As part of the new Toxic Substances Control Act (TSCA) fees rule, manufacturers will have to pay higher fees to the Environmental Protection Agency (EPA) for new chemical substance applications. The new fees, effective as of October 1, 2018, apply to the following activities: (i) test orders, test rules and consent agreements under Section 4, (ii) notices and exemptions under Section 5, and (iii) risk evaluations under Section 6 (including EPA-initiated risk evaluations, manufacturer-initiated risk evaluations for chemicals on the TSCA Work Plan and manufacturer-initiated risk evaluations for chemicals not on the TSCA Work Plan). The final rule echoes in substantial part the proposal set forth in February.
Objectives for the New Rule
The new rule establishes a framework for the EPA’s goal of recouping 25% of the costs associated with its chemical safety activities by imposing fees on industry manufacturers. The fees are intended to offset some of the expenses related to the implementation of TSCA as amended in 2016. The EPA’s goal is to collect more than $20 million annually from manufacturers and distributors of chemical substances to conduct mandated activities associated with chemical safety. Under the final rule, submitting new substance applications will entail a significant price increase from $2,500 to $16,000.
Special Fees for Small Businesses
There is some good news for small businesses. The new rule establishes reduced fees for some small businesses. This fee is applicable only when the only entity or group of entities are categorized as small businesses or when a consortium that is paying the fee consists entirely of small businesses. The lower fees for small businesses amount to an 80 percent reduction in comparison to the base amount for each category of fees. For TSCA Section 5 notices, the small business fee reduction is slightly higher at 82.5 percent. The one exception to this amended fee rule is small businesses that request a risk evaluation. As set forth in the proposed rule, small business manufacturers are not eligible for reduced fees for risk evaluations since those fees are fixed as a percentage of the total costs of the activity.
Fees Going Forward
Under the law, the fees are subject to mandatory reevaluation and reassessment (if necessary) every three years. The EPA intends to monitor costs during the 2019-2021 fiscal years and use that information to determine whether changes are necessary.
Grimaldi Law Offices has been advising clients for over 20 years on chemical and product law. For knowledgeable advice and in-depth analysis on your Prop 65 compliance obligations, contact Grimaldi Law Offices at (415) 463-5186 or email us at [email protected].