Regulatory Developments

TSCA Reform: House Subcommittee Holds Markup of Revised Draft TSCA Bill and Passes Amended Draft

May 14, 2015

On May 14, 2015, the House Energy and Commerce Subcommittee on Environment and the Economy held a markup of a revised discussion draft of the TSCA Modernization Act of 2015, prepared by Subcommittee Chair John Shimkus (R-IL) and released on May 12, 2015. The May 12, 2015, press release announcing the revised discussion draft and markup emphasizes the bipartisan nature of the bill, which is supported by Shimkus, Subcommittee Ranking Member Paul Tonko (D-NY), Committee Chair Fred Upton (R-MI), and Ranking Member Frank Pallone, Jr. (D-NJ).

Summary of Revised Discussion Draft

The May 12, 2015, fact sheet regarding the revised discussion draft includes a summary of its provisions. According to the summary, the revised discussion draft would:

  • Provide the U.S. Environmental Protection Agency (EPA) the tools to ensure chemicals in commerce are safe for consumers.
     
  • Create a new system for EPA to evaluate and manage risks associated with chemicals already on the market:
     
    • Either EPA or a manufacturer (who is willing to pay the cost) may designate a chemical for risk evaluation;
       
    • The risk evaluation must stand up to rigorous scientific standards set out in the legislation; and
       
    • If unreasonable risk is determined, EPA must immediately draft a rule to manage the risk.
       
  • Set deadlines for EPA to take action:
     
    • Risk evaluations must be completed within three years; and
       
    • Risk management rules must follow completion of risk evaluations by 90 days.
       
  • Ensure user fees paid to EPA for specific purposes are used just for those purposes.
     
  • Provide limited preemption of state law:
     
    • Once EPA makes a final decision on a chemical, either a new rule or a determination that it poses no unreasonable risk, EPA action would apply in all states; and
       
    • Prior state laws that do not conflict with the Toxic Substances Control Act (TSCA), and private rights of action under tort or contract law, are preserved.
       
  • Maintain protection of confidential business information (CBI):
     
    • Certain state, local, and tribal government officials and health care professionals will have access;
       
    • Confidentiality claims must be reclaimed after ten years; and
       
    • Exemption from CBI protection for health and safety studies does not include disclosure of confidential chemical formulas.

A detailed summary and analysis of the revised discussion draft will be available in our forthcoming memorandum, which will be available online.

Subcommittee Markup

The markup hearing was short and demonstrated the upsides of bipartisanship. In his opening statement, Shimkus encouraged members to work together and stated that members on both sides are prepared to engage. Shimkus expressed his desire that changes made to the current bill be made in a bipartisan manner. Tonko expressed his appreciation for the constructive process that brought the Subcommittee to this point. Tonko stated that Congress still needs to hear from the Obama Administration and that he knows the Administration has issues it would like clarified. Tonko hopes to resolve these issues before the bill is considered by the full Committee. Upton described the revised discussion draft as a model of bipartisan legislation. Pallone noted that the current bill includes improvements sought by Committee Democrats and stated that he looks forward to continuing to work on the bill.

Representative Bill Johnson (R-OH) offered one of the few criticisms of the revised discussion draft, regarding the treatment of byproducts. Johnson stated that TSCA reform should include an exemption for byproducts from TSCA reporting whether they are disposed of as waste or are sent for recycling and recovery. Shimkus encouraged Johnson to keep working on the issues and to "grab someone on the other side" and push forward. Representative Jerry McNerney (D-CA) stated that when Shimkus stated that he wanted to work on a bipartisan basis, he was skeptical. As recently as yesterday, McNerney was concerned with state preemption, "but we worked through it."

Tonko offered an amendment that would make several technical changes that had been worked out with Republicans before the hearing. Tonko did not provide any details regarding the amendment. Shimkus stated that the amendment clarifies but does not change the policy of the bill. Under the amendment, state preemption would not include preemption for state tort laws. The Subcommittee passed the amendment by a voice vote. The Subcommittee then unanimously passed the amended revised discussion draft by a roll call vote.

Commentary

This markup was relatively pro-forma as a way to continue to move the legislation forward to the full Energy and Commerce Committee. Given the explicit support of both Chairman Upton and Ranking Minority member Pallone, it appears the legislative wheels are also expected to be greased at that level. In some ways, given the bitter acrimony that characterizes so much of current debate on Capitol Hill, this literal love fest among the members was intriguing regardless of the subject matter, let alone that it is legislation to give EPA much stronger regulatory powers and some additional resources. It is clear to us that the discussion draft, if enacted, would more stringently regulate chemical companies -- a major sector of the economy. It is not clear if a discussion of oil drilling and disclosure of chemicals used in fracking would receive similar bipartisan harmony.

It also appears that the current House proposal is largely the result of Republican and Democratic staff meeting in earnest to resolve areas of disagreement. Presumably there is some activity by those staff to seek counsel from their respective base constituencies, such as the chemical manufacturers and environmental group activists. What seems missing from this equation, however, is the serious presence of anyone who has extensive work experience in a regulatory agency such as EPA implementing a serious risk management statute such as TSCA. There remain serious questions about how the legislation, albeit consensus legislation, will actually work in practice given the many ill-defined terms, lack of resources, and numerous mandates dumped onto the EPA toxics program. This newest House version contains serious gaps that must be addressed to achieve successful legislation, as described in our analysis of the previous draft. We will discuss these gaps in our forthcoming review of this second discussion draft of the TSCA Modernization Act of 2015 released a few days ago. To cite some examples relative to S. 697, which was recently passed by the Senate Environment and Public Works Committee and favorably reported to the Senate Floor, the TSCA Modernization Act of 2015:

  • Proposes no changes (other than conforming changes) to TSCA Section 5 on new chemicals, Section 8 on information gathering, Section 12 concerning exports, and Section 19 on judicial review;
     
  • Includes no requirement for EPA to prioritize existing chemicals;
     
  • Retains the current TSCA Section 4 findings despite the fact that EPA has not been able to use them effectively to require testing and, although it proposes to add a new finding, this is limited to requiring testing needed to conduct a Section 6 risk evaluation; and
     
  • Proposes expanded and clarified fee authority compared to the April version of the discussion draft, but, while the changes are welcomed, the Act would not allow the fees to be used to support either preparation of risk evaluations initiated by EPA or development and promulgation of Section 6 regulatory actions. EPA would be forced to rely on appropriations for all such work.

This is not meant to detract from the epic nature of the progress made so far with this Congress, characterized largely by bitter partisanship and stalemate. The progress of these proposals on both sides of Capitol Hill is impressive and frankly, unexpected. At the same time, there remain many issues that seem in need of refinement to provide those who will have to implement any new law, as well as those who will have to live under its mandates, a clearer sense of how the program pieces can fit together to achieve the laudable goals articulated so uniformly at today's Congressional event.


 
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