New Federal Toxics Law Could Have Future Implications for State

Federal Government Recently Enacted Major Reform. On June 22, 2016, the President signed the Frank R. Lautenberg Chemical Safety for the 21^st Century Act. The new law implements significant reforms to the federal Toxic Substances Control Act (TSCA). Created in 1976, TSCA provided the U.S. Environmental Protection Agency (EPA) with the authority to evaluate and regulate chemicals used in industrial processes and consumer products. Policymakers, environmental advocates, and industry representatives have discussed the need for reform in this program for years. Environmental advocates, for example, were concerned that under the prior law, EPA had little authority to evaluate and restrict the use of chemicals that had the potential to harm people or the environment. In addition, industry advocates raised concerns that states were enacting their own restrictions, resulting in varying policies across the country.

Under the new law, EPA will have greater authority to evaluate and regulate existing chemicals, as well as new chemicals proposed to be brought to the market. In general, the process for evaluating the safety of chemicals will have four steps:

• Prioritization. EPA is required to develop a risk-based screening process to identify high-priority chemicals to be evaluated.

• Assessment. For each chemical identified as high-priority, EPA will have three years (with a possible six-month extension) to scientifically assess the chemical’s safety. Within a few years, EPA must be evaluating at least 20 chemicals. (The legislation allows that some of these chemicals can be ones requested by companies, in which case the requesting companies would pay some or all of the evaluation costs.)

• Determination. For each chemical assessed, EPA will have to make a determination as to whether the chemical is generally safe to people and the environment or if its use would fail to meet safety standards. The agency could determine that a particular chemical is safe to use in certain circumstances but unsafe in others, such as when used in specific ways or by sensitive populations.

• Rulemaking. For chemicals it finds do not meet safety standards, EPA will have two years to issue regulations on the chemical so that the chemical would no longer present an unreasonable risk. Those regulations could ban or otherwise restrict the chemical’s use, establish safety requirements, or require additional reporting or labeling by the manufacturer.

In addition, the federal law increases EPA’s authority in a few ways. It clarifies the standard by which EPA is to evaluate the risk of chemicals. Specifically, the agency’s risk evaluation is required to focus on a chemical’s potential risk to human health and the environment and not to consider potential compliance costs. This could have the effect of making it more likely for EPA to evaluate a chemical as posing an unreasonable risk if the agency does not have to demonstrate that those risks are outweighed by the potential costs of addressing the risks. (Costs are supposed to be taken into consideration during rulemaking.) In addition, the new law allows EPA to charge fees on manufacturers (up to $25 million in revenue annually) to offset evaluation costs and requires the agency to evaluate new chemicals before they can be brought to the market. The law also includes provisions that would make chemical information provided by businesses to EPA more accessible to the public, including state agencies.

Reform Includes Significant Preemption of States. In addition to providing EPA with more authority to enforce restrictions on chemicals, the new law places greater limits on the authority of states to enforce their own laws and regulations restricting the use of chemicals. For any specific chemical, the limits on states depends on whether the chemical has been designated by EPA as high-priority and is under active review, whether a safety determination has been made and what that determination is, and the scope of the final EPA regulation when implemented. The following table summarizes those preemption requirements.

There are, however, some exceptions to these federal preemption requirements. First, states can still implement restrictions on chemicals in accordance with other federal laws, such as the Clean Air Act and Clean Water Act. Second, the new law “grandfathers” in some existing legislation—such as California’s Proposition 65—as well as state laws and regulations already implemented prior to April 22, 2016. (The National Conference of State Legislatures provides a useful summary of existing state laws.) Third, federal preemption only applies to restrictions on uses included in the scope of EPA’s review and rules. In other words, states would still be able to implement new laws and regulations that covered a different scope related to the use or affected populations of a studied chemical. Fourth, states can seek waivers to federal preemption.

California’s Safer Consumer Products Program. Chapters 559 of 2008 (AB 1879, Feuer) required the California Department of Toxic Substances Control (DTSC) to establish a process to identify and prioritize chemicals in consumer products that have the potential to have adverse impacts to public health and the environment and to establish a process for evaluating safer alternatives. The law was meant to establish a more systematic approach to regulating potentially unsafe chemicals and products. The previous approach has been described as a “piecemeal” one in which the use of chemicals—such as lead, arsenic, and mercury—and products were restricted through separate pieces of legislation.

In 2013, DTSC completed its regulations for the Safer Consumer Products program. This program requires DTSC to identify consumer products containing potentially hazardous chemicals. Responsible entities—generally product manufacturers—will have to identify and evaluate alternatives that reduce adverse impacts of the chemicals in those products. This would entail evaluating whether the chemical is necessary, if there is a safer alternative, and whether all relevant impacts throughout the products lifecycle are considered. After the responsible entity’s alternatives analysis, DTSC may impose regulations to improve the protection of public health and the environment. Regulatory requirements could include restricting the sale of the product; end-of-life product stewardship; requiring increased safety measures in the production, use, or disposal of the product; or increased information to the department or consumers.

In 2013, DTSC identified its initial list of three priority products for review: (1) paint, varnish, and surface cleaners containing methylene chloride; (2) spray polyurethane foam systems containing unreacted diisocyanates; and (3) children foam-padded sleeping products containing polyurethane foam and tris phosphate. Regulations to officially list these as priority products subject to alternatives analysis has not been finalized. When they are, responsible entities will have up to 180 days to complete their analyses.

Uncertain How Federal Changes Will Ultimately Affect California Program in Long Run. While the federal reforms are significant, they are unlikely to have a major impact on California’s chemical safety laws and regulations in the short term. U.S. EPA is still in the early phases of developing its regulations to implement the new TSCA law. Moreover, while EPA is required to identify the first ten high-priority products by December of this year, the new law specifically excludes those products from triggering preemption while they are under review by EPA.

In the long run, however, it is quite possible that the new federal law—and specifically the preemption provisions—could significantly affect the state’s chemical safety programs and the implementation of current and future state restrictions. Yet, it is difficult to predict the extent to which such preemption will occur because it will depend on several factors related to EPA’s final program regulations and future implementation decisions. These factors include:

• Selection of High-Priority Chemicals and Scope of Review. It is unknown which chemicals EPA will identify as high-priority subject to analysis or the extent to which those chemicals will overlap with chemicals addressed under state law. Nor do we know the extent to which EPA will focus the scope of its analyses broadly or narrowly. If for a particular product EPA intends to review the full range of chemical applications and potential human and environmental harms, then it is more likely that a state restriction could be preempted if it conflicts with the ultimate federal rulemaking. A more narrow scope of EPA evaluation might leave more opportunity for states to enforce restrictions in place that target other uses or harms.

• How Exceptions Are Implemented. EPA has the authority to issue waivers to states, which would reduce the effect of the preemption provisions. However, it is unclear how often waivers will be granted, as well as the scope of those waivers. In addition, based on our conversations with experts on the federal reforms, there is some uncertainty about how the grandfathering provisions will work in the future. Specifically, it is unclear the extent to which laws and restrictions implemented by states before April 2016 can be updated or modified in the future if they would conflict with EPA determinations and regulations.

Given the potential impacts on state programs, it will be important for DTSC to stay engaged in the current federal rulemaking process and offer comments on behalf of the state’s interests. In the longer run, DTSC may need to be strategic in its selection of chemical/product combinations selected for alternatives analysis to reduce the likelihood that efforts are spent evaluating and restricting the use of chemicals already—or likely to become—subject to EPA review. On the other hand, it is important to note that the new federal law does not affect the ability of the state to require alternative analyses or implement certain other changes, such as reporting of additional safety information or increasing biomonitoring activities, even when the chemical has been reviewed by EPA.