KMK Law Real Estate Blog

Introduction
On June 22, 2016, President Obama signed into law reforms to the federal Toxic Substances Control Act (TSCA), referred to as the “Frank R. Lautenberg Chemical Safety for the 21^st Century Act” (Act).  The Act is the first substantive reform to TSCA in about 40 years and  revises the process and requirements for evaluating regulatory control of a chemical and enhances public safety by increasing EPA scrutiny on existing and new chemicals being used in commerce.  The Act was approved by large majorities in the House and Senate and had the support of the chemical industry, business interests, environmental and health groups, etc.  The Act will affect what chemicals are used in commerce based on the potential for unreasonable risks to human health or the environment.

Background
TSCA was enacted in 1976 by the U.S. Congress to regulate the manufacture and sale of chemicals.  TSCA regulates the introduction of new chemicals before they enter the market, regulates existing chemicals that pose an unreasonable risk to health or the environment, and regulates the distribution and use of these chemicals. 

TSCA prohibits the manufacture or importation of chemicals which are not on the “TSCA Inventory of Chemical Substances” (TSCA Inventory), unless subject to an exemption.  Chemicals on the TSCA Inventory are “existing chemicals,” and those not listed are “new chemicals.”  The original TSCA Inventory included about 62,000 chemical substances that were manufactured or imported into the U.S. prior to 1979 — all of these chemicals were grandfathered onto the TSCA Inventory and allowed to remain on the market without assessing toxic impacts or safety.  Since the enactment of TSCA, the TSCA Inventory has grown to approximately 85,000 chemicals.

The United States Environmental Protection Agency (EPA) has only required about 200 of these chemicals to be tested.  As examples, TSCA has been used to regulate the manufacture, processing, distribution, use and disposal of PCBs, lead, mercury, radon, and chlorofluorocarbons.  While EPA is authorized to test the chemicals, it has difficulty obtaining data from chemical manufacturers to assess chemical risks and the testing is too costly for EPA to undertake.  Only several chemicals (PCBs, CFCs, dioxin, hexavalent chromium) have been restricted under TSCA in its 40 year history.  EPA’s efforts to ban the manufacture and sale of asbestos were unsuccessful under TSCA despite the known adverse health effects caused by asbestos.

Generally, under TSCA, chemical manufacturers are required to submit a pre-manufacturing notification to the EPA prior to manufacture or importation of a new chemical into commerce.  (Food additives, cosmetics, tobacco, and pesticides are regulated under other federal statutes and are exempt under TSCA.)  EPA reviews the new chemical notifications, and if it finds an “unreasonable risk to human health or the environment,” it may regulate the chemical by limiting its use and production or banning it.  EPA was required to undertake testing within 90 days of receipt of a pre-manufacturing notice, otherwise manufacture, importation or use of the chemical could proceed.  EPA rarely had the time to complete the risk evaluation and most new chemicals entered the market without evaluation.

Summary
The Act now requires EPA to make an affirmative pre-market determination that a new chemical is not likely to present an “unreasonable risk of injury to health or the environment under the conditions of use” before the chemical can be manufactured, imported or used in the U.S.

The new law increases EPA’s authority over the manufacture, distribution and use of chemicals in the U.S.  The Act:

• requires EPA to evaluate any existing chemicals to determine if they pose an “unreasonable risk of injury to health or the environment under the conditions of use,” and for new chemicals, an affirmative pre-market determination is required
• excludes cost considerations or other non-risk factors in undertaking chemical evaluations
• requires EPA to consider potentially highly exposed or susceptible populations (i.e., children, pregnant women, elderly) in evaluating chemicals
• requires EPA to designate existing chemicals on the TSCA Inventory as either “active” or “inactive”
• requires EPA to designate active chemicals as high- or low-priority chemicals and conduct risk evaluations on the high priority chemicals
• requires EPA to complete risk evaluations of high-priority chemicals within set time frames
• allows chemical manufacturers to ask EPA to evaluate existing chemicals and pay for the testing — manufacturers pay 50% of evaluation cost for chemicals on TSCA Work Plan and 100% of cost of chemicals not on TSCA Work Plan
• gives EPA authority to issue administrative orders to require chemical testing or risk evaluation
• promotes use of non-animal testing methodologies
• when unreasonable chemical risks are identified, EPA is required to act within 2 years of completing risk evaluation, or within up to 2 additional years
• risk management action by EPA, including bans and phase outs, are required to begin quickly but no later than 5 years after the final regulation is adopted
• preempts state regulation under certain circumstances
• puts limits on confidential business claims
• allows EPA to charge higher fees for chemical reviews
• allows EPA to issue exemptions to a regulatory action required under the Act under certain circumstances
• creates a fast track use and exposure assessment process to address persistent, bioaccumulative and toxic chemicals on the TSCA Work Plan

The Act also requires EPA to develop and issue various procedural rules to prioritize chemical reviews within one year (i.e., June 22, 2017) and to develop and adopt various polices, procedures and guidance within 2 years (i.e., June 22, 2018).

It will be important for the industry to monitor EPA’s rule-makings under the Act as to how EPA determines what are active and inactive chemicals on the TSCA Inventory, whether active chemicals are high- or low-priority chemicals, what high-priority chemicals will be on the TSCA Work Plan, and how EPA’s adoption of a risk management rule will affect the evaluation and use of high-priority chemicals.

Conclusions
The Act amends and updates TSCA to ensure the safety of public health and the environment from chemicals in the market by requiring EPA to evaluate high-priority chemicals based on a risk-based safety standard within clear deadlines.  The Act provides EPA with the authority to require additional chemical information and testing by chemical manufacturers before allowing a new chemical or a significant new use of an existing chemical to be allowed in the market.  The Act provides EPA with a funding mechanism to ensure it is able to undertake the chemical evaluations.  The Act has the support of the chemical industry and various interest groups because it ensures dangerous new chemicals do not enter the market or are restricted in their use, forces the evaluation of existing high-priority chemicals and  limits the ability of states to enact laws that vary from one jurisdiction to another.