Thursday, December 10, 2020
Underneath Poisonous Substances Management Act (TSCA) Part 26(b), as amended by the Frank R. Lautenberg Chemical Security for the 21st Century Act (Lautenberg Act), the U.S. Environmental Safety Company (EPA) is permitted to gather charges from chemical producers (outlined to incorporate importers beneath TSCA) to defray a portion of the EPA prices related to TSCA implementation efforts. The TSCA Charges Rule, which turned efficient on October 18, 2018, requires fee of charges for eight classes of fee-triggering occasions beneath TSCA, together with EPA-initiated danger evaluations beneath TSCA Part 6. 83 Fed. Reg. 52694.
As a part of the ultimate Charges Rule, EPA is required to arrange a preliminary checklist of producers topic to charge obligations for EPA-initiated Part 6 danger assessments. On January 27, 2020, EPA revealed a Federal Register discover figuring out the preliminary lists of producers of the 20 high-priority chemical substances for danger analysis for which charges will likely be charged. 85 Fed. Reg. 4661. The discover included data on the circumstances and processes for which producers (together with importers) are required to self-identify as producers of a high-priority substance no matter whether or not they’re included on the preliminary lists recognized by EPA.
On March 25, 2020, EPA introduced that it might think about the event of a proposed rule that might have a look at potential exemptions to the TSCA Charges Rule in response to stakeholder considerations about implementation challenges. EPA said that by contemplating a proposal to slim the broad scope of the present necessities, it “might considerably cut back burden on probably hundreds of companies throughout the nation whereas sustaining the flexibility to efficiently implement the Lautenberg Act amendments to [TSCA] to guard human well being and the atmosphere.” In keeping with EPA, it deliberate to provoke a brand new rulemaking course of to think about proposing exemptions to the present rule’s self-identification necessities related to EPA-initiated danger evaluations for producers that import the chemical substance in an article; produce the chemical substance as a byproduct; or produce or import the chemical substance as an impurity. EPA said that it might additionally think about proposing different modifications to the rule throughout this course of in keeping with TSCA’s requirement to reevaluate the charges rule each three years. EPA famous that it believes that contemplating exempting sure entities from self-identification necessities is not going to impede the flexibility to gather absolutely the required charges and can nonetheless enable it to attain the final word goal of the TSCA Charges Rule and the statute — “to defray a portion of EPA’s TSCA implementation prices.”
EPA said that it intends to situation proposed amendments to the present Charges Rule later in 2020, with the purpose of promulgating the amendments in 2021. As mirrored within the Fall 2020 Unified Agenda of Regulatory and Deregulatory Motion (the newest model accessible as of early December 2020), the proposed rule was scheduled to be revealed December 2020 and the ultimate rule October 2021. As of early December 2020, the proposed rule was present process Government Order 12866 assessment with the Workplace of Administration and Finances.
Within the March 25, 2020, announcement, EPA said additionally that “in gentle of the extraordinarily uncommon circumstances of this example and the undue hardship imposed on sure companies who can be required to gather and report data” beneath the TSCA Charges Rule, it issued a “no motion assurance” for the three classes of producers (i.e., for producers that import the chemical substance in an article; produce the chemical substance as a byproduct; or produce or import the chemical substance as an impurity). Extra particularly, EPA said that it “will train its enforcement discretion relating to the self-identification requirement for the three classes of producers” for which EPA intends to suggest an exemption. On the time, EPA steered that companies which are erroneously on the preliminary lists of charge payers or fall into one of many three classes mentioned above ought to see its ceaselessly requested questions for extra details about the best way to certify as such to EPA and to keep away from charge obligations.
On September 4, 2020, EPA revealed a Federal Register discover asserting the “ultimate” lists of producers of the 20 high-priority chemical substances for danger analysis for which charges will likely be charged. 85 Fed. Reg. 55283. In that discover, EPA said that the “TSCA Charges Rule offers EPA flexibility to refine the ultimate checklist of producers in a fashion that’s cheap and prudent, in gentle of statutory and regulatory obligations associated to TSCA danger evaluations and related charge fee obligations. As such, the Company determined to not cost a charge to these importers who had been solely importing small portions of the 20 [high-priority substances] for analysis and growth functions solely.” On November 25, 2020, EPA launched updates to the interim ultimate checklist, stating that the up to date checklist contains further producers not recognized on the ultimate checklist of corporations and removes producers that self-identified in error or imported the chemical solely for the aim of analysis and growth. EPA said additional that it’s dedicated to making sure the checklist is correct and plans to make use of the up to date checklist to start invoicing for charges. EPA added that as a result of public well being emergency, EPA was exploring choices for fee flexibilities; installment fee choices had been advocated for by sure potential charge payers.
Underneath 40 C.F.R. Part 700.45(g)(3)(iv) of the Charges Rule, charge funds are due January 2, 2021, 120 days from publication of the ultimate scopes of the chance evaluations for the 20 high-priority chemical substances now present process danger analysis. 85 Fed. Reg. 55281.
Since issuing in January 2020 the preliminary lists of producers of the 20 high-priority chemical substances for danger analysis for which charges will likely be charged, the lists have been a transferring goal, not solely due to procedures mandated beneath the Charges Rule that ponder the self-identification of producers coated by the rule, but in addition on account of coverage modifications made exterior of the rulemaking course of that served to cut back the set of individuals required to pay a charge and the necessity to make corrections to the lists. The particular foundation for a person firm’s addition to or elimination from the lists shouldn’t be clear. We consider EPA can be well-served to be extra clear, in keeping with TSCA Part 14 necessities relating to the remedy of confidential enterprise data, in how the lists advanced, and the way charge fee shares are assessed for these producers remaining on the lists.
We perceive that invoices have been transmitted to at the least sure producers of the 20 high-priority chemical substances for danger analysis topic to charge funds. Within the invoices that we’re conscious of, EPA is assessing one-third of the charge owed right now, with a due date of January 2, 2021; it has not said the due date(s) for the rest of the charge. Underneath the Charges Rule, your complete charge is due by January 2, 2021. Whereas we consider that the deferral of the evaluation of two-thirds of the charge will likely be a welcomed growth for many charge payers, particularly in gentle of the COVID-19 well being disaster, better transparency in how and when EPA is invoicing for the charges would even be welcomed. We’re conscious of no common announcement by EPA of this modified course of.
EPA famous in issuing the ultimate rule that individuals that fail to self-identify for functions of charges assessments will likely be topic to TSCA non-compliance penalties — versus the fee of a share of the charge that they could have in any other case been assessed if that they had self-identified in compliance with the Charges Rule (along with penalties). Relying on what the penalty is perhaps, there could also be perverse incentives for producers to take an opportunity that they won’t be caught or be caught and be topic to a penalty that’s lower than the charge can be — and to not report. Whereas we perceive that reallocation of assessed charges primarily based on the addition of producers to the set of individuals chargeable for charge fee can be impractical, we hope that the monetary acquire obtained by non-compliance will likely be a considerable issue thought-about by EPA in assessing penalties to discourage non-compliance.
We await the deliberate proposed amendments to the TSCA Charges Rule to see how EPA addresses the problems which have arisen within the early levels of its implementation, particularly for these related to EPA-initiated danger evaluations. It seems possible that, primarily based on EPA’s March 2020 announcement on the proposed amendments to the Charges Rule, exemptions will likely be proposed for producers that import chemical compounds in an article, produce the chemical as a byproduct, or produce or import the chemical as an impurity. Moreover, primarily based on the September 4, 2020, Federal Register discover asserting the “ultimate” checklist of producers of the 20 high-priority chemical compounds for danger analysis for which charges will likely be charged beneath the Charges Rule and the November 25, 2020, replace to the checklist, it additionally seems that an exemption will likely be proposed for individuals that import chemical compounds solely for analysis and growth. Whether or not exemptions for different individuals are included (e.g., for individuals that manufacture a chemical in some outlined low quantity or low focus, or as a non-isolated intermediate) or the exemptions added exterior of rulemaking are refined or nuanced (e.g., to require charges for individuals that produce substances as byproducts for sure separate industrial functions, in keeping with reporting required beneath TSCA premanufacture notification and Chemical Knowledge Reporting necessities, versus throughout the board) stays to be seen. Given the stakes concerned and the broader consideration being given to TSCA implementation as a result of mandates within the TSCA Lautenberg Act amendments, there ought to be a substantial amount of curiosity within the growth of the Charges Rule amendments.