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By Pat Rizzuto
June 10 — Most chemical manufacturers are well-positioned to keep their chemicals on a list that is crucial to stay in business, even though that list is slated for a complete overhaul under the chemicals bill Congress has passed, attorneys told Bloomberg BNA.
Manufacturers may find, however, that in providing the Environmental Protection Agency information to stay on that critical list, the agency will raise legal questions about confidential business information or naming practices, according to attorneys from Keller & Heckman LLP.
Additionally, not only will multiple industry sectors be affected by the new bill, but many companies that will be affected don't yet realize it, an attorney from Sidley Austin LLP told Bloomberg BNA.
The Senate passed the Frank R. Lautenberg Chemical Safety for the 21st Century Act (H.R. 2576) June 7. The bill would revise core provisions of the nation's primary chemical law, the Toxic Substances Control Act. The bill passed the House on May 24 and is expected to be signed by President Barack Obama.
Once enacted, the legislation would boost the EPA's ability to get information about and regulate chemicals; require companies to pay fees for agency risk reviews; and require them to justify the confidential business information claims they make.
Bloomberg BNA spoke with five law firms that are preparing for implementation of the new law: Bergeson & Campbell PC, Beveridge & Diamond PC, Keller & Heckman LLP, Sidley Austin LLP and Steptoe & Johnson LLP.
The law firms are preparing for new mandates with in-depth analyses of changes and identifying the many deadlines the EPA would have to meet under the legislation with the goal of helping companies anticipate and participate in the development of rules, guidance and policies.
“The bill's many deadlines will drive EPA activities at a frantic pace,” said Lynn Bergeson, managing partner of Bergeson & Campbell.
Bergeson, Mark Duvall with Beveridge & Diamond and Martha Marrapese with Keller & Heckman have already detailed tasks they expect the EPA to focus on initially.
Among the deadlines the EPA faces in the first year of the law's implementation:
The bill's mandates for the EPA identify tasks companies should undertake, Bergeson and Duvall said.
To start preparing, they urged companies to:
Judah Prero, an attorney formerly with the American Chemistry Council and now with Sidley Austin, said some deadlines the EPA must meet won't have a big effect on industries but some others will.
He pointed to the bill's requirement that the EPA have risk assessments for 10 chemicals under way within six months of enactment of the law.
The EPA must select the 10 chemicals from the 2014 TSCA Work Plan list that consists of about 90 chemicals. EPA already is assessing enough chemicals that it may be complying with the legislation's requirement, Prero said.
“I don't think you're going to see a flurry of activity stemming from that,” Prero said.
However, within one year of enactment, the EPA would be required to propose and issue two rules: a “prioritization” rule detailing how it would designate chemicals in commerce as high- or low-priority for further review, and a rule describing how it will “reset” an inventory of chemicals that may be out of date.
Those EPA efforts will generate a huge uptick in regulated entities' activities across multiple industry sectors, Prero said.
“There are many companies that don't think they are regulated by [EPA's] TSCA,” but will now be affected, Prero said.
The companies think of their products as being regulated by the U.S. Department of Agriculture, the Food and Drug Administration, the Consumer Product Safety Commission or the EPA's Federal Insecticide, Fungicide, and Rodenticide Act, he said.
“Once the EPA decides to focus on a specific chemical, it will initially seek to determine the range of uses of that chemical in order to select the one or ones posing a potential risk,” Prero said.
Marrapese said companies can get an idea of EPA's likely prioritization approach by looking at the method the agency employed to develop its Work Plan chemicals list.
“That will provide a road map for prioritization,” she said.
As it sets priorities to review existing chemicals, the EPA is likely to use computer models, databases and other tools to flag potential hazards of new chemicals, Marrapese said.
A Chemical Categories document the EPA updated in August 2010 that encompasses 56 groups also could be useful, Marrapese said.
The categories document describes human health or environmental concerns triggered by that category and the types of data that could address its concerns.
Tom Berger, also with Keller & Heckman, said chemicals that are structurally similar to substances on the work plan could be early targets for EPA scrutiny.
Each of the attorneys told Bloomberg BNA that the bill's requirement that the EPA “reset” the currently incomplete TSCA Inventory should be a key focus for chemical manufacturers.
The inventory lists more than 84,000 chemicals that are or have been made, sold or distributed in the U.S.
All chemicals in U.S. commerce must now be on that inventory. Companies that have violated that requirement have paid fines totaling more than $1 million.
One of the problems TSCA reformers aimed to address with the new law is that only a fraction of the chemicals listed on the TSCA Inventory are actually in commerce. The EPA doesn't know precisely how many or which ones and the bill heading to the president's desk would require the agency to reset the inventory by dividing it into two categories: active in commerce and inactive.
The reset would let the EPA focus its attention on the active chemicals that may impact human health and/or could be released into the environment.
If a company wants to start making, processing or trading an inactive chemical it could request that EPA transfer the name of that substance to the active inventory.
Prero said the anticipated timing of the legislation is good news for companies.
“A large chunk of the regulated population is well-prepared,” he said.
Prero said the Chemical Data Reporting rule information that chemical manufacturers must submit to the EPA between June 1 and Sept. 30 includes chemical production volumes information for 2012, 2013, 2014 and 2015 along with data about how companies processed and used the chemicals in 2015.
The timing of rule submissions means that, “A lot of companies will have up-to-date information on what they are making and how it's used,” Prero said.
Companies will likely have to supplement the information they prepared for the reporting rule to be sure the portfolio of chemicals they make, process or import remains on the TSCA Inventory, he said.
The reason, Prero said, is that TSCA doesn't require companies to provide chemical data reports for some compounds including polymers, microorganisms and certain forms of natural gas and water.
To stay in business, however, companies that make, import or use these chemicals will have to make sure these substances get assigned to—and remain on—the active inventory, Prero said.
As companies develop internal lists of chemicals they make, import, process or ship, they should determine which chemicals have identities or other information that is kept confidential by the EPA, Bergeson and Duvall said.
TSCA and the legislation updating it allow the exact identity and formula of a chemical to be claimed as confidential business information to prevent competitors from making the same substance.
The identities of roughly 17,000 of 84,000 chemicals on the TSCA Inventory are currently claimed as confidential, Richard Denison, lead senior scientist with the Environmental Defense Fund, wrote in an April 23, 2015, blog.
New mandates in the TSCA-reform bill, however, would require companies to substantiate the reasons they claim confidentiality, and require the EPA to periodically review the substantiation, Bergeson and Duvall said.
Marrapese and Berger said the chemical identities companies use to describe a chemical may be challenged by the EPA as it resets the inventory, in part because the nomenclature the agency uses to identify chemicals has changed over time.
In the late 1970s, when the agency compiled the initial TSCA Inventory, there were fewer rules or naming conventions, he said.
At the time, much of the information companies provided was not closely scrutinized by the EPA until 1995's nomenclature guidance, Berger said.
The agency issued nomenclature guidance in conjunction with amendments to a pre-manufacturing notice rule it issued, but by then tens of thousands of chemicals already were listed without the benefit of the clarifying guidance and might be named differently today, Berger said.
Marrapese said when the European Union's sweeping new chemicals law (Regulation No. 1907/2006 on the registration, evaluation, authorization and restriction of chemicals, known as REACH) went into effect, securing agreement on chemical identity information was the first challenge companies faced.
Manufacturers registering their chemicals under EU law had to make “sameness” determinations and agree they made the same substances even though at times they had relied on different Chemical Abstracts Service (CAS) numbers—a globally used chemical identification system—for the same compound.
“This made reconciliation under [EU law] quite a challenge because no rules for making equivalency determinations existed at the time. A similar exercise will happen under TSCA reform,” Marrapese said.
Hiring a law firm with access to chemists and other scientists on staff as well as attorneys cross-trained in chemical engineering and intellectual property can help, Marrapese and Berger said.
Keller & Heckman has 23 staff scientists—at least one in each of the firm's offices, they said.
Bergeson said her law firm has cultivated core scientific, administrative, risk assessment and legal competence in chemicals for more than 25 years.
Access to scientific expertise is critical, she said, because, “Disagreements are very common in the area of scientific interpretation.”
Prero, from Sidley Austin, said he expects to see legal challenges over the science the EPA uses or the ways it applies that science in risk assessments mandated under the legislation.
“EPA's decision that a chemical poses or does not pose an unreasonable risk is judicially reviewable,” he said.
Outside groups may also pursue “deadline litigation,” and sue the EPA for missing a deadline, Prero said.
Duvall, from Beveridge & Diamond, said despite lengthy discussions of the confidential business information provisions of the bill, some ambiguity remains about the confidentiality of chemical identities used in health and safety studies, which may spark legal challenges, he said.
Cynthia Taub, of Steptoe & Johnson, said federal preemption of state laws and regulations may also be contested in litigation.
Striking a balance between federal and state authority over chemicals was a central issue throughout the extensive debates and negotiations in Congress as it prepared and revised the Lautenberg bill.
Taub and other attorneys urged companies to join or be more active in trade associations.
Industry associations, she said, can:
Meanwhile law firms are reaching out through webinars, conference briefings and other ways to educate attorneys within their own firms, existing clients and attract new potential clients about ways the TSCA-reform bill could affect them.
To contact the reporter on this story: Pat Rizzuto in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Larry Pearl at email@example.com
Bergeson and Campbell's TSCA Reform News & Information website is available at http://src.bna.com/fNy.
Beveridge & Diamond's TSCA Reform Resource Center is available at http://src.bna.com/fNz.
Keller & Heckman's TSCA Reform Center is available at http://src.bna.com/fNA.
Sidley Austin will announce a dedicated TSCA-reform portal at http://src.bna.com/fNB.
Steptoe & Johnson will have information available at http://src.bna.com/fNC.
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