TSCA Fee Controversy Continues

[pullquote] In last month’s column, we reported on the January 27, 2020, notice from the U.S. Environmental Protection Agency (EPA) identifying the preliminary lists of manufacturers, including importers, of the 20 chemical substances the EPA designated as high-priority for risk evaluation and for which fees will be charged. The notice created a firestorm of criticism over the lack of any exemptions from being considered potentially responsible for paying a share of the EPA’s $1,350,000 fee for conducting a risk evaluation of a high-priority chemical. This column updates the status of this fast-changing matter.

Background

As noted, companies that manufactured or imported any of the 20 high-priority chemical substances prior to January 27, 2020, are required to submit a notice to the EPA admitting that fact, even if the agency didn’t identify them in the preliminary lists published in January. Companies on the list and not removed, and companies that “self-identify” are deemed potentially responsible for paying a share of the $1,350,000 administrative fee the EPA will charge to conduct a risk evaluation under Toxic Substances Control Act (TSCA) Section 6. Other charges, including industry consortia fees and related expenses, may apply.

Companies can certify to the EPA that they have not manufactured the chemical substance in the five-year period preceding publication of the preliminary lists, or certify that they had ceased producing or importing the substance prior to the March 20, 2019, deadline and will not do so in the five years following that date. Either certification action will avoid the fee obligations.

The EPA developed the preliminary lists of manufacturers and importers subject to fees using data submitted via the Chemical Data Reporting (CDR) Rule (2012 and 2016 reporting years) and the Toxics Release Inventory (TRI) (2012–2018 reporting years); some entities not expecting to be included on the list, in fact, are. The EPA admits it may have incorrectly identified companies that had ceased manufacture prior to the defined cutoff dates or as a result of processing or use activities reported under TRI.

The absence of exemptions and the wide scope of potentially liable entities inspired confusion and concern in industry, and many are annoyed about this state of affairs. Some are especially irritated with having to master the EPA Central Data Exchange (CDX) merely to advise the EPA they aren’t a responsible entity. As stakeholders know, CDX is manageable if you know it, but a bit daunting if you don’t.

EPA Clarification

Given industry stakeholder confusion, EPA leadership said the agency is considering options to alleviate these concerns. With this in mind, potentially impacted industry stakeholders may wish to consider suspending ongoing internal deliberations on self-reporting obligations until the EPA provides the additional guidance promised. The EPA plans to extend the response period to April 27, 2020. During this period, manufacturers, including importers, must self-identify as manufacturers of a high-priority substance irrespective of whether they are included on the EPA’s preliminary identification lists.

Self-notifying is a required action under the TSCA and failure to do so is a violation of TSCA Section 16. Whether and when the EPA would actually pursue such an action is another matter, and the EPA is likely also considering enforcement discretion options. This means the EPA could indicate that while violations of TSCA in this regard are actionable offenses, the EPA could elect not to enforce them under certain circumstances. Chances are, this would go a long way in providing the comfort stakeholders seek. Stay tuned.

The preliminary lists are available in Docket EPA-HQ-OPPT-2019-0677 and on the EPA’s website at www.epa.gov/TSCA-fees. Entities are urged to review the lists now and take the appropriate action.