House TSCA reform bill draws mixed reactions.

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More reactions and commentary from a range of stakeholders are beginning to roll in following last week’s release of the Chemicals in Commerce Act (CICA), the proposed House legislation to modernize the Toxic Substances Control Act (TSCA). As we discussed earlier, key Democrat Rep. Henry Waxman has said he does not support CICA in its current form, although he hopes to work with Republicans in crafting an improved version. Industry groups including the American Chemistry Council, American Cleaning Institute and Society of Chemical Manufacturers and Affiliates have expressed support for the draft bill by Rep. John Shimkus (R-IL), while many NGOs, including the Center for Environmental Health, Environmental Working Group, and Natural Resources Defense Council, have strongly criticized it. On its blog, Environmental Defense Fund (EDF), which expressed qualified support on the introduction of CICA, has identified two major flaws in the bill: state preemption and the “regulatory hoops” EPA would have to jump through in order to take any action, which EDF Senior Scientist Richard Denison says is “even more onerous and paralyzing” than the current law, and better addressed in the exemption provision in the Chemical Safety Improvement Act (CSIA), which was introduced in the Senate last May.

Both bills were a popular topic at this week’s GlobalChem Conference in Baltimore, where panelists were optimistic that bipartisan support could mean TSCA reform could pass Congress this year. Connie Deford, Director of Products Sustainability and Compliance at Dow Chemical, emphasized that passing reform was a priority for the chemical sector, noting that consumer confidence in the industry was at an all-time low, the current approach is short-sighted, and reform is needed to continue to foster domestic innovation and competitiveness in the global arena. David McCarthy, Counsel to the House Energy and Commerce Committee, also emphasized the need for reform to keep the U.S. competitive globally. Mark Duvall, Partner at Beveridge & Diamond, highlighted differences between CICA and CSIA, including varying reporting requirements for processors and tort implications regarding the admissibility of EPA’s safety determinations.

We will be bringing you more in-depth analysis of CICA, including side-by-side comparisons to CSIA and current law, in the near future.

Rep. Shimkus releases draft TSCA reform bill.

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Yesterday, Rep. John Shimkus (R-IL) introduced his proposal to reform the Toxic Substances Control Act (TSCA). The legislation unveiled yesterday, the “Chemicals in Commerce Act” (CICA) [PDF], is billed as a discussion draft; Rep. Shimkus has emphasized that he is open to reworking the proposal based on feedback.

The CICA broadly resembles the Senate’s bipartisan Chemical Safety Improvement Act (CSIA, S. 1009) in creating a prioritized two-tiered system for assessing existing chemicals. EPA would establish a system to designate chemicals as either high- or low-priority. The agency would be authorized to study whether high-priority chemicals pose risks to human health or the environment, including to vulnerable subpopulations, and to take regulatory actions – such as requiring labeling or volume limitations – as appropriate. CICA addresses the issue of preempting state laws – a major sticking point for critics of the CSIA – by keeping state measures in effect until EPA makes a final priority designation for each chemical.

In a statement, Rep. Henry Waxman (D-CA), Ranking Member of the House Energy and Commerce Committee, said he would not support the bill in its current form, as it would “endanger the public health,” but expressed his willingness to work with the bill’s backers on changes to make it sufficiently protective of health and the environment “while ensuring workability for industry.”

The American Chemistry Council praised the bill, calling it a “balanced approach” to passing a critically-needed update of the country’s chemical management law. The Environmental Defense Fund’s response was more cautious, calling the CICA draft a “starting line in the House, not the finish.” Safer Chemicals, Healthy Families, a coalition of public health groups, unions, and other NGOs, was more critical in its response statement, saying the bill would “roll back the very limited oversight that we currently have.”

Stay tuned for more detailed analysis of CICA next week.

Draft of House TSCA reform bill expected today.

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Rep. John Shimkus (R-IL) is expected to release today a discussion draft of his bill to modernize the Toxic Substances Control Act (TSCA). Rep. Shimkus, the Chairman of the House Energy and Commerce’s Subcommittee on Environment and the Economy, announced that he will discuss the draft with reporters tonight, and that he will work to build support with House Democrats, who were not involved in the bill’s development. Although the Subcommittee has held five hearings on TSCA, this proposal would be the first House legislation on the issue, while the Senate has considered two bipartisan bills this year. Rep. Shimkus said that he would hold two hearings on his legislation.

It is not yet known how the House proposal compares to the leading bipartisan Senate bill, the Chemical Safety Improvement Act (CSIA, S. 1009). Industry insiders expect Rep. Shimkus’ bill to resemble the CSIA, which some House Democrats have said they would not support in its current form. Sen. Barbara Boxer (D-CA), a vocal critic of certain provisions of the CSIA, acknowledged that she has had good communication with Rep. Shimkus on his bill, but is still looking for agreement on state preemption issues. Sen. Tom Udall (D-NM), who is working with CSIA cosponsor Sen. David Vitter (R-LA) to amend the Senate bill, says that “significant changes are happening” to the CSIA to gain support from critics like Sen. Boxer, and an updated version will be released soon.

Earlier this month, Rep. Shimkus told Bloomberg BNA that he expected the Subcommittee to approve his proposal by mid-March and to bring the bill before the full Energy Committee in late spring or early summer. At the time, Rep. Shimkus said the legislation would address three main issues: preemption of state regulations; industry concerns about protecting confidential business information; and the prioritization of new chemical reviews.

Elementis Chromium appeals $2.6 million penalty in TSCA 8(e) reportable data case.

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In a case that may have broad implications for chemical manufacturers, Elementis Chromium has appealed the $2.57 million penalty handed down by an EPA Administrative Law Judge (ALJ) in November 2013. The ALJ ruled that Elementis, one of the world’s largest chromium manufacturers, had violated section 8(e) of the Toxic Substances Control Act (TSCA), which requires reporting information about serious health risks to EPA. In addition to the hefty penalty at stake, the Elementis case is worth watching because it signals that EPA is continuing to pursue a very broad interpretation of what constitutes reportable data under TSCA § 8(e).

In its appeal [PDF] to the Environmental Appeals Board (EAB), Elementis makes two arguments: (1) EPA’s enforcement action was barred by the federal five-year statute of limitations; and (2) the epidemiological study at issue was not required to be submitted under TSCA § 8(e).

According to Elementis, the study’s findings were consistent with previous studies and merely confirmed and corroborated risk findings already known to EPA and the industrial health community. Elementis argues that the ALJ erred in interpreting new “substantial risk information” under TSCA to include “mere differences in scientific study methods or subjects between studies.” Instead, Elementis argues that EPA was already aware of the study’s information on substantial risk of injury to human health, “namely that high cumulative exposures to hexavalent chromium lead to an increased risk of lung cancer.”

Elementis’ appeal also argues that since § 8(e) requires the “immediate” reporting of certain information to EPA, violations of the provision are not “continuing” in nature. Thus, if the five-year statute of limitations began running upon the company’s receipt of the study in 2002, EPA’s 2010 Complaint was filed beyond the statute of limitations. According to Elementis, a violation of § 8(e) is not “continuing,” since there is no clear indication in the statute that Congress intended for the continuing violation exception to apply and, moreover, the statute establishes a definite timeframe for compliance by requiring “immediate” reporting. The company’s appeal criticizes the ALJ’s interpretation of the statute, which is described as establishing a “never-ending duty to inform that begins immediately.”

Furthermore, Elementis argues that the Supreme Court’s decision in SEC v. Gabelli, declining to apply the “discovery rule” in the case of an SEC civil enforcement action for an alleged fraud, means that the EPA’s enforcement action is time-barred here. In Gabelli, the Supreme Court relied on public policy reasoning in criticizing “grafting the discovery rule onto” the federal five-year statute of limitations in actions for penalties. Elementis argues that the continuing violation exception functions like the discovery rule in Gabelli, and thus was applied by the ALJ in error.

The Response Brief from EPA Region 8 to Elementis’ Appeal Brief has not yet been posted to the EAB docket, although it is expected soon.

EPA will withdraw proposed rules for fourth set of High Production Volume chemicals.

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The EPA will withdraw a 2011 proposed rule requiring testing and other data for 23 High Production Volume (HPV) chemicals and imposing Significant New Use Rules (SNURs) on 22 other HPV chemicals. Last week, Bloomberg BNA reported that the agency had confirmed in an email that the rule will be formally withdrawn, although a timeline has not been established yet. Under the Toxic Substances Control Act (TSCA), HPV chemicals are those produced or imported into the U.S. at the rate of at least 1 million pounds per year. However, significant data gaps exist regarding the hazards associated with these substances.

The rules were part of the EPA’s HPV Challenge Program, which encouraged the voluntary submission of health and hazard data for approximately 1,400 HPV chemicals sponsored by companies. EPA previously issued three other test rules for “unsponsored chemicals.”

EPA justified the withdrawal of the fourth set of rules by alluding to higher priorities, such as the agency’s TSCA Work Plan, an initiative launched in 2012 that identified 83 substances on which to conduct risk assessments. When the regulatory package was proposed, industry groups commented that the proposal was duplicative in requesting data already developed for and collected by the European Chemicals Agency (ECHA), which implements REACH.

Data from over 860 chemicals was made publicly available to the HPV Challenge Program through international efforts. However, of the over 2,200 chemicals sponsored through the voluntary part of the HPV Challenge Program, data was received for only 82 percent of the substances – and not all of that data is complete.

Until the regulatory package is withdrawn, the substances subject to the SNURs remain subject to 12(b) export notification requirements.

EPA issues 35 SNURs.

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Yesterday, U.S. EPA issued Significant New Use Rules (SNURs) for 35 substances which were subject to Premanufacture Notices (PMNs) under the Toxic Substances Control Act (TSCA). The SNURs were promulgated as a Direct Final Rule, and take effect starting April 14, 2014.

Fourteen of the substances, including various polyfluorinated alkyl compounds and multi-walled carbon nanotubes, are subject to “risk-based” TSCA § 5(e) consent orders which require use of protective measures to limit exposure or otherwise mitigate risk; the SNURs for these substances designate as a significant new use the absence of these protective measures. The SNURs for the other 21 substances designate various significant new uses, including releases to water as well as certain industrial, commercial and consumer activities, and establish certain protection in the workplace requirements, such as the use of respirators.

Written adverse or critical comments, or notice of intent to submit such comments, must be received by E.P.A. by March 14, 2014.

House Subcommittee holds fifth and final hearing on TSCA reform.

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Yesterday, the House Energy and Commerce’s Subcommittee on Environment and the Economy held its fifth hearing on the Toxic Substances Control Act (TSCA). In its last hearing on the subject for the 113th Congress, Subcommittee members focused on TSCA sections 4 and 8, which govern chemical testing and information reporting and retention requirements. (We previously covered Subcommittee hearings on TSCA here and here.)

In his opening remarks, Subcommittee Chair John Shimkus (R-IL) expressed his interest in reconsidering EPA’s authority to “produce tailored, necessary and high quality test data and other information to carry out TSCA.” Rep. Shimkus also highlighted the need to reexamine section 8’s exemptions to reporting requirements and the definition of “processor.”

Both Republican and Democratic members emphasized the importance of sending TSCA modernization legislation to the President this year. Committee Ranking Member Henry Waxman (D-CA) offered to work with Rep. Shimkus, whose office has reportedly been developing TSCA reform legislation without input from any Democratic members. Rep. Waxman also pointed out that the public interest community is deeply concerned with the bipartisan Senate bill known as the Chemical Safety Improvement Act (CSIA) and noted that the American Chemistry Council and Safer Chemicals, Healthy Families coalition had in 2011 identified and documented areas of agreement in a mediated discussion. Rep. Waxman and Subcommittee Ranking Member Paul Tonko (R-NY) sent a letter to the two organizations requesting this documentation in the hope that it might “provide a blueprint for legislative success.”

Hearing witnesses from the private and public sectors all voiced their support for TSCA modernization. Industry members called for a flexible, prioritized risk-based approach to screening and assessing chemicals. Public sector witnesses advocated for significant reform of TSCA’s testing and reporting requirements, including making it easier for EPA to require testing from manufacturers, especially for vulnerable populations such as children and pregnant women, and increasing transparency for data currently protectable as Confidential Business Information (CBI).

The January 9 chemical spill in West Virginia prompted witnesses and Democratic members to question the adequacy of TSCA’s data collection, pointing out the lack of basic health and safety data on the contaminant in that spill. Also on Tuesday, the Senate Subcommittee on Water and Wildlife, part of the Environment and Public Works Committee, held a hearing on the safety and security of drinking water supplies. Senator Joe Manchin (D-WV) testified at that hearing, calling for stronger chemical storage standards and more frequent safety inspections, as well as TSCA reform.

Changes for TSCA CBI claims on the horizon.

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According to the OMB’s regulatory agenda, EPA is planning to issue a proposed rule on confidential business information (CBI) claims under TSCA.  The proposed rule, which is expected to be released in spring 2014, would require companies making CBI claims to reassert and re-substantiate those claims on a periodic basis. EPA’s intent in proposing the new regulation is to increase transparency and the availability of environmental and health effects information for existing chemicals in the marketplace.

Details about the proposed rule are not yet available, but ChemicalWatch identified two critical issues that will need to be addressed: (1) whether CBI claims will be evaluated immediately and (2) whether individual chemicals must be disclosed. According to ChemicalWatch, stakeholders expect that CBI claims would stand for five years before review and renewal is required.

The future of CBI claims may be further complicated by current legislative efforts to reform TSCA. The Chemical Safety Improvement Act (CSIA), the TSCA modernization bill currently before the Senate Environment and Public Works Committee, contains complex CBI provisions which have been criticized by NGOs as overly burdensome for EPA’s resources.

It is also unclear how the new CBI rule would affect EPA’s voluntary CBI Declassification Challenge. In December, Bloomberg discussed the state of the CBI Declassification Challenge with Jim Jones, EPA’s Assistant Administrator for chemical safety and pollution prevention. Through this initiative, EPA has determined that over half of the 22,000 CBI claims the agency had thought were submitted by chemical companies were in fact never made. The inflated number was due to a newly identified problem in EPA’s tracking system. Of the remaining claims, 909 cases have been declassified, 3,349 claims have been assessed as valid, and EPA is still investigating the last 7,000 claims.

Industry optimistic on passing TSCA reform; House bill in the works.

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Although there has been no reported progress on Senate attempts to amend the Chemical Safety Improvement Act (CSIA) since last month’s update, the American Chemistry Council (ACC) weighed in last week with confidence that legislation to reform the United States’ outdated Toxic Substances Control Act (TSCA) could pass before the 2014 elections. ACC President Cal Dooley told a press briefing: “There continues to build momentum that could result in enactment of CSIA or some version thereof prior to the November elections.”

The ACC, the major trade group representing chemical and plastics companies, has supported the CSIA since its introduction in May. Despite bipartisan support and backing from industry and some environmental groups, the CSIA has been strongly criticized by key Democrats, including Senate Environment and Public Works Chairwoman Barbara Boxer (D-CA), and a large coalition of environmental and public health groups. In response, the CSIA is quietly being reworked in the Senate to achieve broader support.

The Energy and Commerce Committee has held four hearings on TSCA, but similar legislation has yet to be introduced in the House. However, Chemical Watch reported last week that industry representatives, sharing Dooley’s optimism, said that a House version of the bill is being prepared in the office of Rep. John Shimkus (R-IL). The House bill is expected to address objections raised by critics of the CSIA such as preemption of state laws and protections for especially vulnerable populations.

Chromium manufacturer fined by EPA for failure to disclose health risks.

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Last month, an Administrative Law Judge (ALJ) ruled on a relatively rare Toxic Substances Control Act (TSCA) enforcement case, ordering Elementis Chromium to pay a $2.57 million penalty for violating TSCA § 8(e), a provision of the law that required the company to disclose information about serious health risks.  The ALJ found that Elementis Chromium, one of the world’s largest manufacturers of chromium chemicals, failed to notify EPA of a study finding substantial risk of injury to human health from exposure to hexavalent chromium.

The November 12, 2013 decision [PDF] is the latest development in an enforcement action that EPA initiated in 2010. At issue in the case was an industry-backed study documenting health impacts – including increased cancer risks – on workers in chromium processing plants: EPA contended that the study filled a “data gap” in the literature, while Elementis argued, among other defenses, that EPA was already adequately informed of the information. However, the ALJ interpreted “information” broadly, following EPA guidance, in concluding that the study in question presented new substantial risk information about occupational hexavalent chromium exposure. Chief ALJ Susan Biro also thoroughly discussed and ultimately rejected Elementis’ contention that the study fell under an exception to TSCA § 8(e) as merely “corroborative of well-established adverse effects.”

The decision is also notable for its discussion interpreting the EPA’s penalty policy on “attitude,” a sub-factor of “culpability.” ALJ Biro increased the penalty amount by 10% for attitude, citing Elementis’ “bad faith” and attempts to influence the Occupational Safety and Health Administration’s exposure limits for chromium while keeping the study information in its “back pocket.” The decision concluded: “Over time, …the frontier in risk assessment is always going to be studying lower and lower exposures…. This decision takes into account that Congress intended to place the onus for understanding that frontier on the industries whose workers may be at risk.”

The decision becomes final 45 days after its issuance unless Elementis chooses to appeal to the Environmental Appeals Board.