TSCA Reform:  Administration Letter Submitted to Congress on TSCA Reform Legislation

A January 20, 2016, letter from U.S. Environmental Protection Agency (EPA) Administrator Gina McCarthy provides the Administration’s reaction to, and comments on, the Toxic Substances Control Act (TSCA) reform legislation that has passed both the House and the Senate in somewhat different forms. The differences between the bills are currently being sorted out and reconciled. The bills at issue are the TSCA Modernization Act of 2015 (H.R. 2576) and the Frank R. Lautenberg Chemical Safety for the 21st Century Act (S. 697). Details can be found in our H.R. 2576 and in our S. 697 memos discussing each of the bills.

EPA’s letter cites the Administration’s Essential Principles for Reform of Chemical Management Legislation (2009) (Principles) and reviews the bills’ provisions against those points. It also provides a reaction to several aspects not touched on in the Principles, and offers to work with Congress on “more technical drafting issues” during the reconciliation process.

Specific points touched on in the Administration letter include the following:

• Deadlines for Action. The Senate bill is identified as preferable, as it provides certainty about the progress that EPA is required to make in reviewing chemicals.
   
• Elimination of the “Least Burdensome” Requirement. This point relates to the provision in TSCA Section 6 that many believe has contributed to EPA’s problems in successfully using TSCA to regulate existing chemicals. The letter recognizes that both bills include new, different considerations for EPA to apply when selecting among risk management measures, and indicates a preference for the approach in S. 697. The letter notes that the House bill leaves some uncertainty as to how many cost effective options EPA would need to review and reject as inadequate before selecting a non-cost effective option.
   
• Prioritizing Chemicals for Review. The letter focuses on the provisions in both bills that allow industry to identify priority chemicals for EPA review, and warns about the potential for such a provision to overrun EPA’s ability to prioritize and manage chemical reviews. It indicates a preference for the Senate bill that has language capping the number of such reviews, and also requires that industry pay the costs of such reviews as well as the costs of taking needed regulatory actions.
   
• Sustained Sources of Funding. The letter points out potential limitations in the fee provisions in the House bill and expresses a preference for S. 697’s approach, which explicitly adds new fee collection authority for a variety of activities, including reviewing Confidential Business Information (CBI) claims, and assessing and regulating chemicals. The letter also requests that EPA receive broad authority to use the fees to cover Agency costs. Several potential implementation challenges are identified for the Senate bill concerning spending caps and minimum appropriation requirements for assessing fees.
   
• Implementation Challenges. The letter warns against imposing extensive, overly prescriptive requirements on EPA to develop more policy and procedure documents, as such requirements could “frustrate” EPA’s timely implementation of the substantive requirements. The letter notes S. 697’s “pressing deadlines” and specific requirements for the development of various documents, and points to the body of existing policy, procedure, and guidance documents that EPA has developed over the years. In this instance, the letter indicates a preference for the approach in H.R 2576 which limits the requirement for development of new documents to the “extent necessary.”
   
• Safety Standard. The letter encourages the revised statute to apply the new safety standard consistently throughout the statue. It goes on to discuss how the approach in the House bill, which limits the application of the safety standard to Section 6 on existing chemicals, could create uncertainty as to what standard would apply under other provisions of TSCA that involve “unreasonable risk,” and discusses ways that this uncertainty might be remedied. The letter discusses the possibility that the House bill could apply different standards to Section 6(a) rulemakings that involve “non-cost-effective requirements” determined under Section 6(c) versus the Section 6(a) rules that do not present this issue. It also notes other possible “confusion” relating to the control of persistent, bioaccumulative, and toxic (PBT) chemicals as provided in the House bill.
   
• Regulatory Flexibility. The letter indicates that the approach in the House bill of retaining the current TSCA Section 6(a) menu of regulatory requirements, while extensive, is not comprehensive and indicates a preference for the inclusion of a “catch-all” regulatory authority, as found in the Senate bill.
   
• Safety of New Chemicals. The letter states its support for the approach in S. 697 that requires an affirmative safety determination on new chemicals, which it describes as being consistent with the Administration’s Principles regarding new chemicals.
   
• Transparency and CBI. The letter indicates that both bills make improvements to substantiation requirements for CBI claims. It also indicates its support for a greater ability to share CBI with others when necessary to protect public health and safety. At the same time, it raises concerns with a provision in the House bill that allows “molecular structure” information to be claimed as CBI.
   
• Authority to Require Development of Information. While recognizing that both bills give EPA new authority to require testing, the letter raises questions about the approach in the House bill and suggests that it could have the effect of perpetuating the difficulties EPA has encountered under TSCA Section 4.
   
• Chemicals in Articles. The letter states that the articles provisions in the bills may make it more difficult for EPA to review and regulate risks from chemicals in articles. The letter goes on to discuss EPA’s concerns regarding several of these provisions.
   
• Enforcement Improvements. While the Administration’s Principles do not touch on this aspect, the letter indicates support for the provisions on civil and criminal enforcement in the Senate bill.
   
• Federal-State Relationship. The letter discusses several aspects of preemption as it appears in the two bills. It states that the intent of the comments is to note provisions that “could benefit” from drafting changes to better reflect Congress’ presumed intent, as well as scope provisions that could result in permanent preemption of state action on risks not addressed by federal regulation. Specific comments concerning clarification of the drafters’ intent include preservation of existing state laws/regulations and the scope of potential preemption of state environmental laws that “actually conflict” with an EPA “action or determination.” The letter indicates support for the approach in S. 697 that clarifies that preemption extends to state laws adopted under the authority of federal law, as well as state laws that are adopted using a state’s own authority or that are adopted to meet a need under federal law. The letter discusses several aspects of the scope issue and indicates support for the approach in S. 697 that limits preemption to the particular risks actually considered in the EPA assessment or action. The letter also notes that, while the House bill does not require an affirmative determination on new chemicals, it nonetheless would preempt state regulation for all uses of a new chemical.

Commentary

It is good that the Administration is engaging with Congress on its efforts to sort out and reconcile the differences between the two bills. The points raised are generally useful and should be helpful in sorting out the issues discussed. We particularly appreciate the points regarding implementation challenges that we agree are formidable. At the same time, the letter takes a narrow approach that remains focused on the Administration’s Principles. Our recent paper on the “workability” of TSCA reform legislation identified a number of aspects that we thought could be clarified or improved to help ensure that the bill, as enacted, can be successfully implemented at the outset and over time. We continue to believe that the debate would benefit from EPA input that goes beyond “technical drafting issues,” as discussed in EPA’s letter.