02 Oct 2018

Changes in the adjustments of fees will begin fiscal year 2019 (effective October 1, 2018 through September 30, 2019)

On August 31, the US EPA submitted its final rule to cover fee administration under the Toxic Substances Control Act (TSCA) as amended by the Frank R. Lautenberg Chemical Safety for the 21st Century Act (LCSA), to the Office of Management and Budget (OMB) for review and approval. This submission started the standard inter-agency review process for significant rules, which must take place before the final version is published in the Federal Register.

The rule submitted to the OMB was originally released on February 7, 2018 and published at 83 Fed. Reg. 8212 (Feb. 26, 2018). It contained a schedule enabling the agency to collect approximately $20 million in fees from industry each year. This figure represents 25% of the estimated $80.2 million annual cost to run its chemical review activities. The rule removes the $100 cap on fees collected from small businesses and the $2,500 cap on fees from other manufacturers, importers and processors. The new fees are established for work under TSCA sections 4, 5 and/or 6. Although many comments focus on Section 5, manufacturers, importers, and processors will also be affected if they:

  • are required by test rule, test order or enforceable consent agreement to submit information (TSCA section 4);
  • submit notification of or information related to intent to manufacture a new chemical or significant new use of a chemical (TSCA section 5); and/or
  • manufacture or process a chemical substance that is subject to a risk evaluation, including a risk evaluation conducted at the request of a manufacturer (TSCA section 6(b)).

For Section 5, the proposed rule calls for an increase from $2,500 to $16,000 for Pre-Manufacturer Notices (PMN) and consolidated PMNs for new chemical substances, Significant New Use Notices (SNUN), and Microbial Commercial Activity Notices (MCAN) and from $0 to $4,700 for exemptions. The EPA is required to adjust the fees beginning fiscal year 2019 (October 1, 2018 through September 30, 2019) and adjust every three years to reflect inflation.

While these fees do not represent the highest fees among global chemicals regulatory management programs, they do represent a significant change. The EPA rule does represent a simplification form other global jurisdictions in that there are no graduated fees for claims of Confidential Business Information (CBI) as in the European Union.

From industry groups that suggest the fees will threaten innovation, to Non-Government Organizations (NGOs) implying that the EPA underestimates chemical review costs, there is much discussion as to the effect of the increased fees. There is also discussion concerning small business definition. The EPA stated that small business definition change could shift the TSCA fees schedule. In addition to the possible shift in the other fees, it is imperative that the criteria of what constitutes a small business be published, since a reduced fee structure for small businesses may help foster innovation.  Publishing the criteria of who will be included in the small business sector is critical.  If a business does meet the criteria, their fees will increase only from $100 to $2,800 for notices and $0 to $940 for exemption petitions.

What can you do?

Manufacturers and importers should carefully evaluate if an exemption can be applied. They should investigate if a consolidation can be applied if they are considering multiple similar substances. They should evaluate if the new small business definition applies to them.

How can we help?

Intertek is closely monitoring the developments. Intertek discussed and provided input into the Frequently Asked Questions being developed by the EPA and will be watching for the small business definition. Intertek will be communicating important information as we move through this new implementation. Intertek offers a range of services to help you navigate the new TSCA; including filing dossiers, developing substantiation for consolidation, evaluating if exemptions may apply; working with your supply chain; interpreting risk evaluation data; and interpreting the results of EPA's risk evaluation.

If you have questions about how this, or any area of the reformed TSCA may affect your business, please contact us.

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