Chemicals, EHS Administration, Regulatory Developments

Hefty TSCA Fee Hikes Proposed

The EPA in November released a notice to modify and supplement its proposed revisions to the Fees for the Administration of the Toxic Substances Control Act (TSCA) Rule. The proposed fee increases are substantial.

The TSCA Fees Rule was first promulgated in 2018. The 2016 Frank R. Lautenberg Chemical Safety for the 21stCentury Act directs the EPA to collect annual fees to offset up to 25 percent of the costs associated with implementing the rule.

The Agency estimates annual implementation costs have risen from $87.5 million in 2021 to approximately $182 million.

Impacted industry includes chemical manufacturers; chemical, petroleum, and merchant wholesalers; and petroleum and coal products.

Fee increases

The fee increases include more than doubling the fees for a Premanufacture Notice (PMN) or Significant New Use Notice (SNUN) from $19,020 to $45,000.  This is expected to discourage companies from submitting PMNs for chemicals that are not certain to be commercialized. It is also likely to “prompt submitters to invest additional resources toward compiling more robust PMN submissions,” says The National Law Review. “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).”

Additionally, under TSCA Section 6, manufacturers selected for EPA-initiated risk evaluations must split a fee for the evaluation. The changes propose raising that fee from $2.56 million to $5.081 million per chemical, to be paid in 2 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),” the National Law Journal says. “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 On the other hand, EPA has withdrawn its 2021 proposal to collect fees for Bona Fide Notices, Notices of Commencement (NOC), and test order amendments.”

Other changes of note include a requirement for processors to pay fees for Section 4 test orders and enforceable consent decrees when there are no manufacturers or importers identified.

“It also proposes to assess fees on any manufacturer or importer who is required to submit information to EPA in response to a test order, rather than only manufacturers/importers who actually conduct testing,” says Hunton Andrews Kurth LLP. “EPA proposes exemptions for certain entities subject to TSCA Section 4 testing fees and Section 6 risk evaluation fees, although it is proposing to narrow the byproduct exemption to include only manufacturers of byproducts that are not later used for commercial purposes or distributed for commercial use.”

Supplemental changes

The supplemental proposed changes include:

  • Narrowing certain proposed exemptions for entities subject to the EPA-initiated risk evaluation fees and propose exemptions for the test rule fee activities;
  • Modifying the self-identification and reporting requirements for EPA-initiated risk evaluation and test rule fees;
  • Proposing a partial refund of fees for premanufacture notices withdrawn at any time after the first 10 business days during the assessment period of the chemical;
  • Modifying the EPA’s proposed methodology for the production volume-based fee allocation for EPA-initiated risk evaluation fees in any scenario in which a consortium is not formed;
  • Expanding the fee requirements to companies required to submit information for test orders;
  • Modifying the fee payment obligations to require payment by processors subject to test orders and enforceable consent agreements (ECA);
  • Extending the time frame for test order and test rule payments; and
  • Changing the fee amounts and the estimate of the EPA’s full costs for administering TSCA.

Written comments on the proposed rule can be made until January 17, 2023, at regulations.gov under Docket # EPA-HQ-OPPT-2020-0493. The EPA expects to issue the final rule in 2023.