TSCA Sticker Shock: EPA Proposes Large Fee Increases
Does your company manufacture domestically or import chemicals that the U.S. Environmental Protection Agency (EPA) is reviewing under section 6 of the Toxic Substances Control Act (TSCA)? Does your company submit applications to EPA under section 5 of TSCA? Has your company received a test order under TSCA section 4? If so, be prepared to pay more in the future for engaging in those activities. EPA proposed to triple some fees for activities under TSCA.
On November 16, 2022, EPA published a supplemental notice of proposed rulemaking on fees for various TSCA activities, 87 Fed. Reg. 68647 (Nov. 16, 2022). The supplemental proposal would raise the fees in 40 C.F.R. Part 700, Subpart C.
EPA initially established those fees in 2018, 83 Fed. Reg. 52694 (Oct. 17, 2018), for fiscal years (FYs) 2019 through 2021. To account for inflation, EPA increased those fees by 18.9%, effective January 1, 2022, as provided in that rule. Now EPA needs to increase them again, for FYs 2023-2025.
The previous Administration published a proposed fee increase for FYs 2022-2024. 86 Fed. Reg. 1890 (Jan. 11, 2021). The supplemental proposal would substantially increase those proposed fees for FYs 2022-2024. Both proposals would adopt the usual TSCA exemptions for byproducts, impurities, and substances in articles. These exemptions are an about-face to the original fees rule, which did not include these exemptions. EPA later had to issue a No Action Assurance memorandum to exempt persons from section 6 fees who only manufactured high-priority substances as impurities, byproducts, or in imported articles.
Adjustments to fees for risk assessment and risk management activities under TSCA sections 5 and 6
EPA’s supplemental proposed rule would increase the fee for submitting a TSCA section 5 premanufacture notice or significant new use notice nearly threefold, from $16,000 in the 2018 rule to $45,000. EPA notes that this increase would still constitute less than 25% of the implementation costs for TSCA section 5 activities. EPA also proposes to refund 20% of the fee where a PMN is withdrawn after the first 10 days of the assessment period but before EPA initiates a risk management process.
The 2021 proposed rule did not include costs of TSCA risk management activities for the first 10 chemicals reviewed under the new TSCA, nor did it consider costs for risk management plans for the 20 chemicals currently undergoing risk evaluations. The supplemental rule would account for these activities: fees for an EPA-initiated risk evaluation under TSCA section 6(b) would nearly quadruple, from $1,350,000 in the 2018 fees rule to $5,081,000.
The supplemental proposed rule modifies the proposed rule’s exemptions for chemical substances undergoing EPA-initiated risk evaluations, including exemptions for byproducts, impurities, substances in articles, nonisolated intermediates, and research and development and low-volume production. The supplemental proposed rule would specifically limit the byproduct exemption to “producers of a chemical substance as a byproduct that is not later used for commercial purposes or distributed for commercial use.” It would also require self-identifying information from manufacturers claiming an exemption for low-volume production.
Adjustments to fees for TSCA section 4 activities
The supplemental proposed rule would increase the fee for submitting information under a section 4 test order from $9,800 in the 2018 Fees Rule to $25,000. It would exempt from TSCA section 4 test rules fees for chemical substances in imported articles and chemicals that are byproducts or impurities. It would extend the timeframe for test orders and test rule payments as well.
EPA will accept public comments on the supplemental proposed rule until January 17, 2023. Prior to that, on Tuesday, December 6, 2022, EPA will hold a public webinar for stakeholders to provide comments to EPA on proposed changes.
Beveridge & Diamond’s Chemicals Regulation practice group provides strategic, business-focused advice to the global chemicals industry. We work with large and small chemical companies whose products and activities are subject to EPA’s broad chemical regulatory authority under TSCA and state chemical restrictions. For more information, please contact the authors.