[Federal Register Volume 85, Number 103 (Thursday, May 28, 2020)]
[Rules and Regulations]
[Pages 31986-31996]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-10435]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 704 and 712
[EPA-HQ-OPPT-2018-0321; FRL-10008-14]
RIN 2070-AK57
Small Manufacturer Definition Update for Reporting and
Recordkeeping Requirements Under the Toxic Substances Control Act
(TSCA) Section 8(a)
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
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SUMMARY: EPA is finalizing amendments to the definition of small
manufacturer, including a new definition for small government, in
accordance with the Toxic Substances Control Act (TSCA). Changes to the
small manufacturer definition impact certain reporting and
recordkeeping requirements established under TSCA. EPA is also
finalizing other minor changes.
DATES: This final rule is effective June 29, 2020.
ADDRESSES: The docket for this action, identified by docket
identification (ID) number EPA-HQ-OPPT-2018-0321, is available at
http://www.regulations.gov or at the Office of Pollution Prevention and
Toxics Docket (OPPT Docket), Environmental Protection Agency Docket
Center (EPA/DC), West William Jefferson Clinton Bldg., Rm. 3334, 1301
Constitution Ave. NW, Washington, DC. 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.
Please note that due to the public health emergency the EPA Docket
Center (EPA/DC) and Reading Room was closed to public visitors on March
31, 2020. Our EPA/DC staff will continue to provide customer service
via email, phone, and webform. For further information on EPA/DC
services, docket contact information and the current status of the EPA/
DC and Reading Room, please visit https://www.epa.gov/dockets.
FOR FURTHER INFORMATION CONTACT:
For technical information contact: Tyler Lloyd, Chemical Control
Division (7405M), Office of Pollution Prevention and Toxics,
Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington,
DC 20460-0001; telephone number: (202) 564-4016; 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 potentially affected by this action if you manufacture
(defined by statute at 15 U.S.C. 2602(9) to include import) chemical
substances, including byproduct chemical substances, and are subject to
either of the following: (1) Reporting under the TSCA Chemical Data
Reporting (CDR) requirements at 40 CFR part 711 or (2) TSCA reporting
and recordkeeping requirements at 40 CFR part 704 or other TSCA
reporting requirements which reference the small manufacturer standards
at 40 CFR 704.3. Any use of the term ``manufacture'' in this document
will encompass ``import'' and the term ``manufacturer'' will encompass
``importer'' unless otherwise stated.
The potentially regulated community consists of entities that
produce domestically or import into the United States chemical
substances listed on the TSCA Inventory. The Agency's previous
experience with TSCA section 8(a) data collections has shown that most
respondents affected by this collection activity are from the following
North American Industrial Classification System (NAICS) code
categories:
Chemical manufacturing or processing (NAICS code 325); and
Petroleum and coal products manufacturing (NAICS code
324).
The NAICS codes have been provided to assist you and others in
determining whether this action might apply to certain entities. To
determine whether you or your business may be affected by this action,
you should carefully examine the applicable provisions at 40 CFR 711.8.
If you have any questions regarding the applicability of this action to
a particular entity, consult the technical contact person listed under
FOR FURTHER INFORMATION CONTACT.
B. What is the Agency's authority for taking this action?
TSCA section 8(a)(1) authorizes EPA to promulgate rules under which
manufacturers and processors of chemical substances must maintain such
records and submit such reports as EPA may reasonably require (15
U.S.C.
[[Page 31987]]
2607(a)(1)). TSCA section 8(a) generally excludes small manufacturers
and processors of chemical substances from the reporting (reporting and
recordkeeping) requirements established in TSCA section 8(a). However,
EPA is authorized by TSCA section 8(a)(3)(A)(ii) to require TSCA
section 8(a) reporting and recordkeeping from small manufacturers and
processors with respect to any chemical substance that is the subject
of a rule proposed or promulgated under TSCA sections 4, 5(b)(4), or 6;
that is the subject of an order in effect under TSCA section 4 or 5(e);
that is subject to a consent agreement under TSCA section 4; or that is
the subject of relief granted pursuant to a civil action under TSCA
section 5 or 7.
TSCA section 8(a)(3)(B) requires EPA, after consultation with the
Administrator of the Small Business Administration (SBA), to prescribe
by rule the standards for determining the manufacturers and processors
which qualify as small manufacturers and processors. In 1988, EPA
established the general TSCA section 8(a) small manufacturer definition
for use in other rules issued under TSCA section 8(a), which are
codified at 40 CFR 704.3. TSCA section 8(a)(3)(C) requires EPA, after
consultation with the SBA Administrator and no later than 180 days
after June 22, 2016, to review the adequacy of those standards and,
after providing public notice and an opportunity for comment, make a
determination as to whether revision of the standards is warranted.
Pursuant to TSCA section 8(a)(3)(C), in the Federal Register of
November 30, 2017, EPA announced that it determined that revision of
these standards is warranted (82 FR 56824) (FRL-9968-41).
TSCA section 8(a)(5) requires EPA, to the extent feasible when
carrying out TSCA section 8, to not require unnecessary or duplicative
reporting and to minimize the cost of compliance for small
manufacturers and processors.
C. What action is the Agency taking?
EPA is finalizing an amendment to update the size standards
definition for small manufacturers for reporting and recordkeeping
requirements under TSCA section 8(a). In addition to updating the
definition for small manufacturers, EPA is finalizing a definition for
small governments as proposed. EPA is also finalizing as proposed a
technical correction to the small manufacturer reference at 40 CFR
704.104 for Hexafluoropropylene oxide, which only includes a rule-
specific small processor definition and not a small manufacturer
definition. When reviewing the small manufacturer size standards, EPA
found this to be an inadvertent error. As originally promulgated, 40
CFR 704.104 included the small manufacturer standard via the cross
reference in 40 CFR 704.104(c)(2) to the exemption provisions in 40 CFR
704.5, which was lost when the exemptions at 40 CFR 704.5 were amended
and the necessary corresponding change was not made at 40 CFR
704.104(c)(2) (52 FR 41297, October 27, 1987 (FRL-3280) and 53 FR
51717, December 22, 1988 (FRL-3368-1)). Lastly, EPA is finalizing the
proposed update to the current small manufacturer definition in the
Preliminary Assessment Information Rule (PAIR) rule at 40 CFR 712.25 to
align it with the updated small manufacturer definition at 40 CFR
704.3. Further details of these amendments are in Unit II.
Because the small manufacturer size standard under TSCA section
8(a) impacts the CDR rule more than other TSCA section 8(a) reporting
rules at this time, EPA included amendments to the small manufacturer
definition and revisions to CDR as one proposed rule (84 FR 17692;
April 25, 2019 (FRL-9982-16)). However, as stated in the proposed rule,
EPA recognizes that the changes to the small manufacturer definition
will also apply to 8(a) rules other than CDR and EPA is now finalizing
these amendments as two separate actions.
D. Why is the Agency taking this action?
EPA previously determined that revision of the TSCA section 8(a)
size standards for small manufacturers is warranted (82 FR 56824,
November 30, 2017 (FRL-9968-41)). TSCA section 8(a)(3)(C), which was
amended in 2016, requires EPA, after consultation with the
Administrator of the SBA, to review the adequacy of the standards for
determining which manufacturers and processors qualify as small
manufacturers and processors for purposes of TSCA sections 8(a)(1) and
8(a)(3). EPA's determination, supporting documents, and comments
received can be found at http://www.regulations.gov under docket ID No.
EPA-HQ-OPPT-2016-0675. In response to the determination, EPA proposed
an update to the small manufacturer definition as part of the proposed
rule entitled ``TSCA Chemical Data Reporting Revisions and Small
Manufacturer Definition Update for Reporting and Recordkeeping
Requirements Under TSCA Section 8(a),'' issued in the Federal Register
on April 25, 2019 (84 FR 17692 (FRL-9982-16)).
In reviewing the TSCA section 8(a) size standards for small
manufacturers, EPA also decided to add a definition for small
governments in order to reduce report burden for governments reporting
under CDR. Additionally, when reviewing the small manufacturer size
standards, EPA found an inadvertent error in the small manufacturer
reference at 40 CFR 704.104 for Hexafluoropropylene oxide and is taking
the opportunity to correct that error. Lastly, EPA is updating to the
current small manufacturer definition in the PAIR rule at 40 CFR
712.25, which has not been updated since it was established in 1982, in
order to align it with the definition at Sec. 704.3.
E. What are the estimated incremental impacts of this action?
EPA evaluated the costs and benefits of modifying standards for
small manufacturers with regard to CDR and other TSCA section 8(a)
reporting. This analysis, which is available in the docket, is
discussed in Unit II. and is briefly summarized here (Ref. 1).
The modified standards for small manufacturers affect some TSCA
section 8(a) rules, including CDR. These rules use the TSCA section
8(a) small manufacturer definition to identify the entities exempted
from reporting or subject to other reduced reporting requirements. The
amendments are expected to have the greatest impact on CDR and could
affect the need to submit, or the number of chemicals reported in, a
CDR report for a given site. As discussed in the proposed rule, there
is no measurable impact to other current TSCA section 8(a) rules either
because EPA has not received any chemical reports for the rule for an
extended period of time or because the rule uses a different definition
that is not being changed by this amendment (see Unit IV.A. of the
proposed rule for a more detailed discussion (84 FR 17692; April 25,
2019)). The amendments, discussed in detail in Unit II., result in a
cost savings.
1. Impact of amendments to the small manufacturer definition. The
final amendment is estimated to eliminate CDR reporting entirely for
127 industry sites and reduce reporting by eliminating the need to
report at least one chemical for additional 173 industry sites (Ref.
1). The final amendment is an update of the current two-standard
definition (see Unit II.A.). For sites that are considered small under
the first standard ($120 million and 100,000 lbs), it is possible to be
considered small for chemical substances with production volumes below
100,000 lbs and not small for
[[Page 31988]]
chemical substances with production volumes above 100,000 lbs, even
when the site's total annual sales are less than $120 million. Such
sites will continue to report the chemical substances with production
volumes over 100,000 pounds. For sites considered small under the
second standard ($12 million) and sites considered small for all of
their chemical substances under the first standard, such sites will be
eliminated entirely from reporting. This reduction in reporting is in
addition to the sites already not reporting because they meet the
current small manufacturer definition.
Under the amended definition, incremental future CDR reporting
cycle burden reductions and cost savings are estimated at 92,000 hours
and $7.0 million, respectively, over a four-year CDR reporting cycle
(Ref. 1). On an annualized basis, using a 3 percent and 7 percent
discount rate over a 10-year period yields net annualized incremental
cost savings of $1.7 million and $1.7 million per year, respectively
(rounding to two significant figures results in the same number) (Ref.
1).
2. Impact of adding a small government definition. The following
government entities reported under CDR during the 2016 reporting
period: One site owned by the U.S. Federal Government, four foreign
government-owned sites, seven municipalities, one county-level public
utility district, and one tribal entity. In total, for the 2016 CDR
reporting period, EPA identified 14 government entities who reported to
CDR. Under this final amendment to add a small government definition
and based on information from the 2016 CDR submission period, four of
these government entities would be exempt from the need to report. The
burden and cost savings associated with the exempted entities, in
future reporting cycles, are included in the estimates for the final
definition with incremental future CDR reporting cycle burden reduction
and cost savings estimated at 440 hours and $34,000 respectively, over
a four-year CDR reporting cycle (Ref. 1). On an annualized basis, using
a 3 percent and 7 percent discount rate over a 10-year period yields
net annualized incremental cost savings of $8,000 and $7,900 per year,
respectively (Ref. 1).
II. Modifications to Small Manufacturer Definition and Size Standards
EPA is finalizing modifications to the TSCA section 8(a) small
manufacturer size standards, following EPA's determination on November
30, 2017 that revision to the current size standards is warranted (82
FR 56824). These final standards apply to TSCA section 8(a) rules
unless a different standard is identified in the regulatory text of a
particular rule. The current chemical-specific TSCA section 8(a) rules
that use the small manufacturer definition listed in 40 CFR 704.3 are:
Sec. Sec. [thinsp]704.25 (11-Aminoundecanoic acid); 704.33 (P-tert-
butylbenzoic acid (P-TBBA), p-tert-butyltoluene (P-TBT) and p-tert-
butylbenzaldehyde (P-TBB)); 704.45 (Chlorinated terphenyl); 704.95
(Phosphonic acid, [1,2-ethanediyl-bis[nitrilobis-(methylene)]]tetrakis-
(EDTMPA) and its salts); and 704.175 (4,4'-methylenebis(2-
chloroaniline) (MBOCA)). As proposed on April 25, 2019 (84 FR 17692),
EPA is also finalizing a TSCA section 8(a) definition for small
government entities, finalizing a technical correction to the small
manufacturer reference at 40 CFR 704.104 for hexafluoropropylene oxide,
and finalizing an update to the current small manufacturer definition
in the PAIR rule at 40 CFR 712.25, in order to align it with the
definition at Sec. 704.3.
A. Scope and Content of the Final Small Manufacturer Definition Update
For the TSCA section 8(a) small manufacturer definition update, EPA
is finalizing an update to the current definition based on inflation.
This definition applies to chemical manufacturers (including
importers), but not to chemical processors. Because the amended
definition predominantly impacts the CDR, in which reporting is
required by manufacturers and not processors, EPA believes it is not
necessary to develop a definition of ``small processor'' for purposes
of TSCA section 8(a) at this time and that it is best to continue the
past practice of developing definitions for small processors on a rule-
by-rule basis, as applicable.
All data in this preamble correspond to impacts to the
manufacturing portion of the chemical industry, as evaluated for the
CDR. The final definition is as follows:
Small manufacturer definition. When EPA proposed the update to the
current small manufacturer definition (84 FR 17692; April 25, 2019),
EPA inflated the current definition based on 2017$. EPA is now
finalizing the definition based on 2018$, to ensure that the definition
is as up-to-date as possible at the time of finalization. EPA applied
the same economic analysis for updating the definition with 2018$ that
is used in the proposal (84 FR 17692; April 25, 2019). EPA is basing
the update of the current two-standard definition at 40 CFR 704.3 on
inflation by adjusting the sales standard level for the first part from
$40 million to $120 million (originally proposed as $110 million) and
for the second part from $4 million to $12 million (originally proposed
as $11 million). The impacts of this option are provided in Unit I.E.2.
The final definition is set out in the regulatory text below.
Under CDR, sites that meet the small manufacturer definition are
exempted from reporting either for the full site (based on the second
standard) or for particular chemical substances (based on the first
standard), unless the chemical substance the site is manufacturing
(including importing) is the subject of one of certain TSCA actions: A
rule proposed or promulgated under TSCA section 4, 5(b)(4), or 6, or an
order in effect under TSCA section 5(e), or relief that has been
granted under a civil action under TSCA section 5 or 7. As part of this
rule, EPA is finalizing as proposed the amendment to add TSCA section 4
orders to the list of certain TSCA actions. The authority to issue
section 4 orders was added to TSCA when the statute was amended in
2016.
Relative to the 2016 reporting period, EPA estimates that the
updated definition will eliminate reporting entirely for 127 industry
sites that reported under the 2016 CDR and will reduce reporting by
eliminating the need to report at least one chemical for an additional
173 industry sites that reported under the 2016 CDR (Ref. 1). Overall,
1,248 chemical reports from industry sites will no longer be submitted
to CDR. In sum, the use of the inflation adjustment definition results
in a reduction of two percent of sites, an overall reduction of three
percent of chemical reports, and a reduction of 0.09 percent of total
volume reported (Ref. 1).
Inflation index. The current small manufacturer definition at 40
CFR 704.3 specifies that EPA will use an inflation index for purposes
of determining the need to update the two standards comprising the
definition. On April 25, 2019, EPA proposed an amendment to use the
Gross Domestic Product (GDP) deflator, or implicit price deflator,
instead of the Producer Price Index (PPI) for Chemical and Allied
Products, when determining the need to adjust the total annual sales
values. As discussed in the proposal, the GDP deflator is less volatile
and is broader than the PPI for Chemicals and Allied Products, and
therefore EPA believed it would be a better measure for considering
future updates to the revenue size standards. After considering
comments on this proposed amendment, however, EPA will not be
finalizing the change to GDP
[[Page 31989]]
as an inflation index. While GDP is less volatile, EPA now recognizes
that PPI for Chemicals and Allied Products is a better overall
accounting of chemical manufacturers that would be subject to reporting
under TSCA section 8(a) because it directly reflects the chemical
manufacturing sector as opposed to the U.S. economy as a whole. Instead
of using the GDP deflator as proposed, EPA will amend the small
manufacturer definition at 40 CFR 704.3 to use a five-year average for
the PPI for Chemicals and Allied Products when determining if the small
manufacturer definition warrants adjustment. This change will better
protect against volatility while continuing to be representative of the
chemical manufacturers that fall under the small manufacturer
definition. The regulated community had an opportunity to comment on
EPA's desire to change to an indicator that was less volatile.
Commenters did not comment that changing to a less voltile indicator
would be unfavorable but rather commented on which indicator would be
best suited for determining if an update was warranted. EPA believes
that the change to a 5-year average PPI will be beneficial to the
regulated community. In any given year PPI could change drastically. By
taking a 5-year average of PPI, EPA could ensure that uncharacteristic
market swings do not unduly influence EPA's decision to update the
small manufacturer definition. Further discussion of this change can be
found in the Response to Public Comment in Unit III.
Small government definition. EPA is also finalizing as proposed a
definition for small government. EPA is adding a small government
definition to reduce the reporting burden for governments that may lack
necessary resources. EPA will use the same definition for small
government as the Regulatory Flexibility Act (5 U.S.C. 601(5)): A small
governmental jurisdiction is the government of a city, county, town,
township, village, school district, or special district with a
population of less than 50,000. State and tribal governments are not
considered small governments.
EPA estimates 33 government sites report under CDR in a four-year
cycle. Under the added definition of small government, reporting will
be eliminated entirely for four government sites with an associated six
chemical reports.
Application of standards. The size standards in this final rule
will apply to all manufacturers of chemical substances subject to TSCA
section 8(a) reporting and recordkeeping rules, unless a different
standard is identified in the regulatory text of a particular TSCA
section 8(a) rule. TSCA section 8(a) rules with different definitions
than the current small manufacturer definition at 40 CFR 704.3 are: The
nanoscale rule at 40 CFR 704.20; certain chemical-specific rules at 40
CFR 704.43 (chlorinated naphthalenes) and 40 CFR 704.102
(hexachloronorbornadiene); and the Preliminary Assessment Information
Rule (PAIR) at 40 CFR part 712. EPA is finalizing an amendment to the
current small manufacturer definition in the PAIR rule at 40 CFR 712.25
to use the updated small manufacturing definition at Sec. 704.3. As
explained in the proposal (84 FR 17692; April 25, 2019), the other TSCA
section 8(a) rules noted previously will retain small manufacturer
definitions different than the small manufacturer definition at 40 CFR
704.3. Additionally, because of an inadvertent error, there is
currently no applicable definition of ``small manufacturer'' in 40 CFR
704.104 (hexafluoropropylene oxide); EPA is finalizing a correction to
cross reference the small manufacturer definition at 40 CFR 704.3, as
discussed in the proposal, to correct this error.
B. Agency Objectives
Compliance with TSCA section 8(a) reporting and recordkeeping
requirements involves the expenditure of time, money, and personnel
resources. These costs have particular impact on entities that have
limited financial and personnel resources, such as smaller
manufacturers. These smaller manufacturers tend to have fewer
administrative personnel and less capability for data compilation and
recordkeeping than larger manufacturers.
The information collection authority of TSCA section 8(a) reflects
Congressional recognition of EPA's need for sufficient data from the
chemical industry to enable the Agency to effectively carry out its
TSCA obligations. EPA has concluded that if a manufacturer produces a
subject chemical in substantial quantities, it is inappropriate to
exempt that company from TSCA section 8(a) reporting requirements.
Production data is valuable to EPA as an indicator of potential for
chemical exposure and high-volume chemical production reflects a
greater potential for environmental release. For this reason, EPA is
maintaining the annual production or importation volume modifier of
100,000 lb at any individual site owned or controlled by the
manufacturer or importer for the first part of the updated small
manufacturer definition.
The standards should not prevent TSCA section 8(a) reporting of
information that is representative of manufacturers of different sizes.
Manufacturers of different sizes have varying amounts of capital
available, and therefore may utilize different production processes,
techniques, and equipment. Different methods of production may cause
the potential for chemical exposure to vary among manufacturers of
different sizes. It is important for the Agency to be able to monitor
these differences. To ensure that EPA will receive information from a
representative portion of manufacturers regulated under TSCA section
8(a), the structure of the definition and levels of the size standards
have been designed to allow the Agency to obtain production, use, and
exposure data from a variety of manufacturers.
A final objective for the standards is that they be easily applied
by both industry and the Agency. The updated small manufacturer
definition uses readily available data. These data enable
identification of companies which are small manufacturers. The
standards can also be easily enforced because the selected criteria for
the small manufacturer definition will enable EPA to monitor compliance
with the exemption. For further discussion of EPA's methodology and
considerations for developing the size standards in this final rule,
see Unit IV. of the proposed rule (84 FR 17692; April 25, 2019) and
Unit III. of this action.
III. Response to Public Comment
The Agency reviewed and considered all comments received on the
proposed rule. EPA received ten public comments pertinent to the small
manufacturer definition update, which included comments from chemical
manufacturers, chemical distributors, electric utilities, scrap metal
recyclers, petroleum industry representatives, biotechnology companies,
and environmental organizations. Copies of all comments are available
in the docket for this action (EPA-HQ-OPPT-2018-0321). A discussion of
the comments germane to this rulemaking and the Agency's responses
follows.
1. Comment. Two commenters supported the proposed update to the
current two-standard definition at 40 CFR 704.3. (Docket IDs: EPA-HQ-
OPPT-2018-0321-0089, EPA-HQ-OPPT-2018-0321-0102.)
Response. EPA acknowledges the comment.
2. Comment. Four commenters requested that EPA implement a variable
employment-based size
[[Page 31990]]
standard for CDR and TSCA section 8(a) that uses different industry
specific standards defined by NAICS codes, similar to the final rule
for Fees for the Administration of the Toxic Substances Control Act
(fees rule) (83 FR 52694, October 17, 2018 (FRL-9984-41)), which is
based on the SBA definition for small business, as opposed to the
current two-standard revenue-based definition. One commenter further
stated that EPA should finalize an employment-based size standard for
CDR reporting with the addition of a 100,000 lb volume modifier.
Commenters stated that using a definition similar to that in the fees
rule would provide consistency and ``more accurately reflect the
business size of companies in the chemical industry.'' Another
commenter noted that the EPA's economic analysis for the proposed rule
(Ref. 2) shows that the ``SBA Only'' definition would provide the least
regulatory burden. The same commenter requested to know why a
``definition that is variable and maintained by another agency would be
unwieldy.'' (Comment IDs: EPA-HQ-OPPT-2018-0321-0091, EPA-HQ-OPPT-2018-
0321-0096, EPA-HQ-OPPT-2018-0321-0097, EPA-HQ-OPPT-2018-0321-0104.)
Response. Using a variable employment-based size standard similar
to the fees rule leads to a reduction of information that would hamper
EPA's ability to carry out the Agency's obligation under TSCA. As
discussed in the proposal, EPA examined the utility of several criteria
for ``small'' including a definition based on SBA's definition for
small businesses. EPA's decision to finalize the update to the small
manufacturer definition as proposed (using 2018$ rather than 2017$) is
a result of EPA balancing Agency data needs under TSCA section 8(a) for
implementing TSCA against the burden imposed on the regulated
community. EPA also considered comments on the 2017 determination and
the 2019 proposed rule, held multiple meetings with SBA to obtain
input, and developed new analyses to understand the impact of the
updated definition on the CDR requirements.
The economic analysis for the proposed rule (Ref. 2) evaluated an
unmodified SBA-based definition (``SBA Only'') in addition to SBA-based
definitions that included production volume modifiers of 100,000 lb,
50,000 lb, and 25,000 lb (SBA+100k, SBA+50k, SBA+25k). The purpose of
the production volume modifier was similar to its purpose in the
existing definition: To balance the need to minimize the reporting and
recordkeeping burden on small manufacturers with EPA's need for
exposure-related information that will be reported under TSCA section
8(a). EPA's analysis found that using SBA standards in isolation
results in a large loss of information, approximately 20% of chemical
reports and 24% of sites, in addition to those already not reported to
CDR as a result of the current definition (``Baseline'') (See Ref. 2,
Table ES-1). While this option provides the least regulatory burden, it
also creates the greatest loss of data to the Agency. EPA determined
that losing such a large amount of information would hamper EPA's
ability to effectively carry out and implement the requirements of
TSCA.
EPA calculated the loss of reports for chemicals on the TSCA Work
Plan for Chemical Assessments to be 23% for SBA Only, 7% for SBA+100k,
and 3% for the inflation definition. The TSCA Work Plan, originally
released in 2012 and updated in 2014, identified a work plan of
chemicals for further assessment under TSCA. 2016 amendments to TSCA
require that at least 50 percent of all chemical substances undergoing
risk evaluation come from the 2014 update to the Work Plan, until the
Work Plan chemical list is exhausted. Disproportionate losses of
reporting on TSCA Work Plan chemicals constitute a potential loss of
information necessary for key Agency decisions. Again, EPA determined
that losing an additional 23% or 8% of information on TSCA Work Plan
chemicals would hamper EPA's ability to effectively carry out and
implement the requirements of TSCA.
Prior to finalizing this final rule, EPA updated its analysis of
the reporting impact of the updated small manufacturer definition, as
well as the potential reporting impacts of alternative small
manufacturer definitions. In the updated analysis, EPA compared the
final rule's inflation adjusted small manufacturer definition to the
TSCA fees rule's small manufacturer definition with a series of
production volume modifiers. The calculated impacts remained largely
unchanged from the proposed to final rule. (See the supporting
document, Economic Analysis for the Final Rule on the TSCA Section 8(a)
Small Manufacturer Definition Update for a more in-depth analysis (Ref.
1)). These impacts of the various alternative small manufacturer
definitions were part of the basis for deciding to finalize the updated
definition as proposed (updated with 2018$ rather than 2017$).
In deciding to finalize the updated definition as proposed (updated
with 2018$ rather than 2017$), EPA considered the practicality of
implementing any potential definition. SBA's variable definition is
developed and managed by SBA, and EPA cannot simply cite SBA's
definition. As was done with the TSCA fees rule, EPA would need to
finalize an SBA-based definition in part or in whole as part of its own
regulations. While EPA adopted parts of the SBA definition for the fees
rule, CDR and the fees rule operate differently for small
manufacturers. Under the fees rule, small manufacturers pay a reduced
fee but are still subject to the same requirements as large
manufacturers. Under the CDR rule, however, small manufacturers are
completely exempt from reporting. Given the differences in impact that
a small manufacturer definition has for the fees rule and CDR, EPA
carefully considered the balance between a reduction in burden and the
loss of data from small manufacturer reporters when updating the TSCA
section 8(a) small manufacturer definition.
As stated, under the fees rule, small manufacturers pay a reduced
fee (i.e., a reduction of burden) while for CDR small manufacturers are
completely exempt from reporting (i.e., an elimination of burden).
While both the fees rule and CDR are implemented under TSCA, they have
different purposes. The purpose of the fees rule size standards is for
apportionment of fees between small and large entities in the context
of the implementation of new provisions for TSCA sections 4, 5, and 6.
This purpose does not include any data quality and data availability
consequences, which are part of CDR considerations. EPA uses CDR data
to support risk screening, risk assessment, chemical prioritization,
risk evaluation, and risk management activities, among other
activities. This information allows EPA to develop an understanding of
the types, amount, end uses, and possible exposure to chemicals in
commerce.
Additionally, the SBA definition is used to define the largest size
a business can be to participate in government contracting programs and
compete for contracts reserved or set aside for small businesses.
Applications for these programs are reviewed on a case-by-case basis
and a determination is made if a business qualifies. For the CDR rule,
however, the small manufacturer definition is self-implementing. EPA
does not make a determination on whether a company is exempted as a
small manufacturer or is required to report to CDR, prior to CDR
reporting. For CDR, it is up to the manufacturer to determine if the
small manufacturer definition applies. A small manufacturer definition
differentiated by NAICS codes could be difficult to
[[Page 31991]]
apply for reporters because CDR imposes site-based reporting
requirements and multiple NAICS codes could apply to a given site. To
apply a small manufacturer definition differentiated by NAICS codes,
the reporter would have to select a single NAICS code. For importers
and domestic manufacturing sites with multiple activities to which
multiple NAICS codes could apply, this can pose a problem for the
reporter and EPA. If the manufacturer chooses an incorrect code that
results in no reporting of chemical data, then EPA would not be aware
that the company is involved in chemical manufacturing. EPA would have
difficulty determining if an appropriate NAICS code was selected for a
given site that has multiple applicable NAICS codes, and, consequently,
would have difficulty determining if a site is appropriately exempted
from reporting due to qualification as a small manufacturer based on
the choice of NAICS code. EPA believes the current revenue and
production volume approach is more amenable to compliance monitoring
and believes that it would be more difficult to determine the
appropriate NAICS classification for a company because often multiple
NAICS apply to a site.
For these reasons, EPA has decided to finalize the updated small
manufacturer definition as proposed (updated with 2018$ rather than
2017$), instead of finalizing an employee-based size standard.
3. Comment. In addition to broadly updating the small manufacturer
definition to an employment-based size standard for all manufacturers
subject to reporting under TSCA section 8(a), two commenters
specifically asked that EPA use the SBA size standard for the utility
sector. One commenter went on to state that ``EPA should incorporate
the SBA size standard of 750 employees as the definition of `small
manufacturer' for NAICS 221112, fossil fuel electric power generation;
or define `total sales' for NAICS 221112 as only including sale of
electricity from coal-fired generation.'' (Comment IDs: EPA-HQ-OPPT-
2018-0321-0105, EPA-HQ-OPPT-2018-0321-0104.)
Response. EPA is finalizing a standardized two-part revenue-based
small manufacturer definition that applies to all chemical substance
manufacturers. Given the difficulties that EPA has already described in
implementing a small manufacturer standard defined by industry sector,
EPA does not believe that the Agency should adopt industry-specific
standards. If EPA made specific standards for one industry, it would
need to consider additional standards for other industries that
requested a standard different from those in the general TSCA section
8(a) small manufacturer definition, which would result in a complex and
unworkable definition. That being said, EPA did conduct an analysis of
the CDR submitters from utilities sites (government and industry) and
also considered the public commenters' recommendation to use the SBA
size standard for NAICS code 221112, fossil fuel electric power
generation. From this analysis, EPA found that CDR reporters represent
a variety of utilities, one of which is electricity generation. NAICS
code 221112 does not have high representation in CDR and is not the
most often used electricity NAICS.
EPA disagrees with the concept of relying only on sales associated
with a subset of the production of the reportable chemical substance.
As described in Unit II.B., the purpose of the small manufacturer
exemption is to reduce (or eliminate) the burden of compliance for
those entities that have limited financial and personnel resources.
Reducing the sales of a company to only a subset of its revenue does
not identify the companies that have such limited resources.
4. Comment. One commenter requested that EPA implement a third
standard, in addition to the proposed two-part revenue-based standard,
for the small manufacturer definition under TSCA section 8(a). The
commenter asked that this third standard be an employee-based size
standard combined with a production limit, specifically ``a small
manufacturer definition of 500 or fewer employees, as defined by the
U.S. Small Business Administration Office of Advocacy, if annual
production (including import) volume of the particular substance does
not exceed 100,000 lbs. at any individual site.'' (Comment ID: EPA-HQ-
OPPT-2018-0321-0102)
Response. EPA disagrees with the comment. Adding a third standard
using a different metric than the first two standards would unduly
complicate the definition because companies would not only have to
identify their company sales volume, but would also have to determine
the number of employees. If EPA added a standard of 500 or fewer
employees to the proposed SMD definition, another 34 sites (1%) and 829
reports (2%) would be eliminated. The additional loss of information
incurred as a result of adding this third standard would hamper EPA's
ability to effectively carry out and implement the requirements of
TSCA. Due to the need to balance the reduction of the reporting and
recordkeeping burden on small manufacturers with EPA's need for
exposure-related data, EPA would need to adjust the third standard in
such a way that it would not result in additional losses of
information. Thus, adding a third standard would introduce additional
complexity but without further reducing burden or information received
by EPA. See the response to Comment 2 for further discussion.
5. Comment. Two commenters recommended that EPA retain the use of
the PPI for Chemicals and Allied Products in future updates of the size
standard threshold instead of changing to GDP when determining if an
update to the TSCA section 8(a) small manufacturer size standards is
warranted. (Comment IDs: EPA-HQ-OPPT-2018-0321-0096, EPA-HQ-OPPT-2018-
0321-0102.)
Response. After reviewing the comments received, EPA decided that
it will not finalize the change to Gross Domestic Product (GDP) as an
inflation index. Instead, EPA will amend the small manufacturer
definition at 40 CFR 704.3 to use a five-year average of the PPI for
Chemicals and Allied Products when determining if the small
manufacturer definition warrants adjustment. EPA proposed the change to
GDP because a GDP deflator is less volatile and is broader than the PPI
for Chemicals and Allied Products, and therefore EPA believed it to be
a better measure when considering an update to the revenue size
standards in the proposed definition. While GDP is less volatile, EPA
now recognizes that PPI for Chemicals and Allied Products is a better
overall accounting of chemical manufacturers that would be subject to
reporting under TSCA section 8(a) because it directly reflects the
chemical manufacturing sector as opposed to the U.S. economy as a
whole. By using a five-year average of PPI for Chemicals and Allied
Products, EPA will be able to protect against volatility while
continuing to account for the chemical manufacturers that fall under
the small manufacturer definition.
6. Comment. Three commenters requested that EPA change the
production volume modifier. Two commenters requested that EPA remove or
raise the 100,000 lb production volume modifier used as part of the
first standard for TSCA section 8(a) small manufacturer definition.
Another commenter asked that EPA evaluate the impacts of decreasing the
100,000 lb production volume modifier. One commenter asked that EPA
show ``why 100,000 lbs. is an appropriate modifier and consult with the
SBA on this
[[Page 31992]]
threshold.'' Additionally, the commenter asked that the Agency
``consider a volume modifier with an employee-based standard.'' One
commenter stated that, with no change in the existing 100,000 lb
modifier, the proposed increases of annual company sales thresholds are
unlikely to provide regulatory relief from reporting for small scrap
metal recyclers. The commenter further stated that while the 100,000 lb
limit made sense when inorganic chemical substances were exempt from
reporting (before 2003), the threshold has not made sense since
inorganic chemical manufacturers became subject to reporting under IUR/
CDR because inorganic chemicals are denser than organic chemicals and
the production volume threshold is quickly reached. To support their
public comments, the commenter provided excerpts from industry
testimonies made during the 1975 Senate hearings on pending TSCA
legislation. (Comment IDs: EPA-HQ-OPPT-2018-0321-0097, EPA-HQ-OPPT-
2018-0321-0100, EPA-HQ-OPPT-2018-0321-0111).
Response. EPA disagrees that the production volume modifier should
be changed (either raised or lowered) or that industry-specific
modifiers should be developed. EPA has updated the revenue thresholds
for the small manufacturer definition based on changes to the value of
the U.S. dollar as a result of inflation. There is, however, no
corresponding basis for adjusting the production volume modifier. In
developing the initial small manufacturer standard, EPA included a
production volume modifier to ensure that chemical substances
manufactured or imported at high volumes were reported to EPA. The
commenters have provided no support to indicate that the 100,000 lb
threshold requires updating as a result of changes to the chemical
manufacturing sector.
Regarding industry-specific modifiers, such as for the scrap metal
industry, EPA believes that it would be difficult and resource
intensive for EPA to establish, administer, and update industry- or
chemical-specific modifiers that align with the 100,000 lb threshold.
As stated in EPA's response to Comment 2, EPA does not feel it is
appropriate to have small manufacturer standards that are
differentiated by industry. Please see EPA's full response to Comment 2
for further discussion.
7. Comment. One commenter asked that EPA justify why EPA chose to
``to round its inflation adjustment of the threshold by two significant
figures--from $112 million to $110 million for the first standard and
$11.2 to $11 million for the second standard.'' (Comment ID: EPA-HQ-
OPPT-2018-0321-0096.)
Response. EPA used two significant figures instead of three
significant figures for the levels of the revenue standards. EPA does
not consider the additional precision to be merited based on the type
of information being used to make the inflation adjustment. The
underlying data used for inflating the revenue standard does not
support the use of more than two significant figures. Since proposing
the updated small manufacturer definition, however, EPA has decided to
use 2018$ as the basis for inflation rather than 2017$, to ensure that
the definition is as up-to-date as possible at the time of
finalization. EPA is basing the update of the current two-standard
definition at 40 CFR 704.3 on inflation by adjusting the sales standard
level for the first part from $40 million to $120 million (originally
proposed as $110 million) and for the second part from $4 million to
$12 million (originally proposed as $11 million).
8. Comment. EPA received one comment on statutory and executive
order reviews. The commenter emphasized that tribal consultation under
Executive Order 13175, and EPA's 1984 Indian Policy, should have been
carried out by this rulemaking. (Comment ID: EPA-HQ-OPPT-2018-0321-
0092)
Response. EPA disagrees that a tribal consultation was necessary
for this rule. EPA stated in Unit VII.G of the proposed rule that this
rule would not have tribal implications because it is not expected to
have substantial direct effects 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). EPA concluded that the impacts of the rule
would not significantly nor uniquely affect the communities of tribal
governments. Thus, EPA determined that Executive Order 13175 did not
apply to this rule.
Even though EPA determined that Executive Order 13175 did not
apply, EPA conducted tribal outreach on the TSCA Chemical Data
Reporting Revisions and Small Manufacturer Definition Update for
Reporting and Recordkeeping Requirements Under TSCA Section 8(a) from
May 2019 through August 2019 to provide information to tribes on the
proposed rule and to obtain feedback. Two nationwide outreach sessions
were also conducted, and tribal comments were accepted through August
30, 2019. In addition, EPA developed supplemental background
information to further explain the proposed actions to tribes. EPA
previously responded to this comment in the Response to Public Comments
for the TSCA Chemical Data Reporting Revisions for Reporting and
Recordkeeping Requirements under TSCA Section 8(a) (Ref. 4).
9. Comment. One commenter requested that EPA ``commit to updating
the size standard threshold every time the inflation index has risen by
20% or more from the last adjustment.'' The commenter points out that
the proposed rule does not obligate EPA to update the small
manufacturer definition. The commenter asks that EPA make future
updates to the small manufacturer definition automatic. (Comment ID:
EPA-HQ-OPPT-2018-0321-0096)
Response. EPA appreciates the comment but does not feel that such a
commitment is necessary. While the updated small manufacturer
definition at 40 CFR 704.3 does not establish a timeline or obligation
for updating the small manufacturer definition in the future, the 2016
Amendments to TSCA require that EPA review the adequacy of the size
standards no less than once every 10 years. The requirements under TSCA
will lead to routine reevaluation of the small manufacturer definition
under section 8(a). Committing to an automatic update, as requested,
would bind EPA to making the adjustment when PPI changed 20% and would
disallow any future flexibility. Instead, future updates to the small
manufacture definition will follow the requirement at TSCA section
8(a)(3)(C), which require EPA to review the standards every ten years,
in addition to changes in PPI. Other factors that EPA may consider
include changes in SBA's definition, inflation, and other economic or
global factors that may have impacted chemical manufactures. The
factors EPA considers are made on a case-by-case basis. As required by
TSCA, EPA will consult with SBA when updating the definition.
10. Comment. One commenter stated that with respect to the 93 fewer
reporting sites, EPA did not show which part of the modified revenue
definition applied. The commenter stated that ``if all or the majority
of the sites are now exempt due to the first standard of $11 million,
the purpose of having a second prong is unclear.'' (Comment ID: EPA-HQ-
OPPT-2018-0321-0097).
Response. As stated in the economic analysis, the structure of the
definition was designed for effective targeting of small manufacturers
(Ref. 1). Note that the information from baseline conditions for this
question is unmeasured (i.e., CDR does not receive
[[Page 31993]]
reports from these manufacturers). Nonetheless, not all sites that are
exempted are expected to meet the conditions of the Second Standard of
annual sales less than $12 million. EPA considered the increment of the
changes in the proposed rule via the 93 fewer reporting sites (now
calculated to be 127 using an updated analysis); EPA found that
although a larger portion of sites incur exemption via the Second
Standard compared to the First Standard, there is a non-trivial portion
of sites that incur exemption via the First Standard (Refs. 3 and 4).
11. Comment. Two commenters specified that EPA needs to better
determine the information loss resulting from a revised small
manufacturer definition. One commenter stated that the ``definition
update would result in less data collected by EPA and thus less
information available to the public on the chemical substances in their
environment.'' Another commenter said that EPA was not required to base
the update to the small manufacturer definition on inflation but had
the discretion to update the standards to best meet the goals of TSCA.
Additionally, the commenter believes that ``EPA has failed to evaluate
whether and how the proposed standards will affect its ability to
implement the law effectively, contrary to its Section 8 mandate.''
Lastly, the commenter pointed out that updating the definition will
have minimal economic benefits. (Comment IDs: EPA-HQ-OPPT-2018-0321-
0092, EPA-HQ-OPPT-2018-0321-0100)
Response. EPA appreciates the comment but disagrees that EPA has
not adequately evaluated the impacts of the updated small manufacturer
definition. EPA, however, does agree that EPA was not required to base
the update to the small manufacturer definition on inflation, yet EPA
believes the decision to do so best meets the goals of TSCA. As shown
in the Economic Analysis for the proposed rule (Ref. 2), EPA considered
the impact the updated small manufacturer definition would have on the
number of companies reporting, number of sites reporting, number of
chemical reports received, number of chemicals in chemical reports,
total volume of all chemicals in chemical reports, number of full
reports, number of chemical reports received covering chemicals that
are intended for products used by children, and the number of chemical
reports received covering chemicals on the 2014 update to the TSCA Work
Plan. EPA selected the last two parameters in particular as important
data for effective implementation of TSCA.
Under CDR, manufacturers of chemicals with consumer uses must
further identify whether a chemical is present in or on any product
intended for use by children. EPA uses this information to inform its
analysis of chemicals that are of concern due to their potential impact
on children's health. The loss of such reporting would decrease the
amount of information EPA has regarding chemicals used in children's
products, which EPA has worked to retain while balancing relief to
small manufacturers. Further, the 2014 update to the TSCA Work Plan
plays an important role in the new prioritization and risk evaluation
processes under TSCA (Ref. 5). TSCA requires that 50 percent of all
chemical substances on which risk evaluations are conducted be drawn
from the 2014 update to the TSCA Work Plan, meaning that EPA will need
to draw at least 50 percent of High-Priority Substance candidates from
that list. By operation of this statutory directive, all TSCA Work Plan
chemicals will eventually be prioritized (82 FR 33753, July 20, 2017,
FRL-9964-24). Information on manufacture, processing, and use of these
chemicals through TSCA section 8(a) reporting will support
prioritization and EPA's evaluations of these chemicals. The loss of
chemical reports on Work Plan chemicals may affect the timeliness and
quality of EPA's risk evaluations.
Lastly, EPA considered several approaches, including approaches by
SBA and others, when amending the small manufacturer definition. The
discussion is further documented in Appendix B of the Economic Analysis
(Ref. 1). EPA considered alternative small business definitions used by
U.S. Federal Government agencies, including other small business
definitions used by EPA, with a focus on the purpose of the small
business size standards and the approach used to establish them.
12. Comment. One commenter asked that the updated small
manufacturer definition not apply to mercury reporting under CDR. This
request was made because the mercury reporting rule promulgated by EPA
on June 27, 2018 includes certain exemptions for persons who already
report for mercury and mercury-added products to CDR (83 FR 30054). The
commenter points out that EPA included this exemption because
comparable data would be provided to EPA under the CDR rule. The
commenter then states that this assumption may no longer be correct if
EPA modifies the small manufacturer standards as proposed.
Response. EPA appreciates the comment. The first reporting cycle
for the mercury inventory closed on July 1, 2019. The Agency is
currently assessing data received in preparation for the statutory
deadline for publishing the mercury inventory not later than April 1,
2020. The Agency is amenable to suggestions of ways to improve the
reporting requirements related to mercury supply, use, and trade in the
United States, and will take all comments under consideration for
future program refinement.
IV. 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. EPA (2019). Economic Analysis for the Final Rule on TSCA Section
8(a) Small Manufacturer Definition Update (RIN 2070-AK57). Office of
Pollution, Prevention, and Toxics. Washington, DC. April 2020.
2. EPA (2019). Economic Analysis for the Proposed Rule on TSCA
Section 8(a) Small Manufacturer Definition Update (RIN 2070-AK33).
Office of Pollution, Prevention, and Toxics. Washington, DC. April
2019.
3. EPA (2014). TSCA Work Plan for Chemicals Assessments: 2014
Update. http://www.epa.gov/sites/production/files/2014-02/documents/work_plan_chemicals_web_final.pdf. Retrieved January 30, 2018.
4. EPA (2020). TSCA Chemical Data Reporting Revisions for Reporting
and Recordkeeping Requirements under TSCA Section 8(a).
5. EPA (2018). EPAB CDR Database Statistics Report (General Report
and Special Reports on Inorganics and Government/Industry). Office
of Pollution Prevention and Toxics, Economic and Policy Analysis
Branch. September 2018.
6. EPA (2018). Information Collection Request Proposed Addendum to
Chemical Data Reporting under the Toxic Substances Control Act (TSCA
section 8(a)) (EPA ICR No. 1884.12; OMB Control Number 2070-0162).
September 2018.
V. 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.
[[Page 31994]]
A. Executive Order 12866: Regulatory Planning and Review and Executive
Order 13563: Improving Regulations 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
Order 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, cost
savings, and benefits associated with this action. A copy of the
economic analysis, entitled Economic Analysis for Final Rule on the
TSCA Section 8(a) Small Manufacturer Definition Update (Ref. 1), is
available in the docket and is briefly summarized in Unit I.E.
B. Executive Order 13771: Reducing Regulation and Controlling
Regulatory Costs
This action is considered an Executive Order 13771 deregulatory
action. Details on the estimated cost savings on this final rule can be
found in the Economic Analysis.
C. Paperwork Reduction Act (PRA)
This final rule does not impose a new or revised information
collection activities, but the changes in the definitions impact the
burden estimates associated with existing reporting and recordkeeping
rules because the respondent universe changes. EPA has therefore
submitted an addendum to the existing Information Collection Request
(ICR) for approval to OMB under the PRA, 44 U.S.C. 3501 et seq. (Ref.
6). The existing ICR is identified under EPA ICR No. 1884.11 and
approved under OMB Control No. 2070-0162. The ICR Addendum is
identified under EPA ICR No. 1884.12, a copy of the ICR Addendum in the
docket for this rule, and is briefly summarized here.
Respondents/affected entities: Entities potentially affected by
this ICR include companies manufacturing (including importing) chemical
substances listed on the TSCA Inventory and regulated under TSCA
section 8.
Respondent's obligation to respond: Mandatory.
Estimated number of respondents: 5,660.
Frequency of response: Reporting under CDR occurs every four years.
The next CDR collection will occur in 2020.
Total estimated burden: A reduction of 23,014 hours per year from
the total burden currently approved. Burden is defined at 5 CFR
1320.3(b).
Total estimated cost: A reduction of $1,760,578 per year, includes
$0 annualized capital or operation and maintenance costs.
For TSCA section 8(a) reporting outside of CDR, including the TSCA
section 8(a) Preliminary Assessment Information Rule (PAIR) (OMB
control number 2070-0054) or any of the existing chemical specific TSCA
section 8(a) rules, EPA did not estimate incremental burden and cost
either because EPA has not received any chemical reports under those
rules for an extended period of time, or because the rule uses a rule
specific definition that is not being changed by this final rule. For
these reasons, no change is expected in the impacted universe of
respondents, respondent burden or respondent cost for the PAIR or other
chemical specific TSCA section 8(a) rules and no ICR addendums in these
cases are needed. The technical correction for hexafluoropropylene
oxide also did not change the respondent universe, burden or cost that
would need to be captured in an ICR addendum.
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 for the
EPA's regulations in 40 CFR are listed in 40 CFR part 9. When OMB
approves this ICR addendum, the Agency will announce that approval in
the Federal Register.
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. The small entities subject to
the requirements of this action are manufacturers and importers of
chemical substances, including byproduct chemical substances, and are
subject to either of the following: (1) Reporting under the TSCA
Chemical Data Reporting (CDR) requirements at 40 CFR part 711 or (2)
TSCA reporting and recordkeeping requirements at 40 CFR part 704 or
other TSCA reporting requirements which reference the small
manufacturer standards at 40 CFR 704.3. The Agency has determined that
no currently exempt small manufacturers will become newly subject to
any current TSCA section 8(a) rules under the new TSCA section 8(a)
small manufacturer definition, because all manufacturers that are
currently exempt will remain exempt under the final definition.
Moreover, the updated definition allows exemptions for certain current
reporters, thereby eliminating their reporting burden. EPA also notes
that there are no adverse small entity impacts to small government
entities because under the final rule, all entities defined as small
for purposes of small government assessment are the same entities that
are newly eligible to take the small government exemption and eliminate
their CDR reporting burden entirely. A small amount of incremental
burden will be incurred for rule familiarization and is less than 1% of
revenues for each small parent company. Details of this analysis are
presented in the Economic Analyses (Ref. 1).
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 will not
significantly or uniquely affect small governments. According to the
information derived using the 2016 CDR, there are government entities
that report to CDR, including: Seven municipalities, one county-level
public utility district, and one tribal entity. However, under the
changes finalized by this action, four of the municipalities will be
exempt, with the remaining entities incurring a minimal average
incremental burden and cost per site at about 0.1 hours and $8 per
year, respectively. Consequently, impacts will not exceed $100 million
for all governments.
In sum, the final rule is not expected to result in expenditures by
State, local, and Tribal governments, in the aggregate, or by the
private sector, of $100 million or more (when adjusted annually for
inflation) in any one year. Accordingly, this final rule is not subject
to the requirements of sections 202, 203, or 205 of UMRA.
F. Executive Order 13132: Federalism
This action will 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).
Thus, Executive Order 13132 does not apply to this action.
G. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments
This action will not have tribal implications because it is not
expected to have substantial direct effects on
[[Page 31995]]
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).
According to the information presented in the economic analysis for the
TSCA section 8(a) small manufacturer definition update (Ref. 1), one
tribal entity reported during the 2016 CDR collection. Under the final
rule, this entity is estimated to incur a minimal average incremental
burden and cost per site at about 0.5 hour and $36 per year,
respectively. Consequently, EPA has concluded that the impacts of the
final rule will not significantly or uniquely affect the communities of
tribal governments. Thus, Executive Order 13175 does not apply to this
final rule.
H. Executive Order 13045: Protection of Children From Environmental
Health and Safety Risks
EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997),
as applying to those regulatory actions that concern environmental
health and safety risks that EPA has reason to believe may
disproportionately affect children, per the definition of ``covered
regulatory action'' in section 2-202 of the Executive Order. This
action is not subject to Executive Order 13045 because it does not
concern an environmental health risk or safety risk.
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 the supply,
distribution, or use of energy.
J. National Technology Transfer and Advancement Act (NTTAA)
Because 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 will not have 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).
The final rule is directed at manufacturers (including importers)
of chemical substances. All consumers of these chemical products and
all workers who come into contact with these chemical substances could
benefit if data regarding the chemical substances' health and
environmental effects were developed. Therefore, it does not appear
that the costs and the benefits of the final rule will be
disproportionately distributed across different geographic regions or
among different categories of individuals.
VI. Congressional Review Act (CRA)
Pursuant to the CRA (5 U.S.C. 801 et seq.), EPA will submit a
report containing this rule and other required information to the U.S.
Senate, the U.S. House of Representatives, and the Comptroller General
of the United States prior to publication of the rule in the Federal
Register. This action is not a ``major rule'' as defined by 5 U.S.C.
804(2).
List of Subjects in 40 CFR Parts 704 and 712
Chemicals, Confidential business information, Environmental
protection, Hazardous substances, Reporting and recordkeeping
requirements.
Dated: May 11, 2020.
Alexandra Dapolito Dunn,
Assistant Administrator, Office of Chemical Safety and Pollution
Prevention.
Therefore, 40 CFR chapter I, subchapter R, is amended as follows:
PART 704--[AMENDED]
0
1. The authority citation for part 704 continues to read as follows:
Authority: 15 U.S.C. 2607(a).
0
2. Amend Sec. 704.3 as follows:
0
a. Add, in alphabetical order, the definition for ``Small government''.
0
b. Remove the definition of ``Small manufacturer or importer'' and add
the definition of ``Small manufacturer'' in its place.
The additions read as follows:
Sec. 704.3 Definitions.
* * * * *
Small government means the government of a city, county, town,
township, village, school district, or special district with a
population of less than 50,000.
* * * * *
Small manufacturer means a manufacturer (including importer) that
meets either of the following standards:
(1) First standard. A manufacturer (including importer) of a
substance is small if its total annual sales, when combined with those
of its parent company (if any), are less than $120 million. However, if
the annual production or importation volume of a particular substance
at any individual site owned or controlled by the manufacturer or
importer is greater than 45,400 kilograms (100,000 lbs), the
manufacturer (including importer) will not qualify as small for
purposes of reporting on the production or importation of that
substance at that site, unless the manufacturer (including importer)
qualifies as small under paragraph (2) of this definition.
(2) Second standard. A manufacturer (including importer) of a
substance is small if its total annual sales, when combined with those
of its parent company (if any), are less than $12 million, regardless
of the quantity of substances produced or imported by that manufacturer
(including importer).
(3) Inflation index. EPA shall make use of the Producer Price Index
for Chemicals and Allied Products, as compiled by the U.S. Bureau of
Labor Statistics, for purposes of determining the need to adjust the
total annual sales values and for determining new sales values when
adjustments are made. EPA may adjust the total annual sales values
whenever the Agency deems it necessary to do so, provided that the
five-year average of the Producer Price Index for Chemicals and Allied
Products has changed more than 20 percent since either the most recent
previous change in sales values or May 28, 2020, whichever is later.
EPA shall provide Federal Register notification when changing the total
annual sales values.
* * * * *
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3. Amend Sec. 704.104 by revising paragraph (c)(2) to read as
follows:
Sec. 704.104 Hexafluoropropylene oxide.
* * * * *
(c) * * *
(2) Persons described in Sec. 704.5(a) through (f).
* * * * *
PART 712--[AMENDED]
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4. The authority citation for part 712 continues to read as follows:
Authority: 15 U.S.C. 2607(a).
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5. Amend Sec. 712.25 by revising paragraph (c) to read as follows:
Sec. 712.25 Exempt manufacturers and importers.
* * * * *
(c) Persons who qualify as small manufacturers (including
importers) in respect to a specific chemical substance listed in Sec.
712.30 are exempt. However, the exemption in this paragraph (c) does
[[Page 31996]]
not apply with respect to any chemical in Sec. 712.30 designated by an
asterisk. A manufacturer is qualified as small and is exempt from
submitting a report under this subpart for a chemical substance
manufactured at a particular plant site if it meets the definition for
small manufacturer in Sec. 704.3 of this chapter.
* * * * *
[FR Doc. 2020-10435 Filed 5-27-20; 8:45 am]
BILLING CODE 6560-50-P