ACC’s state of denial about the Lautenberg Act widens – and has further infected EPA, now in its fee rule

Richard Denison, Ph.D., is a Lead Senior Scientist.

I was on vacation last week, so I missed two notable pronouncements from the American Chemistry Council (ACC) regarding the 2016 reforms to the Toxic Substances Control Act (TSCA) and implementation of them by the Environmental Protection Agency (EPA).

One was a statement issued by ACC upon publication of EPA’s proposed “TSCA fee rule” in the Federal Register on February 27.  The other was remarks given by Cal Dooley, ACC’s CEO and President, to kick off the chemical industry annual GlobalChem meeting on March 1.  Let me start with the fee rule.  

Fees for new chemical reviews:  ACC starts out its comments on the proposed fee rule by complaining that EPA’s proposed fee for new chemical reviews is 5-6 times higher than under old TSCA.  There was widespread acknowledgment that those old fee levels – set four decades ago and never adjusted even for inflation – were far too low and needed to be substantially increased.  At the level EPA now proposes, the fees would still cover only a fraction of EPA’s estimated costs for reviewing a premanufacture notice (PMN).  And the Lautenberg Act imposed substantial new burdens on EPA in conducting those reviews that necessarily translate into higher costs.  ACC once again seems to be in denial of those changes to the law.

Fees for imposing testing requirements:  ACC complains that EPA is proposing to charge any fee at all to defray costs it incurs under TSCA section 4 to require testing through test orders, rules or consent agreements.  Let’s put this complaint in context:

  • EPA’s proposed fee is, if anything, far too low relative to that provided for in the law. It is set at a level to cover a measly 3.5% of EPA costs – far lower than the average of 25% of its costs EPA is directed to set fees to cover under the law.
  • The only reason EPA provides in the proposed rule for such a low fee is that industry asked it not to charge much or anything (see p.  8221); EPA doesn’t even mention our comments that urged EPA to set fees proportional to its actual costs.
  • Despite EPA acceding to industry’s wishes and proposing an incredibly low fee, ACC accuses EPA of “overturning the existing 32-year-old policy not to assess fees for the submission of section four data.” Once again, ACC completely ignores that the new law expanded EPA’s fee authority and even more clearly applied it to section 4 testing requirements.  Section 26(b)(1) was amended to call on EPA to require payment from those “required to submit information under section 4 … of a fee that is sufficient and not more than reasonably necessary to defray the costs related to such chemical substance of administering section 4.”
  • ACC was all for this (during TSCA negotiations) before it was against it (now). Now ACC argues that charging a fee to cover a portion of EPA’s costs is unfair because industry already has to pay for the testing itself.
  • While industry does pay for any required testing, this is no different than what has been done for decades for other chemicals such as pharmaceuticals and pesticides. Moreover, it is national policy under TSCA dating back to the original 1976 law.  TSCA section 2(b)(1) states (emphasis added):

It is the policy of the United States that … adequate information should be developed with respect to the effect of chemical substances and mixtures on health and the environment and that the development of such information should be the responsibility of those who manufacture and those who process such chemical substances and mixtures.

The expanded fee authority the Lautenberg Act grants EPA helps to realize this longstanding policy.  ACC would have the taxpayer cover all of the costs EPA incurs to require industry to provide information it should already have provided to demonstrate the safety of its chemicals.

Fees for manufacturer-requested risk evaluations:  ACC complains that EPA’s fee proposal “fails to recognize the disincentive that it creates for the manufacturer-requested review process.”  A controversial aspect of the Lautenberg Act was its allowance for companies to request EPA to conduct risk evaluations on chemicals of their choosing.  To ensure such requests did not overwhelm EPA’s conduct of risk evaluations for chemicals EPA identified as high-priority substances, the law placed numerous limits on manufacturer requests.  One was that companies pay the full costs of risk evaluations they request (or 50% of those costs if the chemical was already listed as a priority on EPA’s Work Plan).  Another was that such requested risk evaluations get no preferential treatment whatsoever, including with respect to their scope and pace of completion.

EPA already violated the second of these requirements in its final risk evaluation rule, by allowing a company or trade association to request, and EPA to conduct, risk evaluations on only a subset of uses of a chemical that the industry desires.  This is a key concern EDF has voiced over EPA’s rule.

EPA appears intent on violating that requirement yet again in its fee rule.  EPA has assumed its costs to conduct a manufacturer-requested risk evaluation will be only two-thirds of EPA’s costs to conduct a risk evaluation on a chemical EPA selects (see p. 8219); on that basis it then proposes to charge fees that are that much lower, effectively giving preferential treatment to the industry requests.

EPA makes two arguments for why it assumes a manufacturer-requested risk evaluation will cost it less to conduct, neither of which hold much water.  First, it argues that companies will provide more information up front with their requests and hence EPA will have to spend less collecting information.  But remember, EPA’s final rule (see 40 CFR § 702.37(b)(4), p. 33749) allows companies to limit what information they submit only to “information that is relevant to whether the chemical substance, under the circumstances identified by the manufacturer(s), presents an unreasonable risk of injury to health or the environment.”  Assuming EPA does what the law actually requires and conducts a full risk evaluation, EPA will still have to collect information on all of the other circumstances not identified by the manufacturer; and it will still have to review and determine the adequacy and completeness of the manufacturer’s information.   Even EPA’s own numbers (see Table 2 on p. 8219) indicate the costs of all “data gathering” accounts for only 10% of the total costs of conducting a risk evaluation – clearly not sufficient to justify an assumption that its costs will be 33% lower.

EPA’s second argument is even more suspect:  It assumes companies will request risk evaluations only on easy chemicals:  those that are “low hazard or low exposure, or are otherwise fairly straightforward to analyze.”  This assumption doesn’t stand up to scrutiny.  In the proposed fee rule, EPA assumes it will be working on five manufacturer-requested risk evaluations each year, that two of them will be drawn from EPA’s Work Plan and that the other three will be non-Work Plan chemicals.  Let’s look at each group:

  • The Work Plan chemicals are clearly not low-hazard, low-exposure chemicals: they’re on the Work Plan in the first place because they are generally high-hazard and high-exposure.
  • The non-Work Plan chemicals can’t be assumed to be easy ones either. The #1 reason the industry fought so hard for its ability to request risk evaluations was to compel federal review of chemicals that states or the market was acting on, in order to get some degree of direct or indirect pre-emption.  Whatever one thinks of those state and market actions, they are certainly not focusing on chemicals of low concern; quite the opposite.

EPA’s proposal to charge disproportionately lower fees to companies that request risk evaluations amounts to preferential treatment disallowed under the law.  It also amounts to taxpayers footing more than their fair share of the bill, and industry footing less.

It’s not clear from ACC’s statement what specific aspects of the fees for manufacturer-requested risk evaluations it is griping about.  But ACC’s notion that EPA should set its fees to provide an incentive to companies to request risk evaluations – thereby shifting more of the costs to the taxpayer – violates the balance Congress struck on this contentious issue and illustrates yet one more attempt by ACC to press EPA to “deviate” from implementing the law as written.

Let me now turn briefly to Mr. Dooley’s remarks at Global Chem.  As reported by Greenwire, Mr. Dooley singled out EDF for doing “a little bit of a reinterpretation of some of the provisions of TSCA.”  He then asserted that, in contrast, ACC has been “taking an intellectually consistent, science-based approach to the implementation of TSCA.  We are not deviating in any way in terms of what we committed to do when we committed to working with members of Congress on both sides of the aisle.”

As Greenwire noted, I had recently blogged about ACC’s revisionist history regarding the extent of changes the Lautenberg Act made to the new chemicals review provisions of TSCA.  ACC’s statement on the proposed fee rule I’ve discussed above provides yet more evidence that it is ACC, not us, reinterpreting this law.


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