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EPA Proposes Massive TSCA Fee Increases

On November 16, 2022, the U.S. Environmental Protection Agency (EPA) issued a supplemental notice of proposed rulemaking to modify the fees collected for a variety of actions under the Toxic Substances Control Act (TSCA) (15 U.S.C. § 2601 et seq.) 87 Fed. Reg. 68,647 (Nov. 16, 2022). The Frank R. Lautenberg Chemical Safety for the 21st Century Act, enacted in 2016, directed EPA to collect fees to offset as much as 25% of TSCA’s implementation costs. EPA’s estimate of those annual costs has risen from $87.5 million in 2021 to roughly $182 million.

EPA proposes significant fee increases for new chemical applications under TSCA section 5, more than doubling fees for a Premanufacture Notice (PMN) or Significant New Use Notice (SNUN), from $19,020 to $45,000. These proposed increases, if adopted, likely will dissuade companies from submitting PMNs for chemicals other than those for which commercialization would appear to be a virtual certainty, and likely will prompt submitters to invest additional resources toward compiling more robust PMN submissions. 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).

The fee split among manufacturers of chemicals selected for an EPA-initiated risk evaluation under TSCA section 6 also would increase from $2.56 million to $5.081 million per chemical, to be paid in two 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). 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 On the other hand, EPA has withdrawn its 2021 proposal to collect fees for Bona Fide Notices, Notices of Commencement (NOC), and test order amendments.

The proposed changes from current inflation-adjusted fees are shown below.

 

Fee Category

Current Fee

Proposed Fee

Test Order

$11,650

$25,000

Test Rule

$35,080

$50,000

Enforceable Consent Agreement

$27,110

$50,000

PMN, Consolidated PMN, SNUN, MCAN, Consolidated MCAN

$19,020

$45,000

LoREX, LVE, TME, Tier II, TERA, Film Articles

$5,590

$13,200

EPA-Initiated Risk Evaluation

$2,560,000

$5,081,000

Manufacturer-Requested Risk Evaluation (Work Plan Chemical)

$1,890,0001

$2,994,0001

Manufacturer-Requested Risk Evaluation (Non-Work Plan Chemical)

$3,780,0002

$5,986,0002

 

Approximate – fee must be paid in two initial installments, with a third installment on completion of the risk evaluation to bring the total to 50% of EPA’s actual costs.

Approximate – fee must be paid in two initial installments, with a third installment on completion of the risk evaluation to bring the total to 100% of EPA’s actual costs.

EPA proposes an amended fee exemption for manufacturers of substances subject to an EPA-initiated risk evaluation. EPA proposed a fee exemption for manufacturers of “byproducts” and five other categories in the 2021 fee rule proposal 86 Fed. Reg. 1,890 (Jan. 11, 2021). The amended proposal would narrow the “byproduct” exemption to “producers of a chemical substance as a byproduct that is not later used for commercial purposes or distributed for commercial use,” which is intended to allow EPA to collect fees from producers of byproduct chemicals that are sold or used for commercial purposes.

EPA proposes a new manner to allocate fees for EPA-initiated risk evaluations among responsible manufacturers. The proposed algorithm reflects a mix of per capita and semi-volumetric approaches, which, in the end, arbitrarily allocates more than 80% of the total fee to the manufacturers representing the top 20th percentile of manufacturers by volume. This arbitrary cutoff could result in highly disproportionate fee responsibilities between companies manufacturing very similar volumes of the affected chemical.

Other proposed changes include a 20% refund of the user fee for new chemical submissions that are withdrawn after 10 business days from the beginning of the applicable review period; amending the self-identification and reporting requirements for EPA-initiated risk evaluation and test rule fees; expanding the fee requirements to non-manufacturers required to submit information for test orders; and extending the timeframe for test order and test rule payments.

EPA will hold a public webinar on Tuesday, December 6, 2022, from 1-2:30 p.m. EST to provide an overview of its revised rulemaking proposal and to provide the public an opportunity to comment on the proposed changes. Register for the webinar here. EPA will accept written comments on the supplemental proposed rule until January 17, 2023, via docket EPA-HQ-OPPT-2020-0493 at www.regulations.gov.

© 2023 Keller and Heckman LLPNational Law Review, Volume XII, Number 322
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 Thomas C. Berger, Keller Heckman, Environmental Protection lawyer, Product Liability Management Attorney
Partner

Tom Berger joined Keller and Heckman in 1993. Mr. Berger is a partner in Keller and Heckman's Washington DC office and heads Keller and Heckman's Indianapolis satellite office.

Mr. Berger has extensive experience in representing foreign and domestic companies, large and small, in a broad range of areas, including counseling, advocacy, and rulemaking in environmental law, occupational safety and health law, contracts, EPA enforcement proceedings, and chemical and product liability management. Mr. Berger assists clients in bringing new products to...

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Gregory A. Clark, Keller Heckman, EPA Contractor Lawyer, Environmental matters Attorney
Associate

Gregory Clark joined Keller and Heckman in 2010. He practices in the area of environmental law.

While in law school, Mr. Clark served as an articles editor for the Virginia Journal of Law and Technology. Prior to law school, Mr. Clark worked as an EPA contractor, primarily for the Water Security Division in the Office of Groundwater and Drinking Water. In this arena, Mr. Clark worked on validation of molecular biology and microbiology methods and on emergency preparedness. He led development of what is now EPA's Water Laboratory Alliance...

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Herbert Estreicher Ph.D., Keller Heckman, International Regulation Lawyer, Environmental law Attorney
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Herbert Estreicher, Ph.D. joined Keller and Heckman in 2003. He has a broad practice in international environmental regulatory law.

Dr. Estreicher has an interdisciplinary approach combining law and science. He represents leading manufacturers of chemicals, pesticides, insect repellents, food additives, and consumer products before Federal and State regulatory agencies.

Dr. Estreicher provides advice on product liability risk control and assists clients with crisis management for embattled products, including...

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Partner

James Votaw has an extensive practice focusing on environmental and health and safety regulation.Within that arena, he concentrates on the regulation of conventional and nanoscale chemicals, pesticides, consumer and industrial products, and industrial processes and wastes.

For his clients, Mr. Votaw obtains pre-market product approvals and exemptions, including the first U.S. approval of a nanoscale pesticide. He negotiates testing orders, defends enforcement actions, advises on restrictions and disclosures associated with the chemical content...

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David B. Fischer Counsel Keller and Heckman
Counsel

David Fischer advises clients on environmental, policy, and health and safety matters, with a concentration on the Toxic Substances Control Act (TSCA) and the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA). In addition, he has extensive experience with numerous other statutes including the Clean Air Act (CAA), Clean Water Act (CWA), Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), Safe Drinking Water Act (SDWA), and the Emergency Planning and Community Right-to-Know Act (EPCRA), Food Quality Protection Act (FQPA). 

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