On September 27, 2018, EPA (the Company) launched a pre-publication copy of the ultimate rule establishing “user fees” for the administration of the Toxic Substances Control Act (TSCA) (15 U.S.C. § 2601 et seq.). This rulemaking is likely one of the 4 “framework” guidelines promulgated by EPA as a part of the implementation of the Frank R. Lautenberg Chemical Security for the 21st Century Act (LCSA). The rule turned efficient October 1, 2018.
Objective of User Charges
Part 26(b) of TSCA authorizes EPA to gather charges for sure TSCA actions from chemical producers, importers, and processors, and establishes provisions for auditing, payment changes and refunds, and issues for charge allocation and small companies. The aim of such charges is to defray a portion of the prices related to:
The Company’s administration of sections four, 5, and 6;
The Company’s assortment, processing, evaluation, and safety of confidential enterprise info (CBI) claims underneath part 14.
These charges defray each intramural (EPA employees) and extramural prices (i.e., contractor prices). Within the rule, EPA established consumer charges for producers and importers that:
Submit info to EPA underneath part four (testing);
Submit a discover, exemption software, or different info beneath part 5 (new chemical compounds);
Manufacture or import a chemical topic to a danger analysis or request a danger analysis beneath part 6(b).
The rule permits EPA to gather charges from processors in restricted situations, comparable to when a processor submits a big new use discover (SNUN), when a fee-triggering part four exercise is tied to a SNUN submission by a processor, or when a processor joins a consortium.
As EPA indicated within the proposed rule, EPA expects to gather roughly $20 million in common annual charges (excluding charges for manufacturer-requested danger analysis). For manufacturer-initiated danger evaluations, EPA expects to gather $1.three million yearly for chemical compounds within the TSCA Work Plan, and $three.9 million for chemical compounds not included within the Work Plan.
Abstract of Charges
Within the remaining rule, aside from manufacturer-initiated danger evaluations, EPA established the identical payment quantities as initially proposed:
FEE AMOUNT (NOT APPLICABLE TO SMALL BUSINESSES)
FEE AMOUNT (SMALL BUSINESSES)
Timing of Funds
TSCA Part four
Inside 120 days of issuance of check order.
Inside 120 days of publication of ultimate check rule.
Enforceable consent settlement (ECA)
Inside 120 days of signing ECA.
TSCA Part 5
PMN and consolidated PMN
MCAN and consolidated MCAN
$four,700 (charge for every exemption request and modifications to earlier exemption requests)
Tier II exemption
TSCA Part 6
EPA-initiated danger analysis
Inside 120 days of publishing the ultimate scope of danger analysis
Producer-initiated danger analysis on a chemical included within the TSCA Work Plan
Preliminary cost of $1.25M, with remaining bill to get well 50% of precise prices
Preliminary cost of $1.25M, with last bill to get well $50% of precise prices
Preliminary payment- inside 30 days of EPA granting request, adopted by a last bill on the finish of the danger analysis.
Producer-initiated danger analysis on a chemical not included within the TSCA Work Plan
Preliminary cost of $2.5M, with ultimate bill to get well 100% of precise prices
Preliminary cost of $2.5M, with remaining bill to recuperate 100% of precise prices
Preliminary payment- inside 30 days of EPA granting request, adopted by a ultimate bill on the finish of the danger analysis.
* EPA will waive the TME charge for submissions from corporations which have graduated from EPA’s Sustainable Futures program.
*EPA is imposing charges for all exemption submissions besides Tier 1 exemption submissions and polymer exemption reviews. There’s additionally no charge for bona fide submissions.
EPA had proposed a charge of $1.3M for a manufacturer-requested danger analysis of a chemical included within the Work Plan, and $2.6M for a manufacturer-requested danger analysis of a chemical not included within the Work Plan. Nevertheless, within the remaining rule, EPA determined to construction the funds in order that the producer makes an preliminary cost ($1.25M for Work Plan Chemical compounds and $2.5M for non-Work Plan chemical compounds) after which EPA submits an bill to the producer as soon as the danger analysis is accomplished to defray the prices (50% of precise prices for Work Plan chemical compounds and 100% of the particular prices for non-Work Plan chemical compounds).
For submissions underneath part 5, EPA retained its proposal to evaluate the identical charge for particular person pre-manufacture notices (PMNs) as consolidated PMNs to maintain a “practical, implementable TSCA fee structure”, and for simplicity. Nevertheless, consolidated PMNs are nonetheless restricted to as much as six chemical substances.
The Company additionally finalized its proposed provisions for refunds and said that it plans to concern full refunds for:
PMN submissions for substances which might be decided to not be “new chemical substances,”
MCAN submissions when the microorganism is decided to not be a brand new microorganism or vital new use,
SNUN submissions if the use is decided to not be a “significant new use,”
The Company’s failure to make a willpower on a discover by the top of the relevant discover evaluate interval, until the submitter unduly delayed the method (observe that a voluntary suspension merely “pauses” the evaluation interval), and
The Company’s failure to approve or deny an exemption inside the relevant evaluation interval, until the submitter unduly delayed the method. EPA clarified that “undue delay” by the submitter “might occur” if the submitter submits an amended submission or new info late within the assessment course of and that on this case, the Company won’t droop the assessment interval.
EPA will challenge partial refunds, or 75% of the payment quantity, if a TSCA part 5 submission is withdrawn through the first 10 enterprise days after the start of the relevant evaluate interval.
Figuring out Producers Topic to Charges for Check Guidelines and EPA-Initiated Danger Evaluations
EPA finalized a number of provisions from the proposed rule, together with the methodology for calculating charges (aside from manufacturer-requested danger evaluations), program value estimates, payment classes, cost by means of consortia, small enterprise provisions, and the supply for refunds. Nevertheless, EPA additionally made some modifications from the proposed rule. One of many main modifications is that EPA established a brand new course of for figuring out producers topic to payment guidelines beneath TSCA part four (check guidelines), in addition to EPA-initiated danger evaluations underneath part 6. EPA initially proposed to depend on Chemical Knowledge Reporting (CDR) info and self-identification from producers not topic to CDR reporting. Nevertheless, within the ultimate Fee Rule, EPA establishes a brand new course of for figuring out the universe of producers, which incorporates:
Publication of a preliminary record (based mostly on CDR reporting, info submitted underneath TSCA part 5, Toxic Launch Stock knowledge, U.S. Customs and Border Patrol knowledge, and different publicly out there sources like Panjiva);
A public remark interval to permit for self-identification and correction of errors, and/or certification of no manufacture for the subsequent 5 years; and
Publication of ultimate record defining the universe of producers obligated to pay.
If EPA receives a certification assertion that a producer has ceased manufacturing the substance in query, previous to the date the prioritization course of is initiated for the chemical, and won’t manufacture for five years into the longer term, or they haven’t manufactured the chemical within the 5 years previous publication of the preliminary record, then the producer won’t be obligated to pay the charge.
Importantly, the duty to pay for EPA-initiated danger evaluations attaches to producers and importers when EPA initiates prioritization (i.e., earlier than publication of the preliminary listing), which signifies that corporations can’t keep away from paying for a danger analysis by dropping out of the market after prioritization is underway. Slightly, corporations should stop manufacture or import earlier than prioritization begins. Thus, corporations that manufacture or import a substance that was on the TSCA Work Plan must be ready to stop manufacture and import earlier than the primary spherical of drugs are recognized for prioritization (which can be as early as December 2018), in the event that they want to keep away from charges for danger analysis.
Business Consortia and Allocation of Charges
EPA additionally offered further steerage on the allocation of charges for business consortia. The Company defined that producers topic to check orders, check guidelines, enforceable consent agreements, and EPA-initiated danger evaluations can type a consortium and work out the allocation of charges inside the consortium. Producers could have 60 days to inform EPA of their intent to type a consortium (relatively than solely 30 days as proposed) and 120 days from the triggering occasion for cost. As for the allocation of charges, EPA explains within the remaining rule that the “ideal scenario” is that a single consortium varieties and agrees on the allocation of charges, and EPA would ship a single bill to the consortium. Nevertheless, if a number of consortia type, EPA will allocate charges by:
Counting the whole variety of producers, together with the variety of producers inside any consortia.
Dividing the full charge quantity by the entire variety of producers and allocating equally on a per capita foundation to generate a base charge.
Offering all small companies which might be both (a) not related to a consortium, or (b) related to an all-small enterprise consortium with an 80% low cost from the bottom charge.
Calculating the remaining charge and variety of remaining producers by subtracting out the discounted charges and the variety of small companies recognized.
Reallocating the remaining payment throughout these remaining people and teams in equal quantities, counting every producer in a consortium as one individual.
It’s important for corporations impacted by this Fee Rule—together with producers, importers and processors—to rigorously evaluation the brand new charge necessities, as they apply to actions and submissions on or after Oct. 1, 2018.