Prop. 65 Short Form Warning Change

In January 2021, OEHHA announced a proposal to make changes to use the of the short-form Proposition 65 warnings.  These changes restrict when a manufacturer would be allowed to use the short-form.  Previous use of the short-form warning label had “no limitation on using the short-form warning on larger products”.  The only requirement was that the entire warning text be at least the same size as the largest text for the rest of the consumer information on the product, or at least 6-point in size if the rest of the consumer information text was smaller.

Under the proposal, short-form warnings would only be allowed under the following conditions:

  • The total surface area of the product label available for consumer information is 5 square inches or less, and;
  • The package shape or size cannot accommodate the full-length warning described in section 25603(a).

The shape and size limitation described in section 25603(a) govern the ability to fit the text of the warning on the product and not dimensions of the shape or size of the warning.

OEHHA stated the purpose of the change is to correct widespread overuse use of the short form warning and to provide additional guidance for its use.  The comment period for this proposal is open until March 29, 2021.

Antimicrobial Inert Ingredient QR Code/Website Link

EPA is now allowing companies to include a QR code or website link on their product labels to provide information on inert ingredients.  As of this publication date, this option is only available for antimicrobial pesticide products.  Providing this additional information is strictly voluntary for companies, with exception on a case-by-case basis for where it has been required.  Although voluntary, providing this information is encouraged for showing transparency.

EPA states that if a company chooses to disclose their inert ingredients, they should include all of them.  Any partial lists could mislead the consumer into believing it was a complete list.  The Agency also recommends listing ingredients in descending order of weight.

Pesticide producers should note that including a QR code or website link results in the information being subject to FIFRA and EPA review in order to ensure there is no violation of FIFRA’s provisions against misbranding (FIFRA sections 2(q) and 12(a)(1)(E)).  The companies including this information need to verify the its accuracy.  Companies must also submit an application to EPA for voluntary inert ingredient disclosure.  The application identifies the proposed changes on the product label detailing the QR code or website link, and includes a self-certification statement.  The self-certification statement includes acknowledgement that any false statements could lead to enforcement actions.   EPA’s announcement also mentions that once the Agency gains experience handling this type of labeling, they may allow inert ingredient disclosure applications to be included with other actions.

Amazon Creates New Restricted Substances List

In December 2020, Amazon announced they will avoid the intentional addition of chemicals in certain products in their U.S. and EU market.  These restrictions concern Amazon’s food contact packaging.  The chemicals targeted have carcinogenic, mutagenic, reproductive, and other toxicant properties.  Amazon also focused on chemicals that are persistent and bioaccumulative.  The chemicals on the restricted substances list include all PFAS, phthalates, and BPA.   This announcement comes shortly after a 2020 court case closed in December, in which the plaintiff alleged Amazon had PFAS in their disposable plates.

Amazon has updated their chemicals and restricted substances page on the website to reflect the announcement.  The company already seeks to avoid a number of chemicals in their Amazon brands of Private Brand Baby, Household Cleaning, Personal Care, and Beauty products, including formaldehyde, nonylphenols, parabens, and phthalates.

PFAS in the NDAA

The 2021 National Defense Authorization Act (NDAA) addresses PFAS in several ways.  Sections 330 and 334 incentivize developers to create and promote additional alternative firefighting foam to replace the PFAS-containing aqueous film-forming foam.

Section 332 establishes an interagency body on PFAS research and development.  The interagency group will have representatives from at least 19 different agencies. The Director of the Office of Science and Technology Policy will Co-Chairs the group with a representative from another member agency, which will change on a biannual rotating basis. Goals of the organization will be:

  • Removal of PFAS from the environment,
  • Safe destruction or degradation of PFAS,
  • Development of safer and environmentally friendly alternatives to PFAS,
  • Understanding sources of environmental PFAS contamination and exposure, and
  • Understanding the toxicity of PFAS to humans and animals.

Section 333 states that the “Department of Defense may not procure any covered item that contains perfluorooctane sulfonate (PFOS) or perfluorooctanoic acid (PFOA).”  ”Covered items” is limited to nonstick cookware and utensils, and fabrics that have been treated with stain-resistant coatings.  This section does not take effect until April 1, 2023.

Section 335 requires providing notification to agricultural operations located in areas exposed to department of defense PFAS use.  Any agricultural operation within 1 mile of a military or National Guard facility where PFAS has been detected in the ground water, drinking water, or well water must be notified.  Notification must occur within 60 days of the enactment of the NDAA. Notification of any updated testing results must occur within 15 days after validated test results are received.

The NDAA was passed by Congress on December 11, 2020.

Trump Administration Issues Guidance on the Executive Order, “Reducing Regulation and Controlling Regulatory Costs”

On April 5, 2017, the Trump Administration issued guidance on Executive Order (EO) 13771, “Reducing Regulation and Controlling Regulatory Costs.” The guidance, published by the Office of Information and Regulatory Affairs (OIRA), provides details on the policy established by the January 30, 2017 executive order that requires agencies to repeal two existing regulations for each new regulation they promulgate. This guidance supersedes the previous interim guidance published in February, and it reflects OIRA’s consideration of the comments received in response to the interim guidance.

EO 13771 mandates that for every new regulation issued, at least two prior regulations should be eliminated. For fiscal year (FY) 2017 and moving forward, the heads of all agencies are directed that the total incremental cost of all new regulations, including the cost savings associated with eliminating the two prior regulations, must be no greater than zero—unless otherwise required by law or consistent with written advice of the director of the Office of Management and Budget (OMB). The term ”total incremental cost” means the sum of all costs from EO 13771 regulatory actions minus the cost savings from EO 13771 deregulatory actions.

It appears that the EO is based solely on “cost.” In the interim guidance, the administration dictated that “costs” are to be measured as the “opportunity cost to society” and referenced OMB Circular A-4 to define this concept. In the April guidance, the administration dictated that “opportunity cost” would equal the sum of consumer and producer surplus, minus any fixed costs, and also referenced OMB Circular A-4. OMB Circular A-4, issued Sept. 17, 2003, does not actually define “opportunity cost to society.” Instead, it provides guidance for conducting a cost-and-benefit analysis as required by Executive Order 12866 issued by President Clinton in 1993, which applies to rulemakings that establish new rules as well as those that rescind or modify existing rules. OMB Circular A-4’s only reference to “opportunity cost” describes the concept in terms of “willingness-to-pay,” or the measure of “what individuals are willing to forego to enjoy a particular benefit,” as well as the amount of compensation individuals are “willing to accept” to forego the benefit. The OMB Circular A-4 may well be unhelpful in making a “zero-cost” analysis, as EO 13771’s focus is on monetary costs, and “opportunity costs” are difficult to estimate. Indeed, it is difficult to imagine a situation for implementing a regulation or even deregulating in which the cost is “zero.”

The April guidance notes that, in general, agencies can comply with the requirements of the EO by issuing two “deregulatory actions” for each new “regulatory action.” Beginning with FY 2018 and moving forward, the EO requires OMB to identify for each agency the total amount of incremental costs for all deregulatory and regulatory actions finalized during the fiscal year, based on the information that was submitted to OMB by each agency. The guidance defines “EO 13771 regulatory actions” as either: 1) a “significant regulatory action” (i.e., has an annual effect on the economy of $100 million or more, among other things. See EO 12866 3(f)) that has already been finalized and that imposes total costs greater than zero, or 2) a “significant guidance document” with costs above zero that has been finalized. The guidance further defines a “significant guidance document” as one that is reasonably anticipated to have a major impact on the economy, create inconsistency with an action taken or planned by another agency, materially alter the budgetary impact or entitlements, grants, user fees, or loan programs or the rights and obligations of the recipients thereof, or raise novel legal or policy issues.

The guidance defines a “deregulatory action” as an action that has been finalized and has total costs less than zero. It is unclear from the EO and guidance what “total costs less than zero” means. A “deregulatory action” qualifies as both: (1) one of the actions used to satisfy the provision to repeal or revise at least two existing regulations for each regulation issued, and (2) a cost savings for purposes of the total incremental cost allowance. “Deregulatory actions” can be issued in multiple forms, including rulemaking, guidance or interpretive documents, certain actions related to international regulatory cooperation, and information-collection requests that repeal or streamline recordkeeping, reporting, or disclosure requirements.

EO 13771 applies to each “executive department or agency,” but leaves a number of government regulatory functions outside of its scope. These include agencies involved in military, national security, and foreign affairs functions, as well as any government organization arising from the Legislative or Judicial branches. Also exempt are regulations that are legislative rules that qualify for a “good cause” exemption or for which compliance with the terms of EO 13771 would be impracticable or contrary to the public interest. Importantly, the guidance does not indicate which entity is ultimately responsible for making such determinations. Some other exemptions include expressly exempt actions, emergency actions, statutorily or judicially required actions, and de minimis actions.

On its face, EO 13771 could have a significant impact on the pace of federal rulemaking during the Trump Administration, however it remains to be seen what the practical impact of the EO will be. Further, it appears based on the EO itself and the guidance published thus far, it will be difficult for agencies to determine “cost” of implementing and eliminating regulations.

Note: There will be more guidance forthcoming relating to other aspects of the EO, such as Section 3, which concerns the “Annual Regulatory Cost Submissions to the Office of Management and Budget.” Hopefully the forthcoming guidance will shed more light into the EO and its requirements.