House Committee holds hearing on new Chemicals in Commerce Act.

Today, the House Energy and Commerce Committee held its second hearing on the Chemicals in Commerce Act (CICA), introduced by Rep. John Shimkus (R-IL) as the House’s proposal to modernize the Toxic Substances Control Act (TSCA). Today’s hearing was based on an updated version of CICA which Rep. Shimkus, who is Chair of the Subcommittee on Environment and the Economy, unveiled last week.

Rep. Shimkus began the hearing by highlighting “significant changes” from the earlier version, including: new authority for EPA to develop information for priority designation purposes; new deadlines for EPA to take action on existing chemicals; and limits on the preemption effects of a low-priority designation, which now would leave in place state regulations that were in effect before the low-priority designation was made.

In his opening remarks, Environment and the Economy Subcommittee Ranking Member Paul Tonko (D-NY) argued that, as industry witnesses have agreed, CICA must restore the public confidence in the safety of chemical products by establishing a safety standard based on health and environmental information alone, while costs and benefits should be separately incorporated in risk management actions. Energy and Commerce Committee Ranking Member Henry Waxman (D-CA) alleged that the unilateral process of developing CICA and pointed out that under the bill, “EPA would be prohibited from revealing the identity of chemicals that cause serious health and environmental harms,” which would harm companies marketing safer consumer products.

In the hearing’s first panel, EPA Assistant Administrator Jim Jones of the Office of Chemical Safety and Pollution Prevention testified that the Administration had not yet developed a “formal position” on CICA, but noted that the bill did not align with the Administration’s announced principles for TSCA reform.  Mr. Jones commented that CICA does not provide EPA with a way to review existing chemicals that may pose a concern in a timely fashion, because the legislation uses a “significant risk” standard very similar to the current law. Similarly, according to Mr. Jones, the bill’s treatment of new chemicals, like current law, does not require EPA to conclude that a chemical is safe before it is allowed to enter the marketplace.

As in previous legislative hearings on TSCA reform, all of the witnesses agreed on the importance of modernizing the law. Industry witnesses included representatives from BASF, Procter & Gamble, the Society of Chemical Manufacturers and Affiliates, and the American Chemistry Council. These witnesses supported many of the changes in the updated version of CICA, including the bill’s risk evaluation provision, new authority for EPA to develop information for prioritization, and protection of Confidential Business Information (CBI). Industry witnesses did, however, raise questions about some issues related to the bill, including the length of EPA’s deadlines, the meaning of “significant risk,” the definition of “best available science,” and appropriate fee approaches to provide appropriate resources for EPA. Witnesses from the NGO Safer Chemicals and Healthy Families and the National Conference of State Legislatures criticized the bill’s broad preemption provisions.

Outside of today’s hearings, reactions to the new version of the bill continue to trickle in. Yesterday, leading Democrats Rep. Waxman and Rep. Tonko sent a letter to Rep. Shimkus expressing concern that the bill’s preemption provisions “could jeopardize state or local laws and regulations relating to hydraulic fracturing and the chemicals used in the hydraulic fracturing process.” Environmental and public health NGOs have also been critical; the Natural Resources Defense Council called it “a dud” and the Environmental Working Group described it as a “bad piece of legislation, pure and simple.”

DTSC announces Priority Products workshops and releases Draft Regulatory Concepts.

California’s Department of Toxic Substances Control (DTSC) has announced a series of Priority Product workshops intended to engage members of the public before official rulemaking for the initial Priority Products begins. Along with the announcement, DTSC released a document on “Priority Products Draft Regulatory Concepts and Topics for Stakeholder Input,” [PDF] to elicit input from the public during the workshops. The forthcoming Priority Products rules will be a significant step in implementing DTSC’s Safer Consumer Products Program.

The Draft Regulatory Concepts document contains several questions for stakeholder input, on the following topics:

  • Priority Product description (e.g., Are the definitions and terms clear and unambiguous as to which related products are included and excluded?);
  • Chemicals of Concern and alternatives (e.g., Are there other Candidate Chemicals in this product that you suggest be considered?); and
  • Market information (e.g., What is the market presence of the Priority Product?).

The document also describes the Priority Products, similar products that are excluded, and the chemicals of concern. Notably, the agency now includes bedside sleepers and co-sleepers as new examples of children’s foam padded sleeping products, explaining that these products were not included in the “Priority Product Profile” but were “later found to meet DTSC’s intent for this Priority Product.”

Three workshops have been announced, to take place in May through early June, in Sacramento, Oakland, and Los Angeles. The agenda for the first meeting, in Sacramento on May 7, is available here [PDF]. DTSC will accept written comments from the public submitted by June 30, 2014, so that the agency can consider them before releasing the proposed rulemaking package.

A first look at the changes in the updated Chemicals in Commerce Act.

As we briefly mentioned yesterday, Rep. John Shimkus (R-IL) released a new version of his proposal to reform the Toxic Substances Control Act (TSCA), the Chemicals in Commerce Act (CICA), and announced that another hearing on the bill will be held on Tuesday, April 29. Witnesses have not yet been announced.

The changes in the latest version of CICA do not constitute a major overhaul. Many of the changes in the bill are essentially changes in structure and nomenclature – for example, the “safety determinations” discussed in the initial “discussion draft” are renamed “risk evaluations.” Much discussion of scientific standards and considerations EPA must make in assessing scientific information – such as the use of a “weight of the evidence” approach – are stripped throughout the bill, only to be re-consolidated in new subsections on “Scientific Standards” and “Weight of Scientific Evidence.” However, the new version of CICA does remove requirements that EPA develop and establish specific standard practices and criteria for developing and evaluating high quality, reliable, and valid data.

The bill’s risk standards have also changed; previously, EPA was to determine whether new chemicals are “likely to result in” an “unreasonable risk of harm” to human health or the environment, but the new version instead asks if the chemical “may present” an unreasonable risk of harm. Chemicals are to be designated as low priority if EPA determines, based on available information, that the chemical is “not likely to present a significant risk of harm” under the intended conditions of use. In evaluating the risk of high priority existing chemicals, the Administrator is to determine whether a chemical might present, “in the absence of regulation,” a significant risk of harm under its intended conditions of use.

The new version of CICA elaborates on the risk evaluation (formerly “safety determination”) process – for example, specifying factors to be considered as well as factors not to be considered. Factors in the former category include the nature, circumstances, severity and magnitude of risk, as well as whether harm has occurred from the chemical under its intended conditions of use. In the latter category, EPA is precluded from considering the economic costs or benefits of either the intended use of the chemical or reducing the exposure of the chemical via rule. If a risk evaluation results in a determination of no significant risk, then that determination – which must be published, but is not required to be subject to public notice and comment rules – is considered a final agency action, and would not result in any further regulation (although EPA may choose to review risk evaluations). A determination of significant risk, however, does not become a final agency action until EPA promulgates a rule imposing restrictions or requirements “to protect adequately against an unreasonable risk of harm.” The updated CICA also adds a deadline for this section: risk evaluations must be published within four years of a chemical’s designation as high priority, although another provision authorizes EPA to grant extensions as necessary “but not to exceed a cumulative period of 3 years.”

Other changes to the updated CICA include:

  • Defines and incorporates more references to “potentially exposed subpopulations,” for example, effects on potentially exposed subpopulations are a factor that must be considered when EPA assigns a priority to an existing chemical;
  • Specifies in the definition of “intended conditions of use” and throughout the bill (e.g., as a test marketing activity that might qualify for a Section 5 exemption) that “disposal” is a covered activity (along with manufacturing, processing, etc.);
  • Strikes the notice and comment and Administrative Procedures Act requirements previously applied to “Risk-Based Exemptions” for new chemicals or uses;
  • Authorizes EPA to require manufacturers and processors to develop hazard and exposure information for priority designation purposes, upon the determination “that available information is not sufficient to make a priority designation”;
  • Adds an “Alternative Risk Evaluation” provision authorizing EPA to conduct a risk evaluation for a substance that is not designated as high-priority, to determine that the substance will not present a significant risk of harm in the absence of regulation and under specific conditions of use;
  • Adds a requirement that, in issuing a rule imposed on a chemical after making a significant risk determination, EPA must provide for a “reasonable” transition period for implementation; and
  • If considering a rule that would prohibit or substantially prevent a specific use of a chemical, EPA must determine whether technically and economically feasible alternatives “that benefit human health or environment, compared to the use proposed to be prohibited or substantially prevented,” will be “reasonably available as a substitute” when the rule would take effect. The discussion draft’s comparison point was whether the alternatives “materially reduce risk.”

A key sticking point for the bill’s detractors has been its express preemption provision, but the new CICA does not make substantial changes on this issue. If enacted, it appears that CICA would effectively preempt almost any state efforts to regulate or request information on chemicals covered by TSCA – except, perhaps, if the state law or regulation does not regulate the chemical substance under its intended conditions of use.

Chemical Watch reports that House Democrats have been negotiating with Rep. Shimkus on resolving their concerns with CICA, such as the scope of preemption. However, it appears that some disagreement among House Democrats remains as to the likelihood of reaching a resolution; Rep. Henry Waxman (D-CA), the Energy and Commerce Committee Ranking Member, reportedly remains concerned about establishing a “health-based safety standard,” among other issues. Currently, CICA is the only proposal on the House side; meanwhile, according to Chemical Watch, there is still no clear timeline for putting out a new version of the bipartisan bill in the Senate, the Chemical Safety Improvement Act.

Attorneys General from 13 states oppose House Republicans' TSCA reform bill.

A coalition of Attorneys General from 13 states spoke out last week against the House Republicans’ plan to reform the Toxic Substances Control Act (TSCA). The Attorneys General sent a letter [PDF] to the leadership of the House Subcommittee on Environment and the Economy criticizing the Chemicals in Commerce Act (CICA), the proposal introduced by Subcommittee Chair Rep. John Shimkus (R-IL) in late February. Like other critics, the letter lauded the legislators’ efforts and the necessity of modernizing TSCA but took particular issue with CICA’s preemption provisions, arguing that they would “effectively eliminate the existing federal-state partnership on the regulation of toxic chemicals” and “cripple states’ ability to protect their citizens and the environment from the risks posed by toxic chemicals.” The Attorneys General on the letter are all Democrats and represent the following states: New York, California, Connecticut, Hawaii, Iowa, Maine, Maryland, Massachusetts, New Hampshire, New Mexico, Oregon, Vermont, and Washington.

CICA has already been the subject of one House Subcommittee hearing in March, and today, a second hearing on an updated draft of the bill was announced, to be held on April 29. The new draft [PDF] and a redline comparison [PDF], among other materials, are available on the hearing page.

According to the Attorneys General, CICA’s preemption provisions for both existing and new chemicals would preempt any state law or regulation that “prohibits or restricts the manufacture, processing, distribution in commerce, or use” of any chemical for which EPA has made a “safety determination,” prioritization decision, or promulgated a rule imposing requirements or restrictions. Since CICA contemplates that EPA would take at least one of those actions for all new and existing chemicals, states would eventually be preempted from regulating any chemicals. States would not be able to regulate, for example, chemicals EPA designates as low-priority but does not take further action to regulate, but which may still pose a high hazard or high exposure risk. Neither would preemption be affected by EPA’s failure to make a safety determination within the mandated 90 days.

The letter further criticizes the elimination of two of TSCA’s current “categorical exemptions” from preemption, which apply when a state regulation is identical to an EPA action, or if the state regulation prohibits the use of a chemical in the state, as well as the case-by-case exemption available under current law.

In addition, the Attorneys General argue that CICA’s preemption of states’ authority to obtain health and safety information about toxic chemicals is an unprecedented, “significant step backward in the realm of the ‘right to know’ about toxic chemicals.”

The Attorneys General pointed out that states have historically been leaders in reducing risks from toxic chemicals, as in the case of Connecticut’s early ban on polychlorinated biphenyls (PCBs) two years before the federal government’s nationwide ban came into effect under TSCA. The Attorneys General also emphasized more recent efforts by state legislatures on chemical management bills and phase-outs of particular substances and in certain applications, arguing that “[p]rotection of children’s health from harmful chemicals has been a particular focus of the states.” Under CICA, the letter argues, the states would no longer be able to serve as innovators and standard-setters for the whole nation’s benefit.

The letter is the latest critique of the House bill, which has come under attack from NGOs and some Democrats while receiving support from industry. Last month, Bloomberg BNA interviewed two former EPA officials were both more sanguine about CICA’s prospects. The officials argued that although CICA imposed serious implementation challenges on the EPA, those issues could be fixed with only minor changes. Although they agreed that CICA was relatively similar to the Senate TSCA reform proposal, the Chemical Safety Improvement Act, the officials also cautioned that the key challenge to achieving TSCA reform is addressing state preemption concerns.

Scientists: 100nm definition for nanoparticles may be "inappropriate."

The 100 nanometer (nm) upper limit for defining nanoparticles may be “potentially inappropriate” and does not reflect the “complexity of ecological interactions” with nanoparticles, according to a viewpoint article [PDF] published in Environmental Sciences and Technology and highlighted by ChemicalWatch. According to a team of Chinese and American scientists, threshold sizes for nanoparticles likely exist and thus, critical sizes for environmental impacts are also likely to exist and exceed, or at least differ from, the 100 nm definition.

Studies show that nanoparticle threshold sizes vary with composition and shape, probably due to “changes in excess surface energy and crystallography of [nanoparticles] as size decreases.” Threshold size ranges have been established for nanoparticles based on physicochemical properties including particle dissolution, contaminant adsorption, and suspension stability, for example. However, further research is required to determine threshold sizes for complex biological effects like accumulation and toxicity, as nanoparticles may have size-specific mechanisms for transformation, reactive oxygen species production, etc.

The scientists point out that if threshold sizes for nanoparticles’ environmental impacts exist, changes in the effects could not be predicted by larger particle sizes, even under the 100 nm definition. Thus, to better assess and minimize environmental risks from nanoparticles, the size and functionalization of nanoparticles in development should be designed appropriately if that nanoparticle is determined to have substantially increased ecotoxicological effects below a certain threshold.

The scientists call for more research “to assess the potential for threshold sizes for environmental impacts and to assess if [nanoparticles] larger than the threshold sizes have different impacts than bulk particles of the same composition.” The results of such research could better inform the current size definition of nanoparticles and affect methods for modeling environmental impacts and risks.

D.C. Circuit Court partially strikes down SEC conflict minerals rule.

On Monday, a federal appeals court struck down a rule implementing the Dodd-Frank Act’s requirement that companies disclose whether their products contain conflict materials originating from the Democratic Republic of Congo (DRC), or adjoining countries. A divided (2-1) panel of the U.S. Court of Appeals for the D.C. Circuit ruled [PDF] that the U.S. Securities and Exchange Commission (SEC) rule compelled commercial speech in violation of the First Amendment.

Industry groups challenged the SEC’s final rule on Administrative Procedure Act (APA), Exchange Act, and First Amendment claims. In National Association of Manufacturers v. Securities and Exchange Commission, the industry groups appealed the District Court’s rejection of their claims, but only prevailed with respect to the First Amendment challenge.

The APA claim in part attacked the rule’s lack of a de minimis exception. As we reported in November, because the SEC rule does not contain a de minimis exception, the disclosure requirement – which also calls for due diligence and auditing – could apply to firms that use conflict minerals in very small amounts as catalysts in the manufacturing process. The Court upheld the decision not to include a de minimis exception, finding that the SEC, “relying on text, context, and policy concerns, inferred that Congress wanted the disclosure regime to work even for small uses,” and a de minimis exception would thwart the statute’s goals.

The Exchange Act challenge also failed, as the Court found that the SEC’s cost-benefit analyses as required by the Exchange Act were “reasonable,” even though the rule’s “compelling social benefits” were not quantifiable.

However, the Court sided with the industry groups with regard to the SEC rule’s requirement that companies describe its products as not “DRC conflict free” in reports filed with the Commission and on the companies’ own websites. Writing for the Court (and joined by Judge Sentelle), Judge Randolph found that rational basis review was not appropriate for this type of speech, because it only applies to “purely factual and uncontroversial information,” in cases in which “disclosure requirements are reasonably related to the State’s interest in preventing deception of consumers.” In this case, the SEC did not argue that the rule related to preventing consumer deception. Judge Randolph concluded that requiring the use of the “conflict free” label was found to convey a “moral responsibility for the Congo war,” tantamount to “compelling an issuer to confess blood on its hands” in interference with the First Amendment.

The Court further found that the SEC’s rule failed to meet the intermediate standard for commercial speech set out in Central Hudson, which “invalidates regulations for which narrower restrictions on expression would serve the government’s interest as well.” (Quotations omitted.) In this case, the SEC presented no evidence that less restrictive means would be ineffective, and the Court rejected its argument that the rule’s minimal impact was dispositive of the “narrowly tailored” requirement.

Notably, Judge Srinivasan declined to join the Court’s opinion with respect to the First Amendment claim, arguing that the issue should have been held in abeyance and part of the SEC rule stayed until the Circuit’s en banc re-hearing of a related case, American Meat Institute v. United States Department of Agriculture, regarding meat labeling.

Moving forward, the rule’s effective date for compliance is June 2, and the SEC has not yet offered a stay or guidance to companies on how to comply with the partially-invalidated rule. The SEC has also not yet announced whether it will seek to participate in the AMI case; otherwise, the case will be remanded to the D.C. District Court.