[Federal Register Volume 83, Number 201 (Wednesday, October 17, 2018)]
[Rules and Regulations]
[Pages 52694-52724]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-22252]
[[Page 52693]]
Vol. 83
Wednesday,
No. 201
October 17, 2018
Part III
Environmental Protection Agency
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40 CFR Parts 700, 720, 723 et al.
Fees for the Administration of the Toxic Substances Control Act; Rules
Federal Register / Vol. 83 , No. 201 / Wednesday, October 17, 2018 /
Rules and Regulations
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 700, 720, 723, 725, 790, and 791
[EPA-HQ-OPPT-2016-0401; FRL-9984-41]
RIN 2070-AK27
Fees for the Administration of the Toxic Substances Control Act
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
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SUMMARY: As permissible under the Toxic Substances Control Act (TSCA or
the Act), EPA is establishing fees applicable to any person required to
submit information to EPA; or a notice, including an exemption or other
information, to be reviewed by EPA; or who manufactures (including
imports) a chemical substance that is the subject of a risk evaluation.
This final rulemaking describes the final TSCA fees and fee categories
for fiscal years 2019, 2020, and 2021, and explains the methodology by
which the final TSCA fees were determined. It identifies some factors
and considerations for determining fees for subsequent fiscal years;
and includes amendments to existing fee regulations governing the
review of premanufacture notices, exemption applications and notices,
and significant new use notices. As required in TSCA, EPA is also
establishing standards for determining which persons qualify as ``small
business concerns'' and thus would be subject to lower fee payments.
Requiring manufacturers and processors of certain chemical substances
to pay a fee for specific fee-triggering events under TSCA, will defray
part of the EPA cost of administering TSCA.
DATES: This final rule is effective on October 18, 2018.
ADDRESSES: The docket for this action, identified by docket
identification (ID) number EPA-HQ-OPPT-2016-0401, is available at
http://www.regulations.gov or at the Office of Pollution Prevention and
Toxics Docket (OPPT Docket) in the Environmental Protection Agency
Docket Center (EPA/DC), West William Jefferson Clinton Bldg., Rm. 3334,
1301 Constitution Ave. NW, Washington, DC 20460-0001. The Public
Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through
Friday, excluding legal holidays. The telephone number for the Public
Reading Room is (202) 566-1744, and the telephone number for the OPPT
Docket is (202) 566-0280. Please review the visitor instructions and
additional information about the docket available at http://www.epa.gov/dockets.
FOR FURTHER INFORMATION CONTACT:
For technical information contact: Mark Hartman, Immediate Office,
Office of Pollution Prevention and Toxics, Environmental Protection
Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460-0001; telephone
number: (202) 564-3810; email address: [email protected].
For general information contact: The TSCA-Hotline, ABVI-Goodwill,
422 South Clinton Ave., Rochester, NY 14620; telephone number: (202)
554-1404; email address: [email protected].
SUPPLEMENTARY INFORMATION:
I. Executive Summary
A. Does this action apply to me?
You may be affected by this action if you manufacture (including
import), distribute in commerce, or process a chemical substance (or
any combination of such activities) and are required to submit
information to EPA under TSCA sections 4 or 5, or if you manufacture a
chemical substance that is the subject of a risk evaluation under TSCA
section 6(b). The following list of North American Industry
Classification System (NAICS) codes is not intended to be exhaustive,
but rather provides a guide to help readers determine whether this
document applies to them. Potentially affected entities may include
companies found in major NAICS groups:
Chemical Manufacturers (NAICS code 325),
Petroleum and Coal Products (NAICS code 324), and
Chemical, Petroleum and Merchant Wholesalers (NAICS code
424).
If you have any questions regarding the applicability of this
action, please consult the technical person listed under FOR FURTHER
INFORMATION CONTACT.
B. What is the Agency's authority for taking this action?
The Toxic Substances Control Act (TSCA), 15 U.S.C. 2601 et seq., as
amended by the Frank R. Lautenberg Chemical Safety for the 21st Century
Act of 2016 (Pub. L. 114-182) (Ref. 1), provides EPA with authority to
establish fees to defray a portion of the costs associated with
administering TSCA sections 4, 5, and 6, as amended, as well as the
costs of ``collecting, processing, reviewing, and providing access to
and protecting information about chemical substances from disclosure as
appropriate under TSCA section 14.'' EPA is finalizing this rule under
TSCA section 26(b), 15 U.S.C. 2625(b).
C. What action is the Agency taking?
Pursuant to TSCA section 26(b), EPA is finalizing a rule to
establish and collect fees from manufacturers (including importers)
and, in some cases, processors, to defray some of the Agency's costs
related to activities under TSCA sections 4, 5, and 6, and collecting,
processing, reviewing, and providing access to and protecting
information about chemical substances from disclosure as appropriate
under TSCA section 14. EPA is also finalizing standards for determining
which persons qualify as small business concerns and thus would be
subject to lower fee amounts. TSCA section 26(b)(4) requires that EPA,
in setting fees, establish lower fees for small businesses.
D. Why is the Agency taking this action?
The 2016 amendments to TSCA authorize EPA to establish fees to
defray a portion of the costs of administering TSCA sections 4, 5, and
6 and collecting, processing, reviewing, providing access to, and
protecting information about chemical substances from disclosure as
appropriate under TSCA section 14. Pursuant to the final rule, the
Agency will collect payment from manufacturers who: Are required to
submit information under TSCA section 4; are required to submit a
notice, exemption application, or other information under TSCA section
5; or manufacture a chemical substance that is the subject of a risk
evaluation under TSCA section 6(b). The Agency will also collect
payment from processors in limited scenarios, i.e., where a processor
submits a Significant New Use Notice (SNUN) under TSCA section 5; or
where a fee-triggering TSCA section 4 activity is tied to a SNUN
submission by a processor. These fees are intended to achieve the goals
articulated by Congress by providing a sustainable source of funds for
EPA to fulfill its legal obligations to conduct activities such as
designating applicable substances as High- and Low-Priority, conducting
risk evaluations to determine whether a chemical substance presents an
unreasonable risk of injury to health or the environment, requiring
testing of chemical substances and mixtures, and evaluating and
reviewing new chemical submissions, as required under TSCA sections 4,
5 and 6, as well as and collecting, processing, reviewing, and
providing access to and protecting information about chemical
substances from disclosure as appropriate under TSCA section 14.
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E. What are the estimated incremental impacts of this action?
EPA has evaluated the potential incremental economic impacts of
this final rule. The Agency analyzed a three-year period, since the
statute requires EPA to reevaluate and adjust, as necessary, the fees
every three years. The Economic Analysis (Ref. 2), which is available
in the docket, is briefly summarized here and discussed in more detail
in Unit IV.
The annualized fees collected from industry are approximately $20
million, excluding fees collected for manufacturer-requested risk
evaluations. Total annualized fee collection was calculated by
multiplying the estimated number of fee-triggering events anticipated
each year by the corresponding fees. EPA estimates that section 4 fees
account for less than one percent of the total fee collection, section
5 fees for approximately 43 percent, and section 6 fees for
approximately 56 percent.
Total annual fee collection for manufacturer-requested risk
evaluations is estimated to be $1.3 million for chemicals included in
the 2014 TSCA Work Plan (TSCA Work Plan) (based on two requests over
the three-year period) and approximately $3.9 million for chemicals not
included in the TSCA Work Plan (based on three requests over the three-
year period).
EPA estimates that 18.6 percent of section 5 submissions will be
from small businesses that are eligible to pay the section 5 small
business fee because they meet the definition of ``small business
concern.'' Total annualized fee collection from small businesses
submitting under section 5 is estimated to be $339,000 (Ref. 2). For
sections 4 and 6, reduced fees paid by eligible small businesses and
fees paid by non-small businesses may differ over the three-year period
that was analyzed, since the fee paid by each entity is dependent on
the number of entities identified per fee-triggering event. EPA
estimates that average annual fee collection from small businesses
impacted by section 4 and section 6 would be approximately $7,000 and
$926,000, respectively. For each of the three years covered by this
rule, EPA estimates that total fee revenue collected from small
businesses will account for about 6 percent of the approximately $20
million total fee collection, for an annual average total of
approximately $1.3 million. For fees paid through consortia for
activities under section 4 and 6, since consortia will be required to
pay the full fee amount, general industry firms that are not eligible
for reduced fees will pay more to ensure the fee is covered. Therefore,
although more firms are eligible for small business discounts under the
SBA definition used in the final rule, the total annual fee revenue
estimate remains relatively stable at approximately $20 million.
Total social cost represents the total burden a regulation will
impose on the economy. It can be defined as the sum of all opportunity
costs incurred as a result of the regulation. The opportunity cost
incurred by industry to carry out these activities is the foregone
value of the time (burden) and investments required to comply with
rule. Total social cost for this final rule does not include the fees
collected from industry by EPA, as these fees are considered transfer
payments. Rather, total social cost includes the opportunity costs
incurred by industry, such as the cost to read and familiarize
themselves with the rule; determine their eligibility for paying
reduced fees; register for CDX; form, manage and notify EPA of
participation in consortia; notify EPA and certify whether they will be
subject to the action or not; and arrange to submit fee payments via
Pay.gov. Total social costs also include the additional costs to EPA to
administer fee assessment and collection for TSCA sections 4, 5, and 6,
and collecting, processing, reviewing, and providing access to and
protecting information about chemical substances from disclosure as
appropriate under TSCA section 14. The total annualized opportunity
cost to industry is approximately $231,000 and the additional
annualized Agency cost is approximately $7,000, yielding a total
annualized social cost of approximately $238,000.
II. Background
A. Statutory Requirements for TSCA Fees
The proposed rule provides a robust overview of the history of fees
under TSCA and the 2016 amendments to TSCA (83 FR 8212, February 26,
2018) (FRL-9974-31). TSCA authorizes EPA to establish, by rule, fees
for activities under TSCA sections 4, 5 and/or 6. In so doing, the
Agency must set lower fees for small business concerns and establish
the fees at a level such that they'll offset 25% of the Agency's costs
to carry out a broader set of activities under sections 4, 5, and 6 and
of collecting, processing, reviewing, and providing access to and
protecting from disclosure as appropriate under section 14 information
on chemical substances under TSCA. In addition, in the case of a
manufacturer-requested risk evaluation, the Agency is authorized to
establish fees sufficient to defray 50% of the costs associated with
conducting a manufacturer-requested risk evaluation on a chemical
included in the TSCA Work Plan for Chemical Assessments: 2014 Update,
and 100% of the costs of conducting a manufacturer-requested risk
evaluation for all other chemicals. TSCA now requires fee revenue to be
deposited into a new dedicated TSCA fund intended to ensure that
resources are made available to the Agency to defray some of the costs
that EPA incurs in carrying out activities under sections 4, 5, and 6,
and of collecting, processing, reviewing, and providing access to and
protecting from disclosure as appropriate under section 14 information
on chemical substances under TSCA. EPA is also required in TSCA section
26(b)(4)(F) to review and adjust the fees established in this rule
every three years, and to consult with parties potentially subject to
fees when the fees are reviewed and updated to reflect changes in
program costs.
B. Overview of Final Rule
Pursuant to TSCA section 26(b), this final rule establishes fees
for certain activities under TSCA sections 4, 5, and 6 to defray
approximately 25% of the costs to carry out a broader set of activities
under these sections of TSCA and of collecting, processing, reviewing,
and providing access to and protecting from disclosure, as appropriate
under TSCA section 14, information on chemical substances under TSCA.
In addition, the final rule establishes fees for risk evaluations
requested by manufacturers to defray 50% or 100% of the costs,
depending on whether the chemical is listed on the TSCA Work Plan or
not, respectively.
After consideration of public comments, EPA is finalizing a number
of provisions from the proposed rule without modification, including
the general methodology for calculating fees (except in the case of
manufacturer-requested risk evaluations), the program cost estimates,
the eight proposed fee categories, the fee amounts, the allowance of
payment of fees through consortia, the discounted fees for small
business concerns, and the provision of refunds under certain
circumstances.
Based on consideration of public comments, the final rule also
includes certain modifications and clarifications related to the
proposal. For example, in response to comments, the final rule includes
a new process for identifying manufacturers subject to fee obligations
for TSCA section 4 test rules and TSCA section 6 EPA-initiated risk
evaluations, including publication of a preliminary
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list, opportunity for public comment, self-identification, and/or
certification of no manufacture, and publication of a final list
defining the universe of manufacturers obligated to pay. The final rule
also reflects modifications to the proposed methodology for calculating
fees for manufacturer-requested risk evaluations, the timing for
consortia formation, payment due dates, and the standard for small
business concerns. Finally, the final rule provides the additional
clarity requested by commenters in areas including: The allocation of
fees in complex multi-payer scenarios, the estimation of program costs
and activity level assumptions, and the circumstances for providing
refunds. The content of the final rule and these changes are discussed
in greater detail in Unit III.
III. Discussion of the Final Rule and Response to Comments
A. Purpose and Applicability
As described in 40 CFR 700.40, the purpose of the final rule is to
establish and collect fees from manufacturers (including importers) and
processors to defray a portion of EPA's TSCA implementation costs. The
rule applies to manufacturers who are required to submit information
under TSCA section 4, manufacturers and processors who submit certain
notices and exemptions under TSCA section 5, and to manufacturers who
are subject to risk evaluation under TSCA section 6(b), including
manufacturers who submit requests for risk evaluation under TSCA
section 6(b)(4)(C)(ii).
B. Entities Subject to Fees
Although EPA has authority to collect fees from both manufacturers
and processors of chemical substances, the final rule focuses fee
collection primarily on manufacturers. EPA will collect fees from
processors only when processors submit a SNUN or test-marketing
exemptions (TME) under section 5, when a section 4 activity is tied to
a SNUN submission by a processor, or when a processor voluntarily joins
a consortium and therefore agrees to provide payment as part of the
consortium. This approach is consistent with the proposed rule and with
most comments received. Although a few commenters urged EPA to allocate
more of the fee burden to processors, EPA is declining to do so at this
time. EPA believes the allocation primarily to manufacturers, and, in
limited circumstances, to processors, is an appropriate balance as
required in TSCA. As noted in the proposal, the effort of trying to
identify relevant processors for all fee-triggering actions would be
overly burdensome and EPA expected many processors would be missed.
Generally limiting fee obligations to manufacturers is the simplest and
most straightforward way to assess fees for conducting risk evaluations
under TSCA section 6 and most TSCA section 4 testing activities.
Furthermore, EPA expects that manufacturers required to pay fees will
have a better sense of the universe of processors and will pass some of
the costs on to them.
C. Identifying Manufacturers Subject to Fee Obligations
The proposed rule suggested that EPA would use Chemical Data
Reporting (CDR) data to identify manufacturers subject to fee
obligations, but would also rely on self-identification from other
manufacturers not subject to CDR reporting requirements. EPA also
proposed to include a ``manageable approach'' in the final rule for
identifying manufacturers subject to fees for TSCA section 4 and 6
activities, and requested public comment in this area. See 83 FR 8212,
8216. EPA also requested comment on whether to adopt a process that
would allow time for public input before finalizing a list. A number of
commenters agreed that such a process was necessary, and EPA is
codifying a process in the final rule to provide the necessary clarity
and certainty for those potentially subject to fees.
1. In general. EPA intends the process to include publication of a
preliminary list that identifies manufacturers (based on information
available to EPA through CDR reporting and other sources), a public
comment period (to allow for self-identification, correction of errors,
and certification of no-manufacture and no intention to manufacture in
the next five years), and publication of a final list defining the
universe of manufacturers responsible for payment. Further, EPA will
follow this process for only two fee-triggering events: TSCA section 4
test rules and TSCA section 6 EPA-initiated risk evaluations. EPA
believes that for all other fee-triggering events, the relevant
manufacturer(s) will already be apparent to the Agency and a specific
identification process will not be necessary. This process is not
necessary for TSCA section 5 activities, TSCA section 4 enforceable
consent agreements (ECAs), or TSCA section 6 manufacturer-requested
risk evaluations as manufacturers are self-identified through those
activities. The process is also not necessary for TSCA section 4 test
orders, as EPA will ultimately select the manufacturer(s) subject to
the order prior to or during the development of the order.
2. Data sources. To compile the preliminary list, EPA will use the
most up-to-date information available, including information submitted
to the Agency (e.g., information submitted under TSCA sections 5(a),
8(a) (including CDR), 8(b), and to the Toxics Release Inventory) as
well as other information available to the Agency, such as publicly
available information (e.g., Panjiva) or information submitted to other
agencies to which EPA has access (e.g., U.S. Custom and Border Patrol
data). To be able to include the most recent CDR data (collected every
four years) and to account for annual or other typical fluctuations in
manufacturing (including import), EPA will use five years of data
submitted or available to the Agency to create the preliminary list.
Although some commenters suggested looking back a greater or fewer
number of years, EPA believes that a five-year period enables EPA to
utilize a number of data sources described earlier and increase
accuracy.
3. Publication of preliminary list. EPA will publish this
preliminary list in the Federal Register concurrently with a relevant
milestone for each action. For risk evaluations initiated by EPA under
TSCA section 6, the preliminary list will be published at the time of
final designation of the chemical substance as a High-Priority
Substance. For test rules under TSCA section 4, the preliminary list
will be published with the proposed test rule.
4. Public comment period. Publication of the preliminary list will
be followed by a comment period of no less than 30 days, during which
manufacturers and the public will have the opportunity to correct
errors, self-identify as a manufacturer, and/or certify to already
having exited the market and that they will not return for a period of
5 years. EPA believes this process is largely consistent with comments
on the proposal encouraging EPA to publish a preliminary list and
engage with stakeholders to identify others who may be missing, correct
errors, and provide an opportunity for manufacturers to be removed from
the list under certain circumstances.
5. Self-identification and certification. If a manufacturer is on
the preliminary list, or is not on the preliminary list but is a
manufacturer of the chemical substance at issue, they must report to
EPA and self-identify with certain basic contact information. Although
EPA expects reporting to occur through CDX, EPA has developed a form to
reflect the self-identification statements, for reference purposes.
(Ref. 9.)
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Manufacturers on the preliminary list also have an opportunity to
certify through CDX that (1) they have already ceased manufacturing
prior to the defined cutoff dates and will not manufacture for five
years into the future, or (2) they have not ever manufactured the
chemical substance. If EPA receives such a certification statement from
a manufacturer, the manufacturer will not be obligated to pay the fee.
Manufacturers who are not listed on the preliminary list and otherwise
believe they can ``certify out'' as described previously, may choose to
attest these facts to EPA. However, if information received during the
public comment period would prompt the addition of manufacturers to the
final list, EPA will first notify those manufacturers. Manufacturers
who plan to cease manufacture in the future (but have not yet done so),
or those who have already ceased but may re-enter the market within the
next five years, would not be permitted to certify out, and would still
be subject to the fee obligation. The cutoff date (i.e., the date by
which manufacture must have ceased in order to certify out) for an EPA-
initiated risk evaluation is the date upon which the prioritization
process is initiated for that chemical (i.e., approximately 9-12 months
before the risk evaluation begins and 9-12 months before the
preliminary list is published). The cutoff date for a TSCA section 4
test rule is the date upon which the proposed test rule is published.
EPA chose an earlier cutoff date for risk evaluations to provide
greater assurance that the manufacturer has exited the market and will
not return for five years. Numerous commenters expressed concerns that
some manufacturers may only temporarily stop manufacture to avoid
potentially significant fee obligations, and subsequently return to the
market. The earlier cutoff date provides an extra measure of protection
against that scenario. See paragraph 7 for additional discussion
regarding free riders and late entrants.
6. Publication of final list. After the comment period for the
preliminary list of entities subject to a fee obligation, EPA will make
any associated updates or corrections, and then publish a final list of
manufacturers. This list will indicate if any manufacturers were
identified in error, any additional manufacturers that were identified
through the comment period and/or reporting form, and if any
manufacturers have certified that they have already ceased manufacture
prior to the cutoff date described earlier and will not manufacture the
subject chemical substance for five years into the future. The final
list will be published concurrently with the final scope document for
risk evaluations initiated by EPA under TSCA section 6, and with the
final test rule under TSCA section 4.
7. Free riders and late entrants. A number of commenters raised
concerns about the potential for manufacturers to exit the market
shortly before or during the fee-triggering event, and avoid their fee
obligations. Commenters expressed further concern about those same
manufacturers re-entering the market shortly after the fee-triggering
event, thereby getting a ``free ride.'' Other commenters suggested that
EPA also impose fees on ``late entrants'' (i.e., manufacturers who
enter the market after the fee-triggering event has concluded), and
reallocate fees accordingly, and provide partial refunds as
appropriate. EPA believes that the identification process will help
prevent the problems identified by some commenters regarding free
riders and manufacturers who may otherwise too easily exit and reenter
the market to avoid fee obligations. Specifically, the final rule
requires manufacturers to self-identify, and, for those who have exited
the market, certify that they will not manufacturer for at least 5
years or face penalties for violating TSCA. For chemicals with ongoing
uses, there is no requirement for new market entrants to provide notice
to EPA. Furthermore, it is impracticable for EPA to administer fees to
such late entrants by reallocating fee amounts, collecting additional
monies, and providing partial refunds to previously identified
manufacturers. Those entities who truly begin to manufacture during or
after the fee event would not be subject to fees, late charges or other
penalties, but this is consistent with how TSCA operates in the new
chemicals context: New manufacturers, not subsequent chemical
manufacturers, are required to submit PMNs and pay fees and subsequent
manufacturers are not obligated to reimburse a PMN submitter.
Existing manufacturers who fail to identify themselves as required
by this rule is a prohibited act under TSCA section 15(1) and therefore
subject to a penalty under TSCA section 16. EPA views each day of
failed identification by a manufacturer past the payment due date as a
separate event subject to penalty. Likewise, manufacturers who falsely
certify to having ceased manufacture and/or not re-initiating
manufacture within five years will also be subject to penalty.
D. Methodology for Calculating Fees
For the proposed rule, EPA calculated fees by estimating the total
annual costs of administering TSCA sections 4, 5, and 6 (excluding the
costs of manufacturer-requested risk evaluations) and of collecting,
processing, reviewing, and providing access to and protecting from
disclosure as appropriate under TSCA section 14; identifying the full
cost amount to be defrayed by fees under TSCA section 26(b) (i.e., 25%
of those annual costs); and allocating that amount across the fee-
triggering events in TSCA sections 4, 5, and 6, weighted more heavily
toward TSCA section 6 based on early industry feedback. EPA
specifically requested comment on this methodology. While a number of
commenters generally supported the allocation as an appropriate balance
of fees amongst activities in TSCA sections 4, 5, and 6, many
commenters offered alternative suggestions for calculating fees, such
as an actual cost approach or level-of-effort approach.
A common theme from commenters was that fees, particularly those
for TSCA section 6 activities, should more closely align with EPA's
actual costs for carrying out the specific activity on the specific
chemical. Some commenters pointed to the likelihood for variability in
costs stemming from the number of uses evaluated, extent of exposures,
amount of existing information such as assessments from other
government bodies, the level of contractor support necessary, the
complexity and number of tests required, and other factors.
As a general matter, EPA believes it is important to track costs on
a chemical and activity basis in light of the increased
responsibilities under TSCA and the need to better understand
associated new costs. The Agency is working towards building this
capability and, consistent with commenters' suggestions, expects to
begin tracking actual costs on a chemical basis as soon as feasible.
EPA plans to use our time reporting system to track employee hours and
contract expenditures for each chemical undergoing risk evaluation and
at the fee category level for section 4 and 5 activities. EPA also
plans to track CBI claim review direct and programmatic support costs
as well as cross cutting costs, direct costs and indirect costs
associated with section 4, 5, 6, and collecting, processing, reviewing,
and providing access to and protecting from disclosure as appropriate
under section 14 information on chemical substances under TSCA.
However, EPA does not currently track costs with this level of
[[Page 52698]]
specificity and, as with any new activity, expects there to be some
initial challenges as it works to do so. As such, EPA does not believe
it would be feasible or appropriate to implement an actual cost
approach for all fee-triggering events at this time. Furthermore,
because actual costs of individual activities are unknown at this time
and unknowable in advance (i.e., every activity will be unique and bear
different actual costs), and because the fee-triggering events are a
narrower subset of the activities that TSCA fees must defray, it is
unclear how EPA could ensure that an actual cost approach would yield
fee revenue sufficient to defray 25% of the overall TSCA implementation
costs associated with section 4, 5, and 6, and collecting, processing,
reviewing, and providing access to and protecting from disclosure as
appropriate under section 14 information on chemical substances under
TSCA, absent a better understanding of the actual costs of these new
activities. More generally, EPA has many new responsibilities under
TSCA and relatively little information and experience to inform
assumptions on costs or activity levels. EPA expects to gain valuable
experience implementing this initial fee structure. Ultimately, EPA
believes this initial experience and information gained from tracking
actual costs will help EPA to continue refining methodologies for
calculating fees, and will inform potential revisions to the fee
structure in the future. To inform these revisions EPA plans to use our
time reporting system to track employee hours and contract expenditures
for each chemical undergoing risk evaluation and at the fee category
level for section 4 and 5 activities. EPA also plans to track CBI claim
review direct and programmatic support costs as well as cross cutting
costs, direct costs and indirect costs associated with section 4, 5, 6,
and collecting, processing, reviewing, and providing access to and
protecting from disclosure as appropriate under section 14 information
on chemical substances under TSCA. Congress implicitly recognized the
benefit of gained experience and understanding over time by requiring
EPA to revisit the fees structure every three years. Therefore, after
considering the comments, for the final rule, EPA has determined to
calculate the fees using the same approach as used in the proposed rule
for most fee categories.
EPA is, however, finalizing an actual cost approach for calculating
fees for manufacturer-requested risk evaluations. Although EPA proposed
a static fee for manufacturer-requested risk evaluations based on
general cost estimates for risk evaluation activities, upon further
consideration and in light of public comments received, EPA will
include a provision in the final rule to align this fee with the actual
costs of the activity as a plain reading of TSCA would require.
Specifically, EPA will require an initial payment of $1,250,000 (for a
chemical on the TSCA Work Plan) or $2,500,000 (for a chemical not on
the TSCA Work Plan), payable within 30 days after granting the request,
and a final invoice to total either 50% or 100% of the actual costs in
line with the percentage requirements in TSCA, or a refund to achieve
these requirements, if warranted. As described in this unit, EPA
estimates the cost of a manufacturer-requested risk evaluation to be
approximately $3.88M. The initial payment amounts were calculated to
capture approximately two thirds of either 50% or 100% of that
estimated cost, with the expectation that approximately the last third
would come from the final payment. This approach is well-supported in
the language of TSCA, which explicitly requires the Agency to collect a
percentage of costs incurred ``in conducting the risk evaluation''
(i.e., 50% or 100%, depending on whether or not the chemical is on the
TSCA Work Plan). TSCA section 26(b)(4)(D) specifies that EPA shall
establish a fee for manufacturer-requested risk evaluations sufficient
to defray the full costs (or 50% of the costs for TSCA Work Plan
chemicals) and the approach being finalized is consistent with that.
Commenters had a variety of suggestions for how to implement an actual
cost approach (e.g., multiple payments at various milestones, small
upfront payments or application fees followed by one or more additional
payments, multiple payments based on target cost estimate ranges,
etc.), but EPA determined that a simple two-payment approach--an
initial payment, followed a final invoice at the conclusion of the risk
evaluation for the total remaining due, or a refund--was a fair,
understandable and practical approach in line with EPA's goals for the
rulemaking.
EPA is confident that the actual cost approach for manufacturer-
requested risk evaluations will be implementable for these activities
beginning in FY19. Because fees collected for manufacturer-requested
risk evaluations do not count towards the requirement that fees defray
25% of overall implementation costs in TSCA section 26(b)(4)(F), there
is not a need to count manufacturer-requested risk evaluation fees
towards achieving a specific percentage of total revenue collected.
Additionally, EPA continues to believe that these types of requests
will generally be less complex (i.e., companies will request risk
evaluations on chemicals that are likely to present fewer significant
risk issues) than most EPA-initiated risk evaluations, and therefore
easier/simpler to assess and track for actual costs.
E. Fee Categories
EPA proposed 8 distinct fee categories: (1) Test orders, (2) test
rules and (3) enforceable consent agreements, all under TSCA section 4;
(4) notices and (5) exemptions, both under TSCA section 5; and (6) EPA-
initiated risk evaluations, (7) manufacturer-requested risk evaluations
for chemicals on the TSCA Work Plan, and (8) manufacturer-requested
risk evaluations for chemicals not on the TSCA Work Plan, all under
TSCA section 6. Although EPA received some comment on these and other
potential fee categories as described later in this discussion, EPA is
not altering these fee categories for the final rule. The activities in
these categories are fee-triggering events that result in obligations
to pay fees under this final rule.
As a general matter, EPA received very few comments on the
categories proposed for TSCA section 4 activities. One commenter
expressed concern that testing requirements that are associated with
TSCA section 5 or 6 activities should not be subject to a separate TSCA
section 4 fee, otherwise it would amount to double-charging. EPA
disagrees with this characterization. Cost estimates for TSCA section 4
activities do not overlap with cost estimates for TSCA section 5 or 6
activities, and the expenses defrayed by the fees are different. There
is a cost to the Agency to (1) develop an order, rule or consent
agreement, and (2) to review the data. These costs are separate from
and in addition to the costs associated with review of a TSCA section 5
notice or exemption, or undertaking a TSCA section 6 risk evaluation.
EPA received a number of comments related to TSCA section 5 fee
categories--most pertaining to the proposed fees for low-volume
exemptions (LVEs) and other exemptions. A number of commenters sought
to eliminate the exemption fee category entirely, and particularly for
LVE fees. Historically, EPA has not charged a fee for TSCA section 5
exemption applications (e.g., LVE, low exposure/low release exemptions
(LoREX), test-marketing exemptions (TME), TSCA experimental release
[[Page 52699]]
applications (TERA), etc.). EPA's prior fee structure was set in 1988
and, while TSCA authorized EPA to collect fees for exemption
applications, EPA only implemented fees for PMNs, SNUNs, and MCANs. EPA
is imposing fees in this rule for all exemption submissions, except
Tier I and polymer exemptions because the expected revenue from those
activities would be largely negated by the administrative costs of
collection. Some commenters suggested that fees for any exemption
application would become a barrier to research, development and
innovation. While EPA shares commenters' general concerns for impacts
to innovation, EPA does not believe the LVE fee--a onetime $4,700 cost
per submission ($940 for small business concerns)--will be a
significant barrier to chemical industries seeking to introduce a new
chemical to market. There is already a regulatory exemption from the
TSCA section 5 notice requirements for those who manufacture only for
research and development purposes (see 40 CFR 720.36). Another
commenter asked EPA to clarify whether there would be a fee for bona
fide submissions to ascertain whether or not a chemical is on the TSCA
Inventory. EPA did not propose a fee for bona fide submissions, and
there is no fee in the final rule for such submissions. Moreover, if a
PMN was determined not to be a new chemical substance, the submitter
would be due a full refund.
No commenters opposed the proposed fee categories for TSCA section
6 activities. However, several suggested exclusions or discounts for
those who manufacture a chemical as an impurity or byproduct, or those
who manufacturer chemicals for small, niche markets as their revenue
may be insufficient to support a risk evaluation. As indicated earlier,
EPA is not adjusting the fee categories in the final rule. TSCA
requires EPA to evaluate chemicals under their conditions of use, and
conditions of use evaluated may involve manufacture of impurities or
byproducts, or chemicals used in niche market applications. As such,
EPA does not believe it would be appropriate to exclude these
manufacturers from fee obligations for TSCA section 6 activities.
Finally, EPA solicited comment in the proposed rule about the
potential for additional fee categories for other TSCA activities such
as CBI claims or risk management activities. A majority of commenters
opposed fee categories or surcharges associated with submission of CBI
claims, with the exception of some who noted that requiring payment of
fees could help reduce the number of unwarranted claims. Commenters
were split regarding a separate risk management fee. Several opposed a
separate fee, suggesting there was no authority in TSCA to implement
one. Other commenters encouraged EPA to include a separate fee category
for risk management activities to both place the costs of this activity
on companies choosing to use more dangerous chemicals, and to
incentivize companies to move to safer chemistries. After further
consideration, EPA has determined not to add these additional
categories. EPA already accounted for both CBI and risk management
activities in the baseline cost estimates in the proposed rule, meaning
that EPA will recover a portion of these costs through the other fee
categories. EPA believes this approach is in line with TSCA section 26,
which does not explicitly authorize EPA to assign fees for CBI claims
or risk management activities. EPA expects that the historical problem
of unwarranted CBI claiming will be mitigated to a certain extent by
enhanced CBI review requirements for EPA and substantiation
requirements in TSCA. Similarly, EPA believes that the new general
requirements for prioritization and evaluation of existing chemicals
will themselves be a disincentive to manufacturing chemicals with more
significant risks.
F. Program Cost Estimates and Activity Assumptions
The estimated annual Agency costs of carrying out TSCA section 4,
5, and 6, and of collecting, processing, reviewing, and providing
access to and protecting from disclosure as appropriate under TSCA
section 14 information on chemical substances under TSCA, are
approximately $80.2 million excluding the estimated cost of having 5
manufacturer-requested risk evaluations underway each year. Because the
25% cap on cost recovery does not apply to manufacturer-requested risk
evaluations, the total cost to which the cap applies is $80.2 million.
Based on these cost estimates, EPA anticipates collecting approximately
$20 million in fees not associated with manufacturer-requested risk
evaluations. In addition, the Agency intends to collect fees from
manufacturers to recover 50% or 100% of the actual costs incurred by
EPA in conducting chemical risk evaluations requested by manufacturers.
EPA expects the amount collected will be approximately $1.94 million
per chemical for chemicals on the TSCA Work Plan and $3.9 million per
chemical for chemicals not on the TSCA Work Plan.
EPA determined the anticipated costs associated with TSCA sections
4, 5, and 6 of collecting, processing, reviewing, and providing access
to and protecting from disclosure as appropriate under TSCA section 14
information on chemical substances under TSCA, including both direct
program costs and indirect costs (see Table 1). For fiscal year 2019
through fiscal year 2021, these costs were estimated to be
approximately $80.2 million per year. More detail on how anticipated
costs were calculated follows in Unit III.B.2.
Table 1--Estimated Annual Costs to EPA
[Fiscal Year 2019 through Fiscal Year 2021]
----------------------------------------------------------------------------------------------------------------
Direct program
costs Indirect costs Annual costs
----------------------------------------------------------------------------------------------------------------
TSCA Section 4.................................................. $2,765,000 $778,000 $3,543,000
TSCA Section 5.................................................. 22,375,000 6,296,000 28,672,000
TSCA Section 6.................................................. 34,073,000 9,545,000 43,618,000
TSCA Chemical Information Management............................ 3,531,000 814,000 4,345,000
-----------------------------------------------
Total....................................................... 62,744,000 17,425,000 80,178,000
----------------------------------------------------------------------------------------------------------------
Notes: Numbers may not add due to rounding. The indirect cost rate for Office of Chemical Safety and Pollution
Prevention is estimated at 28.14% for the purposes of this analysis.
[[Page 52700]]
After estimating the annual costs of administering TSCA section 4,
5, and 6, and of collecting, processing, reviewing, and providing
access to and protecting from disclosure as appropriate under TSCA
section 14 information on chemical substances under TSCA, the Agency
had to determine how the costs would be allocated over the narrower set
of activities under TSCA section 4, 5 and 6, which trigger a fee. The
Agency took an approach to determining fees that tied the payment of
fees to individual distinct activity types or ``fee-triggering
events''. This allows allocation of costs more equitably among the
activity types and their related costs.
1. Program costs. To determine the program costs for implementing
TSCA sections 4, 5, and 6, of collecting, processing, reviewing, and
providing access to and protecting from disclosure as appropriate under
TSCA section 14 information on chemical substances under TSCA, the
Agency accounted for the intramural and extramural costs for activities
under these sections. Intramural costs are those costs related to the
efforts exerted by EPA staff and management in operating the program,
collecting and processing information and funds, conducting reviews,
and related activities. Extramural costs are those costs related to the
acquisition of contractors to conduct activities such as analyzing
data, developing IT systems and supporting the TSCA Help Desk. The
Agency then added indirect costs to the direct program cost estimates.
The Agency used an indirect cost rate of 28.14% to calculate the
indirect costs associated with all direct program cost estimates for
TSCA sections 4, 5, 6 and collecting, processing, reviewing, and
providing access to and protecting from disclosure as appropriate under
TSCA section 14 information on chemical substances under TSCA.
Some commenters expressed concerns that agency cost estimates and
fee amounts were too low while other commenters expressed concerns that
general or specific cost estimates, or fee amounts were too high or
were not well substantiated. EPA continues to believe that the
estimates presented represent the best estimates possible given our
reliance, to the extent possible, on past experience and consideration
of the additional work under the expanded authorities in the amended
statute. Given this limited experience with novel obligations and
authorities, our costs are estimates and subject to change and become
more precise over time. However, EPA informed these estimates by
relying on past experience with similar activities coupled with
significant interaction and discussion with programmatic staff and
management to develop estimates.
Because of the novelty and expanded scope of many aspects of the
program under amended TSCA, EPA is not able to fully benchmark or
substantiate all our estimates through past staffing or contract budget
needs for identical activities. However, EPA carefully took into
account the expanded requirements for risk evaluation, risk management,
and new chemical review activities as well as the new test order
authority when developing the cost estimates. Furthermore, EPA believes
that Congress understood the uncertainty in standing up a new chemical
review and management program and therefore required EPA to perform
annual audits and reassess fees every three-years to allow for costs
estimates and the associated fees to be refined.
a. TSCA section 4 program costs. TSCA section 4 gives EPA the
authority to require (by rule, order, or ECA) manufacturers and
processors to conduct testing of identified chemical substances or
mixtures. EPA estimated TSCA section 4 activity costs based on prior
experience with developing test rules and ECAs, reviewing study plans,
and reviewing the data received. These activity level assumptions
represent EPA's best professional judgment on how the program will be
implemented in the first 3-year fees cycle. EPA estimates that, on
average, it will undertake work associated with 10 test orders, one
test rule and one ECA each year. While EPA expects to work on one test
rule and one ECA each year, we expect to initiate each of these
activities about every other year as it takes approximately two years
to complete the work associated with both of these activities. While
not EPA's current practice, these estimates represent EPA's best
estimate on the work that will be required as a result of the 2016
amendments to TSCA, including the requirements to prioritize chemicals
for risk evaluation review and to have 20 risk evaluations underway at
all times beginning in December 2019.
EPA used historical averages of the number of affected firms per
chemical from the three most recent section 4 test rules for high
production volume (HPV) chemicals (71 FR 13708, March 16, 2006) (FRL-
7335-2); (76 FR 4549, January 26, 2011) (FRL-8862-6); and (76 FR 65385,
October 21, 2011) (FRL-8885-5) and assumed an average of seven
chemicals involved per TSCA section 4 action and four affected firms
per chemical. EPA based Section 4 costs on our general experience with
the rulemaking process, our experience with the developing an ECA for
Octamethylcyclotetrasiloxane (D4) and costs associated with reviewing
information received, and administration of, the HPV Voluntary Testing
Program. EPA relied on this past experience augmented thorough a
process of coordination with programmatic staff and management to
estimate the TSCA section 4 costs.
EPA's cost estimates included a full suite of activities related to
developing and implementing actions under the TSCA section 4
authorities including development of screening-level hazard and
environmental fate information, including tests that provide
information on the toxicity of a chemical (e.g., aquatic toxicity, and
mammalian toxicity). EPA also included estimates of the costs of
reviewing physical/chemical properties and environmental fate and
pathways data and tests.
Some commenters felt that EPA cost estimates were too low. However,
EPA's estimates reflect the best estimates currently available, rely on
past programmatic experience, and fully consider the information needs
under amended TSCA for section 4 activities. In addition, TSCA section
4 actions have historically included multiple chemicals per action. EPA
TSCA section 4 test orders, for example, could cover a group of similar
chemicals allowing EPA to collect information on more than 10 chemicals
in a given year. Further, if EPA learns that more activities are needed
per year or that costs are higher than expected, EPA will appropriately
revise the requirements during the annual and three-year review of
fees.
Based on previous experience and expected work under TSCA as
amended, EPA assumed that testing required by test orders is likely to
be completed in under a year, and test rules and ECAs are likely to
take two years to complete. To estimate the costs of reviewing test
data, we assume that on average, data will be submitted to EPA for
seven chemicals in each TSCA section 4 activity and that each chemical
would have 4 associated companies to test for a total of 28 firms per
action.
Based on this approach, the estimated cost to the Agency of each
test order is approximately $279,000. Each test rule is estimated to
cost approximately $844,000 and each enforceable consent agreement is
estimated to cost approximately $652,000. These cost estimates include
submission review and are based on projected full-time equivalent (FTE)
and extramural support needed for each activity divided by the number
of orders, rules and ECAs EPA assumes will be worked on over a
[[Page 52701]]
three-year period. Several of these activities (rules and ECAs) are
expected to span two years, as noted earlier so those estimates are
based on the annual estimated costs multiplied by two. The annual cost
estimate of administering TSCA section 4 in fiscal year 2019 through
fiscal year 2021 is $3,543,000 (Ref. 3: Table 8).
b. TSCA section 5 program costs. TSCA section 5 requires that
manufacturers and processors provide EPA with notice before initiating
the manufacture of a new chemical substance or initiating the
manufacturing or processing for a significant new use of a chemical
substance. EPA is required to review and make affirmative
determinations for new chemical submission and take risk management
action, as needed.
Examples of the notices or other information that manufacturers and
processors are required to submit under TSCA section 5 are PMNs,
significant new use notifications (SNUNs), microbial commercial
activity notices (MCANs), and numerous types of exemption notices and
applications (e.g., low-volume exemptions [LVEs], test-marketing
exemptions [TMEs], low exposure/low release exemptions [LoREXs], TSCA
experimental release applications [TERAs], certain new microorganism
[Tier II] exemptions, film article exemptions, etc.).
EPA's TSCA section 5 efforts prior to the 2016 amendments to TSCA
are well understood through experience that spans several decades. The
Agency has 40 years of experience and historical data on costs, as well
as the number of different TSCA section 5 submission types sent to the
Agency each year under the previous statute. In 1987, the costs for the
Agency to process a PMN were approximately up to $15,000 per
submission, depending on the amount of detailed analysis necessary;
these estimates did not include indirect costs. Recent data on the
number of annual submissions is found at https://www.epa.gov/reviewing-new-chemicals-under-toxic-substances-control-act-tsca/statistics-new-chemicals-review. In calendar year 2016, EPA received 577 PMNs, SNUNs
and MCANs, and another 560 exemption notices and applications, most of
which were LVEs.
Cost estimates were developed based on our historical understanding
of costs, extensive consultation with programmatic staff and management
and careful consideration of the requirements for new chemical reviews
under amended TSCA, including the requirement to make an affirmative
safety determination, and costs of pre-notice consultation. Based on
the extent of past experience to rely upon for costs estimation, TSCA
section 5 costs are some the best understood in terms of anticipated
activity level and per activity cost.
Some commenters commented that EPA did not fully consider the
statutory requirements under amended TSCA. However, EPA feels the costs
are developed using our robust historical cost understanding, extensive
discussion with programmatic staff and management, and consideration of
the requirements under amended TSCA to evaluate intended, known, or
reasonably foreseen conditions of use and the Agency's costs of taking
any related required regulatory action such as with a SNUR and/or a
consent order. Costs of reviewing any data that is submitted to EPA as
a result of an order is also included in EPA's estimates. EPA's cost
estimates for administering TSCA section 5 also include the costs
associated with processing and retaining records related to a Notice of
Commencement (NOC) submission. NOC costs also include the cost of
registering the chemical with the Chemical Abstracts Service. EPA has
lumped the costs associated with NOCs (totaling an estimated $1,700,000
per year) with those of PMNs, MCANs and SNUNs. The estimated average
cost for EPA to review a PMN, MCAN and SNUN is approximately $55,200.
This estimate is based on projected FTE and extramural support needed
for these actions divided by the number of submissions the Agency
assumes will be received each year once fees are in place. EPA
estimated that there will be 462 submissions annually. EPA's estimate
of number of submissions is based on submissions received in FY 16, and
reduced by 20% due to the anticipated impact of increased fees on the
number of submissions (Ref. 3: Table 9). EPA does not believe that this
estimated reduction in submissions will translate into a reduction in
new chemicals entering commerce as only roughly 57% of new chemicals
reviewed by EPA have historically entered commerce. Furthermore, EPA
acknowledges that these activity level assumptions are only estimates
and there is underlying uncertainty regarding the true impact of these
fees.
Estimated costs associated with TSCA section 5 exemption notices
and applications include pre-notice consultation, processing and
reviewing the application, retaining records, and related activities.
The average cost for EPA to review an exemption is $5,600. This
estimate is based on projected FTE and extramural support needed for
these actions divided by the number of submissions the Agency assumes
will be received each year once fees are in place. EPA estimates that
there will be 560 exemptions submitted annually. While EPA did not
assume a reduction in the number of exemption submissions, EPA
acknowledges that these activity level assumptions are only estimates
and there is underlying uncertainty regarding the true impact of fees
on exemption submissions. Our estimate of number of submissions is
based on submissions received in FY 16 (Ref. 3: Table 10).
The annual cost estimate of administering TSCA section 5 in fiscal
year 2019 through fiscal year 2021 is $28,600,000. Approximately
$25,500,000 is attributed to PMNs, SNUNs and MCANs; another
approximately $3,149,000 is attributed to section 5 exemptions notices
and applications for LVEs, LoREXs, TMEs, TERAs, Tier IIs and film
articles.
c. TSCA section 6 program costs. TSCA section 6 describes EPA's
process for assessing and managing chemical safety under TSCA. TSCA
section 6 addresses: (a) Prioritizing chemicals for evaluation; (b)
evaluating risks from chemicals; and (c) addressing unreasonable risks
identified through the risk evaluation. Under TSCA, EPA is now required
to undergo a risk-based prioritization process to designate existing
chemicals on the TSCA Inventory as either high-priority for risk
evaluation or low-priority. EPA is also currently considering
approaches for identifying potential candidates for prioritization and
has included estimates for this the EPA costs for TSCA section 6. For
chemicals designated as high-priority substances, EPA must evaluate
existing chemicals to determine whether they ``present an unreasonable
risk of injury to health or the environment'' (TSCA section 6(a)).
Under the conditions of use the Agency expects to consider for each
chemical, the Agency will assess the hazard(s), exposure(s), and the
potentially exposed or susceptible subpopulation(s) that EPA determines
are relevant. This information will be used to make a final
determination as to whether the chemical presents an unreasonable risk
under the conditions of use. The first step in the risk evaluation
process, as outlined in TSCA, is to issue a scoping document for each
chemical substance within six months of its designation in the Federal
Register. The scoping document will include information about the
chemical substance, such as conditions of use, exposures, including
potentially exposed or susceptible subpopulations, and hazards, that
the Agency expects to consider in the risk
[[Page 52702]]
evaluation. TSCA requires that these chemical risk evaluations be
completed within three years of initiation, allowing for a 6-month
extension. By the end of calendar year 2019, EPA must have at least 20
chemical risk evaluations ongoing at any given time on high-priority
chemicals, have identified at least 20 low-priority substances for
which risk evaluation is not warranted at this time, and have an
additional 5-10 manufacturer-requested risk evaluations underway, if
sufficient requests and fee payments have been made. For each risk
evaluation that the Agency completes for a High-Priority Substance,
TSCA requires that EPA identify another High-Priority Substance. The
Agency expects to have between 25 and 30 risk evaluations ongoing at
any time in any given year at different stages in the review process.
TSCA section 6 cost estimates have been informed by the Agency's
experience completing assessments for several TSCA Work Plan chemicals,
including N-methylpyrrolidone, antimony trioxide, methylene chloride,
trichloroethylene, and 1,3,4,6,7,8-Hexahydro-4,6,6,7,8,8-
hexamethylcyclopenta[[gamma]]-2-benzopyran (HHCB) and by the Agency's
experience with risk management actions addressing risks identified
from particular uses of a chemical. In addition, EPA relied on our
experience with work to date on the first ten 10 chemicals currently
undergoing risk evaluation. TSCA section 6 risk evaluation costs
include the cost of information gathering, considering human and
environmental hazard, environmental fate, and exposure assessments.
Costs also include the use of the ECOTOX knowledge and Health and
Environmental Research Online (HERO) databases, among others. Other
costs include scoping (including problem formulation, conceptual model
and analysis plan), developing and publishing the draft evaluation,
conducting and responding to peer review and public comment, and
developing the final evaluation, which includes a risk determination.
Under TSCA section 6, the Agency also has obligations to take
action to address the unreasonable risks identified from a chemical.
TSCA section 6(a) provides authority for EPA to prohibit or otherwise
restrict the manufacture, processing, distribution in commerce, and
commercial use of chemicals, as well as any manner or method of
disposal of chemicals. Cost estimates for risk management activities
have been informed, in part, by EPA's recent risk reduction actions on
several chemicals, including development of the proposed rules
regarding the use of N-methylpyrrolidone and methylene chloride in
paint and coating removal and trichloroethylene in both commercial
vapor degreasing and aerosol degreasing and for spot cleaning in dry
cleaning facilities.
In addition to considering previous experience with TSCA Work Plan
chemicals described in this Unit, EPA also benchmarked risk evaluation
costs against cost associated with conducting risk assessments for
pesticides under the Pesticide Registration Improvement Act (PRIA). The
Agency chose the costs of conducting reviews for new conventional food-
use pesticide active ingredients as the most relevant comparison to an
existing chemical review under TSCA based on the scope and complexity
of the assessments and the data considered in conducting the reviews.
EPA estimates the cost of completing a risk assessment and risk
management decision for a new conventional food use pesticide active
ingredient to be approximately $2,900,000 which includes direct cost
estimates provided by the Office of Pesticide Programs and indirect
costs at 28.14%. The primary rationale for the increased cost estimate
for a risk evaluation under TSCA when compared to a new pesticide
review under PRIA are that the scope of an existing chemical assessment
under TSCA is expected to be broader in terms of conditions of use and
exposure scenarios that will be assessed.
EPA also expects that risk management costs will be higher under
TSCA since rulemaking is required to implement any mitigation that is
considered appropriate whereas most mitigation for a pesticide can be
achieved directly through changes to the product labeling and/or terms
and conditions of the registration. Some commenters commented that risk
evaluation costs were over-estimated since risk assessments by private
firms are less expensive. EPA does not agree with this as the scope of
an assessment from a private firm could be significantly lower than
that required under amended TSCA.
The breakdown of costs for an average three-year EPA-initiated
chemical risk evaluation is shown in Table 2.
Table 2--Estimated Costs (Direct and Indirect) Associated With an
Average Chemical Risk Evaluation
------------------------------------------------------------------------
Estimated
Risk evaluation activity cost
------------------------------------------------------------------------
Risk Evaluation: Data Gathering (i.e., literature search)... $395,000
Risk Evaluation: Databases (e.g., ECOTOX and HERO).......... 147,000
Risk Evaluation: Hazard Assessment.......................... 1,008,000
Risk Evaluation: Exposure Assessment........................ 1,038,000
Risk Evaluation: Scoping.................................... 235,000
Risk Evaluation: Draft Evaluation........................... 502,000
Risk Evaluation: Peer Review & Responding to Comment........ 230,000
Risk Evaluation: Final Evaluation........................... 329,000
-----------
Total..................................................... 3,884,000
------------------------------------------------------------------------
Upon further consideration and in light of public comments
received, EPA cost estimates for manufacturer-requested risk
evaluations were revised from those in the proposed rule to be
consistent with the costs of EPA-initiated risk evaluations and to
increase accountability and transparency by using an actual cost
approach when determining the fee for a specific manufacturer-requested
chemical review. In the proposed rule, EPA estimated the costs of a
manufacturer-requested risk evaluation to be $2.6M, and the costs of an
EPA-initiated risk evaluation to be $3.88M. Upon consideration of
comments and further analysis, for purposes of the economic analysis
and burden analysis, EPA estimated the same costs for both
manufacturer-requested and EPA-initiated risk evaluations at $3.88M.
However, EPA also carefully considered commenters that expressed
concern that some risk evaluations may be less burdensome. In order to
address concerns with potentially overcharging for some risk
evaluations, EPA is implementing an actual cost approach to fees for
manufacturer-requested risk evaluations as described in Unit III.
The estimated annual cost of administering TSCA section 6 in fiscal
year 2019 through 2021 is $43,618,000. Approximately $32,370,000 is
attributed to risk evaluation work on chemical risk evaluations;
another approximately $6,584,000 is attributed to risk management
efforts; another approximately $2,091,000 is attributed to support from
the Office of Research and Development (ORD) for alternative animal
testing and methods development and enhancement, data integration,
meta-analysis of studies, and providing access to other models, tools
and information already developed by ORD, and approximately $2,573,000
is attributed to the process of designating chemicals as High- or Low-
priority substances (Ref. 3: Table 11).
[[Page 52703]]
d. Costs of collecting, processing, reviewing, and providing access
to and protecting from disclosure as appropriate under section 14
information on chemical substances under TSCA. EPA's cost estimates for
TSCA section 14 as presented for the proposed rule are unchanged for
the final rule.
Some commenters thought that the statutory requirement that EPA
collect fees to defray 25% of the costs of ``collecting, processing,
reviewing, and providing access to and protecting from disclosure as
appropriate under section 14'' would apply to costs beyond those to
manage information related to activities in TSCA section 4, 5 and 6.
EPA generally agrees and is clarifying that cost estimates do fully
consider these costs of general information management but do not
include the costs of administering other authorities for collection
such as those in TSCA section 8 and 11. EPA does not believe that
Congress intended EPA to offset costs associated with administering
authorities under these other sections. The statutory text clearly
points to the authorities of sections 4, 5, 6 and 14 but not others. If
the costs of administering activities under sections 8 and 11 were
intended to be defrayed with fees, Congress would have specifically
included those authorities in the statutory text. Therefore, cost
estimates in the proposed rule already considered costs associated with
managing information that for instance, comes in pursuant to a TSCA
section 8 rule, but not the costs of developing the TSCA section 8
rule.
In response to commenter's requests to better substantiate costs
related to information management, EPA expanded upon the categories in
the cost estimates provided in the Technical Background Document (Ref.
3) from those released in the proposed rule to provide a cost breakout
that better elaborates which activities were included and the
associated cost estimates. Specific activities considered when
developing this estimate for these activities include: Prescreening/
initial review; substantive review and making final determinations;
documents review and sanitization; regulation development; IT systems
development; and transparency/communications. Estimates also include
Office of General Counsel costs associated with issuing TSCA CBI claim
final determinations, and supporting guidance, policy and regulation
development for TSCA Section 14 activities, e.g., implementing the
unique identifier provisions, access to TSCA CBI for emergency
personnel, states, tribes and local governments, the TSCA CBI sunset
provisions, among others.
Other chemical information management activities included in the
analysis are: The costs for implementation of the Unique Identifier
Rule; costs for implementing the requirements in TSCA section 14(d);
costs for implementing the CBI sunset requirements; costs for Notice of
Activity chemical identity CBI claim reviews, costs for Freedom of
Information Act-Related CBI claim reviews; and costs for providing
public access to Non-CBI Data and IT costs for operating and
maintaining the CBI Local Area Network (LAN). The annual cost estimate
of collecting, processing, reviewing, and providing access to and
protecting from disclosure as appropriate under TSCA section 14
information on chemical substances under TSCA, including FTE and
extramural costs, from fiscal year 2019 through fiscal year 2021 is
$4,346,000 (Ref. 3).
1. Indirect costs. Indirect costs are the intramural and extramural
costs that are not accounted for in the direct program costs, but are
important to capture because of their necessary enabling and supporting
nature, and so that our proposed user fees will accomplish full cost
recovery up to that provided by law. Indirect costs typically include
such cost items as accounting, budgeting, payroll preparation,
personnel services, purchasing, centralized data processing, and rent.
Indirect costs are disparate and more difficult to track than the other
cost categories, because they are typically incurred as part of the
normal flow of work (e.g., briefings and decision meetings involving
upper management) at many offices across the Agency.
EPA accounts for some indirect costs in the costs associated with
TSCA sections 4, 5, and 6, costs of collecting, processing, reviewing,
and providing access to and protecting from disclosure as appropriate
under TSCA section 14 information on chemical substances under TSCA by
the inclusion of an indirect cost factor. This rate is multiplied by
and then added to the program costs. An indirect cost rate is
determined annually for all of EPA offices by the Agency's Office of
the Controller, according to EPA's indirect cost methodology and as
required by Federal Accounting Standards Advisory Board's Statement of
Federal Financial Accounting Standards No. 4: Managerial Cost
Accounting Standards and Concepts. An indirect cost rate of 28.14% was
applied to direct program costs of work conducted by EPA's Office of
Chemical Safety and Pollution Prevention, based on FY 2016 data (Ref.
4). Some of the direct program costs included in the estimates for TSCA
sections 4, 5, and 6 and collecting, processing, reviewing, and
providing access to and protecting from disclosure as appropriate under
TSCA section 14 information on chemical substances under TSCA are for
work performed in other Agency offices (e.g., the Office of Research
and Development and the Office of General Counsel). Appropriate
indirect cost rates were applied to those cost estimates (i.e., 25.56%
and 8.05%). These indirect rates are based on an EPA's existing
indirect cost methodology (Ref. 4). Indirect cost rates are calculated
each year and therefore subject to change. Indirect costs were included
in the program cost estimates in the previous sections.
2. Total costs of fee-triggering events. The annual estimated costs
for fee categories under TSCA section 4, including both direct and
indirect program costs are shown in Table 3. Note that the costs
presented in Tables 3, 4 and 5 include only the costs of fee-triggering
events and so do not include costs associated with CBI reviews,
alternative testing methods development, risk management for existing
chemicals or prioritization of existing chemicals. Costs associated
with those activities are part of the overall costs of administering
TSCA sections 4, 5, 6 and of collecting, processing, reviewing, and
providing access to and protecting from disclosure as appropriate under
TSCA section 14 information on chemical substances under TSCA and, as
such, are included in the overall cost estimates previously in Table 1.
[[Page 52704]]
Table 3--TSCA Section 4 Costs *
----------------------------------------------------------------------------------------------------------------
Estimated
number of Estimated cost Estimated
Fee category ongoing to agency/ annual cost to
actions/year action agency
----------------------------------------------------------------------------------------------------------------
Test Order...................................................... 10 $279,000 $2,795,000
Test Rule....................................................... 1 844,000 422,000
Enforceable Consent Agreement................................... 1 652,000 326,000
----------------------------------------------------------------------------------------------------------------
* Numbers may not add due to rounding.
The estimated annual costs for fee categories under TSCA section 5,
including both direct and indirect program costs are shown in Table 4.
Table 4--TSCA Section 5 Costs *
----------------------------------------------------------------------------------------------------------------
Estimated
number of Estimated cost Estimated
Fee category ongoing to agency/ annual cost to
actions/year action agency
----------------------------------------------------------------------------------------------------------------
PMN and consolidated PMN, SNUN, MCAN and consolidated MCAN...... 462 $55,200 $25,500,000
LoREX, LVE, TME, Tier II exemption, TERA, Film Article.......... 560 5,600 3,149,000
----------------------------------------------------------------------------------------------------------------
* Numbers may not add due to rounding.
The estimated annual costs for fee categories under TSCA section 6,
including both program and indirect costs are shown in Table 5.
Table 5--TSCA Section 6 Costs *
----------------------------------------------------------------------------------------------------------------
Estimated
number of Estimated cost Estimated
Fee category ongoing to agency/ annual cost to
actions/year action agency
----------------------------------------------------------------------------------------------------------------
EPA-initiated risk evaluation................................... 25 $3,884,000 $32,370,000
Manufacturer-requested risk evaluation: Work Plan chemical...... 2 3,884,000 2,589,000
Manufacturer-requested risk evaluation: Non-Work Plan chemical.. 3 3,884,000 3,884,000
----------------------------------------------------------------------------------------------------------------
* Numbers may not add due to rounding.
G. Fee Amounts
With the exception of manufacturer-requested risk evaluations, EPA
is finalizing the fee amounts as described in the proposed rule. EPA
applied the same formula to calculate the fees per submission for each
fee category as used in the proposal to ensure that 25% of the costs of
administering TSCA sections 4, 5, and 6, and of collecting, processing,
reviewing, and providing access to and protecting from disclosure as
appropriate under TSCA section 14 information on chemical substances
under TSCA would be collected in any given year (i.e., approximately
$20 million annually in fiscal years 2019 through 2021). Because the
eight fee categories do not span all of the activities (e.g., costs of
administering TSCA section 14, risk management activities under section
6, prioritization of chemicals for evaluation, support for alternative
testing and methods development and enhancement, etc.), EPA set fee
amounts to ensure these costs were captured.
1. Fee amounts in general. EPA received a number of comments on the
specific fee amounts in the proposed rule. Commenters generally had
suggestions for adjusting fee amounts in various ways: Some specific to
fee categories (described in the subsequent paragraphs) and some more
generally applicable across all fee categories. For example, one
commenter suggested a maximum fee for scenarios where there is a small
number of manufacturers subject to a large fee. Another commenter
suggested that fee amounts should be adjustable based on the number of
identified manufacturers for the particular chemical and activity.
Ultimately, EPA determined not to adjust fee amounts for the final rule
based on these general comments. As a primary matter, EPA does not know
in advance how many manufacturers will be identified for a particular
fee-triggering activity. As such, it would be impossible to provide
some type of discount when the number of identified manufacturers is
low, while still ensuring that EPA collects sufficient fees overall to
defray 25% of implementation costs. EPA made a significant effort to
explain its methodology for calculating fees and basis for determining
fee amounts in the proposed rule, and has further clarified certain
aspects in the final rule. EPA has many new responsibilities under
TSCA, and this presents challenges for developing cost estimates for
the fees rule. With more experience, EPA may be able to refine
estimates and potentially adjust fee amounts when revisiting this rule
in the future as required under TSCA.
2. Fee amounts for TSCA section 4 activities. EPA is finalizing
three fee amounts--one for each of the TSCA section 4 fee categories:
Test orders, test rules and ECAs. These fees amount to approximately
3.5% of the total estimated activity cost. Several commenters expressed
general support for the lower fee amounts for TSCA section 4
activities. Another commenter felt that section 4 fees were set too
[[Page 52705]]
low--that they should be more proportional to actual costs, noting that
Congress set a national policy that industry should pay for development
of information. One commenter suggested that EPA consider assigning
lower fees when companies agree to collaborate and produce data. EPA
recognizes that manufacturers will be responsible for paying to develop
the test information in addition to paying the TSCA fee, and reflected
this in assigning lower fee amounts in the proposed rule. While EPA
strongly encourages collaboration amongst manufacturers when developing
data, EPA does not believe that such collaboration should result in
lower fees. If manufacturers collaborate to voluntarily produce and
provide data that EPA needs, that may obviate the need for a test rule
or order. If, however, EPA issues a test rule and companies
subsequently form a consortium to jointly produce data, no discount
would be warranted. EPA would still incur the cost of developing the
test rule and reviewing data regardless of the extent of collaboration
amongst manufacturers.
3. Fee amounts for TSCA section 5 activities. EPA is finalizing two
fee amounts for TSCA section 5 activities--one for notices (PMNs, SNUNs
and MCANs) at approximately 29% of the estimated cost of the
activities, and one for exemptions (LVEs, LoREX, TME, Tier II, TERA and
film articles) at approximately 89% of the estimated cost of the
activities.
A number of commenters indicated that the proposed TSCA section 5
fees were too high and should be kept as low as possible to promote
innovation. Some of these commenters argued that these fees will result
in reduced new chemical submissions and lost social benefits, and will
reduce research and development efforts in the industry. Another
commented that EPA was not permitted under TSCA to set fees based on
promoting innovation. Others had more specific comments or requests.
Some commenters, for example, suggested that EPA also apply a PMN
discount for graduates of EPA's Sustainable Futures program (Ref. 5).
Another commenter expressed concern regarding EPA's proposal to
establish the same fee amount for both individual and consolidated
notices, even though EPA acknowledges that consolidated submissions are
more costly to review.
EPA appreciates commenters' concerns regarding increased TSCA
section 5 fees and potential impacts to chemical innovation. First,
amongst the fee categories for TSCA sections 4, 5, and 6 activities,
EPA proposed to collect the bulk of fees from manufacturers subject to
TSCA section 6 EPA-initiated risk evaluations, in part, to minimize
impacts to innovation and competitive standing for new chemical
manufacturers. TSCA calls for EPA to implement TSCA in a manner that
does not ``impede'' or create ``unnecessary barriers to technological
innovation.'' See TSCA section 2(b)(3). Second, the proposed fee amount
for PMNs, MCANs and SNUNs was only moderately higher than the current
fee adjusted for inflation (i.e., $10,400). As discussed in the
proposed rule preamble, EPA also benchmarked the proposed new chemicals
fees against similar activities conducted in EPA's pesticide program
and found them to fall within an appropriate range of costs. With
respect to specific requests to lower fee amounts, EPA has similarly
determined not to make any adjustments for the final rule. Sustainable
Futures program graduates do not currently receive a PMN discount and
EPA did not propose to provide one. While one aim of the program is to
encourage better quality submissions, there is no evidence to support
that such submissions are categorically any less complex or expensive
to review. EPA chose to lump PMN, MCAN and SNUN fees into a single
category, setting a single fee applicable to each, for practical
implementation reasons. Although certain activities (i.e., consolidated
PMNs and MCANs) may cost the agency more than other activities in the
same category (i.e., individual PMNs and MCANs), EPA chose to assign
the same fee amount for individual and consolidated submissions in
furtherance of EPA's goal to develop a practicable, implementable TSCA
fee structure. EPA believes that there is value in keeping the fee
structure relatively simple from an implementation perspective, but
also because EPA currently lacks the experience and information to more
narrowly tailor fees while still meeting the collection requirements in
TSCA. Finally, EPA is finalizing the fee amount for section 5
exemptions. EPA is finalizing the proposal to eliminate the
``intermediate PMN'' fee category. As discussed in the preamble to
proposed rule, discounted fees are not warranted for intermediate PMNs
as EPA has not realized costs savings in review of these submissions.
Reviewing and processing these exemptions is not an insignificant
amount of work, and EPA believes the exemption fee--set at a fraction
of the fee for PMNs and other notices--is well within reason.
4. Fee amounts for TSCA section 6 activities. EPA is finalizing one
fee amount for EPA-initiated risk evaluations at approximately 35% of
the estimated cost of the activity. As indicated earlier, EPA is
finalizing an actual cost approach for manufacturer-requested risk
evaluations, whereby the requesting manufacturer (or requesting
consortia of manufacturers) would be obligated to pay either 50% or
100% of the actual costs of the activity, depending on whether or not
the chemical was listed on the TSCA Work Plan, respectively. EPA
received a number of comments on the proposed section 6 fee amounts.
Some expressed concern that the amounts were too high, and could result
in manufacturers abandoning production of critical substances. Others
suggested discounts when data/analytical needs were low, when companies
voluntarily submit additional data, or if a company would--prior to or
during the risk evaluation--agree to voluntarily phase out manufacture
of the substance. One commenter requested clarification that only one
fee will be required for a risk evaluation, even if it is completed in
phases as contemplated in the Risk Evaluation framework rule, and that
only one fee will be required for risk evaluations performed on
categories of chemicals.
While EPA recognizes the possibility for variation in complexity of
a risk evaluation for any number of reasons (e.g., availability of
data, number and type of associated uses, etc.), and therefore
variation in cost, EPA has limited experience in conducting risk
evaluations under new TSCA except for that related to ongoing work
associated with the first 10 chemicals, and no experience or evidence
to justify specific cost reductions related to number or type of uses,
availability of more information, etc. In assigning fees across
activities in TSCA sections 4, 5, and 6, EPA believes it achieved an
appropriate balance in the proposal: a structure that was both
efficient and practical to implement, while also distributing the fee
burden across the fee-triggering events consistent with stakeholder
input and the goals and policies of TSCA. With respect to commenter's
request for clarification, EPA will only charge one fee for each risk
evaluation activity, including risk evaluations on a category of
substances, regardless of how unreasonable risk determinations may be
communicated.
The final fee amounts are described in Table 6.
[[Page 52706]]
Table 6--Final TSCA Fee Amounts
------------------------------------------------------------------------
Fee category Fee amount
------------------------------------------------------------------------
TSCA Section 4:
Test order......................... $9,800.
Test rule.......................... $29,500.
Enforceable consent agreement...... $22,800.
TSCA Section 5:
PMN and consolidated PMN, SNUN, $16,000.
MCAN and consolidated MCAN.
LoREX, LVE, TME,* Tier II $4,700.
exemption, TERA, Film Articles.
TSCA Section 6:
EPA-initiated risk evaluation...... $1,350,000.
Manufacturer-requested risk Initial payment of $1.25M, with
evaluation on a chemical included final invoice to recover 50%
in the TSCA Work Plan. of Actual Costs.
Manufacturer-requested risk Initial payment of $2.5M, with
evaluation on a chemical not final invoice to recover 100%
included in the TSCA Work Plan. of Actual Costs.
------------------------------------------------------------------------
* EPA will waive the TME fee for submissions from companies that have
graduated from EPA's Sustainable Futures program.
5. Fee amounts for small businesses. EPA is finalizing reduced fee
amounts for small businesses, consistent with the proposed rule and
without change. EPA is, however, adjusting the small business size
standard as discussed in Unit III. The reduced fee amounts are
summarized in Table 7. These fee amounts represent an approximate 80%
reduction compared to the base fee for each category. In one case, for
TSCA section 5 notices (i.e., PMNs, MCANs and SNUNs), the small
business reduction is 82.5%. For all fee categories, the reduced fee is
only available when the only entity or entities are small businesses,
including when a consortium is paying the fee and all members of that
consortium are small businesses. Consistent with the proposed rule,
reduced fees are not available for small business manufacturers
requesting a risk evaluation, as TSCA requires those fees to be set at
a specific percentage of the actual costs of the activity.
Some commenters expressed concern regarding accommodations made to
small businesses in the proposed rule. For example, a few commenters
argue that reduced fees for companies with annual sales of $91 million
is an undue accommodation for companies that can clearly support fees,
and the discount relief was unjustified and excessive. Another
commenter urged EPA to clarify and better support its proposed discount
of 80%. With respect to the approximate 80% discount in the proposed
rule, EPA continues to believe this is appropriate. The discount is
generally in line with EPA's discount for small businesses in the
pesticides program (i.e., 75%), but slightly higher in line with
significant stakeholder input regarding the need to minimize impacts to
small businesses.
Table 7--Final TSCA Fees for Small Businesses
------------------------------------------------------------------------
Fee category Small business fee
------------------------------------------------------------------------
TSCA Section 4:
Test order......................... $1,950.
Test rule.......................... $5,900.
ECA................................ $4,600.
TSCA Section 5:
PMN and consolidated PMN, SNUN, $2,800.
MCAN and consolidated MCAN.
LoREX, LVE, TME, Tier II exemption, $940.
TERA, Film Articles.
TSCA Section 6:
EPA-initiated risk evaluation...... $270,000.
Manufacturer-requested risk $1,250,000 initial payment +
evaluation on a chemical included 50% of total actual costs.
in the Work Plan.
Manufacturer-requested risk $2,500,000 initial payment +
evaluation on a chemical not 100% of total actual costs.
included in the Work Plan.
------------------------------------------------------------------------
H. Definition for ``Small Business Concerns''
EPA is also finalizing a revision to the size standard used to
identify businesses that can qualify as a ``small business concern''
under TSCA for the purposes of fee collection. EPA proposed to adjust
the 1988 size standard used to identify businesses that can qualify as
a ``small business concern'' from a prior revenue threshold of $40
million to approximately $91 million (See Ref. 6). EPA also proposed to
use average annual sales values over the three years preceding the
activity, instead of just one year. Further, EPA proposed to apply this
definition to all fee categories in TSCA, not just TSCA section 5
submissions.
EPA specifically requested comment on this proposal and some
alternative approaches, and commenters provided a variety of views. A
number of commenters expressed support for SBA's employee based
definition. Other commenters suggested that EPA apply only the
inflation-adjusted approach in proposal, or else risk over-identifying
small business concerns. At least one commenter expressed support for
the proposed revenue-based definition, arguing that an employee-based
metric is antiquated. A number of commenters supported an ``either/or''
approach, where a company could choose to certify as a small business
under either the EPA's proposed revenue standard or SBA's employee-
based standards. One commenter suggested that EPA consider
[[Page 52707]]
an additional ``micro business'' category of 1-9 employees with an
associated fee cap of $100.
After further consideration, review of the public comments and
consultation with SBA, including the Office of Advocacy, EPA has
determined to adopt an employee-based size standard modeled after SBA's
standards. When establishing its size standards, SBA examines various
industry characteristics such as average firm size, degree of
competition within an industry, start-up costs and entry barriers, and
distribution of firms by size. SBA also evaluates federal market
factors including a small business's share in total industry's
receipts. For more details, please see the ``SBA's Standards
Methodology'' white paper, available at www.sba.gov/size. The SBA size
standards are industry-specific mostly based on either average annual
revenue or number of employees, for reference please see the SBA size
standards at 13 CFR 121.202. In order for an entity to be classified as
a small business for federal contracting and other small business
programs, its enterprise level revenue or number of employees
(including all affiliates) shall not exceed the size standard for the
applicable industry. These size thresholds are determined at the 6-
digit North American Industry Classification System (NAICS) levels.
SBA's employee-based size thresholds range from 100 to 1,500 employees
to account for differences among NAICS codes.
The Small Business Jobs Act of 2010 (Jobs Act) (Pub. L. 111-240,
124 Stat. 2504, Sept. 27, 2010) requires SBA to review every five years
all size standards and make adjustments to reflect current industry and
market conditions. SBA completed the first 5-year review of size
standards in early 2016 and is currently performing the second 5-year
review. As part of that effort, SBA plans to publish for public
comments a series of proposed rules on size standards revisions in the
coming years.
For the final rule, EPA has incorporated the 2017 NAICS codes and
SBA's associated size thresholds most likely to apply to manufacturers
and processors subject to TSCA fees, see table 700.43. For those NAICS
codes not represented on the table provided in 700.43 of the final
rule, the manufacturer or processor must have 500 or fewer employees to
be considered as a ``small business concern'' under TSCA for the
purposes of fee collection. As a general matter, the reduction in
revenue collection was minimal when applying an employee-based standard
versus a revenue-based standard, and EPA deferred to the expertise of
SBA in relying on an employee-based standard for this rulemaking. The
definition in the final rule is updated accordingly, as well as
supporting materials.
EPA considered several other options offered by commenters
including an ``either/or'' approach and a ``micro-business'' category.
With respect to the first, EPA did not believe it was appropriate to
allow small businesses to choose to certify either under a revenue-
based standard, or an employee-based standard. Doing so would
potentially result in a significant increase to the total number of
businesses identified as small, resulting in a shortfall in EPA's
overall fee revenue and the need to adjust the fee structure--either by
providing small businesses with a lower discount, or by increasing fees
for other businesses. Adding a ``micro-business'' category would likely
create similar issues with revenue shortfalls for EPA and a need to
increase fee amounts elsewhere. Further, such a standard is not
currently used anywhere in the federal government, including SBA.
Ultimately, EPA did not believe the TSCA fees rule was an appropriate
venue to introduce a micro-business standard. As indicated in the
proposed rule, EPA believes a forthcoming TSCA section 8(a) rulemaking
will provide for more consideration of appropriate size standards for
industries subject to TSCA and offer the public further opportunities
to comment on small business size standards, and EPA is committed to
considering the results of that rulemaking, as well as the experience
and information gained from implementing this final rule and future
rulemaking to update the TSCA fees rule for the next three-year cycle.
I. Payment of Fees and Refunds
1. Timing. The final rule generally requires upfront payment of
fees (i.e., payment due prior to reviewing a TSCA section 5 notice,
within 120 days of publication of final test rule, within 120 days of
issuance of a test order, within 120 days of signing an ECA, within 30
days of granting a manufacturer-requested risk evaluation, and within
120 days of publishing the final scope of a risk evaluations). However,
for manufacturer-requested risk evaluations, payment will now be
collected in two installments over the course of the activity.
A number of commenters encouraged EPA to allow for phased payments,
particularly for TSCA section 6 activities. Some of these commenters
suggested that payment at specific milestones would better hold EPA
accountable and assist with business planning efforts. EPA is
finalizing an actual cost approach for manufacturer-requested risk
evaluations which will, in effect, allow for phased payments (i.e.,
initial payment followed later by a final invoice).
This final rule is effective the day after publication and will
apply to all submissions that are received starting October 1, 2018.
Section 553(d)(3) of the Administrative Procedure Act (``APA''), 5
U.S.C. 553(d), provides that final rules shall not become effective
until 30 days after publication in the Federal Register ``except . . .
as otherwise provided by the agency for good cause.'' The purpose of
this provision is to ``give affected parties a reasonable time to
adjust their behavior before the final rule takes effect.'' Omnipoint
Corp. v. Fed. Commc'n Comm'n, 78 F.3d 620, 630 (D.C. Cir. 1996); see
also United States v. Gavrilovic, 551 F.2d 1099, 1104 (8th Cir. 1977)
(quoting legislative history). Thus, in determining whether good cause
exists to waive the 30-day delay, an agency should ``balance the
necessity for immediate implementation against principles of
fundamental fairness which require that all affected persons be
afforded a reasonable amount of time to prepare for the effective date
of its ruling.'' Gavrilovic, 551 F.2d at 1105. EPA has determined that
there is good cause for making this final rule effective immediately
because, under TSCA, as amended, EPA was directed to institute a fee
collection program to ensure that the Agency has a sustainable source
of funding to ensure successful implementation of TSCA as Congress
intended. As is clear by the fact that Congress provided different
parameters for setting fees both before October 1, 2018 (26(b)(4)(B))
and after (26(b)(4)(F)), EPA believes it was Congress' intent for EPA
to be able to start assessing fees as quickly as possible after the
enactment of the fee provisions and that fees would already be in place
by October 1, 2018 when they would need to be updated. As required by
TSCA 26(b)(4)(E), EPA consulted and met with stakeholders that were
potentially subject to fees in August 2016, held and industry-specific
consultation meeting and webinar in September 2016, participated in a
Small Business Roundtable discussion in March 2018, and had several
meetings with individual stakeholders through the development of the
final rule, always stressing the urgency of collecting fees and the
expected timing of collections. In addition, EPA provided public notice
when including this effective date in the proposed rule, did not
receive any comments on this
[[Page 52708]]
provision, and proposed that all submissions starting October 1 would
be subject to fees regardless of when the rule becomes effective. The
fee amounts being finalized have not changed from the proposal other
than those for manufacturer-requested risk evaluations, which will
initially incur a smaller upfront fee. For these reasons, EPA believes
that reasonable notice, including opportunity for comment has been
provided regarding the date when fee collections will occur and that
persons subject to the fees have had reasonable time to prepare to pay
the fees. Between October 1, 2018 and when the rule is effective, EPA
will track submissions and then send invoices to affected companies
within 30 days of the effective date. Since all submitters will be
subject to the fees starting October 1, 2018, and to minimize the need
for after-the-submission invoicing, EPA believes there is good cause
for an effective date one day after publication. For these reasons, the
agency finds that good cause exists under APA section 553(d)(3) to make
finalize its proposed approach to collect fees for all submissions that
are received starting October 1, 2018.
2. Consortium formation and payment. Additionally, EPA is extending
the amount of time for manufacturers to notify EPA of their intent to
form a consortium and the time to provide payment for certain TSCA
section 4 and 6 activities. EPA believes this additional time will be
useful for businesses to financially plan for the additional expense.
Specifically, the final rule allows manufacturers subject to test
orders, test rules, ECAs and EPA-initiated chemical risk evaluations
time to associate with a consortium and work out fee payments within
that consortium. Payment for fee categories under TSCA section 4 (i.e.,
test orders, test rules and ECAs) is due within 120 days of certain
events as described previously. For EPA-initiated risk evaluations,
full payment is due within 120 days of EPA publishing the final scope
of a chemical risk evaluation. The proposed rule provided 60 days for
these activities. EPA believes this additional time will assist
manufacturers with the process of joining a consortium, if they so
choose, and decide on the partial fee payments each member of the
consortium will be responsible for. Manufacturers will have ample
warning that a risk evaluation is underway, well before the final scope
is published in the Federal Register. However, for manufacturer-
requested risk evaluations, EPA will still require the initial payment
within 30 days of when EPA grants the request to conduct the
evaluation, as indicated in the proposed rule. A manufacturer or
manufacturers who make such a request have complete control of the
timing of the request, and are better positioned to sort out payment
and fee allocation issues related to a consortium before the request is
ever sent to EPA.
3. Applicability to ongoing activities. As described at length in
the proposed rule, EPA proposed to begin recording fee obligations
starting on October 1, 2018, even if the final rule is not yet
effective. EPA is codifying this approach in the final rule.
Specifically, EPA intends to record actions that would trigger payment
of fees per the final rule and, once the final rule is effective, send
invoices to the affected parties within 30 days containing information
on timing, fee amounts and other details based on this final rule.
A number of commenters requested that EPA explicitly state whether
fees will apply to certain ongoing activities, such as the first 10
chemical risk evaluations and TSCA section 5 submissions under review
at the time the rule is finalized. To be clear, EPA will not collect
fees for events that started prior to October 1, 2018 such as the first
ten risk evaluations, or any TSCA section 5 activities initiated before
that date. In these cases, the fee event is already ongoing, and EPA
has determined not to retroactively apply fee obligations on these
manufacturers. In addition, the costs of completing these risk
evaluations has been included in the overall program cost estimates for
TSCA section 6 activities, and EPA expects to recover 25% of these
costs through implementation of this rule.
4. Payment method. EPA originally proposed to accept payment of
fees through two different electronic payment options: Pay.gov and
Fedwire. However, upon further review, EPA has determined that Fedwire
is not a viable option for the Agency's current financial systems. As
such, the final rule will only allow electronic payment through the
secure, Pay.gov collection portal. As indicated in the proposed rule,
Pay.gov provides customers the ability to electronically complete forms
and make payments twenty-four hours a day. Because the application is
web-based, customers can access their accounts from any computer with
internet access. Manufacturers (and processors, where appropriate)
would be expected to create payment accounts in Pay.gov and use one of
the electronic payment methods currently supported by Pay.gov (e.g.,
Automated Clearing House debits (ACH) from bank accounts, credit card
payments, debit card payments, PayPal or Dwolla). Because Pay.gov does
not accept paper checks as payment, EPA will not accept paper checks as
payment for TSCA services. Additional instructions for making payments
to EPA using Pay.gov are found at https://www.epa.gov/financial/additional-instructions-making-payments-epa.
5. Refunds. EPA proposed to issue full and partial refunds in
certain circumstance related to TSCA section 5 activities, consistent
with EPA's authority under TSCA sections 5(a)(4)(B) and 26(b)(4)(G).
EPA is finalizing those provisions, with some additional clarifications
and corrections in light of public comments. EPA will issue full
refunds for (1) PMN submissions that are determined not to be a new
chemical substance, (2) MCAN submissions when the microorganism is
determined not to be a new microorganism or significant new use, (3)
SNUN submissions if the use is determined not to be a significant new
use, (4) when the Agency fails to make a determination on a notice by
the end of the applicable notice review period, unless the submitter
unduly delayed the process, and (5) when the Agency fails to approve or
deny an exemption with the applicable review period, unless the
submitter unduly delayed the process. EPA will issue partial refunds
(i.e., 75% of the fee amount) if a TSCA section 5 submission is
withdrawn during the first 10 business days after the beginning of the
applicable review period. EPA is not able to issue refunds for the
entire fee amount because work begins as soon as EPA receives and
application. Due to concerns with administrative burden and potential
delays in issuing refunds, EPA will not calculate and refund a unique
amount for each withdrawn submission. Although EPA originally proposed
to issue a full refund for certain incomplete submissions, EPA's
existing regulations already provide a process and timeline for EPA and
the submitter to correct the issue. EPA believes the existing approach
is more efficient than immediately issuing a full refund, and requiring
the submitter to provide a new, complete submission.
A number of commenters had suggestions with respect to the refund
provisions in the proposed rule. Several asked EPA to clarify the
circumstances under which a full refund would be granted in the event
the review is not completed within the applicable review period and
what was meant by ``undue delay'' by the submitter that would prevent
the submitter from receiving that full refund. Relatedly, a few
commenters argued that voluntary
[[Page 52709]]
suspensions shouldn't pause the review period.
With respect to full refunds, EPA is generally required to complete
TSCA section 5 reviews within 90 days, and can unilaterally extend that
period to 180 days under certain circumstances in TSCA. Consistent with
longstanding practice, EPA and the submitter can, and often do, agree
to suspend the review period to allow the submitter to develop new
information, or to provide EPA with time to review new information. EPA
has also historically allowed the submitter to amend their submission
at any time during the review period. EPA intends to continue these
practices. A voluntary suspension pauses the applicable review period.
``Undue delay'' by the submitter, as contemplated in the proposal,
might occur if the submitter submits an amended submission or
significant new information late in the review process and does not
agree to suspend the review period. In such a case, EPA does not
believe it should be required to issue a refund if the TSCA review
period expires. As a practical matter, EPA believes that a scenario in
which as EPA has authority to unilaterally extend the review period for
an additional 90 days. Moreover, most submitters have appreciated the
flexibility to suspend the review period, as doing so is often in their
best interest.
A few commenters asked EPA to clarify the circumstances, if any,
where EPA would issue refunds in the TSCA sections 4 or 6 context, such
as when a manufacturer-requested risk evaluation fee exceeds the actual
costs. EPA did not propose any refund provisions for TSCA sections 4 or
6 EPA-initiated risk evaluation activities. EPA does not expect to
exceed actual costs for these costs given that fee amounts are set
significantly below estimated costs of these activities. See Technical
Background Document, (Ref. 3). For example, fees for TSCA section 4
activities are set at approximately 3.5% of the estimated costs of
those activities. For both categories of fee-triggering events, EPA
also believe that refunds are not appropriate based on late entrants or
other timing reasons. In the context of manufacturer-requested risk
evaluations, EPA is finalizing an actual cost approach, so there may
be--in rare circumstances--a scenario where a manufacturer might be
charged more than the cost of completing the activity and would be
entitled to a refund. EPA has updated the final regulatory text to
account for this possibility.
J. Multiple Parties Subject to Fee Obligations
The final rule allows joint submissions under TSCA section 5, and
the formation of, and payment by, consortia for submissions under TSCA
sections 4 and 6. Manufacturers who seek to jointly submit a TSCA
section 5 notice would be required to remit the applicable fee for each
TSCA section 5 notice submitted. Only one fee is required for each
submission, regardless of the number of joint submitters for that
notice. To qualify for the small business discount, each joint
submitter of a TSCA section 5 notice must qualify as a small business
concern as defined in this rule. Manufacturers may also form a
consortium to pay TSCA user fees for section 4 and 6 activities. The
consortium must notify EPA of such intent. Once established, the
consortium determines how the user fee would be split among the
members, and ultimately paid to EPA. In response to comments, EPA made
some minor modifications to this process, and provides some additional
clarification on related issues:
1. Consortia: Timing of formation and payment. Under the proposed
rule, manufacturers would have been required to notify EPA of their
intent to form a consortium within 30 days of the fee-triggering event
and pay EPA within 60 days of the fee-triggering event. A significant
number of commenters urged EPA to extend the time for consortia to form
and pay, with suggestions of anywhere from 90 to 180 days. EPA
recognizes the likelihood of challenges and complexities associated
with forming consortia and managing payments. In response to public
comments, EPA will extend the amount of time for consortia to notify
EPA of their intent to form, as well as the payment due date, each by
30 days. Thus, manufacturers will have 60 days to notify EPA of their
intent to form a consortium from the triggering event, and 120 days
total from the triggering event for payment.
2. Consortia: Complex scenarios. EPA is providing some additional
clarification on the division of costs amongst consortia and individual
manufacturers for certain complex scenarios identified by commenters.
The ideal scenario is that a single consortium forms and independently
agrees upon allocation of payment amongst its members. In such a
scenario, EPA would send a single invoice to the consortium, and
receive a single payment in return. It is possible, however, for any
number of more complicated scenarios to arise, such as formation of
multiple consortia, or a combination of consortia and individual
manufacturers not associated with the consortia. Adding discounts for
small business concerns further complicates the allocation of fees in
these scenarios.
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, EPA 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% 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.
Reallocate the remaining fee across those remaining
individuals and groups in equal amounts, counting each manufacturer in
a consortium as one person.
Small businesses in a successfully-formed consortium (other than an
all-small business consortium) cannot be afforded the 80% discount by
EPA. Association with consortia for purposes of jointly paying fees is
a voluntary activity; EPA lacks the authority to compel consortia
managers to provide small businesses with discounts. However, consortia
are strongly encouraged to provide a discount for small business
concerns.
For example, consider a scenario in which there is one consortium
formed (with a mix of small businesses and non-small businesses), plus
some additional individual small businesses and non-small businesses
not associated with the consortium. There are 10 total manufacturers,
with 5 in the consortium and 5 individuals (2 small businesses and 3
non-small businesses). Assume the total fee is $100,000. The base fee
would be $10,000 ($100,000 divided by 10 manufacturers). The two
individual small businesses (not associated with consortium) would be
responsible for $2,000 each ($10,000 base fee x 0.2). That leaves
$96,000 to be paid across 8 total remaining manufacturers. The
consortium (5 of 8 remaining manufacturers) would responsible for 62.5%
of the remaining fee or $60,000,
[[Page 52710]]
and they would be free to determine how to allocate that amount amongst
their membership. Any small businesses within the consortium are not
provided a discount by EPA. Each of the 3 individual non-small business
manufacturers would be responsible for 12.5% of the remaining fee or
$12,000.
3. Consortia: Failure to reach agreement. If a consortium is unable
to reach agreement on splitting the fee, the principal sponsor must
notify EPA prior to the expiration of the 60-day notification period.
EPA defines the principal sponsor as a person who assumes primary
responsibility for the direction of the study, the payment of fees to
EPA, and for oral and written communication with EPA. This notification
by the principal sponsor effectively nullifies the formation of the
consortium, and each member will be treated as an individual
manufacturer, and must pay their portion of the fee--as calculated by
EPA--within the time period remaining. The Agency will divide the total
fee by the number of manufacturers. Small businesses will be afforded
an 80% discount.
4. Consortia: Small business concerns. EPA strongly encourages
consortia to set lower fees for small business concerns; Congress
generally intended small businesses to be afforded lower fee payments
(TSCA section 26(b)(4)(A)). Some commenters suggested that EPA should
go further in prescribing fairness in consortia dealings, including
dealings with small businesses. At least one commenter suggested that
an expectation that consortia would assign lower fees to small
businesses is unrealistic. Another commenter suggested EPA should
require consortia to give a small business discount. One commenter
suggested that the proposal would result in formation of all small
business consortia every time, given that small businesses would
surrender their small business protections by consorting with non-small
businesses. However, association with a consortium is a voluntary
activity; a small business will always have the choice to not associate
with a consortium and to receive the small business discount. Further,
EPA does not believe it has the authority in TSCA to compel consortia
managers to provide a discount to small businesses. Nevertheless, EPA
strongly encourage consortia to do so.
5. Consortia: Administrative costs and burden. Several commenters
suggested that EPA recognize administrative costs associated with
consortia formation and management that companies would be expected to
bear, and to set those expectations in final rule. The administrative
costs of consortia management would be set by third parties and
completely outside the control of EPA, and would not be appropriate for
EPA to factor this into program cost estimates or otherwise reflect in
the fee amounts. However, based on public comments, EPA is including
some minor updates to the economic analysis to reflect this additional
administrative burden and costs associated with forming consortia for
the distinct purpose of submitting fee payments.
K. Enforcement
Failure to comply with any requirement of a rule promulgated under
TSCA is a prohibited act under TSCA section 15 and is subject to
penalties under TSCA section 16. Failure to pay the appropriate fee at
the required time would subject each manufacturer and processor who is
subject to the fee payment to penalties of as much as the maximum
statutory amount per day ($38,114 as of January 2017) until the
required fee is paid. Each person subject to fees would be subject to
such penalties regardless of whether they intend to pay independently,
as a joint submitter or through a consortium. Each member of a
consortium, and each joint submitter, is individually responsible for
payment of the fee, and subject to penalties for non-payment, until the
fee is actually paid. EPA may develop enforcement response policy
guidance provisions for this rule. In the meantime, EPA's Office of
Enforcement will rely on TSCA section 16(a)(2)(B) and GM 21 at https://www.epa.gov/enforcement/policy-civil-penalties-epa-general-enforcement-policy-gm-21.
L. Compliance Date
EPA will be able to start collecting fees the day after the final
TSCA user fees regulations are published in the Federal Register. For
EPA to sufficiently address the increased workload under TSCA, the
Agency must start collecting fees as soon as possible for use in
defraying implementation costs. All submissions starting October 1,
2018 are subject to the fees in this rule regardless of when the rule
becomes effective. For submissions received between October 1, 2018 and
the effective date of the rule, EPA will invoice submitters within 30
days.
M. Conforming and Other Technical Amendments
EPA is finalizing minor changes to several of its regulations that
cross-reference the part 700 fees regulations, specifically 40 CFR
parts 720, 723, 725, 790 and 791. Amending the regulatory text in these
parts will ensure that existing regulations appropriately reference the
regulatory text being finalized today. These include minor updates for
implementing the fee requirements for test marketing exemptions at
Sec. 720.38; premanufacture notification regulations at Sec.
720.45(a)(5); instant photographic and peel-apart film articles
exemptions at Sec. 723.175; amendments to regulations covering MCANs
and exemption requests at Sec. 725.25 and Sec. 725.33; minor
amendments at Sec. 790.45 and Sec. 790.59; and a modification to the
general provisions for data reimbursement found at Sec. 791.39.
IV. Projected Economic Impacts
EPA has evaluated the potential costs for entities potentially
subject to this final rule. More details can be found in the Economic
Analysis (Ref. 2) for this rule.
For the baseline, EPA used the number of section 5 submissions
received in FY 2016 for each of the types of fee-triggering section 5
categories (Ref. 7) as the estimate of the number of submissions per
section 5 fee category for the next three years in the absence of the
rule. As a result of the final rule, EPA expects that the number of
PMNs, MCANs, and SNUNs submitted would decline by 20% from the
baseline, while the number of exemptions would remain the same, on
average. Test orders under section 4 are new under TSCA as amended and
the average number of test orders expected per year represents an EPA
estimate based on previous experience and expected work under TSCA as
amended. Similarly, for the other fee categories under section 4 (test
rules and ECAs), EPA also estimated the expected number of such actions
per year based on previous experience and expected work under TSCA as
amended. The amended TSCA regulations specify the number of risk
evaluations that EPA must have ongoing over the next three years. The
Agency expects to have between 20 and 30 risk evaluations ongoing in
any given year at different stages in the review process, including
manufacturer-requested evaluations.
EPA calculated fees by estimating the total annual costs of
administering TSCA sections 4, 5, and 6 (excluding the costs of
manufacturer-requested risk evaluations) and of collecting, processing,
reviewing, and providing access to and protecting from disclosure as
appropriate under section 14; identifying the full amount to be
defrayed by fees under TSCA section 26(b) (i.e., 25% of those annual
costs);
[[Page 52711]]
and allocating that amount across the fee--triggering events in
sections 4, 5, and 6, weighted more heavily toward section 6 based on
early industry feedback. EPA estimates the total fee collection by
multiplying the fees with the number of expected fee-triggering events
under full implementation for each fee category, for a total of
approximately $20 million in average annual fee revenue. This total
does not include the fees collected for manufacturer-requested risk
evaluations. EPA estimates that section 4 fees account for less than
one percent of the total fee collection, section 5 fees for
approximately 43 percent, and section 6 fees for approximately 56
percent.
Total annual fee collection for manufacturer-requested risk
evaluations is estimated to be $1.3 million for chemicals included in
the Work Plan (based on two requests over the three-year period) and
approximately $3.9 million for chemicals not included in the Work Plan
(based on three requests over the three-year period).
For small businesses, EPA estimates that 18.6 percent of section 5
submissions will be from small businesses that are eligible to pay the
small business fee because they are classified as small businesses
based on the SBA small business thresholds. Total annualized fee
collection from small businesses submitting under section 5 is
estimated to be $339,000 (Ref. 2). For sections 4 and 6, reduced fees
paid by eligible small businesses and fees by paid non-small businesses
may differ over the three-year period that was analyzed, since the fee
paid by each entity is dependent on the number of entities identified
per fee-triggering event. EPA relied on past experience with Test Rules
for HPV chemicals under section 4 as well as work to date on the first
ten 10 chemicals currently undergoing risk evaluation under section 6
to inform its estimates of average number of small businesses impacted
per action, and estimates that average annual fee collection from small
businesses impacted by section 4 and section 6 would be approximately
$7,000 and $926,000, respectively. For each of the three years covered
by this rule, EPA estimates that total fee revenue collected from small
businesses will account for about 6 percent of the approximately $20
million total fee collection, for an annual average total of
approximately $1.3 million.
This rule establishes fee requirements for affected manufacturers
(including importers) and, in some cases, processors of chemical
substances. The fees to be paid by industry would defray the cost for
EPA to administer TSCA sections 4, 5, 6, and collecting, processing,
reviewing, and providing access to and protecting information about
chemical substances from disclosure as appropriate under TSCA section
14. Absent this regulation, EPA costs to administer these sections of
TSCA would be borne by taxpayers through budget appropriations from
general revenue. As a result of this rule, 25% of EPA costs to
administer TSCA section 4, 5, 6, and collecting, processing, reviewing,
and providing access to and protecting information about chemical
substances from disclosure as appropriate under TSCA section 14, and
activities paid from general revenue would be transferred via the fees
to industry. Although these user fees may be perceived by industry as
direct private costs, from an economic perspective, they are transfer
payments rather than real social costs. Therefore, the total social
cost of this rule does not include the fees collected from industry by
EPA. Rather, it includes the opportunity costs incurred by industry,
such as the cost to read and familiarize themselves with the rule;
determine their eligibility for paying reduced fees; register for CDX;
form, manage and notify EPA of participation in consortia; notify EPA
and certify whether they will be subject to the action or not; and
arrange to submit fee payments via Pay.gov. Total social costs also
include the additional costs to EPA to administer fee assessment and
collection for TSCA sections 4, 5, 6, and collecting, processing,
reviewing, and providing access to and protecting information about
chemical substances from disclosure as appropriate under TSCA section
14. The total annualized opportunity cost to industry is approximately
$231,000 and the additional annualized Agency cost is $7,000, yielding
a total annualized social cost of approximately $238,000.
V. References
The following is a listing of the documents that are specifically
referenced in this document. The docket includes these documents and
other information considered by EPA, including documents that are
referenced within the documents that are included in the docket, even
if the referenced document is not physically located in the docket. For
assistance in locating these other documents, please consult the
technical person listed under FOR FURTHER INFORMATION CONTACT.
1. 2016. The Frank R. Lautenberg Chemical Safety for the 21st
Century Act. June 22, 2016.
2. 2017. EPA. Economic Analysis for the TSCA Section 26(b) Proposed
Fees Rule. December 2017.
3. 2018. EPA. Updated Technical Background Document for TSCA Fees.
September 2018.
4. 2017. EPA. Interagency Agreement and Oil Indirect Cost Rates for
FY 2018 and Beyond. September 28, 2017.
5. 2002. EPA. 67 FR 76282. Sustainable Futures--Voluntary Pilot
Project Under the TSCA New Chemicals Program.
6. 2016. Abt Associates. Memorandum: Inflation of Small Business
Definition under section 5 of TSCA. August 31, 2016.
7. 1987. EPA. Proposed Fees for Processing Premanufacture Notices,
Exemption Applications and Notices, and Significant New Use Notices.
42 FR 12940.
8. 2017. EPA. Information Collection Request for the TSCA Section
26(b) Proposed Reporting Requirements Associated with the Payment of
TSCA Fees (EPA ICR No. 2569.01; OMB Control No. 2070-[NEW]).
December 2017.
9. 2018. EPA. TSCA Fee Reporting Notice. September 2018.
VI. Statutory and Executive Order Reviews
Additional information about these statutes and Executive Orders
can be found at https://www.epa.gov/laws-regulations/laws-and-executive-orders.
A. Executive Order 12866: Regulatory Planning and Review and Executive
Order 13563: Improving Regulation and Regulatory Review
This action is a significant regulatory action that was submitted
to the Office of Management and Budget (OMB) for review under Executive
Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821,
January 21, 2011). Any changes made in response to OMB recommendations
have been documented in the docket for this action as required by
section 6(a)(3)(E) of Executive Order 12866. EPA prepared an economic
analysis of the potential costs and benefits associated with this
action (Ref. 2), which is available in the docket and discussed in Unit
IV.
B. Executive Order 13771: Reducing Regulation and Controlling
Regulatory Costs
This action is subject to the requirements for regulatory actions
specified in Executive Order 13771 (82 FR 9339, February 3, 2017).
Details on the estimated costs of this rule can be found in EPA's
analysis (Ref. 2) of the potential costs and benefits associated with
this action, which is available in the docket and is summarized in Unit
IV.
[[Page 52712]]
C. Paperwork Reduction Act (PRA)
The information collection requirements in this final rule have
been submitted to OMB for review and approval under the PRA, 44 U.S.C.
3501 et seq. The Information Collection Request (ICR) prepared by EPA
has been assigned EPA ICR No. 2569.01 and OMB Control No. 2070-0208.
You can find a copy of the ICR in the docket (Ref. 8), and it is
briefly summarized here.
The information collection activities associated with the rule
include familiarization with the regulation; reduced fee eligibility
determination; CDX registration; formation, management and notification
to EPA of participation in consortia; self-identification and
certification; and electronic payment of fees through Pay.gov.
Respondents/affected entities: Persons who manufacture, distribute
in commerce, use, dispose, process a chemical substance (or any
combination of such activities) and are required to submit information
to EPA under TSCA sections 4 or 5, or manufacture or process a chemical
substance that is the subject of a risk evaluation under TSCA section
6(b).
Respondent's obligation to respond: Mandatory.
Estimated number of respondents: 1,418 respondents.
Frequency of response: On occasion to EPA as needed.
Total estimated burden: 539 hours (per year). Burden is defined at
5 CFR 1320.3(b).
Total estimated cost: $230,607 (per year), includes $0 annualized
capital or operation and maintenance costs.
An agency may not conduct or sponsor, and a person is not required
to respond to a collection of information unless it displays a
currently valid OMB control number. The OMB control numbers are
displayed either by publication in the Federal Register or by other
appropriate means, such as on the related collection instrument or
form, if applicable. The OMB control numbers for certain EPA
regulations are listed in 40 CFR part 9.
D. Regulatory Flexibility Act (RFA)
Pursuant to section 605(b) of the RFA, 5 U.S.C. 601 et seq., I
certify that this action will not have a significant economic impact on
a substantial number of small entities under the RFA. The small
entities expected to be subject to the requirements of this action are
small chemical manufacturers and processors, small petroleum
refineries, and small chemical and petroleum wholesalers. There may be
some potentially affected firms within other sectors, but not all firms
within those sectors will be potentially affected firms.
EPA has determined that 84 small businesses may be affected
annually by section 4 actions; 190 small businesses may be affected by
section 5 actions; and 24 small businesses may be affected by section 6
actions. For section 5 actions, the total discounted annual fee
collections and opportunity cost for the affected small businesses is
expected to be about $344,000. For section 4 and section 6 actions,
total discounted annual fee collections and opportunity cost for the
affected small business is expected to be about $14,000 and $927,000
respectively. In total, the annual fee collections and opportunity
costs for the 298 affected small businesses is expected to be about
$1.3 million.
As a result, EPA estimates that, of the 298 small businesses paying
fees every year, all may have annual cost-revenue impacts less than 1%.
EPA estimates the median annual sales for small businesses likely to be
affected by TSCA section 4 and TSCA section 6 actions to be
approximately $5,445,000; and $3,475,000 for small businesses likely to
be affected by TSCA section 5 actions. The average annual cost per
affected small business is expected to be about $170 for section 4;
$1,800 for section 5, and $38,600 for section 6.
E. Unfunded Mandates Reform Act (UMRA)
This action does not contain an unfunded mandate of $100 million or
more as described in UMRA, 2 U.S.C. 1531-1538, and does not
significantly or uniquely affect small governments. As such, the
requirements of sections 202, 203, 204, or 205 of UMRA, 2 U.S.C. 1531-
1538, do not apply to this action.
F. Executive Order 13132: Federalism
This action does not have federalism implications. It will not have
substantial direct effects on the States, on the relationship between
the national government and the States, or on the distribution of power
and responsibilities among the various levels of government, as
specified in Executive Order 13132 (64 FR 43255, August 10, 1999).
G. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments
This action does not have tribal implications because it will not
have any effect on tribal governments, on the relationship between the
Federal government and the Indian tribes, or on the distribution of
power and responsibilities between the Federal government and Indian
tribes, as specified in Executive Order 13175 (65 FR 67249, November 9,
2000).
H. Executive Order 13045: Protection of Children From Environmental
Health Risks and Safety Risks
EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997),
as applying only to those regulatory actions that concern environmental
health or safety risks that EPA has reason to believe may
disproportionately affect children, per the definition of ``covered
regulatory action'' in section 2-202 of Executive Order 13045. This
action is not subject to Executive Order 13045 because it does not
establish an environmental standard intended to mitigate environmental
health risks or safety risks.
I. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
This action is not a ``significant energy action'' as defined in
Executive Order 13211 (66 FR 28355, May 22, 2001), because it is not
likely to have a significant adverse effect on energy supply,
distribution, or use. This action would establish service fees for
TSCA, which will not have a significant effect on the supply,
distribution or use of energy.
J. National Technology Transfer and Advancement Act (NTTAA)
Since this action does not involve any technical standards, NTTAA
section 12(d) (15 U.S.C. 272 note) does not apply to this action.
K. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations
This action does not have disproportionately high and adverse human
health or environmental effects on minority populations, low-income
populations and/or indigenous peoples, as specified in Executive Order
12898 (59 FR 7629, February 16, 1994). This action does not affect the
level of protection provided to human health or the environment.
The fees collected under this rule will assist the Agency in
carrying out various requirements under TSCA, including conducting risk
evaluations, requiring testing of chemical substances and mixtures, and
evaluating and reviewing new chemical submissions, as required under
TSCA sections 4, 5, and 6.
[[Page 52713]]
Although not directly impacting environmental justice-related concerns,
the fees will enable the Agency to better protect human health and the
environment, including in low-income and minority communities.
L. Congressional Review Act (CRA)
This action is subject to the CRA, 5 U.S.C. 801 et seq., and EPA
will submit a rule report to the U.S. Senate, and the U.S. House of
Representatives, and the Comptroller General of the United States. This
action is not a ``major rule'' as defined by 5 U.S.C. 804(2).
List of Subjects
40 CFR Part 700
Chemicals, Environmental protection, Hazardous substances,
Reporting and recordkeeping requirements, User fees.
40 CFR Part 720
Chemicals, Environmental protection, Hazardous substances, Imports,
Reporting and recordkeeping requirements.
40 CFR Part 723
Chemicals, Environmental protection, Hazardous substances,
Phosphate, Reporting and recordkeeping requirements.
40 CFR Part 725
Administrative practice and procedure, Chemicals, Environmental
protection, Hazardous substances, Imports, Labeling, Occupational
safety and health, Reporting and recordkeeping requirements.
40 CFR Part 790
Administrative practice and procedure, Chemicals, Confidential
business information, Environmental protection, Hazardous substances,
Reporting and recordkeeping requirements.
40 CFR Part 791
Administrative practice and procedure, Chemicals, Environmental
protection, Hazardous substances, Reporting and recordkeeping
requirements.
Dated: September 27, 2018.
Andrew R. Wheeler,
Acting Administrator.
Therefore, 40 CFR chapter I, subchapter R, is amended as follows:
PART 700--[AMENDED]
0
1. The authority citation for part 700 is revised to read as follows:
Authority: 15 U.S.C. 2625 and 2665, 44 U.S.C. 3504.
0
2. Section 700.40 is revised to read as follows:
Sec. 700.40 Purpose and applicability.
(a) Purpose. The purpose of this subpart is to establish and
collect fees from manufacturers and processors to defray part of EPA's
cost of administering the Toxic Substances Control Act (15 U.S.C. 2601-
2692), as amended by the Frank R. Lautenberg Chemical Safety for the
21st Century Act (Pub. L. 114-182).
(b) Applicability. This subpart applies to all manufacturers who
are required to submit information under section 4 of the Act, who
submit certain notices and exemption requests to EPA under section 5 of
the Act, who manufacture a chemical substance that is subject to a risk
evaluation under TSCA section 6(b)(4) of the Act, and who process a
chemical substance that is the subject of a Significant New Use Notice
(SNUN) or Test Market Exemption (TME) under section 5 of the Act and
who are required to submit information under section 4 of the Act
related to a SNUN submission.
(c) Effective date. After October 18, 2018, all persons specified
in Sec. 700.45 and paragraph (a) of this section must comply with this
subpart.
0
3. Section 700.43 is amended by:
0
a. Revising the section heading;
0
b. Revising the introductory text;
0
c. Adding in alphabetical order definitions for ``Consortium'',
``Enforceable consent agreement'', and ``EPA-initiated risk
evaluation'';
0
d. Removing the definitions of ``Exemption application'' and
``Intermediate premanufacture notice'';
0
e. Revising the definition of ``Joint submitters'';
0
f. Adding in alphabetical order a definition for ``Manufacturer-
requested risk evaluation'';
0
g. Revising the definition of ``Person'';
0
h. Adding in alphabetical order definitions for ``Principal sponsor''
and ``Risk evaluation'';
0
i. Revising the definitions of ``Significant new use notice'' and
``Small business concern''; and
0
k. Adding in alphabetical order definitions for ``Test order'' and
``Test rule''.
The revisions and additions read as follows:
Sec. 700.43 Definitions applicable to this subpart.
Definitions in section 3 of the Act (15 U.S.C. 2602), as well as
definitions contained in Sec. Sec. 704.3, 720.3, 723.175(b), 725.3,
and 790.3 of this chapter, apply to this subpart unless otherwise
specified in this section. In addition, the following definitions
apply:
* * * * *
Consortium means an association of manufacturers and/or processors
who have made an agreement to jointly split the cost of applicable
fees.
* * * * *
Enforceable consent agreement means a consent agreement used by EPA
to accomplish testing where a consensus exists among EPA and interested
parties (as identified in Sec. 790.22(b)(2)) concerning the need for
and scope of testing under section 4 of the Act.
EPA-initiated risk evaluation means any risk evaluation conducted
pursuant to section 6(b)(4)(C)(i) of the Act.
* * * * *
Joint submitters mean two or more persons who submit a TSCA section
5 notice together.
Manufacturer-requested risk evaluation means any chemical substance
risk evaluation conducted at the request of one or more manufacturers
of that chemical substance pursuant to section 6(b)(4)(C)(ii) of the
Act.
* * * * *
Person means a manufacturer or processor.
* * * * *
Principal sponsor means a person who assumes primary responsibility
for the direction of study, the payment of fees to EPA, and for oral
and written communication with EPA.
Risk evaluation means any risk evaluation conducted pursuant to
section 6(b) of the Act.
* * * * *
Significant new use notice or SNUN means any notice submitted to
EPA pursuant to section 5(a)(1)(B) of the Act in accordance with part
721 of this chapter.
Small business concern means a manufacturer or processor who meets
the size standards identified in the following table. The number of
employees indicates the maximum allowed for a manufacturer or processor
to be considered small. If the North American Industry Classification
System (NAICS) code of a manufacturer or processor is not represented
in the table, it will be considered small if it has 500 or fewer
employees. When calculating the number of employees, a manufacturer or
processor must include the employees of all of its ``parent companies''
(if any) and all companies it ``owns or controls,'' as defined by 40
CFR 704.3. The number of employees are calculated as the average number
of people employed for each pay period of
[[Page 52714]]
the business' latest 12 calendar months, regardless of hours worked or
temporary status.
----------------------------------------------------------------------------------------------------------------
Small business concern size standards
Potentially affected NAICS NAICS description (number of employees)
----------------------------------------------------------------------------------------------------------------
324110.............................. Petroleum Refineries........... 1,500 or fewer.
325110.............................. Petrochemical Manufacturing.... 1,000 or fewer.
325120.............................. Industrial Gas Manufacturing... 1,000 or fewer.
325130.............................. Synthetic Dye and Pigment 1,000 or fewer.
Manufacturing.
325180.............................. Other Basic Inorganic Chemical 1,000 or fewer.
Manufacturing.
325193.............................. Ethyl Alcohol Manufacturing.... 1,000 or fewer.
325194.............................. Cyclic Crude, Intermediate, and 1,250 or fewer.
Gum and Wood Chemical
Manufacturing.
325199.............................. All Other Basic Organic 1,250 or fewer.
Chemical Manufacturing.
325211.............................. Plastics Material and Resin 1,250 or fewer.
Manufacturing.
325212.............................. Synthetic Rubber Manufacturing. 1,000 or fewer.
325220.............................. Artificial and Synthetic Fibers 1,000 or fewer.
and Filaments Manufacturing.
325311.............................. Nitrogenous Fertilizer 1,000 or fewer.
Manufacturing.
325312.............................. Phosphatic Fertilizer 750 or fewer.
Manufacturing.
325314.............................. Fertilizer (Mixing Only) 500 or fewer.
Manufacturing.
325320.............................. Pesticide and Other 1,000 or fewer.
Agricultural Chemical
Manufacturing.
325411.............................. Medicinal and Botanical 1,000 or fewer.
Manufacturing.
325412.............................. Pharmaceutical Preparation 1,250 or fewer.
Manufacturing.
325413.............................. InVitro Diagnostic Substance 1,250 or fewer.
Manufacturing.
325414.............................. Biological Product (except 1,250 or fewer.
Diagnostic) Manufacturing.
325510.............................. Paint and Coating Manufacturing 1,000 or fewer.
325520.............................. Adhesive Manufacturing......... 500 or fewer.
325611.............................. Soap and Other Detergent 1,000 or fewer.
Manufacturing.
325612.............................. Polish and Other Sanitation 750 or fewer.
Good Manufacturing.
325613.............................. Surface Active Agent 750 or fewer.
Manufacturing.
325620.............................. Toilet Preparation 1,250 or fewer.
Manufacturing.
325910.............................. Printing Ink Manufacturing..... 500 or fewer.
325920.............................. Explosives Manufacturing....... 750 or fewer.
325991.............................. Custom Compounding of Purchased 500 or fewer.
Resins.
325992.............................. Photographic Film, Paper, Plate 1,500 or fewer.
and Chemical Manufacturing.
325998.............................. All Other Miscellaneous 500 or fewer.
Chemical Product and
Preparation Manufacturing.
424690.............................. Other Chemical and Allied 150 or fewer.
Products Merchant Wholesalers.
424710.............................. Petroleum Bulk Stations and 200 or fewer.
Terminals.
424720.............................. Petroleum and Petroleum 200 or fewer.
Products Merchant Wholesalers
(except Bulk Stations and
Terminals).
----------------------------------------------------------------------------------------------------------------
Test order means an order to develop information pursuant to
section 4(a) of the Act.
Test rule refers to a regulation requiring the development of
information pursuant to section 4(a) of the Act.
0
4. Section 700.45 is revised to read as follows:
Sec. 700.45 Fee payments.
(a) Persons who must pay fees. (1) Manufacturers submitting a TSCA
section 5 notice to EPA shall remit for each such notice the applicable
fee identified in paragraph (c) of this section in accordance with the
procedures in paragraphs (f) and (g) of this section.
(2) Manufacturers of chemical substances and mixtures required to
test these chemical substance and mixtures under a TSCA section 4(a)
test rule, test order, or enforceable consent agreement shall remit for
each such test rule, order, or enforceable consent agreement the
applicable fee identified in paragraph (c) of this section in
accordance with the procedures in paragraphs (f) and (g) of this
section.
(3) Manufacturers of a chemical substance that is subject to a risk
evaluation under section 6(b) of the Act, shall remit for each such
chemical risk evaluation the applicable fee identified in paragraph (c)
of this section in accordance with the procedures in paragraphs (f) and
(g) of this section.
(4) Processors submitting a SNUN or TME under TSCA section 5 to EPA
shall remit for each such notice the applicable fee identified in
paragraph (c) of this section in accordance with the procedures in
paragraphs (f) and (g) of this section.
(5) Processors of chemical substances and mixtures subject to a
TSCA section 4(a) test rule, test order, or enforceable consent
agreement in association with a SNUN submission referenced in paragraph
(a)(4) of this section shall remit for each such test rule, order, or
enforceable consent agreement the applicable fee identified in
paragraph (c) of this section in accordance with the procedures in
paragraphs (f) and (g) of this section.
(b) Identifying manufacturers subject to fees--(1) In general. For
purposes of identifying manufacturers subject to fees for section 4
test rules and section 6 EPA-initiated risk evaluations, EPA will
publish a preliminary list of manufacturers identified through a review
of data sources described in paragraph (b)(2) of this subsection;
provide an opportunity for public comment; and publish a final list
specifying the manufacturers responsible for payment.
(2) Data sources. To compile the preliminary list, EPA will rely on
information submitted to the Agency (such as the information submitted
under sections 5(a), 8(a), 8(b), and to the Toxics Release Inventory)
as well as other information available to the Agency, including
publicly available information or information submitted to other
agencies to which EPA has access. To be able to include the most recent
CDR data and to account for annual or other typical fluctuations in
manufacturing, EPA will use the five most recent years of data
submitted or
[[Page 52715]]
available to the Agency to develop the preliminary list.
(3) Publication of preliminary list. (i) For risk evaluations
initiated by EPA under section 6, the preliminary list will be
published at the time of final designation of the chemical substance as
a High-Priority Substance.
(ii) For test rules under section 4, the preliminary list will be
published with the proposed test rule.
(4) Public comment period. Following publication of the preliminary
list, EPA will provide a period of public comment that is no less than
30 days.
(5) Self-identification. All manufacturers who have manufactured or
imported the chemical substance in the previous five years, must submit
notice to EPA, irrespective of whether they are included in the
preliminary list specified in paragraph (b)(3) of this section. The
notice must be submitted electronically via EPA's Central Data Exchange
(CDX), the Agency's electronic reporting portal, using the Chemical
Information Submission System (CISS) reporting tool, and must contain
the following information:
(i) Contact information. The name and address of the submitting
company, the name and address of the authorized official for the
submitting company, and the name and telephone number of a person who
will serve as technical contact for the submitting company and who will
be able to answer questions about the information submitted by the
company to EPA.
(ii) Certification of cessation. If a manufacturer has manufactured
in the five-year period preceding publication of the preliminary list,
but has ceased manufacturer prior to the certification cutoff dates
identified in paragraph (b)(6) of this section and will not manufacture
the substance again in the successive five years, the manufacturer may
submit a certification statement attesting to these facts. If EPA
receives such a certification statement from a manufacturer, the
manufacturer will not be obligated to pay the fee under this section.
(iii) Certification of no manufacture. If a manufacturer is
identified on the preliminary list, but has not manufactured the
chemical in the five-year period preceding publication of the
preliminary list, the manufacturer may submit a certification statement
attesting to these facts. If EPA receives such a certification
statement from a manufacturer, the manufacturer will not be obligated
to pay the fee under this section.
(6) Certification cutoff date. (i) For a section 6 EPA-initiated
risk evaluation, the cutoff date for purposes of paragraph (b)(5)(ii)
of this section is the day prior to initiation of the prioritization
process for the applicable chemical substance.
(ii) For a section 4 test rule, the cutoff date for purposes of
paragraph (b)(5)(ii) of this section is the day prior to publication of
the proposed test rule for the applicable chemical substance.
(7) Publication of final list. EPA expects to publish a final list
of manufacturers to identify the specific manufacturers subject to the
applicable fee. This list will indicate if additional manufacturers
self-identified pursuant to paragraph (b)(5) of this section, if other
manufacturers were identified through credible public comment, and if
manufacturers submitted certification of cessation or no manufacture
pursuant to paragraph (b)(5)(ii) or (iii). The final list will be
published no later than concurrently with the final scope document for
risk evaluations initiated by EPA under section 6, and with the final
test rule for test rules under section 4.
(8) Effect of final list. Manufacturers who are listed on the final
list are subject to the applicable fee identified in paragraph (c) of
this section.
(9) Identifying manufacturers for other fee categories. For Section
4 Test Orders and enforceable consent agreements, and Section 6
Manufacturer-Requested Risk Evaluations, EPA will not conduct the
identification process described in paragraphs (b)(1) through (8) of
this section, as manufacturers self-identify through a submission or
are already otherwise known to Agency. However, those manufacturers are
required to provide an information submission to EPA for the purposes
of fee administration. The notice must be submitted electronically via
the Agency's electronic reporting software (e.g., Central Data Exchange
(CDX)) and must contain the manufacturers: Full name, address,
telephone number and email address. Timing of this submission must be
as follows:
(i) For section 4 test orders and enforceable consent agreements,
the informational submission in this paragraph (b)(9) must be provided
within 30 days following notification from EPA.
(ii) For section 6 manufacturer-requested risk evaluations, the
informational submission in this paragraph (b)(9) is required as part
of the procedural process for making such requests, and must be
completed at the time of making the request.
(c) Fees for the 2019, 2020 and 2021 fiscal years. Persons shall
remit fee payments to EPA as follows:
(1) Small business concerns. Small business concerns shall remit
fees as follows:
(i) Premanufacture notice and consolidated premanufacture notice.
Persons shall remit a fee totaling $2,800 for each premanufacture
notice (PMN) or consolidated (PMN) submitted in accordance with part
720 of this chapter.
(ii) Significant new use notice. Persons shall remit a fee totaling
$2,800 for each significant new use notice (SNUN) submitted in
accordance with part 721 of this chapter.
(iii) Exemption application. Persons shall remit a fee totaling
$940 for each of the following exemption requests submitted under
section 5 of the Act:
(A) Low releases and low exposures exemption or LoREX request
submitted to EPA pursuant to section 5(a)(1) of the Act in accordance
with Sec. 723.50(a)(1)(ii) of this chapter.
(B) Low volume exemption or LVE request submitted to EPA pursuant
to section 5(a)(1) of the Act in accordance with Sec. 723.50(a)(1)(i)
of this chapter.
(C) Test marketing exemption or TME application submitted to EPA
pursuant to section 5 of the Act in accordance with Sec. Sec. 725.300
through 725.355 of this chapter.
(D) TSCA experimental release application or TERA application
submitted to EPA pursuant to section 5 of the Act for research and
development activities involving microorganisms in accordance with
Sec. Sec. 725.200 through 725.260 of this chapter.
(E) Tier II exemption application submitted to EPA pursuant to
section 5 of the Act in accordance with Sec. Sec. 725.428 through
725.455 of this chapter.
(iv) Instant photographic film article exemption notice. Persons
shall remit a fee totaling $940 for each instant photographic film
article exemption notice submitted in accordance with Sec. 723.175 of
this chapter.
(v) Microbial commercial activity notice and consolidated microbial
commercial activity notice. Persons shall remit a fee totaling $2,800
for each microbial commercial activity notice (MCAN) or consolidated
MCAN submitted in accordance with Sec. Sec. 725.25 through 725.36 of
this chapter.
(vi) Persons shall remit a total of twenty percent of the
applicable fee under paragraph (c)(2)(vi), (vii) or (viii) of this
section for a test rule, test order, or enforceable consent agreement.
(vii) Persons shall remit a total fee of twenty percent of the
applicable fee under paragraphs (c)(2)(ix) of this section for an EPA-
initiated risk evaluation.
[[Page 52716]]
(viii) Persons shall remit the total fee under paragraph (c)(2)(x)
or (xi) of this section, as applicable, for a manufacturer-requested
risk evaluation.
(2) Others. Persons other than small business concerns shall remit
fees as follows:
(i) PMN and consolidated PMN. Persons shall remit a fee totaling
$16,000 for each PMN or consolidated PMN submitted in accordance with
part 720 of this chapter.
(ii) SNUN. Persons shall remit a fee totaling $16,000 for each
significant new use notice submitted in accordance with part 721 of
this chapter.
(iii) Exemption applications. Persons shall remit a fee totaling
$4,700 for each of the following exemption requests, and modifications
to previous exemption requests, submitted under section 5 of the Act:
(A) Low releases and low exposures exemption or LoREX request
submitted to EPA pursuant to section 5(a)(1) of the Act in accordance
with Sec. 723.50(a)(1)(ii) of this chapter.
(B) Low volume exemption or LVE request submitted to EPA pursuant
to section 5(a)(1) of the Act in accordance with Sec. 723.50(a)(1)(i)
of this chapter.
(C) Test marketing exemption or TME application submitted to EPA
pursuant to section 5 of the Act in accordance with Sec. Sec. 725.300
through 725.355 of this chapter, unless the submitting company has
graduated from EPA's Sustainable Futures program, in which case this
exemption fee is waived.
(D) TSCA experimental release application or TERA application
submitted to EPA pursuant to section 5 of the Act for research and
development activities involving microorganisms in accordance with
Sec. Sec. 725.200 through 725.260 of this chapter.
(E) Tier II exemption application submitted to EPA pursuant to
section 5 of the Act in accordance with Sec. Sec. 725.428 through
725.455 of this chapter.
(iv) Instant photographic film article exemption notice. Persons
shall remit a fee totaling $4,700 for each exemption notice submitted
in accordance with Sec. 723.175 of this chapter.
(v) MCAN and consolidated MCAN. Persons shall remit a fee totaling
$16,000 for each MCAN or consolidated MCAN submitted in accordance with
Sec. Sec. 725.25 through 725.36 of this chapter.
(vi) Test rule. Persons shall remit a fee totaling $9,800 for each
test rule.
(vii) Test order. Persons shall remit a fee totaling $29,500 for
each test order.
(viii) Enforceable consent agreement. Persons shall remit a fee
totaling $22,800 for each enforceable consent agreement.
(ix) EPA-initiated chemical risk evaluation. Persons shall remit a
fee totaling $1,350,000.
(x) Manufacturer-requested risk evaluation of a Work Plan Chemical.
Persons shall remit an initial fee of $1,250,000, and final payment to
total 50% of the actual costs of this activity, in accordance with the
procedures in paragraph (g) of this section. The final payment amount
will be determined by EPA, and invoice issued to the requesting
manufacturer.
(xi) Manufacturer-requested risk evaluation of a non-work plan
chemical. Persons shall remit an initial fee of $2,500,000, and final
payment to total 100% of the actual costs of the activity, in
accordance with the procedures in paragraph (g) of this section. The
final payment amount will be determined by EPA, and invoice issued to
the requesting manufacturer.
(d) Fees for 2022 fiscal year and beyond. (1) Fees for the 2022 and
later fiscal years will be adjusted on a three-year cycle by
multiplying the fees in paragraph (c) of this section by the current
PPI index value with a base year of 2019 using the following formula:
FA = F x I
Where:
FA = the inflation-adjusted future year fee amount.
F = the fee specified in paragraph (c) of this section.
I = Producer Price Index for Chemicals and Allied Products inflation
value with 2019 as a base year.
(2) Updated fee amounts for PMNs, SNUNs, MCANs, exemption
applications and manufacturer-requested chemical risk evaluation
requests apply to submissions received by the Agency on or after
October 1 of every three-year fee adjustment cycle beginning in fiscal
year 2022 (October 1, 2021). Updated fee amounts also apply to test
rules, test orders, enforceable consent agreements and EPA-initiated
chemical evaluations that are ``noticed'' on or after October 1 of
every three-year fee adjustment cycle, beginning in fiscal 2022.
(3) The Agency will initiate public consultation through notice-
and-comment rulemaking prior to making fee adjustments beyond
inflation. If it is determined that no additional adjustment is
necessary beyond for inflation, EPA will provide public notice of the
inflation-adjusted fee amounts most likely through posting to the
Agency's web page by the beginning of each three-year fee adjustment
cycle (i.e., October 1, 2021, October 1, 2024, etc.). If the Agency
determines that adjustments beyond inflation are necessary, EPA will
provide public notice of that determination and the process to be
followed to make those adjustments.
(e) No fee required. Persons are exempt from remitting any fee for
Tier I exemption submissions under Sec. 725.424 and polymer exemption
reports submitted under Sec. 723.250 of this chapter.
(f) Multiple parties, including joint submitters and consortia. (1)
Joint submitters of a TSCA section 5 notice are required to remit the
applicable fee identified in paragraph (c) of this section for each
section 5 notice submitted. Only one fee is required for each
submission, regardless of the number of joint submitters for that
notice. To qualify for the fee identified in paragraph (c)(1) of this
section, each joint submitter of a TSCA section 5 notice must qualify
as a small business concern under Sec. 700.43 of this chapter.
(2) Any consortium formed to split the cost of the applicable fee
under section 4 of the Act is required to remit the appropriate fee
identified in paragraph (c) of this section for each test rule, test
order, or enforceable consent agreement regardless of the number of
manufacturers and/or processors in that consortium. For the consortium
to qualify for the fee identified in paragraph (c)(1) of this section,
each person in the consortium must qualify as a small business concern
under Sec. 700.43 of this chapter. Failure to submit fee payment
pursuant to this paragraph, or to provide notice of failure to reach
agreement pursuant to paragraph (f)(2)(v) of this section constitutes a
violation by each consortium member.
(i) The consortium must identify a principal sponsor and provide
notification to EPA that a consortium has formed. The notification must
be accomplished within 60 days of the publication date of a test rule
under section 4 of the Act, or within 60 days of the issuance of a test
order under Section 4 of the Act, or within 60 days of the signing of
an enforceable consent agreement under section 4 of the Act. EPA may
permit additional entities to join an existing consortium prior to the
expiration of the notification period if the principal sponsor provides
updated notification.
(ii) Notification must be submitted electronically via the Agency's
electronic reporting software--Central Data Exchange (CDX)--and include
the following information:
[[Page 52717]]
(A) Full name, address, telephone number and signature of principal
sponsor;
(B) Name(s) and contact information for each manufacturer and/or
processor associating with the consortium.
(iii) It is up to the consortium to determine how fees will be
split among the persons in the consortium.
(iv) Consortia are strongly encouraged to set lower fees for small
business concerns participating in the consortium.
(v) If a consortium is unable to come to terms on how fees will be
split among the persons in the consortium, the principal sponsor must
notify EPA in writing before the end of the notification period in
paragraph (f)(2)(i) of this section.
(vi) If a consortium provides notice to EPA under paragraph
(f)(2)(v) of this section that they failed to reach agreement on
payment, EPA will assess fees to all persons as individuals described
under paragraph (f)(4) of this section.
(3) Any consortium formed to split the cost of the applicable fee
supporting a risk evaluation under section 6(b) of the Act is required
to remit the appropriate fee identified in paragraph (c) of this
section for each risk evaluation, regardless of the number of
manufacturers in that consortium. For the consortium to qualify for the
fee identified in paragraph (c)(1)(vii) of this section, each person in
the consortium must qualify as a small business concern under Sec.
700.43 of this chapter. Failure to provide notice or submit fee payment
pursuant to this paragraph (f)(3) constitutes a violation by each
consortium member.
(i) Notification must be provided to EPA that a consortium has
formed. The notification must be accomplished within 60 days of the
publication of the final scope of a chemical risk evaluation under
section 6(b)(4)(D) of the Act or within 60 days of EPA providing
notification to a manufacturer that a manufacturer-requested risk
evaluation has been granted.
(ii) Notification must be submitted electronically via the Agency's
electronic reporting software--Central Data Exchange (CDX)--and include
the following information:
(A) Full name, address, telephone number and signature of principal
sponsor;
(B) Name(s) and contact information for each manufacturer and/or
processor associating with the consortium.
(iii) It is up to the consortium to determine how fees will be
split among the persons in the consortium.
(iv) Consortia are strongly encouraged to set lower fees for small
business concerns participating in the consortium.
(v) If a consortium is unable to come to terms on how fees will be
split among the persons in the consortium, the principal sponsor must
notify EPA in writing before the end of the notification period in
paragraph (f)(3)(i) of this section.
(vi) If a consortium provides notice to EPA under paragraph
(f)(3)(v) of this section that they failed to reach agreement on
payment, EPA will assess fees to all persons as individuals as
described under paragraph (f)(4) of this section.
(4) If multiple persons are subject to fees triggered by section 4
or 6(b) of the Act and no consortium is formed, EPA will determine the
portion of the total applicable fee to be remitted by each person
subject to the requirement. Each person's share of the applicable fee
specified in paragraph (c) of this section shall be in proportion to
the total number of manufacturers and/or processors of the chemical
substance, with lower fees for small businesses:
[GRAPHIC] [TIFF OMITTED] TR17OC18.018
Where:
Ps = the portion of the fee under paragraph (c) of this
section that is owed by a person who qualifies as a small business
concern under Sec. 700.43 of this chapter.
Po = the portion of the fee owed by a person other than a
small business concern.
F = the total fee required under paragraph (c) of this section.
Mt = the total number of persons subject to the fee
requirement.
Ms = the number of persons subject to the fee requirement
who qualify as a small business concern.
(5) If multiple persons are subject to fees triggered by section 4
or 6(b) of the Act and some inform EPA of their intent to form a
consortium while others choose not to associate with the consortium,
EPA will take the following steps to allocate fee amounts:
(i) 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.
(ii) Provide all small businesses who are either not associated
with a consortium, or associated with an all-small business consortium
with an 80% discount from the base fee referenced previously.
(iii) Calculate the total remaining fee and total number of
remaining manufacturers by subtracting out the discounted fees and the
number of small businesses identified;
(iv) Reallocate the remaining fee across those remaining
individuals and groups in equal amounts, counting each manufacturer in
a consortium as one person; and
(v) Inform consortia and individuals of their requisite fee amount.
Small businesses in a successfully-formed consortium, other than a
consortium of all small businesses will not be afforded the 80%
discount by EPA, but consortia managers are strongly encouraged to
provide a discount for small business concerns.
(g) Remittance procedure. (1) Electronic payment. Each remittance
under this section shall be paid electronically in U.S. dollars, using
one of the electronic payment methods supported by the Department of
the Treasury's Pay.gov online electronic payment service, or any
applicable additional or successor online electronic
[[Page 52718]]
payment service offered by the Department of Treasury.
(2) Fees incurred prior to October 18, 2018. Timing of payment for
fees incurred between October 1, 2018 and October 18, 2018. Fees
required by paragraph (c) of this section for which the fee-triggering
action or event occurred between October 1, 2018, and October 18, 2018
shall be paid in response to invoices EPA will send within 30 days of
October 18, 2018.
(3) Fees incurred after October 18, 2018. Timing of payment for
fees incurred after October 18, 2018. Fees required by paragraph (c) of
this section for which the fee-triggering action or event occurred
after October 18, 2018 shall be paid at the following time:
(i) Test orders and test rules. The applicable fee specified in
paragraph (c) of this section shall be paid in full not later than 120
days after the effective date of a test rule or test order under
section 4 of the Act.
(ii) Enforceable consent agreements. The applicable fee specified
in paragraph (c) of this section shall be paid in full not later than
120 days after the signing of an enforceable consent agreement under
section 4 of the Act.
(iii) Section 5 notice. The applicable fee specified in paragraph
(c) of this section shall be paid in full immediately upon submission
of a TSCA section 5 notice.
(iv) Risk evaluations. (A) For EPA-initiated risk evaluations, the
applicable fee specified in paragraph (c) of this section shall be paid
in full not later than 120 days after EPA publishes the final scope of
a chemical risk evaluation under section 6(b)(4)(D) of the Act.
(B) For manufacturer-requested risk evaluations under section
6(b)(4)(C)(ii) of the Act, the applicable fees specified in paragraph
(c) of this section shall be paid as follows:
(1) The first payment towards the applicable fee specified in
paragraph (c) of this section shall be paid in full not later than 30
days after EPA provides the submitting manufacture(s) notice that it
has granted the request.
(2) The final payment towards the applicable fee specific in
paragraph (c) of this section shall be paid in full not later than 30
days after EPA publishes a final risk evaluation in the Federal
Register.
(4) Payment identity. (i) Persons who submit a TSCA section 5
notice shall place an identifying number and a payment identity number
on the front page of each TSCA section 5 notice submitted. The
identifying number must include the letters ``TS'' followed by a
combination of 6 numbers (letters may be substituted for some numbers).
The payment identity number may be a ``Pay.gov'' transaction number
used to transmit the fee. The same TS number and the submitter's name
must appear on the corresponding fee remittance under this section. If
a remittance applies to more than one TSCA section 5 notice, the person
shall include the name of the submitter and a new TS number for each
TSCA section 5 notice to which the remittance applies, and the amount
of the remittance that applies to each notice.
(ii) Persons who are required to submit a letter of intent to
conduct testing per Sec. 790.45 of this chapter shall place a payment
identity number on the front page of each letter submitted. The
identifying number must include the letters ``TS'' followed by a
combination of 6 numbers (letters may be substituted for some numbers).
The payment identity number may be a ``Pay.gov'' transaction number
used to transmit the fee. The same TS number and the submitter's name
must appear on the corresponding fee remittance under this section. If
a remittance applies to more than one letter of intent to conduct
testing, the person shall include the name of the submitter and a new
TS number for each letter of intent to conduct testing to which the
remittance applies, and the amount of the remittance that applies to
each letter of intent.
(iii) Persons who sign an enforceable consent agreement per Sec.
790.60 of this chapter shall place a payment identity number within the
contents of the signed agreement. The identifying number must include
the letters ``TS'' followed by a combination of 6 numbers (letters may
be substituted for some numbers). The payment identity number may be a
``Pay.gov'' transaction number used to transmit the fee. The same TS
number and the submitter's name must appear on the corresponding fee
remittance under this section. If a remittance applies to more than one
enforceable consent agreement, the party or parties shall include the
name of the submitter(s) and a new TS number for each enforceable
consent agreement to which the remittance applies, and the amount of
the remittance that applies to each enforceable consent agreement.
(5) Small business certification. (i) Each person who remits the
fee identified in paragraph (c)(1) of this section for a PMN,
consolidated PMN, or SNUN shall insert a check mark for the statement,
``The company named in part 1, section A is a small business concern
under 40 CFR 700.43 and has remitted a fee of $2,800 in accordance with
40 CFR 700.45(c).'' under ``CERTIFICATION'' on page 2 of the
Premanufacture Notice for New Chemical Substances (EPA Form 7710-25).
This form is available on EPA's website at https://cdx.epa.gov/SSL/PMN/Outbound/Electronic_PMN_Form_version2.pdf.
(ii) Each person who remits the fee identified in paragraph (c)(1)
of this section for a LVE, LoREX, TERA, TMEA, or Tier II exemption
request under TSCA section 5 shall insert a check mark for the
statement, ``The company named in part 1, section A is a small business
concern under 40 CFR 700.43 and has remitted a fee of $940 in
accordance with 40 CFR 700.45(c).'' in the exemption application.
(iii) Each person who remits the fee identified in paragraph (c)(1)
of this section for an exemption notice under Sec. 723.175 of this
chapter shall include the words, ``The company or companies identified
in this notice is/are a small business concern under 40 CFR 700.43 and
has/have remitted a fee of $940 in accordance with 40 CFR 700.45(c).''
in the certification required in Sec. 723.175(i)(1)(x) of this
chapter.
(iv) Each person who remits the fee identified in paragraph (c)(1)
of this section for a MCAN or consolidated MCAN for a microorganism
shall insert a check mark for the statement, ``The company named in
part 1, section A is a small business concern under 40 CFR 700.43 and
has remitted a fee of $2,800 in accordance with 40 CFR 700.45(c).'' in
the certification required in Sec. 725.25(b) of this chapter.
(6) Payment certification statement. (i) Each person who remits a
fee identified in paragraph (c)(2) of this section for a PMN,
consolidated PMN, or SNUN shall insert a check mark for the statement,
``The company named in part 1, section A has remitted the fee of
$16,000 specified in 40 CFR 700.45(c).'' under ``CERTIFICATION'' on
page 2 of the Premanufacture Notice for New Chemical Substances (EPA
Form 7710-25).
(ii) Each person who remits a fee identified in paragraph (c)(2) of
this section for a LVE, LoREX, TERA, TMEA, or Tier II exemption request
under TSCA section 5 shall insert a check mark for the statement, ``The
company named in part 1, section A has remitted the fee of $4,700
specified in 40 CFR 700.45(c).'' in the exemption application.
(iii) Each person who remits the fee identified in paragraph (c)(2)
of this section for an exemption notice under Sec. 723.175 of this
chapter shall include the words, ``The company or companies identified
in this notice has/have remitted a fee of $4,700 in accordance
[[Page 52719]]
with 40 CFR 700.45(c).'' in the certification required in Sec.
723.175(i)(1)(x) of this chapter.
(iv) Each person who remits the fee identified in paragraph (c)(2)
of this section for a MCAN for a microorganism shall insert a check
mark for the statement, ``The company named in part 1, section A has
remitted the fee of $16,000 in accordance with 40 CFR 700.45(c).'' in
the certification required in Sec. 725.25(b) of this chapter.
(h) Full fee refunds. EPA will refund, in totality, any fee paid
for a section 5 notice whenever the Agency determines:
(1) That the chemical substance that is the subject of a PMN,
consolidated PMN, exemption request, or exemption notice, is not a new
chemical substance as of the date of submission of the notice,
(2) In the case of a SNUN, that the notice was not required,
(3) That as of the date of submission of the notice: The
microorganism that is the subject of a MCAN or consolidated MCAN is not
a new microorganism; nor is the use involving the microorganism a
significant new use; or
(4) When the Agency fails to make a determination on a notice by
the end of the applicable notice review period under Sec. 720.75 or
Sec. 725.50 of this chapter, unless the Agency determines that the
submitter unduly delayed the process, or
(5) When the Agency fails to approve, or deny an exemption request
within the applicable period under Sec. 720.38(d), Sec. 723.50(g), or
Sec. 725.50(b) of this chapter, unless the Agency determines that the
submitter unduly delayed the process.
(i) Partial fee refunds. (1) If a TSCA section 5 notice is
withdrawn during the first 10 business days after the beginning of the
applicable review period under Sec. 720.75(a) of this chapter, the
Agency will refund all but 25% of the fee as soon as practicable.
(2) Once withdrawn, any future submission related to the TSCA
section 5 notice must be submitted as a new notice.
(3) If EPA determines that the initial payment for a manufacturer-
requested risk evaluation exceed the applicable fee in paragraph (c) of
this section, EPA will refund the difference.
0
5. Section 700.49 is revised to read as follows:
Sec. 700.49 Failure to remit fees.
(a) EPA will not consider a TSCA section 5 notice to be complete
unless the appropriate certification under Sec. 700.45(g) is included
and until the appropriate remittance under Sec. 700.45(c) has been
submitted as provided in Sec. 700.45(g). EPA will notify the submitter
of a section 5 notice that it is incomplete in accordance with
Sec. Sec. 720.65(c) and 725.33(b)(1) of this chapter.
(b) Failure to submit the appropriate remittance specified under
Sec. 700.45(c) for a test order, test rule, enforceable consent
agreement, or EPA-initiated risk evaluation as provided in Sec.
700.45(g) is a violation of TSCA and enforceable under section 15 of
the Act.
(c) EPA will not initiate a manufacturer-requested risk evaluation
the request for which the Agency has otherwise determined to be
complete unless EPA has determined to grant the request and the
appropriate initial remittance under Sec. 700.45(c) has been submitted
as provided in Sec. 700.45(g).
(d) Failure to submit the appropriate final remittance specified
under Sec. 700.45(c) for a manufacturer-requested risk evaluation as
provided in Sec. 700.45(g) is a violation of TSCA and enforceable
under section 15 of the Act.
PART 720--[AMENDED]
0
6. The authority citation for part 720 continues to read as follows:
Authority: 15 U.S.C. 2604, 2607, and 2613.
0
7. Section 720.38 is amended by adding paragraphs (b)(6) and (f) to
read as follows:
Sec. 720.38 Exemptions for test marketing.
* * * * *
(b) * * *
(6) A fee payment identity number, as required in 40 CFR
700.45(g)(4).
* * * * *
(f) When applying for a test marketing exemption, persons are
subject to fees in accordance with 40 CFR 700.45.
0
8. Section 720.45 is amended by revising paragraph (a)(5) to read as
follows:
Sec. 720.45 Information that must be included in the notice form.
* * * * *
(a) * * *
(5) If a manufacturer cannot provide all the information specified
in paragraphs (a)(1) and (2) of this section because the new chemical
substance is manufactured using a reactant having a specific chemical
identity claimed as confidential by its supplier, the manufacturer must
submit a notice directly to EPA containing all the information known by
the manufacturer about the chemical identity of the reported substance
and its proprietary reactant. In addition, the manufacturer must ensure
that the supplier of the confidential reactant submit a letter of
support directly to EPA providing the specific chemical identity of the
confidential reactant, including the CAS number, if available, and the
appropriate PMN or exemption number, if applicable. The letter of
support must reference the manufacturer's name and PMN Fee
Identification Number. The statutory review period will commence upon
receipt of both the notice and the letter of support.
* * * * *
PART 723--[AMENDED]
0
9. The authority citation for part 723 continues to read as follows:
Authority: 15 U.S.C. 2604.
0
10. Revise section 723.175 to read as follows:
Sec. 723.175 Chemical substances used in or for the manufacture or
processing of instant photographic and peel-apart film articles.
(a) Purpose and scope. (1) This section grants an exemption from
the premanufacture notice requirements of section 5(a)(1)(A) of the
Toxic Substances Control Act (15 U.S.C. 2604(a)(1)(A)) for the
manufacture and processing of new chemical substances used in or for
the manufacture or processing of instant photographic and peel-apart
film articles. This section does not apply to microorganisms subject to
part 725 of this chapter.
(2) To manufacture a new chemical substance under the terms of this
exemption, a manufacturer of instant photographic or peel-apart film
articles must:
(i) Submit an exemption notice when manufacture begins under
paragraph (i) of this section.
(ii) Comply with certain requirements to limit exposure to the new
chemical substance under paragraphs (e) through (h) of this section.
(iii) Comply with all recordkeeping requirements under paragraph
(j) of this section.
(iv) Remit the applicable fee specified in Sec. 700.45(c) of this
chapter.
(b) Definitions--(1) Act means the Toxic Substances Control Act (15
U.S.C. 2601 et seq.).
(2) An article is a manufactured item--
(i) Which is formed to a specific shape or design during
manufacture;
(ii) Which has end use function(s) dependent in whole or in part
upon its shape or design during end use; and
(iii) Which has either no change of chemical composition during its
end use or only those changes of composition which have no commercial
[[Page 52720]]
purpose separate from that of the article and that may occur as
described in Sec. 710.2 of this chapter except that fluids and
particles are not considered articles regardless of shape or design.
(3) The terms byproduct, EPA, impurities, person, and site have the
same meanings as in Sec. 710.3 of this chapter.
(4) The term category of chemical substances has the same meaning
as in section 26(c)(2) of the Act (15 U.S.C. 2625).
(5) The terms chemical substance, distribute in commerce,
distribution in commerce, environment, manufacture, new chemical
substance, and process have the same meanings as in section 3 of the
Act (15 U.S.C. 2602).
(6) Director of the Office of Pollution Prevention and Toxics means
the Director of the EPA Office of Pollution Prevention and Toxics or
any EPA employee designated by the Office Director to carry out the
Office Director's functions under this section.
(7) The term exemption category means a category of chemical
substances for which a person(s) has applied for or been granted an
exemption under section 5(h)(4) of the Act (15 U.S.C. 2604).
(8) The term instant photographic film article means a self-
developing photographic film article designed so that all the chemical
substances contained in the article, including the chemical substances
required to process the film, remain sealed during distribution and
use.
(9) Intermediate means any chemical substance which is consumed in
whole or in part in a chemical reaction(s) used for the intentional
manufacture of another chemical substance.
(10) Known to or reasonably ascertainable means all information in
a person's possession or control, plus all information that a
reasonable person similarly situated might be expected to possess,
control, or know, or could obtain without unreasonable burden or cost.
(11) The term peel-apart film article means a self-developing
photographic film article consisting of a positive image receiving
sheet, a light sensitive negative sheet, and a sealed reagent pod
containing a developer reagent and designed so that all the chemical
substances required to develop or process the film will not remain
sealed within the article during and after the development of the film.
(12) Photographic article means any article which will become a
component of an instant photographic or peel-apart film article.
(13) Special production area means a demarcated area within which
all manufacturing, processing, and use of a new chemical substance
takes place, except as provided in paragraph (f) of this section, in
accordance with the requirements of paragraph (e) of this section.
(14) Test data means:
(i) Data from a formal or informal study, test, experiment,
recorded observation, monitoring, or measurement.
(ii) Information concerning the objectives, experimental methods
and materials, protocols, results, data analyses (including risk
assessments), and conclusions from a study, test, experiment, recorded
observation, monitoring, or measurement.
(15) Used in or for the manufacturing or processing of an instant
photographic or peel-apart film article, when used to describe
activities involving a new chemical substance, means the new chemical
substance--
(i) Is included in the article; or
(ii) Is an intermediate to a chemical substance included in the
article or is one of a series of intermediates used to manufacture a
chemical substance included in the article.
(16) Wet mixture means a water or organic solvent-based suspension,
solution, dispersion, or emulsion used in the manufacture of an instant
photographic or peel-apart film article.
(c) Exemption category. The exemption category includes new
chemical substances used in or for the manufacture or processing of
instant photographic or peel-apart film articles which are manufactured
and processed under the terms of this section.
(d) Applicability. This exemption applies only to manufacturers of
instant photographic or peel-apart film articles who:
(1) Manufacture the new chemical substances used in or for the
manufacture or processing of the instant photographic or peel-apart
film articles.
(2) Limit manufacture and processing of a new chemical substance to
the site(s) listed in the exemption notice for that new chemical
substance submitted under paragraph (i) of this section.
(3) Comply with the requirements of paragraphs (e), (f), (g), (h),
and (j) of this section.
(4) Do not distribute in commerce or use a peel-apart film article
containing a new chemical substance until submission of a
premanufacture notice under section 5(a)(1)(A) of the Act (15 U.S.C.
2604) and until the review period for the notice has ended without EPA
action to prevent distribution or use.
(e) Conditions of manufacture and processing in the special
production area. All manufacturing, processing, and use operations
involving the new chemical substance must be performed in a special
production area under the conditions set forth in this paragraph until
the new chemical substance has been incorporated into a wet mixture,
photographic article, or instant photographic or peel-apart film
article.
(1) Exposure limits. In the special production area, the ambient
air concentration of the new chemical substance during manufacture,
processing, and use cannot exceed an 8-hour time weighted average (TWA)
of 10 ppm for gases and vapors and 50 [micro]g/m\3\ for particulates,
with an allowable TWA excursion of 50 percent above those
concentrations for a duration of 30 minutes or less.
(2) Respiratory protection--(i) Respirator requirement. Except as
specified in paragraph (e)(2)(ii) of this section, each person in the
special production area must wear an appropriate respiratory protection
device to protect against dusts, fumes, vapors, and other airborne
contaminants, as described in 29 CFR 1910.134. Selection of an
appropriate respirator must be made according to the guidance of
American National Standard Practices for Respiratory Protection Z88.2-
1969 and the NIOSH Certified Equipment List, U.S. Department of Health
and Human Services, NIOSH publication No. 80-144.
(ii) Waiver of respirator requirement. Employees are not required
to wear respirators if monitoring information collected and analyzed in
accordance with paragraph (e)(3) of this section demonstrates that the
ambient 8-hour TWA concentration of the new chemical substance in the
area is less than 1 ppm for gases and vapors and 5 [micro]g/m\3\ for
particulates with an allowable TWA excursion of 50 percent above these
concentrations for a duration of 30 minutes or less.
(iii) Quantitative fit test. Each respirator must be issued to a
specific individual for personal use. A quantitative fit test must be
performed for each respirator before its first use by that person in a
special production area.
(3) Monitoring--(i) When to monitor. (A) When suitable sampling and
analytic methods exist, periodic monitoring in accordance with this
paragraph must be done to ensure compliance with the exposure limits of
paragraphs (e)(1) and (e)(2)(ii) of this section.
(B) When suitable sampling and analytic methods do not exist,
[[Page 52721]]
compliance with the exposure limits of paragraph (e)(1) and the
requirements of paragraph (e)(10) of this section must be determined by
an evaluation of monitoring data developed for a surrogate chemical
substance possessing comparable physical-chemical properties under
similar manufacturing and processing conditions.
(ii) Monitoring methods. A suitable air sampling method must permit
personal or fixed location sampling by conventional collection methods.
A suitable analytic method must have adequate sensitivity for the
volume of sample available and be specific for the new chemical
substance being monitored. If chemical-specific monitoring methods are
not available, nonspecific methods may be used if the concentration of
the new chemical substance is assumed to be the total concentration of
chemical substances monitored.
(iii) Monitoring frequency. (A) When suitable air sampling and
analytical procedures are available, monitoring must be done in each
special production area during the first three 8-hour work shifts
involving the manufacture or processing of each new chemical substance.
Thereafter, monitoring must be done in each special production area for
at least one 8-hour period per month, during a production run in which
the new chemical substance is manufactured or processed. Samples must
be of such frequency and pattern as to represent with reasonable
accuracy the mean level and maximum 30-minute level of employee
exposure during an 8-hour work shift. In monitoring for an 8-hour work
shift or the equivalent, samples must be collected periodically or
continuously for the duration of the 8-hour work shift. Samples must be
taken during a period which is likely to represent the maximum employee
exposure.
(B) If the manufacturer demonstrates compliance with the exposure
limits for 3 consecutive months, further monitoring of the identical
process must be performed only every 6 months thereafter, unless there
is a significant change in the process, process design, or equipment.
If there is such a change, the manufacturer must begin monitoring again
according to the schedule in paragraph (e)(3)(iii)(A) of this section.
(iv) Location of monitoring. Air samples must be taken so as to
ensure that the samples adequately represent the ambient air
concentration of a new chemical substance present in each worker's
breathing zone.
(4) Engineering controls and exposure safeguards. Engineering
controls such as, but not limited to, isolation, enclosure, local
exhaust ventilation, and dust collection must be used to ensure
compliance with the exposure limits prescribed in paragraph (e)(1) or
(e)(2)(ii) of this section.
(5) Training, hygiene, and work practices--(i) Training. No
employee may enter a special production area before the completion of a
training program. The training program must be adapted to the
individual circumstances of the manufacturer and must address: The
known physical-chemical and toxicological properties of the chemical
substances handled in the area; procedures for using and maintaining
respirators and other personal safeguards; applicable principles of
hygiene; special handling procedures designed to limit personal
exposure to, and inadvertent release of, chemical substances; and
procedures for responding to emergencies or spills.
(ii) Hygiene. Appropriate standards of hygiene must be observed by
all employees handling a new chemical substance in manufacturing,
processing, or transfer operations. The manufacturer must provide
appropriate facilities for employee changing and wash-up. Food,
beverages, tobacco products, and cosmetics must not be allowed in
special production areas.
(iii) Work practices. Operating procedures such as those related to
chemical weighing and filtering, or the charging, discharging and
clean-up of process equipment, must be designed and conducted to ensure
compliance with the exposure limits prescribed in paragraph (e)(1) or
(e)(2)(ii) of this section. Written procedures and all materials
necessary for responding to emergency situations must be immediately
accessible to all employees in a special production area. Any spill or
unanticipated emission must be controlled by specially trained
personnel using the equipment and protective clothing described in
paragraph (e)(6) of this section.
(6) Personal protection devices. All workers engaged in the
manufacture and processing of a new chemical substance in the special
production area must wear suitable protective clothing or equipment,
such as chemical-resistant coveralls, protective eyewear, and gloves.
(7) Caution signs. Each special production area must be clearly
posted with signs identifying the area as a special production area
where new chemical substances are manufactured and processed under
controlled conditions. Each sign must clearly restrict entry into the
special production area to qualified personnel who are properly trained
and equipped with appropriate personal exposure safeguards.
(8) Removal for storage or transportation. A new chemical substance
that is not incorporated into a wet mixture, photographic article, or
instant photographic or peel-apart film article may be removed from the
special production area for purposes of storage between operational
steps or for purposes of transportation to another special production
area. Such storage or transportation must be conducted in a manner that
limits worker and environmental exposure through the use of engineering
controls, training, hygiene, work practices, and personal protective
devices appropriate to the chemical substance in question.
(9) Labeling. (i) Any new chemical substance removed from a special
production area or stored or transported between operational steps must
be clearly labeled. The label must show the identity of the new
chemical substance or an appropriate identification code, a statement
of any known hazards associated with it, a list of special handling
instructions, first aid information, spill control directions, and
where applicable, the appropriate U.S. Department of Transportation
notations.
(ii) No label is required if the new chemical substance has been
incorporated into a photographic article, or if it is contained in a
sealed reaction vessel or pipeline, or if it has been incorporated into
an instant photographic or peel-apart film article.
(10) Areas immediately adjacent to the special production area. The
ambient air concentration of the new chemical substance in areas
immediately adjacent to the special production area must not exceed the
exposure limit established in paragraph (e)(2)(ii) of this section for
waiver of respirator protection within the special production area.
Periodic monitoring in accordance with paragraph (e)(3) of this section
must be performed in immediately adjacent areas where it is reasonable
to expect a risk of inhalation exposure.
(f) Conditions of processing outside the special production area. A
wet mixture may be incorporated into a photographic article or an
instant photographic or peel-apart film article outside the special
production area under the conditions listed in this paragraph:
(1) Engineering controls and exposure safeguards. Engineering
controls must limit the exposure to a new chemical substance contained
in a wet mixture.
(2) Training, hygiene and work practices--(i) Training. Training of
[[Page 52722]]
employees involved in the handling of wet mixtures containing a new
chemical substance must be adapted to the individual circumstances of
the employees' activities and must address: Procedures for using
personal exposure safeguards, applicable principles of hygiene,
handling procedures designed to limit personal exposure, and procedures
for responding to emergencies and spills.
(ii) Hygiene. Appropriate standards of hygiene that limit exposure
must be observed by all employees handling wet mixtures that contain
new chemical substances.
(iii) Work practices. Work practices and operating procedures must
be designed to limit exposure to any new chemical substance contained
in wet mixtures. Any spills or unanticipated releases of a wet mixture
must be controlled by trained personnel wearing appropriate protective
clothing or equipment such as gloves, eye protection, and, where
necessary, respirators or chemically impervious clothing.
(3) Personal protection devices. All workers engaged in the
processing of a wet mixture containing a new chemical substance must
wear suitable protective clothing or equipment such as coveralls,
protective eyewear, respirators, and gloves.
(g) Incorporation of photographic articles into instant
photographic and peel-apart film articles. A photographic article may
be incorporated into the instant photographic or peel-apart film
article outside the special production area. The manufacturer must take
measures to limit worker and environmental exposure to new chemical
substances during these operations using engineering controls,
training, hygiene, work practices, and personal protective devices.
(h) Environmental release and waste treatment--(1) Release to land.
Process waste from manufacturing and processing operations in the
special production area that contain a new chemical substance are
considered to be hazardous waste and must be handled in accordance with
the requirements of parts 262 through 267 and parts 122 and 124 of this
chapter.
(2) Release to water. All wastewater or discharge which contain the
new chemical substance must be appropriately pretreated before release
to a Publicly Owned Treatment Works (POTW) or other receiving body of
water. In the case of release to a POTW, the pretreatment must prevent
structural damage to, obstruction of, or interference with the
operation of the POTW. The treatment of direct release to a receiving
body of water must be appropriate for the new chemical substance's
physical-chemical properties and potential toxicity.
(3) Release to air. All process emissions released to the air which
contain the new chemical substance must be vented through control
devices appropriate for the new chemical substance's physical-chemical
properties and potential toxicity.
(i) Exemption notice. An exemption notices must be submitted to EPA
when manufacture of the new chemical substance begins.
(1) Contents of exemption notice. The exemption notice must include
the following information:
(i) Manufacturer and sites. The notice must identify the
manufacturer and the sites and locations where the new chemical
substance and the instant photographic or peel-apart film articles will
be manufactured and processed.
(ii) Chemical identification. The notice must identify the new
chemical substance as follows:
(A) Class 1 substances. For chemical substances whose composition
can be represented by a definite structural diagram (Class 1
substances), the notice must provide the chemical name (preferably CAS
or IUPAC nomenclature), the molecular formula, CAS Registry Number (if
available), known synonyms (including trade names), and a structural
diagram.
(B) Class 2 substances. For chemical substances that cannot be
fully represented by a structural diagram, (Class 2 substances), the
notice must provide the chemical name, the molecular formula, the CAS
Registry Number (if available), and known synonyms (including trade
names). The notice must identify the immediate precursors and reactants
by name and CAS Registry Number (if available). The notice must include
a partial or incomplete structural diagram, if available.
(C) Polymers. For a polymer, the notice must identify monomers and
other reactants used in the manufacture of the polymer by chemical name
and CAS Registry Number. The notice must indicate the amount of each
monomer used (by weight percent of total monomer); the maximum residual
of each monomer present in the polymer; and a partial or incomplete
structural diagram, if available. The notice must indicate the number
average molecular weight of the polymer and characterize the
anticipated low molecular weight species. The notice must include this
information for each typical average molecular weight composition of
the polymer to be manufactured.
(iii) Impurities. The notice must identify the impurities that can
be reasonably anticipated to be present in the new chemical substance
when manufactured under the exemption by name and CAS Registry Number,
by class of substances, or by process or source. The notice also must
estimate the maximum percent (by weight) of each impurity in the new
chemical substance and the percent of unknown impurities present.
(iv) Physical-chemical properties. The notice must describe the
physical-chemical properties of the new chemical substance. Where
specific physical-chemical data are not available, reasonable estimates
and the techniques used to develop these estimates must be provided.
(v) Byproducts. The notice must identify the name, CAS Registry
number (if available), and the volume of each byproduct that would be
manufactured during manufacture of the new chemical substance.
(vi) Production volume. The notice must include an estimate of the
anticipated maximum annual production volume.
(vii) Test data. The notice must include all information and test
data on the new chemical substance's health and environmental effects
that are known to or reasonably ascertainable by the manufacturer.
(viii) Identity of the article. The notice must identify and
describe the instant photographic film article(s) or peel-apart film
article(s) that will contain the new chemical substance.
(ix) Release to water. The notice must include a description of the
methods used to control and treat wastewater or discharge released to a
POTW or other receiving body of water. The notice must also identify
the POTW or receiving body of water.
(x) Certification. The manufacturer must certify in the notice that
it is familiar with the terms of the exemption and that the
manufacture, processing, distribution, use, and disposal of the new
chemical substance will comply with those terms.
(xi) Fee payment ID number. The manufacturer or processor must
include a payment identity number on the front page of the notice.
(2) Duplication of information in premanufacture notice. If a
manufacturer who submits an exemption notice under this paragraph has
already submitted, or simultaneously submits, a premanufacture notice
under section 5(a)(1)(A) of the Act for the new chemical substance, it
may, in lieu of submitting the information required by
[[Page 52723]]
this paragraph, reference the required information to the extent it is
included in the premanufacture notice. At a minimum, the exemption
notice must identify the manufacturer and the new chemical substance,
and contain the certification required by paragraph (i)(1)(x) of this
section.
(3) Address. The exemption notice must be addressed to the Document
Control Office (DCO) (7407M), Office of Pollution Prevention and Toxics
(OPPT), Environmental Protection Agency, 1200 Pennsylvania Ave. NW,
Washington, DC 20460-0001.
(j) Recordkeeping. (1) Manufacturers of a new chemical substance
under this exemption must keep the following records for 30 years from
the final date of manufacture.
(i) Production records. Each manufacturer must maintain records of
the annual production volume of each new chemical substance
manufactured under the terms of the exemption. This record must
indicate when manufacture of the new chemical substance began.
(ii) Exposure monitoring records. Manufacturers must maintain an
accurate record of all monitoring required by this section. Monitoring
records may be adapted to the individual circumstances of the
manufacturer but, at a minimum, must contain the following information:
The chemical identity of the new chemical substance, date of the
monitoring, the actual monitoring data for each monitoring location and
sampling, and a reference to or description of the collection and
analytic techniques. If the manufacturer does not monitor, the
manufacturer must maintain a record of the reasons for not monitoring
and the methods used to determine compliance with the exposure limits
of paragraph (e)(1) of this section.
(iii) Training and exposure records. For each employee engaged in
the manufacture or processing of a new chemical substance, the company
must develop and maintain a record of the worker's participation in
required training. This record must also demonstrate the regular use of
personal exposure safeguards, including the results of any personal
exposure monitoring, the results of the quantitative fit test for the
worker's personal respirator, and any additional information related to
the worker's occupational exposure.
(iv) Treatment records. Manufacturers who release treated
wastewater or discharge containing a new chemical substance to a POTW
or other receiving body of water must maintain records of the method of
treatment.
(2) The manufacturer must make the records listed in paragraph
(j)(1) of this section available to EPA upon written request by the
Director of the Office of Pollution Prevention and Toxics. The
manufacturer must provide these records within 15 working days of
receipt of this request.
(k) Confidentiality. If the manufacturer submits information under
paragraph (i) or (j) of this section which it claims to be confidential
business information, the manufacturer must clearly identify the
information at the time of submission to the Agency by bracketing,
circling, or underlining it and stamping it with ``CONFIDENTIAL'' or
some other appropriate designation. Any information so identified will
be treated in accordance with the procedures in part 2 of this chapter.
Any information not claimed confidential at the time of submission will
be made available to the public without further notice to the
submitter.
(l) Amendment and repeal. (1) EPA may amend or repeal any term of
this exemption if it determines that the manufacture, processing,
distribution, use, and disposal of new chemical substances under the
terms of the exemption may present an unreasonable risk of injury to
health or the environment. EPA also may amend this exemption to enlarge
the exemption category or to reduce the restrictions or conditions of
the exemption.
(2) As required by section 5(h)(4) of the Act, EPA will amend or
repeal the substantive terms of an exemption granted under this part
only by the formal rulemaking procedures described in section 6(c)(2)
and (3) of the Act (15 U.S.C. 2605(c)).
(m) Prohibition of use of the exemption. The Director of the Office
of Pollution Prevention and Toxics may prohibit the manufacture,
processing, distribution, use, or disposal of any new chemical
substance under the terms of this exemption if he or she determines
that the manufacture, processing, distribution in commerce, use, or
disposal of the new chemical substance may present an unreasonable risk
of injury to health or the environment.
(n) Enforcement. (1) A failure to comply with any provision of this
part is a violation of section 15 of the Act (15 U.S.C. 2614).
(2) Submitting materially misleading or false information in
connection with the requirements of any provision of this part is a
violation of this regulation and therefore a violation of section 15 of
the Act (15 U.S.C. 2614).
(3) Violators may be subject to the civil and criminal penalties in
section 16 of the Act (15 U.S.C. 2615) for each violation.
(4) EPA may seek to enjoin the manufacture of a new chemical
substance in violation of this exemption or act to seize any chemical
substances manufactured in violation of the exemption under the
authority of section 17 of the Act (15 U.S.C. 2616).
PART 725--[AMENDED]
0
11. The authority citation for part 725 continues to read as follows:
Authority: 15 U.S.C. 2604, 2607, 2613, and 2625.
0
12. Section 725.25 is amended by adding paragraph (i) to read as
follows:
Sec. 725.25 General administrative requirements.
* * * * *
(i) Fees. Persons submitting MCANs and exemption requests to EPA
under this part are subject to the applicable fees and conditions
specified in Sec. Sec. 700.40, 700.45(c), and 700.49 of this chapter.
0
13. Section 725.33 is amended by revising paragraphs (a)(9) and (10) to
read as follows:
Sec. 725.33 Incomplete submissions.
(a) * * *
(9) The submitter does not remit the fees required by Sec.
700.45(c) of this chapter.
(10) The submitter does not include an identifying number and a
payment identity number.
* * * * *
PART 790--[AMENDED]
0
14. The authority citation for part 790 continues to read as follows:
Authority: 15 U.S.C. 2603.
0
15. Section 790.45 is amended by adding paragraphs (c)(7) and (g) to
read as follows:
Sec. 790.45 Submission of letter of intent to conduct testing or
exemption application.
* * * * *
(c) * * *
(7) A payment identity number on the front page of the letter, as
required in Sec. 700.45(g)(4) of this chapter.
* * * * *
(g) Manufacturers and processors subject to a test rule described
in Sec. 790.40 and required to comply with the requirements of that
test rule as provided in Sec. 790.42(a) must remit the applicable fee
specified in Sec. 700.45(c) of this chapter.
0
16. Section 790.59 is amended by adding paragraph (c) to reads as
follows:
[[Page 52724]]
Sec. 790.59 Failure to comply with a test rule.
* * * * *
(c) Persons who fail to pay the requisite fee as specified in Sec.
700.45(c) of this chapter will be in violation of the rule.
0
17. Section 790.60 is amended by adding paragraphs (a)(18) and (d) to
read as follows:
Sec. 790.60 Contents of consent agreements.
(a) * * *
(18) Payment identity number, as required in Sec. 700.45(g)(4) of
this chapter.
* * * * *
(d) Fees. Manufacturers and/or processors signing the consent
agreement are subject to the applicable fee specified in Sec.
700.45(c) of this chapter.
0
18. Section 790.65 is amended by revising paragraph (b) to read as
follows:
Sec. 790.65 Failure to comply with a consent agreement.
* * * * *
(b) The Agency considers failure to comply with any aspect of a
consent agreement, including the failure to pay requisite fees as
specified in Sec. 700.45 of this chapter, to be a ``prohibited act''
under section 15 of TSCA, subject to all the provisions of the Act
applicable to violations of section 15. Section 15(1) of TSCA makes it
unlawful for any person to fail or refuse to comply with any rule or
order issued under section 4. Consent agreements adopted pursuant to
this part are ``orders issued under section 4'' for purposes of section
15(1) of TSCA.
* * * * *
PART 791--[AMENDED]
0
19. The authority citation for part 791 continues to read as follows:
Authority: 15 U.S.C. 2603 and 2607.
0
20. Section 791.39 is amended by removing paragraph (a)(3) and revising
paragraph (b).
The revision reads as follows:
Sec. 791.39 Fees and expenses.
* * * * *
(b) Expenses. All expenses of the hearing, including the cost of
recording (though not transcribing) the hearing and required traveling
and other expenses of the hearing officer and of American Arbitration
Association representatives, and the expenses of any witness or the
cost of any proofs produced at the direct request of the hearing
officer, shall be borne equally by the parties, unless they agree
otherwise, or unless the hearing officer, in the award, assesses such
expenses or any part thereof against any specified party or parties.
* * * * *
[FR Doc. 2018-22252 Filed 10-16-18; 8:45 am]
BILLING CODE 6560-50-P