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Friday, September 28, 2018

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On September 27, 2018, the U.S. Environmental Protection Agency (EPA) issued a final fees aphorism beneath the Toxic Substances Control Act (TSCA). The final aphorism abundantly advance the proposed rule. In its columnist release, EPA states that the fees calm from actinic manufacturers “will go against developing accident evaluations for absolute chemicals; accession and reviewing toxicity and acknowledgment abstracts and added information; reviewing Confidential Business Advice (CBI); and authoritative determinations in a adapted and cellophane abode with account to the assurance of new chemicals afore they admission the marketplace.” The final aphorism is able the day afterwards advertisement in the Federal Register and the fees will administer to all submissions accustomed starting on October 1, 2018. Baby businesses will be acceptable to accept a abundant abatement of about 80 percent on their fees. EPA will host a alternation of webinars absorption on authoritative TSCA submissions and advantageous fees beneath the final rule. The webinars will be captivated on October 10, October 24, and November 7, 2018. EPA has acquaint a pre-publication adaptation of the final rule, as able-bodied its acknowledgment to accessible comments on the proposed rule.

As adapted by the Frank Lautenberg Actinic Assurance for the 21st Century Act, TSCA provides EPA the ascendancy to crave acquittal from manufacturers and processors who:

Are adapted to abide advice by ysis rule, ysis order, or acknowledged accord acceding (ECA) (TSCA Area 4);

Submit notification of or advice accompanying to absorbed to accomplish a new actinic or cogent new use of a actinic (TSCA Area 5); or

Manufacture or action a actinic actuality that is accountable to a accident evaluation, including a accident appraisal conducted at the appeal of a architect (TSCA Area 6(b)).

Beginning in budgetary year (FY) 2019 (October 1, 2018, through September 30, 2019), EPA is adapted to acclimatize fees, as necessary, every three years thereafter to reflect aggrandizement and ensure that fees are acceptable to aggregate 25 percent of the costs to EPA in administering TSCA Sections 4, 5, 6, and 14. Afore establishing new fees or alteration any absolute fees, EPA is adapted to argue with manufacturers and processors, or their representatives. A abundant altercation of EPA’s proposed aphorism is accessible in our February 9, 2018, memorandum, “Administrator Pruitt Signs TSCA User Fee Proposal.”

EPA states that the final aphorism establishes fees for assertive activities beneath TSCA Sections 4, 5, and 6 to acquit about 25 percent of the costs to backpack out a broader set of activities beneath these sections of TSCA and of collecting, processing, reviewing, and accouterment admission to and attention from disclosure, as adapted beneath TSCA Area 14, advice on actinic substances beneath TSCA. In addition, the final aphorism establishes fees for accident evaluations requested by manufacturers to acquit 50 percent or 100 percent of the costs, depending on whether the actinic is listed on the TSCA Assignment Plan.

After appliance of accessible comments, EPA states that it is promulgating a cardinal of accoutrement from the proposed aphorism afterwards modification, including the accepted alignment for artful fees (except in the case of manufacturer-requested accident evaluations), the affairs bulk estimates, the eight proposed fee categories, the fee amounts, the allowance of acquittal of fees through consortia, the discounted fees for baby business concerns, and the accouterment of refunds beneath assertive circumstances.

Based on appliance of accessible comments, the final aphorism additionally includes assertive modifications and clarifications accompanying to the proposal. For example, EPA addendum that in acknowledgment to comments, the final aphorism includes a new action for anecdotic manufacturers accountable to fee obligations for TSCA Area 4 ysis rules and TSCA Area 6 EPA-initiated accident evaluations, including advertisement of a basic list, befalling for accessible comment, self-identification, and/or acceptance of no manufacture, and advertisement of a final account defining the cosmos of manufacturers answerable to pay. The final aphorism additionally reflects modifications to the proposed alignment for artful fees for manufacturer-requested accident evaluations, the timing for consortia formation, acquittal due dates, and the accepted for baby business concerns. Finally, the final aphorism provides the added accuracy requested by commenters in areas including the allocation of fees in circuitous multi-payer scenarios, the admiration of affairs costs and action akin assumptions, and the affairs for accouterment refunds.

EPA bent there is “good cause” for authoritative the final aphorism able one day afterwards publication. As discussed in the proposed rule, the final aphorism will administer to all submissions that are accustomed starting October 1, 2018. EPA declared that it will balance afflicted companies aural 30 canicule of the able date.

EPA addendum that although it has the ascendancy to aggregate fees from both manufacturers and processors of actinic substances, the final aphorism focuses fee accumulating primarily on manufacturers. EPA will aggregate fees from processors alone back processors abide a cogent new use apprehension (SNUN) or test-marketing exemptions (TME) beneath Area 5, back a Area 4 action is angry to a SNUN acquiescence by a processor, or back a processor voluntarily joins a bunch and accordingly agrees to accommodate acquittal as allotment of the consortium. EPA states: “[g]enerally attached fee obligations to manufacturers is the simplest and best aboveboard way to appraise fees for administering accident evaluations beneath TSCA area 6 and best TSCA area 4 testing activities. Furthermore, EPA expects that manufacturers adapted to pay fees will accept a bigger faculty of the cosmos of processors and will canyon some of the costs on to them.”

EPA intends the action to yze manufacturers accountable to fee obligations to accommodate advertisement of a basic account that identifies manufacturers (based on advice accessible to EPA through Actinic Abstracts Advertisement (CDR) abstracts and added sources), a accessible animadversion aeon (to acquiesce for self-identification, alteration of errors, and acceptance of no-manufacture and no ambition to accomplish in the aing bristles years), and advertisement of a final account defining the cosmos of manufacturers amenable for payment. Further, according to the final rule, EPA will chase this action for alone two fee-triggering events: TSCA Area 4 ysis rules and TSCA Area 6 EPA-initiated accident evaluations. According to the final rule, EPA believes that for all added fee-triggering events, the accordant manufacturer(s) will already be credible and a specific identification action will not be necessary. This action is not all-important for TSCA Area 5 activities, TSCA Area 4 ECAs, or TSCA Area 6 manufacturer-requested accident evaluations, as manufacturers are self-identified through those activities. The action is additionally not all-important for TSCA Area 4 ysis orders, as EPA will ultimately baddest the manufacturer(s) accountable to the adjustment above-mentioned to or during the development of the order.

For the proposed rule, EPA affected fees by ciphering the absolute anniversary costs of administering TSCA Sections 4, 5, and 6 (excluding the costs of manufacturer-requested accident evaluations) and of collecting, processing, reviewing, and accouterment admission to and attention advice about actinic substances from acknowledgment as adapted beneath TSCA Area 14; anecdotic the abounding bulk bulk to be defrayed by fees beneath TSCA Area 26(b) (i.e., 25 percent of those anniversary costs); and allocating that bulk beyond the fee-triggering contest in TSCA Sections 4, 5, and 6, abounding added heavily against TSCA Area 6 based on aboriginal industry feedback.

According to EPA, a accepted affair from commenters was that fees, decidedly those for TSCA Area 6 activities, should added carefully acclimatize with EPA’s absolute costs for accustomed out the specific action on the specific chemical. EPA states that it believes it is important to clue costs on a actinic and action abject in ablaze of the added responsibilities beneath TSCA and the charge to accept bigger the associated new costs. EPA is alive appear architecture this adequacy and expects to activate tracking absolute costs on a actinic abject “as anon as feasible.” EPA affairs to use its time advertisement arrangement to clue agent hours and arrangement expenditures for anniversary actinic ability accident appraisal and at the fee class akin for Sections 4 and 5 activities. EPA additionally affairs to clue CBI affirmation ysis absolute and programmatic abutment costs, as able-bodied as cantankerous acid costs, absolute costs, and aberrant costs associated with Sections 4, 5, 6, and collecting, processing, reviewing, and accouterment admission to and attention from acknowledgment as adapted beneath Area 14 advice on actinic substances beneath TSCA.

EPA states that it believes this antecedent acquaintance and advice acquired from tracking absolute costs will advice it to abide adorning methodologies for artful fees, and “will acquaint abeyant revisions to the fee anatomy in the future.” For the final rule, EPA has bent to account the fees appliance the aforementioned access as acclimated in the proposed aphorism for best fee categories. EPA addendum that it is, however, authoritative final an absolute bulk access for artful fees for manufacturer-requested accident evaluations. Although EPA proposed a changeless fee for manufacturer-requested accident evaluations based on accepted bulk estimates for accident appraisal activities, aloft added appliance and in ablaze of accessible comments received, EPA bent in the final aphorism to acclimatize this fee with the absolute costs of the action “as a apparent account of TSCA would require.” Specifically, EPA will crave an antecedent acquittal of $1,250,000 (for a actinic on the TSCA Assignment Plan) or $2,500,000 (for a actinic not on the TSCA Assignment Plan), payable aural 30 canicule afterwards acceding the request, and a final balance to absolute either 50 percent or 100 percent of the absolute costs in band with the allotment requirements in TSCA, or a acquittance to accomplish these requirements, if warranted.

EPA antiseptic in the final aphorism that it will aggregate one fee per Area 6 accident evaluation, including one fee for a accident appraisal on a class of substances.

The final fee amounts are included in the afterward table:

FEE CATEGORY

FEE AMOUNT

TSCA Area 4

Test order

$9,800

Test rule

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$29,500

ECA

$22,800

TSCA Area 5

Premanufacture apprehension (PMN) and circumscribed PMN

 

$16,000

SNUN

Microbial bartering action apprehension (MCAN) and circumscribed MCAN

Low exposure/low absolution absolution (LoREX)

 

 

$4,700

Low-volume absolution (LVE)

TME*

Tier II exemption

TSCA alpha absolution appliance (TERA)

Film Articles

TSCA Area 6

EPA-initiated accident evaluation

$1,350,000

Manufacturer-requested accident appraisal on a actinic included in the TSCA Assignment Plan

Initial acquittal of $1.25 million, with final balance to balance 50% of absolute costs

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Manufacturer-requested accident appraisal on a actinic not included in the TSCA Assignment Plan

Initial acquittal of $2.5 million, with final balance to balance 100% of absolute costs

* EPA will abandon the TME fee for submissions from companies that accept accelerating from EPA’s Sustainable Futures Program.

EPA is promulgating bargain fee amounts for baby businesses, constant with the proposed aphorism and afterwards change. The bargain fee amounts represent an almost 80 percent abridgement compared to the abject fee for anniversary category. According to the final rule, in one case, for TSCA Area 5 notices (i.e., PMNs, MCANs and SNUNs), the baby business abridgement is 82.5 percent. For all fee categories, the bargain fee is alone accessible back the alone article or entities are baby businesses, including back a bunch is advantageous the fee and all associates of that bunch are baby businesses. Constant with the proposed rule, bargain fees are not accessible for baby business manufacturers requesting a accident evaluation, as TSCA requires those fees to be set at a specific allotment of the absolute costs of the activity.

EPA addendum that it is adjusting the baby business admeasurement standard, and has absitively to administer an employee-based ogue modeled afterwards the Baby Business Administration’s (SBA) approach. While EPA had proposed to abject the accepted on anniversary revenue, we accede the authoritative and authoritative adherence afforded by adopting the SBA’s approach. The SBA is additionally adapted by statute to periodically ysis and acclimatize its admeasurement accepted to advice accumulate the accepted accepted with industry and bazaar conditions. This will hopefully set the date for alternate ysis by EPA of its ogue of “small business concerns” as allotment of the TSCA claim to ysis fees every three years.

The final fee amounts for baby business are included in the afterward table:

FEE CATEGORY

SMALL BUSINESS FEE

TSCA Area 4

Test order

$1,950

Test rule

$5,900

ECA

$4,600

TSCA Area 5

PMN and circumscribed PMN

$2,800

SNUN

MCAN and circumscribed MCAN

LoREX

 

 

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$940

LVE

TME

Tier II exemption

TERA

Film Articles

TSCA Area 6

EPA-initiated accident evaluation

$270,000

Manufacturer-requested accident appraisal on a actinic included in the Assignment Plan

$1,250,000 antecedent acquittal 50% of absolute absolute costs

Manufacturer-requested accident appraisal on a actinic not included in the Assignment Plan

$2,500,000 antecedent acquittal 100% of absolute absolute costs

The final aphorism about requires upfront acquittal of fees (i.e., acquittal due above-mentioned to reviewing a TSCA Area 5 notice, aural 120 canicule of advertisement of the final ysis rule, aural 120 canicule of arising of a ysis order, aural 120 canicule of signing an ECA, aural 30 canicule of acceding a manufacturer-requested accident evaluation, and aural 120 canicule of publishing the final ambit of a accident evaluation). For manufacturer-requested accident evaluations, acquittal will now be calm in two installments over the advance of the activity, however.

EPA proposed to affair abounding and fractional refunds in assertive affairs accompanying to TSCA Area 5 activities, constant with EPA’s ascendancy beneath TSCA Sections 5(a)(4)(B) and 26(b)(4)(G). EPA is promulgating those provisions, with some added clarifications and corrections in ablaze of accessible comments. EPA will affair abounding refunds for: (1) PMN submissions that are bent not to be a new actinic substance; (2) MCAN submissions back the bacillus is bent not to be a new bacillus or cogent new use; (3) SNUN submissions if the use is bent not to be a cogent new use; (4) back EPA fails to accomplish a assurance on a apprehension by the end of the applicative apprehension ysis period, unless the submitter disproportionately delayed the process; and (5) back EPA fails to accept or abjure an absolution with the applicative ysis period, unless the submitter disproportionately delayed the process. EPA states that it will affair fractional refunds (i.e., 75 percent of the fee amount) if a TSCA Area 5 acquiescence is aloof during the aboriginal ten business canicule afterwards the alpha of the applicative ysis period. According to EPA, it is not able to affair refunds for the absolute fee bulk because assignment begins as anon as EPA receives an application. Due to apropos with authoritative accountability and abeyant delays in arising refunds, EPA states that it will not account and acquittance a different bulk for anniversary aloof submission. EPA acknowledges that it originally proposed to affair a abounding acquittance for assertive abridged submissions, but addendum that its absolute regulations “already accommodate a action and timeline for EPA and the submitter to absolute the issue. EPA believes the absolute access is added able than anon arising a abounding refund, and acute the submitter to accommodate a new, complete submission.”

Under the final rule, abortion to pay the adapted fee at the adapted time would accountable anniversary architect and processor who is accountable to the fee acquittal to penalties of as abundant as the best approved bulk per day ($38,114 as of January 2017) until the adapted fee is paid. Anniversary being accountable to fees would be accountable to such penalties behindhand of whether they intend to pay independently, as a collective submitter, or through a consortium. Anniversary associate of a consortium, and anniversary collective submitter, is alone amenable for acquittal of the fee, and accountable to penalties for non-payment, until the fee is absolutely paid. EPA states that it “may advance administration acknowledgment action advice accoutrement for this rule.”

EPA states that it will be able to alpha accession fees the day afterwards the final aphorism is appear in the Federal Register. For EPA to abode abundantly the added workload beneath TSCA, EPA “must alpha accession fees as anon as accessible for use in defraying accomplishing costs.” All submissions starting October 1, 2018, are accountable to the fees in the final rule, “regardless of back the aphorism becomes effective.” For submissions accustomed amid October 1, 2018, and the able date of the final rule, EPA will balance submitters aural 30 days. EPA additionally antiseptic that it will not aggregate fees beneath the final aphorism for authoritative initiatives that started above-mentioned to October 1, 2018, such as the aboriginal ten accident evaluations and Area 5 activities.

We acclaim EPA for commutual and arising the fees rule, the aftermost of the four framework rules beneath new TSCA. The final aphorism is able-bodied developed and articulate and we accede EPA’s anxious access in because and absolute accessible comments. In particular, we admit EPA’s accommodation to apparatus a new accessible apprehension action for anecdotic manufacturers that will be accountable to fee obligations for Area 4 ysis rules and Area 6 EPA-initiated accident evaluations. This affair was accent as a primary affair in comments submitted by the Bergeson & Campbell, P.C. (B&C®) associate organization, B&C Consortia Management, L.L.C. (BCCM). We are admiring that EPA agreed with our position and will accommodate this action to advice ensure all accountable entities are identified.

We note, however, that EPA’s assurance on CDR for identification of manufacturers and importers could aftereffect in situations in which entities with volumes beneath the advertisement thresholds would not be adapted to accord to the fees, a aftereffect that could allure an aspect of bent to beyond aggregate manufacturers and importers. Assume, for example, that there are ten companies accomplishment a actinic accountable to a accident appraisal — four of which accomplish and/or acceptation at 30,000 pounds per year and six that accomplish and/or acceptation at 10,000 pounds per year. As categorical in the rule, the four companies would anniversary pay $325,000 each, d fees would be aggregate based on assembly volumes. If the added six companies were to contribute, those four companies’ shares would bead to $216,666 each, with the six lower-production companies accidental $72,222 each.

We had apprenticed EPA to accept a tiered fee acquittal schedule, decidedly for the accident evaluations, or at atomic accede that such a tiered access ability be necessary. EPA autonomous not to do so. In affairs in which there is alone one manufacturer, it could be arduous to acquisition $1,300,000 in the aggregation account aural the abbreviate timeframe amid prioritization and arising of the accident appraisal scope.

Finally, we agenda and acclaim EPA’s commitment, as allotment of the triennial ysis claim in new TSCA, to move against absolute bulk accounting in tracking its costs for activities beneath Sections 4, 5, 6, and 14. We attending advanced to alive with EPA agents as allotment of the ysis process, a action that we ahead may activate in two abbreviate years.

©2018 Bergeson & Campbell, P.C.

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