The final rules establish procedures to identify high-risk chemicals, conduct risk evaluations, and reset the TSCA Inventory.

The US Environmental Protection Agency (EPA) recently issued three final framework rules implementing the Frank R. Lautenberg Chemical Safety for the 21st Century Act, which was enacted in June 2016 and reformed the Toxic Substances Control Act (TSCA). These rules include (1) the TSCA Inventory Notification (Active-Inactive) Rule (the “Inventory Rule”); (2) Procedures for Prioritization of Chemicals for Risk Evaluation Under TSCA (the “Prioritization Rule”); and (3) Procedures for Chemical Risk Evaluation Under the Amended TSCA (the “Risk Evaluation Rule”) (collectively the “Final Framework Rules”).

These three rules, which establish the procedures by which EPA will identify and regulate high-risk chemicals, are of vital importance to manufacturers, processors, and the public at large. This LawFlash will discuss the highlights of these rules, identify key differences between the draft and final rules, and forecast likely next steps for the EPA.

Inventory Rule

Issued on June 22 (but not yet published in the Federal Register), the Inventory Rule establishes the procedures by which EPA will “reset” the TSCA Inventory to identify chemical substances that are “active” and “inactive” in commerce. The rule relies on two types of industry reporting to establish which chemicals should be designated as active. First, through retrospective reporting, manufacturers (including importers) that manufactured or imported a chemical substance for a nonexempt commercial purpose during the 10-year period ending June 21, 2016 may notify EPA that the chemical should be designated as active. Manufacturers must report to EPA no later than 180 days after the final rule is published in the Federal Register. Approximately 60 days after the close of this 180-day period, EPA will issue a draft version of the revised Inventory. Following the issuance of this draft, processors will have an additional 180 days to identify any chemical substances that manufacturers failed to designate as active.

During this retrospective reporting period, companies must use a Notice of Activity (NOA) Form A to electronically submit this information. Any chemical not designated as active will receive an inactive designation. Furthermore, any company reporting a confidential substance that wishes to maintain the substance’s Confidential Business Information (CBI) designation must indicate so on the NOA Form A. If a company does not do so, the substance will be listed as active on the public inventory. Because TSCA, as amended (“new TSCA”), requires EPA to review CBI claims within five years after the Inventory is reset, companies seeking to maintain CBI designations during the retrospective period are not required to substantiate their claims when submitting the NOA Form A.

Once the final reset inventory is published, manufacturers and processors may designate chemicals as active through a second mechanism—prospective reporting. This mechanism allows companies to notify EPA that they intend to begin manufacturing/importing/processing an inactive chemical, so that EPA can change the designation from inactive to active. Such notice should be submitted using an NOA Form B and must be given no less than 90 days before the anticipated date of manufacturing/importing/processing. If a company wishes to assert a CBI claim through an NOA Form B, it must substantiate its claim within 30 days or else the substance will be listed on the Inventory’s public portion.

The Inventory Rule does provide a number of exemptions from the reporting requirement, including reporting based on the low volume and polymer exemptions, for naturally occurring substances and for substances added to the Inventory since June 22, 2016. Substances that were reported in response to the 2012 or 2016 Chemical Data Reporting rule, which appear on the interim list of active substances described in new TSCA § 8(b)(6), will be automatically designated as active. Finally, a manufacturer that has evidence documenting EPA’s receipt of an NOA Form A is exempt from reporting. This exemption represents a compromise between EPA and industry. During the comment period on EPA’s proposed Inventory Rule, industry groups suggested that EPA maintain a “rolling” active list that would allow for “one-and-done” reporting, whereby one company’s submission of an NOA Form A for a certain substance would give notice of the active designation. The thought behind this approach was that such a dynamic list would reduce duplicative reporting, cut costs, and ease compliance. EPA ultimately rejected this approach as overly burdensome and instead established this exemption in a nod to industry concerns about cost. This exemption, however, is not without its perils, as manufacturers relying on this exemption bear the risk that the other manufacturer will later withdraw its notice, leading to the substance being designated as inactive.

The final rule contains an important change from the draft rule. Under the draft Inventory Rule, companies making an active designation would have been required to include the activity type and dates of activity. In the final rule, however, EPA removed the requirement to include activity type and dates of activity, acknowledging that doing so was burdensome on industry and that many companies may lack records for historical uses.

Prioritization Rule

Issued on June 22 and published in the Federal Register on July 20, the final Prioritization Rule establishes the risk-based screening process EPA will use to determine which chemicals are deemed “high priority” (for which a risk evaluation will be conducted) versus “low priority” (for which no risk evaluation is needed). This final rule sets forth a three-step process that EPA will follow for prioritizing chemicals:

1. Initiation

2. Proposed designation

3. Final designation

Once it is formally initiated, TSCA mandates that this process last between nine to twelve months.

The “initiation” stage begins when EPA announces in the Federal Register that a substance is a candidate for prioritization. The public will then have 90 days to submit relevant information about the substance, and EPA can extend this comment period for up to an additional three months in order to receive additional information. After this public comment period, EPA will screen the substance against several criteria outlined in TSCA:

• The chemical’s hazard and exposure potential

• The chemical’s persistence and bioaccumulation

• Potentially exposed or susceptible subpopulations

• Storage of the chemical near significant sources of drinking water

• The chemical’s conditions of use or significant changes in conditions of use

• The chemical’s production volume or significant changes in production volume

• Other risk-based criteria that EPA determines to be relevant

Based on the results of this screening, EPA will issue a “proposed designation”—either high or low priority. The public will have an additional 90 days to comment on the proposed designation, after which EPA will issue its “final designation,” announced via the Federal Register.

A major change from the draft rule is that the final Prioritization Rule does not include an initial “pre-prioritization” step that was to occur before “initiation.” The draft rule proposed that, before initiating the screening process, EPA apply the preferences of TSCA § 6(b)(2) to narrow the pool of potential candidates and identify a substance or category of substances to screen against the criteria in § 6(b)(1)(A). In response to stakeholder comments, EPA deleted this step from the final rule and instead indicated that it will be taking further comments regarding how EPA will identify candidates for prioritization.

The most contentious aspect of the final Prioritization Rule will likely prove to be its approach to the concept of “conditions of use,” which TSCA and the rule define as the circumstances “under which a chemical substance is intended, known, or reasonably foreseen to be manufactured, processed, distributed in commerce, used, or disposed of.” The Prioritization Rule clarifies that early in the prioritization process, EPA will identify the “circumstances” that constitute the conditions of use for each chemical and determine which conditions of use would be considered in the prioritization process. When a high or low priority designation is made, EPA also will identify which conditions of use were the central bases for its priority designation. This determination will then be subject to public comment. In effect, this will lead to EPA considering these “circumstances” on a case-by-case basis, rather than considering all potential uses.

The controversy arises because certain stakeholders, particularly environmentalists, contend that TSCA requires EPA to consider all potential uses of a chemical and that the final rule is crafted to favor industry over the public. Specifically, they take issue with EPA’s determination not to evaluate intentional misuses, associated disposal, or legacy disposal of a substance. If EPA is not considering any of these uses of a substance, it will identify such uses in its draft scoping document. Now that the Prioritization Rule has been published in the Federal Register, a number of groups are considering filing legal challenges to this provision.

Risk Evaluation Rule

Once a chemical has been designated as high priority, EPA will follow the procedures in the Risk Evaluation Rule to determine if the chemical presents an unreasonable risk of injury to health or the environment. TSCA requires such evaluations to be completed within three years, with the possibility for a six-month extension. Issued on June 22 and published in the Federal Register on July 20, the Risk Evaluation Rule outlines the following aspects:

• Scope of evaluation

• Hazard assessment

• Exposure assessment

• Risk characterization

• Peer review

• Final risk determination

Within six months of initiating the risk evaluation, EPA must define the scope of the evaluation. The scoping document for each chemical will identify the conditions of use, potentially exposed or susceptible populations EPA expects to consider, ecological receptors, and hazards to human health and the environment that EPA plans to evaluate. The scope also will outline a plan for peer review of EPA’s risk characterization. Once the scoping document identifies this information, EPA will conduct a hazard assessment to identify the types of adverse human health or environmental effects that can be caused by exposure to the chemical. EPA’s exposure assessment will take into account the likely duration, intensity, frequency, and number of exposures under each condition of use. This assessment will also examine the size, nature, and types of populations potentially exposed to the substance.

Once the hazard and exposure assessments are complete, the risk characterization will integrate them into quantitative and/or qualitative estimates of risk for the identified populations and conditions of use identified in the scope. Importantly, new TSCA prohibits EPA from considering costs or other non-risk factors. Once the risk characterization is complete, it will be subject to peer review before EPA makes its final risk determination. Should EPA determine that a chemical presents an unreasonable risk to human health or the environment, it will promulgate a rule to manage the risk of the chemical so that it no longer presents the unreasonable risk.

In addition to applying to substances designated as high priority, the procedures in the Risk Evaluation Rule also will apply to manufacturer-requested risk evaluations. This procedure, available upon payment of its associated fee, allows manufacturers to request an evaluation based on only the conditions of use that are of interest to the manufacturer. Manufacturers may benefit from this procedure because EPA has indicated that it will give preference to requests where the manufacturer can produce evidence that restrictions imposed by at least one state have the potential to significantly impact interstate commerce, health, or the environment. All other requests will be taken on a first-come, first-served basis.

Judicial Review

Stakeholders dissatisfied with an EPA determination may only challenge final agency actions. A low priority designation is a final agency action that can be appealed. However, if EPA determines that a chemical is high priority, this determination is not a final action, as a risk evaluation will then be conducted. If the risk evaluation determines that a chemical does not pose an unreasonable risk of injury to human health or the environment under its conditions of use, this determination is a final, appealable action. However, if a risk evaluation determines that a chemical does pose an unreasonable risk, this determination still is not a final action. Following such a determination, EPA will issue a rule to manage the risk of the chemical so that it no longer presents the unreasonable risk. This risk management rule will constitute the final action subject to judicial review.

Implications of the Final Rules and Future Steps

Although the Inventory Rule has yet to be published in the Federal Register, EPA’s July 20 publication of the Prioritization and Risk Evaluation Rules means that they will become effective on September 18, 2017. Going forward, we can expect EPA to use the Risk Evaluation Rule procedures to conduct evaluations for the first 10 chemicals it selected for risk evaluations from its Work Plan chemicals list in November 2016:

1. Asbestos

2. 1-bromopropane

3. Carbon tetrachloride

4. 1, 4 dioxane

5. Cyclic aliphatic bromide cluster (HBCD)

6. Methylene chloride

7. N-methylpyrolidone

8. Perchloroethylene

9. Pigment violet 29

10. Trichloroethylene

EPA recently issued prepublication versions of the scoping documents for these chemicals. New TSCA mandates that, by December 2019, EPA must designate at least 20 substances as both high and low priority. The new statute also mandates that at least 20 substances be undergoing risk evaluations at any time.

For these reasons, now that the Final Framework Rules are in place, we can expect EPA soon to initiate screening processes to meet TSCA’s deadlines.