The New Toxic Substances Control Act (TSCA) – How we got here, the highlights of the new law, and how it impacts companies and their products – Published in Westlaw Journal Environmental

On June 7, 2016, Congress passed the Frank R. Lautenberg Chemical Safety for the 21st Century Act.  This rare piece of bipartisan legislation – in an election year no less – was signed by President Obama on June 22, 2016.  The law updates the 1976 Toxic Substances Control Act (TCSA).  Numerous previous Congresses have tried and failed to do so.  The initial law was intended to be a comprehensive legislative scheme for the Environmental Protection Agency to protect citizens by regulating chemicals nationwide (excluding pesticides, cosmetics and drugs).  It was passed in an era of expansive environmental legislation that included the Clean Water Act and the Clean Air Act.

“Old” TSCA
The law, however, did not live up to its expectations and was ineffective at achieving its goals for two main reasons.  The first was that it grandfathered in approximately 62,000 chemicals then in existence in the marketplace, effectively making them off limits for EPA regulation.  Second, the initial TSCA law required EPA to prove a chemical in question was harmful rather than require the company seeking to use the chemical to establish safety.  This unique system resulted in less than 300 chemicals being tested in law’s 39 years, and saw only five chemicals established as harmful under this standard.  In fact, EPA tried – and failed after several years and unsuccessful litigation – to establish asbestos as harmful under the old TSCA standard.

What set the stage for “new” TSCA?
Major environmental law changes over the last three decades at both the state and international level starting reshaping the landscape and finally made the time ripe for TSCA reform.  Several states enacted chemical law regulations of their own in the absence of Congressional action.  The 1986 toxic right-to-know law, California’s Proposition 65, is certainly the forerunner.  Chemicals in children’s products also became a driver for change following numerous instances of lead found in toys and jewelry imported from China in the 1990s and 2000s.  States lead by Washington State and Maine were early trailblazers in enacted chemical reporting and compliance regulations centered on children’s products.  At the federal level, Congress enacted, and President George W. Bush signed, the Consumer Product Safety Improvement Act in 2008.  This law established various limits in lead and other hard metals in children’s products, as well as required new certifications for compliance by suppliers.  Finally, internationally, REACH in the European Union, K-REACH in Korea, and Canadian regulations, have each instituted new chemical management paradigms for companies doing business there and worldwide.

So, against this backdrop the United States Congress was hearing from both environmental groups to do more to protect citizens, and particularly vulnerable populations, on the one hand, and from the regulated community and big business on the other to do something about the increasing patchwork of different state regulations they were required to monitor and comply with.  In fact, there are now over twenty states that have some form of chemical law regulations.  California has, in addition to Proposition 65, its Safer Consumer Products law passed in 2008.  It bestows broad authority on the state to regulate certain chemicals and designated “priority products” sold in the state by any company and allows, as one option, the requirement that a manufacturer conduct an alternatives analyses that can result in, ultimately, the designing out of the product the subject chemical at potentially enormous expense.  Hence, one byproduct of new TSCA will be the end of new state laws and regulations where EPA takes the field and regulates or makes a determination of no risk.

What does “new” TSCA do?
The big shift with new TSCA is that it gives the EPA new authority to request safety testing information from chemical manufacturers before chemicals go onto the market.  It will also require the EPA to test all chemicals already on the market, beginning with those considered a “high priority” because of their potential hazard.

1. Safety reviews of all chemicals already in existence.  The biggest change in the revised TSCA is that it mandates safety reviews of all chemicals already in use.  This means that EPA must create a plan for reviewing all of the grandfathered chemicals that got a “pass” when old TSCA was created.  Many of these are no longer in use, however, so EPA will first focus on those that are still being used.  The law requires EPA “prioritize” which chemicals it will conduct its reviews on.  Where chemicals are deemed to pose an unreasonable risk because of a potential hazard and exposure, they are deemed “high priority.”  The agency is required to prioritize those chemicals that are persistent and bioaccumulative and that are known carcinogens and highly toxic.  EPA will be posting an implementation plan on how it intends to proceed and will be identifying which chemicals are high priority.

2. Replaces the cost-benefit analysis with a health-only one. This change could be both a game changer and expensive for the regulated community.  Under old TSCA, there was a “least burdensome” requirement imposed on EPA when assessing chemicals and that included factoring in a cost-benefit analysis.  That made it very difficult for EPA to regulate out some chemicals.  Now, EPA is explicitly precluded from considering cost or other nonrisk factors when making its determination of a chemical’s safety and new TSCA specifically requires EPA to protect vulnerable populations, including children and pregnant women.

3. EPA must make an affirmative determination for all new chemicals (or significant new use).  Where a new chemical is proposed for the market, called a premanufacture notice, or an existing chemical is proposed for a significant new use, new TSCA requires that EPA make one of three determinations:

(a) that it presents an unreasonable risk;

(b) that available information is insufficient to permit a reasoned evaluation of the health and environmental effects; OR in the absence of sufficient information, the manufacture, processing, distribution in commerce, use or disposal of such substance, or any combination of such activities may present an unreasonable risk of injury to health or environment; OR the substance is produced or will be produced in substantial quantities, and such substance either enters or may reasonably be anticipated to enter the environment in substantial quantities or there is or may be significant or substantial human exposure to the substance; or

(c) that the substance is not likely to present an unreasonable risk.

Under the first two situations, EPA must regulate and this requires rule making. Rulemaking is subject to judicial review.

On July 22, 2016, EPA posted on its website the first four determinations for premanufacture notices (PMN), meaning its first four determinations of new chemicals under the law have been issued.  Each of these four chemicals – three lubricants and one finishing agent – were determined to satisfy the third prong, “not likely to present an unreasonable risk,” under the law.  In each case, EPA found the chemicals posed low potential for health hazards and low potential for environmental hazards (“low/low”).

4. Preemption. This is perhaps the most significant issue with the new TSCA law given, as above, so many states have already jumped into the fray with their own chemical compliance laws over the last several years.  New TSCA creates several exemptions and exceptions for existing chemical regulations and laws, but also explicitly preempts future laws and regulations under certain circumstances.  In other words, it does appear Congress is attempting to close the door to further efforts by the states – if they attempt to regulate in areas the EPA has already made a determination on for a specific chemical, or they are considering making one on. New TSCA’s preemption provision grandfathers in state laws that are in effect as of August 31, 2003, and this language was specifically crafted to include California’s Proposition 65.

TSCA also grandfathers in “state actions taken before” April 22, 2016. What the preemption language in the new TSCA law means, however, is that, after final EPA action, states will be barred from making or enforcing state measures that are the same as TCSA provisions, and states cannot restrict or ban chemicals if the EPA, using its final rulemaking authority, has determined that the chemicals do not present an unreasonable risk.  This would include several state green chemistry laws and regulations that have been finalized by this date, including California’s far-reaching Safer Consumer Products Regulations enacted in 2008.  For example, the California agency overseeing this program is currently examining for future regulation as part of its “initial priority products” program paint strippers using methylene chloride.  Now that the TSCA legislation with its preemption provision is passed and the California regulations are not final, if EPA takes up methyl chloride in the future and regulates, or makes a determination of no significant risk, that determination at the federal level would seem to preempt California’s later making a regulation to the contrary.  New TSCA does allow for states to apply for waivers in such instances, but that is obviously an unknown, particularly given the current political climate in Washington.

What does it all mean?  

• EPA’s rulemaking is subject to judicial review, so we can expect it to be tested in the future, perhaps by preempted states seeking to regulate as well as the regulated community once EPA issues its rules.
• To the extent EPA finds existing chemicals present unreasonable risk, they will be regulated out of production and this could mean disruption and cost to business.
• The regulated community can expect the EPA to demand more testing of chemicals given the new law gives it broader authority to do so.  This in turn can impact suppliers and a company’s bottom line and image.  To the extent practicable, companies can and should seize the initiative and get ahead of the curve by meeting with suppliers and discussing the chemical makeup of products, and their available testing and safety profiles.
• State laws and regulations that pre-date new TSCA will continue to be on the books, meaning companies must continue to be vigilant and keep an eye on chemical law compliance regulations and reporting rules in numerous jurisdictions, in addition to understanding the new federal rules.

Download the article published in Westlaw Journal Environmental – Expert Analysis (page 3)