Environmental Law

May 26, 2016

Congress Overhauls 1976 Federal Chemical Regulation Law

Gives EPA Broad Mandate to Evaluate Safety of All Chemicals and Practical Authority to Ensure Safe Use

On Tuesday, the U.S. House of Representatives overwhelmingly passed a bipartisan bill that, for the first time in 40 years, would modernize the federal Toxic Substances Control Act (TSCA)—the nation's premier chemical control law. After extensive negotiations over months and years, the bill has deep, bipartisan support among industry, environmental and consumer protection groups, and the Obama Administration. Although support is not universal, the bill is expected to be quickly passed by the Senate and signed by the President in the next few weeks.

The amendments are significant and will affect companies from the top to the bottom of supply chains:

For manufacturers and importers of existing chemicals, EPA will for the first time be conducting prioritized, systematic risk evaluations of all existing chemicals, with broad authority to require additional product testing as may be needed for decisionmaking. Where unreasonable risks are found, EPA will have practical means to compel companies to mitigate those risks as necessary, with everything from product warnings to complete bans.
For companies that develop or import "new" chemicals, EPA's current premanufacture risk review process is largely unchanged as a practical matter; however, the Agency will have more authority both to require testing to resolve uncertainties and to impose manufacturing and use restrictions by order. EPA likely can be expected to use those new authorities more aggressively over time.
For both new and existing chemical manufacturers and importers, EPA will evaluate chemical risks under the expected conditions of use and exposure. Accordingly, in most cases, companies will benefit from investigating and obtaining robust understandings of how their chemical products are processed and used at each stage down their value chains, with emphasis on the extent of actual environmental release and worker exposure. Even the most hazardous substances can be safely used where exposure and release are controlled.
All chemical manufacturers, processors and users will need to keep a current inventory and understanding of all of the chemical substances important to their supply chain for at least two reasons. First, adverse EPA risk findings for a chemical may curtail its availability or use, and may cause reputational damage to end products that contain it. Intervention into EPA risk evaluation proceedings may be warranted to provide information to protect existing uses. Second, EPA will be "resetting" the current inventory of chemicals in commerce and will require all companies to identify all chemicals used in the past 10 years. Substances listed on the current inventory but not identified as in active use could be used in the future only after submitting new notice to EPA, likely including all ascertainable use and exposure information.
For consumer product manufacturers, the bill provides some relief from proliferating state chemical control laws that impose restrictions on product chemical content or use. Those laws would be preempted to the extent that EPA has reviewed or regulated the chemical, but there is no preemption of "warning" and other information rules such as California's Prop 65, no preemption of state chemical-specific restrictions enacted prior to April 2016, and no preemption of new chemical-specific regulations issued under state statutes enacted prior to August 2003.

Background

Precedent-setting when it was enacted in 1976, TSCA required EPA to evaluate the safety of new chemicals entering the market, but it largely "grandfathered" the inventory of 65,000 chemicals already in commerce in the United States at that time. In principle, TSCA gave EPA the authority to require manufacturer testing and to regulate the safe use of these existing chemicals, but it did not give EPA a mandate (or budget) to conduct a systematic review of the existing inventory. This, coupled with significant procedural burdens in the law to taking unilateral action, largely hobbled EPA's ability to mandate chemical testing by manufacturers or to restrict handling or use of particular chemicals without industry agreement. Since 1976, EPA's chemical programs have been effective in screening and regulating new chemicals where warranted. For existing chemicals, the Agency has won agreements with industry voluntarily to conduct extensive testing on a large number of high production volume chemicals and to voluntarily phase out others. But EPA has been able to order testing of only a relatively small number of chemicals from the inventory, and has not imposed unilateral restrictions on any chemical in that inventory since the 1980s.

There have been calls for TSCA reform for many years, principally to better address the uncertain risks of the thousands of unregulated "grandfathered" chemicals. Industry support for modernizing TSCA has grown in recent years in response to a number of factors, including rising consumer awareness and demand for "green" products well characterized for hazards, the breakup of the United States as a single market for products due to a growing patchwork of state laws restricting particular chemicals from particular products, and the emerging trend for national retailers to establish their own policies excluding particular chemicals from their products. A federal law providing sound, science-based and independent risk assessments and preempting state laws has the potential to provide both manufacturers and product retailers with a more uniform national market and credible support for product ingredient safety claims. It is also significant that the European Union's chemical control law was recently modernized and already requires chemical manufacturers to conduct testing and safety assessments of all their products over a 10-year implementation period ending in 2018. EPA reviews will involve additional work, but much of the heavy lifting may already be done.