EPA Funding Seen as Linchpin for Talks On State Preemption Under Amended TSCA

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By Pat Rizzuto

Feb. 5 — States see no reason to accept federal preemption of their authority to regulate chemicals if the Environmental Protection Agency is inadequately funded under legislation to modernize the Toxic Substances Control Act, the executive director of the Environmental Council of the States said Feb. 5.

“Why should we be preempted if we end up with a barely funded, ineffective program? Preemption is a big give,” said Alex Dunn, who also is the general counsel for state environmental group.

Companies may be willing to pay user fees if a TSCA reform package includes language that preempts state regulation of chemicals, said Herb Estreicher, an attorney with Keller & Heckman LLP.

Dunn and Estreicher were among five speakers at “The Price of Reform: Models for Financing a Toxic Substances Control Act 2.0,” a forum co-sponsored by an American Bar Association subcommittee and an Environmental Law Institute committee. About 100 people representing congressional offices, nongovernmental organizations and the private sector were among the registrants for the forum.

States Increasingly Turn to User Fees 

Speakers described user-fee approaches employed by states, by other U.S. laws—specifically the Federal Insecticide, Fungicide and Rodenticide Act and the Federal Food, Drug and Cosmetic Act—and by Canada and the European Union as they implement their chemical laws.

U.S. states have observed that depending on funding through general revenues can lead to volatile changes in their funding, Dunn said.

The trend, therefore, is for state environmental agencies to move toward fee-based services and specialty fees, she said.

The idea is that the those who are benefiting from having their products in commerce should share the burden, Dunn said.

Chemicals manufacturers and companies that purchase chemicals to make consumer products repeatedly have said they would support some type of user fees in an updated TSCA, an audience member representing a trade association said.

Currently TSCA caps the EPA review fee for new chemicals at $2,500. That is the only fee currently authorized under TSCA.

`What Are We Paying For?'

The primary motivator for industry's support is to get an effective TSCA reform bill passed, the audience member continued. “But over and over again we ask: What are we paying for? We haven’t seen what we’re getting.”

The EPA's work to register pesticides is partially paid for by a user fee established under the Pesticide Registration Improvement Extension Act, said Keith Matthews, an attorney at Sidley Austin LLP who formerly directed the biopesticides and pollution prevention division of the EPA Office of Pesticide Programs.

Similarly, the Prescription Drug User Fee Act and the Medical Device User Fee and Modernization Act established authorities through which the Food and Drug Administration recoups some of the costs of reviewing drugs and medical devices, said Nathan Brown, an attorney with Akin Gump Strauss Hauer & Feld LLP, which hosted the TSCA funding forum.

Yet none of these user fee systems are directly applicable to chemical reviews, participants said.

The EPA's registration of a pesticide includes specific limits on the crops or pests for which it can be used and the times of the year or other conditions of use, Matthews said.

By contrast, a chemical may have thousands or tens of thousands of uses, he said.

Paying Fees So Competitors Can Benefit?

In addition, once a new chemical has cleared the EPA review and entered commerce, any other chemical manufacturer may make the same compound, Martha Marrapese, a Keller & Heckman attorney, said.

Why would the first company to submit a new chemical for agency review pay an exorbitant fee under a revised TSCA if all of its competitors can then make the same chemical, she said.

Marrapese and other audience members also said they do not see an incentive for chemical manufacturers or processors to pay for another anticipated part of EPA responsibilities under an amended TSCA: the prioritization and review of all chemicals in commerce to ensure they are safe.

“Getting industry to pay fees to review existing chemicals is a challenge,” Estreicher said.

EDF: Companies Benefit From EPA Safety Conclusions

Richard Denison, a senior scientist with the Environmental Defense Fund who has worked on TSCA issues for decades, said the audience's depiction of the problems with user fees presented too bleak a picture.

Fees are anticipated to pay for only a small portion of the EPA's costs of administering an amended chemicals law, Denison said.

Chemical manufacturers and other companies will benefit from an increased federal scrutiny of chemicals, when as a result of that review the EPA concludes a chemical is safe, he said.

Credibility is important, the trade association representative said. “We have to deal with the retailers who are becoming more important than states,” he said, referring to the increased assurances retailers are demanding about the safety of the chemicals in products they sell.

To contact the reporter on this story: Pat Rizzuto in Washington at prizzuto@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com