Roger R. Martella, Jr. Judah Prero July 4 2016 Legislative changes will affect companies that manufacture and use chemicals Sidley Austin LLP | Environment & Climate Change - USA Roger R. Martella, Jr., Judah Prero Environment & Climate Change IntroductionBackgroundNew compliance mandatesImplementation scheduleAdditional highlightsIntroductionOn June 7 2016 Congress passed the landmark Frank R Lautenberg Chemical Safety for the 21st Century Act, the first time the Toxic Substances Control Act has been substantively amended since its enactment in 1976. The bipartisan legislation was a product of negotiations between the House of Representatives and the Senate, each of which had passed its own version of the Toxic Substances Control Act reform.The legislation contains a host of new authorities and mandates for the Environmental Protection Agency (EPA). Because of the vastly changed Toxic Substances Control Act landscape, it is important that all companies that manufacture, use, process, import, export or sell products containing chemicals become familiar with the new regulatory regime.At the outset, the five key changes were as follows:Real-time inventory – based on industry-supplied data, the EPA will maintain an up-to-date inventory of all chemicals in active commerce in the United States.Screening assessments – all chemicals on the active inventory will undergo a risk screening based on health, hazard, use and exposure information supplied by the industry, by any interested party and in the EPA's possession. A chemical will be classified either as low priority and not subject to regulation or as high priority and subject to risk evaluation.Risk evaluations – high-priority chemicals will undergo a risk evaluation for uses specified by the EPA. If the evaluation finds the chemical unsafe, it will be subject to use restrictions or banned.Confidential business information – many claims that information provided to the EPA should be protected as classified business information will need to be substantiated upfront, and protection will need to be reasserted and resubstantiated after a period of time.Order authority – the EPA will now be able to compel the testing or submission of information through an order rather than a rule.The legal standard to be met before ordering testing has also been significantly lowered.BackgroundCongress enacted the Toxic Substances Control Act to create protections against the introduction into commerce of new chemical products that could create a serious risk of harm to human health or the environment. The Toxic Substances Control Act provided the EPA with limited authority to gather information about existing chemicals, to require manufacturer testing of chemicals and to regulate chemicals already in commerce when warranted. No chemicals that existed when the Toxic Substances Control Act was enacted were subject to any review at that time. Most have never been subsequently reviewed.The new legislation will significantly change the way that the EPA approaches chemical management under the Toxic Substances Control Act. While the changes create challenges, a new centralised assessment programme should remove incentives for states to enact inconsistent rules and allow the industry to rebut allegations that affect retailer and consumer decisions.New compliance mandatesThe legislation presents many new compliance mandates and the potential for increased enforcement and litigation. The EPA will now be required to review the safety of every chemical in commerce. Furthermore, the new provisions have a more distinct focus on use of and exposure to chemicals. Because of these factors, the size of the population affected by the Toxic Substances Control Act will expand from the traditional chemical manufacturers and processors to potentially any manufacturer that incorporates chemicals into its products. This would include, for example, manufacturers of personal care products, automobile components, computer and electronics components, toys and even athletic wear. As the reach of the regulation is wider than before, the impact it will have on foreign entities that utilise US imports or export to the United States will increase as well.Under the legislation, the industry will have to identify chemicals in commerce and the EPA will then screen those to determine which are high priority and require risk evaluation. The EPA must then establish a scope of uses and exposures to consider, and may order the testing or generation of new information. Based on the risk evaluation, the EPA may require risk management measures such as use restrictions, labelling or bans. The EPA will also perform risk evaluations on chemicals that manufacturers may nominate and that are funded by the industry.Implementation scheduleThe implementation schedule is aggressive:Within the first year, the EPA must develop rules for the inventory reset, prioritisation process and risk evaluation process, and develop guidance for industry-conducted risk evaluations.Within two years, the EPA must develop necessary policies, procedures and guidance.Within three years, the EPA must have risk management rules for certain classes of chemicals, to be followed six months later by a mandate to have at least 20 risk evaluations underway and 20 low-priority designations completed.At each step, there will be an opportunity for the regulated community to engage with the EPA and share its views.Additional highlightsWhile the new compliance mandates and implementation schedule are among the most significant aspects of the new Toxic Substances Control Act amendments, additional provisions worth noting include:the development of new policies for how scientific information will be assessed and weighed. The regulated community should carefully monitor the development of these regulatory materials to ensure that scientifically valid industry-funded studies are accorded proper weight and that there is transparency and predictability in the new regulatory processes;judicial reviews of EPA's actions. The industry may play a constructive role by providing timely information to help the EPA meet deadlines, without being subject to lawsuits from outside entities. At the same time, the industry should carefully monitor new EPA regulations and decisions that may warrant judicial review; andthe pre-emption of new state and local regulation. State and local laws in effect as of April 22 2016 will be not be pre-empted by subsequent EPA action; many others will be.For further information on this topic please contact Roger R Martella Jr or Judah Prero at Sidley Austin LLP by telephone (+1 202 736 8000) or email ([email protected] or [email protected]). The Sidley Austin LLP website can be accessed at www.sidley.com.