On Tuesday July 29, 2013, the California Department of Toxic Substances Control (DTSC) released a revised version of its regulations to regulate the contents and design of consumer products sold in California, “The Safer Consumer Products Regulations.” (To better understand the regulatory program DTSC is proposing and how it has evolved in its many iterations and revised drafts, please see our advisories on the July 27, 2012, release and the November 1, 2011, release, as well as our summary and analysis of industry concerns and comments. DTSC has opted to subject this latest draft to a 30-day public review. The comment period commences on January 29, 2013, and closes on February 28, 2013.

While multiple drafts have been proposed over a four-year period since the law authorizing these regulations was passed in 2008, most observers view this latest release as the DTSC’s final proposal and this 30-day comment period as the last chance for stakeholders to obtain changes to the regulatory language. With this last revision, the regulations will become effective in late spring or early summer 2013.

Who Must Comply?

The regulations continue to apply to manufacturers, importers and retailers of consumer products. For the first time, however, the draft regulations distinguish between the “manufacture” and “assembly” of consumer products. In the hierarchy of liability, entities that assemble consumer products will be treated as retailers, rather than manufacturers. The regulations also continue to apply to all “Priority Products” that contain a listed chemical, or “Chemical of Concern.”

The revisions contained in the January 29, 2013, draft make no fundamental changes to the basic process and regulatory scheme.

What’s New?

Some Positive Changes

  • In order to address the “black list” concern of industry, the initial list of chemicals to be considered in the process of prioritizing product and chemical combinations is now titled the “Candidate Chemicals” list. Only those Candidate Chemicals that are the basis for a product-chemical combination being listed as a Priority Product will be designated Chemicals of Concern.
  • Language has been added that makes it clear that the Priority Products list will be established and updated through a separate Administrative Procedure Act (APA) rulemaking process.
  • Terms such as “economically feasible” and “reasonably foreseeable” have been introduced into the text to provide some boundaries on the analysis required.
  • An upfront applicability exemption has been added for products regulated by other laws that provide equivalent or greater protections in connection with the same public health and environmental impacts and/or exposure pathways that are addressed by the regulations.
  • The regulations clarify that Alternatives Analyses will be limited to an evaluation of chemical hazards and adverse impacts associated with Chemicals of Concern, replacement chemicals and any other chemicals in an alternative that differs from those already contained in the Priority Product.
  • The requirement that a revised Alternatives Analysis Report be submitted if a selection of decision changes can only be imposed within three years of DTSC approving a final Alternatives Analysis Report. DTSC’s authority in this respect is no longer unlimited.
  • The basis for, and application of, regulatory responses has been limited to the Chemicals of Concern in any Priority Product and any replacement chemicals on the Candidate Chemicals list.
  • Distinctions have been added to allow for the presence of a Chemical of Concern as a contaminant, as opposed to an intentionally added chemical, below the Practical Quantitation Limit (PQL).
  • The provision allowing DTSC to require preparation of a new Alternatives Analyses based on the receipt of “new information” has been eliminated.
  • The revised regulations provide DTSC the flexibility to consider whether or not to apply the regulatory response to:
  1. Priority Products ordered by a retailer prior to the effective date of the Priority Product listing and still for sale as of the date of the final regulatory response determination notice; and/or
  2. Priority Products manufactured after the effective date of the Priority Product listing, but before the date of the final regulatory response determination notice.

This gives DTSC the ability to exempt products manufactured and ordered prior to the final regulatory response determination from regulatory response requirements.

  • The definition of “manufacture” has been revised to expressly provide that “manufacture does not include acts that meet the definition of ‘assemble.’” “Assemble” is defined to mean “fit, join, put, or otherwise bring together components to create a consumer product.” This revision dictates that entities assembling complex products with multiple component parts will not be treated as manufacturers. Instead, assemblers will be treated like retailers and can comply with regulation requirements or cease ordering the Priority Product component.
  • Trade secret protection provisions have been revised for the benefit of manufacturers.
  • Language has been added that explicitly states nothing in the regulations authorizes DTSC to supersede the requirements of any other California, state or federal regulatory program.

More Cause for Concern

  • Many of the changes described above are nevertheless subject to broad DTSC discretion, which might dramatically impact how the regulations are actually implemented, rendering any predictability hazardous.
  • There are still few boundaries on the types of information and analysis that DTSC can require a responsible entity to produce, and little or no criteria for judging the sufficiency of that information and analysis.
  • DTSC has added to the already robust list of Candidate Chemicals. The list, which was previously described as 1,200 chemicals, has now been expanded to include chemicals classified by the European Union as Category 1 respiratory sensitizers and additional pollutants identified under the Clean Water Act’s 303(d) list.
  • The multiplicity of notifications required to be sent to DTSC are still present, some with additional information burdens, such as identifying the raw material sourcing of chemicals and periodic reports on the development and introduction of alternative products into the marketplace.
  • New economic impact analysis requirements, which ostensibly were added to benefit industry, now require the responsible entity to analyze public health costs and costs to local government and others in managing solid waste, among other public goods.
  • The mandatory requirement to provide an upfront financial guarantee, including providing compensation to retailers, is still required if end-of-life management is the selected regulatory response. While this burden is lessened if the program is administered by a nonprofit third party, the new annual stakeholder public comment and consultation requirements will subject the manufacturer to annual and unknown revisions to the program.
  • Notwithstanding the benefits demonstrated in the EU’s implementation of REACH, that simulation of a proposed regulatory structure—before it is finally adopted—is invaluable in assuring a clear, workable, regulatory program, the DTSC failed to comment at all on the EU’s September 2012 suggestion that such a collaborative government/ industry simulation program be followed in this instance, before the Safer Consumer Product Regulations are finalized.
    • This seems particularly problematic since efforts to simulate actual compliance with the earlier draft of DTSC’s regulations have shown that substantial problems continue to exist.
  • While the requirement that Alternatives Analyses be performed by certified assessors has been eliminated, along with ancillary provisions relating to certification and accreditation bodies, the regulations now require that Alternatives Analyses be subjected to a public review and comment process. As part of the newly proposed and CEQA-like public review process, final reports will now be required to include:
  1. a summary of public comments received; and
  2. a summary of how public comments are addressed in the final report, or an explanation for why any public comment was not addressed.

Next Steps?

The release of the latest revisions is the final step in the APA process. At the conclusion of the 30-day public comment period, DTSC must respond to any additional comments it receives in a Final Statement of Reasons. Upon considering all additional comments and preparing a response to the same, DTSC can formally adopt this version of the Safer Consumer Product Regulations.

Once proposed changes are adopted, DTSC will transmit the rulemaking file to the Office of Administrative Law (OAL). The OAL then has 30 days to conduct a review of the record and make a determination as to whether all APA requirements have been met. If OAL determines all requirements have been met, the regulations will be filed with the Secretary of State, and will most likely become effective within 30 days. If this version of the regulations is adopted, it is anticipated that the regulations will become effective sometime in the spring of 2013.

This will likely be the last opportunity for public comment on the proposed Safer Consumer Product Regulations. Accordingly, it is critical that those potentially affected exhaust their administrative remedies and submit detailed comments to DTSC.

For more information on the regulatory development process, please see our Green Chemistry database at: http:// www.alston.com/services/environment/green-chemistry/.