On November 16, 2022, the U.S. Environmental Protection Agency (EPA) issued a supplemental notice of proposed rulemaking to modify the fees collected for a variety of actions under the Toxic Substances Control Act (TSCA) (15 U.S.C. § 2601 et seq.) 87 Fed. Reg. 68,647 (Nov. 16, 2022). The Frank R. Lautenberg Chemical Safety for the 21^st Century Act, enacted in 2016, directed EPA to collect fees to offset as much as 25% of TSCA’s implementation costs. EPA’s estimate of those annual costs has risen from $87.5 million in 2021 to roughly $182 million.

EPA proposes significant fee increases for new chemical applications under TSCA section 5, more than doubling fees for a Premanufacture Notice (PMN) or Significant New Use Notice (SNUN), from $19,020 to $45,000. These proposed increases, if adopted, likely will dissuade companies from submitting PMNs for chemicals other than those for which commercialization would appear to be a virtual certainty, and likely will prompt submitters to invest additional resources toward compiling more robust PMN submissions. The Agency also proposes substantial fee increases for companies seeking various exemptions from the section 5 new chemical review process, increasing the application fee from $5,590 to $13,200 for test marketing exemptions (TME), low volume exemptions (LVE), and low release and exposure exemptions (LoREX).

The fee split among manufacturers of chemicals selected for an EPA-initiated risk evaluation under TSCA section 6 also would increase from $2.56 million to $5.081 million per chemical, to be paid in two installments. For a manufacturer-requested risk evaluation of a chemical listed in the TSCA Work Plan, the fee will increase to two payments of $1.497 million, with a final invoice capturing the remainder of payment needed to recover 50% of the actual costs (according to the FR Notice, EPA now expects that it would need to collect fees of ~$4.4 million for a Work Plan chemical and ~$8.98 million for a non-Work Plan chemical that is the subject of a manufacturer-requested risk evaluation). These proposed increases, if adopted, may deter manufacturers from requesting risk evaluations. On the other hand, EPA has withdrawn its 2021 proposal to collect fees for Bona Fide Notices, Notices of Commencement (NOC), and test order amendments.

The proposed changes from current inflation-adjusted fees are shown below.

¹ Approximate – fee must be paid in two initial installments, with a third installment on completion of the risk evaluation to bring the total to 50% of EPA’s actual costs.

² Approximate – fee must be paid in two initial installments, with a third installment on completion of the risk evaluation to bring the total to 100% of EPA’s actual costs.

EPA proposes an amended fee exemption for manufacturers of substances subject to an EPA-initiated risk evaluation. EPA proposed a fee exemption for manufacturers of “byproducts” and five other categories in the 2021 fee rule proposal 86 Fed. Reg. 1,890 (Jan. 11, 2021). The amended proposal would narrow the “byproduct” exemption to “producers of a chemical substance as a byproduct that is not later used for commercial purposes or distributed for commercial use,” which is intended to allow EPA to collect fees from producers of byproduct chemicals that are sold or used for commercial purposes.

EPA proposes a new manner to allocate fees for EPA-initiated risk evaluations among responsible manufacturers. The proposed algorithm reflects a mix of per capita and semi-volumetric approaches, which, in the end, arbitrarily allocates more than 80% of the total fee to the manufacturers representing the top 20^th percentile of manufacturers by volume. This arbitrary cutoff could result in highly disproportionate fee responsibilities between companies manufacturing very similar volumes of the affected chemical.

Other proposed changes include a 20% refund of the user fee for new chemical submissions that are withdrawn after 10 business days from the beginning of the applicable review period; amending the self-identification and reporting requirements for EPA-initiated risk evaluation and test rule fees; expanding the fee requirements to non-manufacturers required to submit information for test orders; and extending the timeframe for test order and test rule payments.

EPA will hold a public webinar on Tuesday, December 6, 2022, from 1-2:30 p.m. EST to provide an overview of its revised rulemaking proposal and to provide the public an opportunity to comment on the proposed changes. Register for the webinar here. EPA will accept written comments on the supplemental proposed rule until January 17, 2023, via docket EPA-HQ-OPPT-2020-0493 at www.regulations.gov.