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By Richard E. Engler, Ph.D., and Carla N. Hutton

The U.S. Environmental Protection Agency (EPA) announced on November 23, 2021, legally mandated changes to the fee requirements under the Toxic Substances Control Act (TSCA). This is not the fee adjustment we have been awaiting. It is a routine increase that TSCA directs EPA every three years to adjust the fees. The adjustment will go into effect on January 1, 2022, and will apply to all TSCA fees. The fee adjustment will not be retroactive and will not impact previous fee invoicing. According to EPA, separate from this action, EPA plans to propose additional revisions in 2022 to the 2018 TSCA fees rule to supplement its January 2021 proposal to ensure that TSCA fee amounts capture up to 25 percent of the actual costs of TSCA activities, fees are distributed equitably, and fee payers are identified through a transparent process.

In its announcement, EPA states that the TSCA program “has been and remains seriously underfunded.” The 2016 amendments to TSCA provided EPA with expanded authority to collect fees from chemical manufacturers and processors to help defray up to 25 percent of the costs associated with eight categories of TSCA implementation activities, including risk evaluations, new chemical notices, test rules, consent agreements, and test orders, as well as the cost of reviewing and managing confidential business information (CBI). EPA published a final TSCA fees rule in October 2018, meaning that EPA did not collect any fees under the rule until fiscal year 2019, and excluded 100 percent of the costs of the first ten risk evaluations. According to EPA, as a result of this and other factors, TSCA fees collected since the 2016 amendments have covered only half of the 25 percent target. EPA states that it “estimates it has less than half of the resources needed to review and approve new chemicals in the manner Congress intended and observes that the statutory deadlines for completing nine of the first 10 risk evaluations were missed.”

According to EPA’s TSCA Fees Table, consistent with the formula in the 2018 final rule, EPA will increase fees by the inflation rate, calculated to be 18.9 percent. EPA calculated the inflation rate by dividing the Producer Price Index (PPI) for September 2021 (348.8) by the PPI for January 2019 (293.4).

EPA states that consistent with the formula in the proposed rule, in any scenario where there is not a single consortium comprised of all manufacturers subject to a single fee, it will take the following steps to allocate fees:

  • Count the total number of manufacturers, including the number of manufacturers within any consortia;
     
  • Divide the total fee amount by the total number of manufacturers and allocate equally on a per capita basis to generate a base fee;
     
  • Provide all small businesses who are either (a) not associated with a consortium, or (b) associated with an all-small business consortium with an 80 percent discount from the base fee referenced previously;
     
  • Calculate the total remaining fee and total number of remaining manufacturers by subtracting out the discounted fees and the number of small businesses identified; and
     
  • Reallocate the remaining fee across those remaining individuals and groups in equal amounts, counting each manufacturer in a consortium as one person.
     

EPA notes that it is providing an approximately 80 percent reduction in TSCA administration fees to submitters who qualify as small businesses. EPA states that small business fees are only applicable to qualifying small businesses that are either not associated with a consortium or associated with an all-small business consortium.

Commentary

This announcement appears to be a routine increase in the TSCA fees based on the regulations in 40 C.F.R. Section 700.45, which requires that every three years, fees be adjusted for inflation. This action is independent from the rulemaking that EPA initiated in January 2021.

Tags: TSCA, Fees

 

By Lynn L. Bergeson

Under Canada’s New Substances Fees Regulations, fees must be provided with each New Substance Notification (NSN) package submitted under the New Substance Notification Regulations (Chemicals and Polymers). The amount of the fee is dependent on the annual sales in Canada for the notifier, the specific Schedule being submitted, and other services being requested (e.g., confidential search on the Domestic Substances List (DSL) or Non-Domestic Substances List (NDSL) or masked name application). As of April 1, 2019, Environment and Climate Change Canada (ECCC) modifies NSN fees annually based on the country’s Consumer Price Index (CPI). Based on a decrease in Canada’s CPI over the past 12 months, fees for NSN submissions will decrease by 0.2% starting April 1, 2021. ECCC has posted a revised fee table, effective April 1, 2021, to March 31, 2022.

Tags: Canada, NSN, Fees

 

By Lynn L. Bergeson and Ligia Duarte Botelho, M.A.

EPA announced that it is extending the public comment period on proposed updates to the Toxic Substances Control Act (TSCA) Fees Rule to give stakeholders more time to review and comment. The current comment period was set to close on February 25, 2021. Comments are now due on March 27, 2021. Information on the proposed updates is available in the Bergeson & Campbell, P.C. (B&C®) December 30, 2020, memorandum, “EPA Intends Proposed Rule to Increase Flexibility and Reduce Burdens under TSCA Fees Program.”

On February 18, 2021, EPA held a virtual public meeting on the TSCA Fees Rule, allowing stakeholders to provide input on the proposed rulemaking. One of the main concerns by industry stakeholders was related to fees collection under TSCA Section 4. Stakeholders reported that EPA should not collect such fees under Section 4 because the same fees are collected under Section 5. The Alliance for Automotive Innovation proposed instead a tiered fees structure, given that the rule as proposed includes downstream user fees, which would double fees within the supply chain.

On the other hand, representatives from the Environmental Defense Fund (EDF) expressed opposition to the exemptions outlined in the proposed rule and criticized EPA for relying on voluntary information requests.

Tags: TSCA, Fees

 

By  Lynn L. Bergeson 

On January 11, 2021, EPA published a proposed rule that would amend the 2018 Toxic Substances Control Act (TSCA) fees rule. 86 Fed. Reg. 1890. Under TSCA, EPA collects fees from chemical manufacturers and processors to help fund implementation and to ensure that public health and the environment continue to be protected. TSCA requires EPA to review its fees every three years and, after consulting with parties potentially subject to the fees, to adjust the fees if necessary. The proposed rule describes the proposed modifications to the TSCA fees and fee categories for fiscal years 2022, 2023, and 2024 and explains the methodology by which these TSCA fees were determined. The proposed updates include:

  • Regarding EPA-initiated risk evaluations, narrowing the scope of the TSCA fees rule by exempting from the requirement to pay fees importers of articles containing a chemical substance, companies that produce a chemical as a byproduct or manufacture or import as an impurity, companies that manufacture or import a chemical in de minimis amounts, companies that manufacture or import chemicals solely for R&D purposes, and companies that produce a chemical as a non-isolated intermediate;
     
  • Using cost data gathered over the past two years, instead of estimates, to update the fee calculations;
     
  • Ensuring fees are fairly and appropriately shared across companies by proposing a production-volume based fee allocation and including export-only manufacturers for EPA-initiated risk evaluations;
     
  • Allowing for corrections to be made to the list of manufacturers subject to fees for EPA-initiated risk evaluations after the final list is published, ensuring the accuracy of the list;
     
  • Increasing flexibility for companies by extending the amount of time to form consortia to share in fee payments;
     
  • Ensuring that EPA can fully collect fees and enabling companies to prepare better for paying fees by allowing payments in installments for EPA-initiated and manufacturer-requested risk evaluations (MRRE); and
     
  • Adding three new fee categories, two associated with new chemical activities and one associated with test orders.
     

Comments are due February 25, 2021. More information is available in our December 30, 2020, memorandum, “EPA Intends Proposed Rule to Increase Flexibility and Reduce Burdens under TSCA Fees Program.

Tags: TSCA, Fees

 

By  Lynn L. Bergeson 

On December 21, 2020, the U.S. Environmental Protection Agency (EPA) released a pre-publication notice of proposed updates to the Toxic Substances Control Act (TSCA) Fees Rule. Specifically, the proposed updates to the original 2018 TSCA Fees Rule include:

  • Narrowing the scope of the rule by exempting importers of articles containing a chemical substance, companies that produce a chemical as a byproduct or manufacture or import as an impurity, companies that produce a chemical in de minimis amounts, companies that use chemicals solely for research and development (R&D) purposes, and companies that manufacture a chemical that is produced as a non-isolated intermediate from fees;
     
  • Using cost data gathered over the past two years, instead of estimates, to update the fee calculations;
     
  • Ensuring fees are fairly and appropriately shared across companies by proposing a production-volume based fee allocation and including export-only manufacturers for EPA-initiated risk evaluations;
     
  • Allowing for corrections to be made to the list of manufacturers subject to fees for EPA-initiated risk evaluations after the final list is published, ensuring the accuracy of the list;
     
  • Increasing flexibility for companies by extending the amount of time to form consortia to share in fee payments;
     
  • Ensuring that EPA can fully collect fees and enabling companies to prepare better for paying fees by allowing payments in installments for EPA-initiated and manufacturer-requested risk evaluations; and
     
  • Adding new fee categories associated with new chemicals activities.

EPA will accept public comments on the proposal for 45 days after its publication in the Federal Register. Further details are available here, and a Bergeson & Campbell, P.C. (B&C®) commentary can be accessed here.


 

By Lynn L. Bergeson 

On August 4, 2020, the U.S. Food and Drug Administration (FDA) Department of Health and Human Services (DHHS) announced the rates for biosimilar user fees for fiscal year (FY) 2021. The fees assessed are used by FDA for certain activities in connection with biosimilar biological product development, review of applications for approval of biosimilar biological products, and approval of product applications. The established fees will apply from October 1, 2020, through September 30, 2021.