Department of Toxic Substances Control (“DTSC”) released revisions to its Proposed Safer Alternatives for Consumer Products Regulations (“Revised Proposed Regulations”), in response to comments received since the proposed regulations were first issued in September 2010.  Stakeholders now have until December 3, 2010, to submit further comments on the revised regulations, which are on track to be adopted by DTSC by January 1, 2011.

The Revised Proposed Regulations continue to follow the general regulatory framework outlined in our previous Client Alert.  However, there are significant modifications to the originally proposed regulations, several of which are highlighted below:

  • Confidential Business Information

The procedure for protecting trade secret information remains uncertain.  DTSC has deleted the vast majority of its originally proposed regulations regarding the treatment of confidential information.  All but one of the deletions improves upon its original proposal.  This one exception is the deletion of clarifying language regarding the procedure to protect trade secrets from public disclosure.  The enabling statute, California Health & Safety Code Sections 25252 et seq., allows a party to prevent disclosure of its trade secret information by “obtain(ing) an action” in superior court for a declaratory judgment within 30 days of DTSC’s notice of its intent to publicly disclose the claimed trade secret information.  See Cal. Health & Safety Code § 25257(d)(3).  The originally proposed regulations clarified that the filing of the lawsuit alone was sufficient to prevented the disclosure of the claimed trade secret information pending a final judicial decision on the merits of the claim.  In the Revised Proposed Regulations, DTSC deleted this clarification and left uncertain whether a party must instead file suit and secure a preliminary injunction within 30 days of DTSC’s notice to protect its trade secrets from public disclosure. 

Chemical ingredients could be subject to public disclosure and would not be eligible for trade secret protection to the extent they are regarded as “hazard traits.”  The Revised Proposed Regulations continue to drive public disclosure of the presence of chemicals in products - in other words, the potentially proprietary formula of a product - and to deny potential trade secret protections to that information.  For example, the enabling statute states that trade secret protections do not apply to “hazard trait” submissions for chemicals and chemical ingredients.  The statutory language implies that the hazard trait information is something other that the chemical ingredients themselves.  However, the Revised Proposed Regulations would extend the definition of “hazard traits” to include lists of chemical ingredients.  By operation of law, therefore, the chemicals identified by DTSC as having certain “hazard traits” would be denied trade secret protection, even though they could otherwise qualify for trade secret protection.

  • Chemical and Product Prioritization

For the first five years of the regulations, “Priority Products” would be limited to three categories of consumer goods.  While the originally proposed regulations provided exemptions for certain products (e.g., food, pharmaceuticals, medical devices), they made no distinctions within the remaining universe of “consumer products” potentially subject to the regulations.  The Revised Proposed Regulations would initially limit the types of consumer products that could be classified as “Priority Products” to (i) children’s products; (ii) personal care products; and (iii) household cleaning products.  These three categories represent DTSC’s efforts to address “everyday” products at the outset which have high exposure potential, potentially significant impacts to sensitive populations, and account for the largest volume of chemicals in the state.  After January 2016, the scope of Priority Products subject to the regulations would not be so limited.

Manufacturers would still be subject to potentially burdensome information submission requirements for chemical and product prioritization.  Under the originally proposed regulations, manufacturers, upon DTSC’s request, would have been obligated to submit to DTSC potentially confidential business information to inform the Department’s chemical and product prioritization processes.  This included information regarding chemical ingredients in specific products, quantities of those chemicals, and chemical and product market data.  The Revised Proposed Regulations purport to limit the categories of data DTSC would be able to request from manufacturers and make the information to be disclosed more general.  However, chemical ingredients, quantities of chemicals, and “market presence information” - which includes statewide sales of a product by volume and units and targeted customer bases - would still be subject to disclosure.  Manufacturers producing such data would also carry the burden of ensuring confidential business information is protected as trade secret.

“Chemicals under Consideration” and “Products under Consideration” lists would be eliminated.  The originally proposed regulations contemplated two chemical lists (“Chemicals under Consideration” and “Priority Chemicals”) and two product lists (“Products under Consideration” and “Priority Products”).  For efficiency, the Revised Proposed Regulations would require DTSC to develop a single list of Chemicals of Concern and a single list of Priority Products.  Each of these lists would then be subject to further prioritization based on such factors as the degree of threat posed by the chemical or product and risks for exposure.  The deadline for DTSC to finalize these two initial lists has also been accelerated.  Under the Proposed Revised Regulations, DTSC would be required to finalize the initial list of Chemicals of Concern by the end of 2011, and the initial list of Priority Products by the end of 2012.  

  • Responsible Entity

Product manufacturers would be the entity primarily responsible for regulatory compliance.  The originally proposed regulations would have assigned responsibility for compliance to multiple parties, including manufacturers, retailers, distributors, and importers.  Despite the identification of multiple responsible parties, DTSC stated it had expected a manufacturer, trade association, or public-private partnership to fulfill the regulatory requirements.  The Revised Proposed Regulations make that expectation explicit; manufacturers would have “primary responsibility” for compliance.  Retailers would only be responsible for compliance in cases where manufacturers failed to comply and where the retailer continues to order that manufacturer’s products following notice by DTSC of the manufacturer’s noncompliance.  In that notice DTSC would inform the retailer of the specific requirements for which it would be responsible.  The Revised Proposed Regulations would not impose any duties of compliance on distributors or importers.

  • Alternatives Assessment

Tiered Alternatives Assessments (“AA”) Would Not Be Required.  The originally proposed regulations took a tiered approach to alternatives assessments and contemplated a multi-track, multi-level AA process.  The Revised Proposed Regulations would eliminate the Tier I AA Notification that would have been required for manufacturers that elected to make an early chemical substitution or reduction, or an early product replacement following DTSC’s chemicals or products listings.  Under the Revised Proposed Regulations, a manufacturer that eliminates or reduces to de minimis levels a Chemical of Concern in a Priority Product would be required to submit a much simpler notification to DTSC.  Accordingly, AAs would only be required for those products identified as Priority Products where Chemicals of Concern persist in concentrations above threshold values.  Further, while still complex and time-consuming, the AAs would not be tiered as in the originally proposed regulations.

Exemptions based on de minimis levels of a Chemical of Concern in products would be facilitated.  The original proposed regulations would have exempted a manufacturer from conducting an Alternatives Assessment for a product containing “de minimis” levels of a chemical subject to the manufacturer request and DTSC’s approval.  Under the Revised Proposed Regulations, a manufacturer would no longer have to seek approval from DTSC for the de minimis exemption.  Rather, a manufacturer would simply be required to submit to DTSC a De Minimis Exemption Notification informing DTSC of the maximum concentrations of the Chemical of Concern in a particular product.  Further, the definition of a de minimis level has been simplified and made more definite.

Next Steps

The Proposed Revised Regulations continue to be subject to the formal rulemaking procedures established by the California Office of Administrative Law (“OAL”).  DTSC will review any further comments it receives by December 3, 2010, and consider further changes to the regulations.  Thereafter, DTSC will submit a final regulatory package to OAL and post the final regulations on DTSC’s website.  As noted, the formal process for DTSC’s adoption of the regulations is expected to be complete by the end of the year.  The regulations will not take effect until after the OAL review, which will be completed in early 2011.

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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