June 08, 2016

The TSCA Modernization Act Passed Congress: Here's What You Need to Know

After several years of work, Congress passed the bipartisan Frank R. Lautenberg Chemical Safety for the 21st Century Act – more commonly referred to as the TSCA Modernization Act of 2015 – and President Obama is expected to sign the bill into law soon. Over the last few months, negotiations between the House and Senate have resulted in the first major update to the Toxic Substances Control Act of 1976 since its inception. This is also the first major rewrite of an environmental statute since the Safe Drinking Water Act Amendments of 1996. In addition to creating a new framework for the regulation of chemicals, the TSCA Modernization Act might also show the path forward for updating other environmental statutes.

Until now, the EPA has been relatively limited in its ability to regulate chemicals. The bill aims to provide clarity to states, courts, and even retailers who, lacking guidance, have taken chemical safety measures on their own over the past several years. Providing objective scientific analysis provides certainty for industry and peace of mind to consumers. The bill updates the way in which the Environmental Protection Agency (EPA) regulates both new and existing chemicals and provides guidance for testing, reporting, the state-federal relationship, interpreting scientific results and handling fees.

Below is an explanation of how the new law will handle the key regulatory provisions:

Existing Chemicals

The EPA will now approach chemical regulation in a bifurcated, two-step process. The first step will consist of risk evaluation, with a second step for risk management if a chemical is found to be dangerous to the public. The risk assessment step determines, without factoring cost or other externalities, whether a given substance presents a risk to the public. If the substance in question is found to present a risk, the risk management process requires the EPA to issue a rule regulating the chemical. The EPA must weigh the chemical’s effects on health and the environment against the benefits of its intended purpose and provide a cost-benefit analysis of proposed regulatory measures, as well as analysis of the economic consequences the regulation may impose. The EPA can recommend a variety of options as a regulation, from simply labeling the product as dangerous to an outright ban.

New Chemicals

Similar to the process outlined above, the EPA will review a new chemical without regard to cost or purpose of the product. Based on the result of this process, the EPA may rule that the chemical presents an unreasonable health risk, may present an unreasonable health risk, is likely not to present a risk, or is a low-hazard material. Each determination brings forth a different set of requirements before manufacture of the chemical may proceed.

Chemical Testing

The chemical testing section maintains most of the original act’s language, but adds provisions that allow the EPA to order testing during key points in the evaluation and rulemaking process. It also reduces animal testing required under the 1974 Act.

Chemical Reporting

This section provides updates to the EPA’s inventory and codifies industry standard naming practices.

State-Federal Relationship

The bill increases regulatory certainty by preempting state laws, preventing them from duplicating federal requirements and restricting states from increasing burdens to market a product the EPA has found does not present unreasonable risk. It also provides guidelines for risk management. States are not barred from the regulatory process, but must work with the EPA and receive permission before promulgating their own regulations.

This bill, the result of years of work between industry and lawmakers, offers much needed updates to the original law and provides increased certainty to manufacturers by giving state guidance and preempting contradicting state regulations. However, the legislation is just the start of the reform process of the chemical statute, with the work now transferring to the EPA. Many guidance documents and implementing regulations are on the horizon.

Who should be concerned: All chemical manufacturers, processers and importers as well as large-scale users of chemicals such as manufacturers and other businesses.

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