Manufacturers and importers of “ high-priority substances” and importers of articles containing these substances may be obligated to pay fees this year to defray the U.S. EPA’s costs for administration of the Toxic Substances Control Act (TSCA). Many companies may be unaware of these potential fee obligations, especially importers of articles that contain HP substances by design or as byproducts or impurities.
The regulation imposing these fees – the “Fees Rule” – went into effect in October 2018, but the obligation to pay the fees kicked in this year, as the EPA launched new risk evaluations for 20 substances.
Companies should be diligent when determining the potential impacts of the Fees Rule. For starters, the EPA has opened a comment period during which companies have the opportunity to review preliminary lists of manufacturers and importers of HP substances. The preliminary lists were developed using the most up-to-date information available, including information submitted to the EPA under the Chemical Data Reporting Rule and the Toxics Release Inventory. However, EPA has indicated that the preliminary list may not be comprehensive, and companies involved in manufacturing or importing HP substances are required to self-identify to the EPA or be subject to daily fines.
Thus, it is critical for companies to undertake the necessary due diligence prior to the end of the comment period, which is May 27, 2020. If a company believes it has been listed wrongly, it should consider filing a “certification of no manufacture” or a “certification of cessation” to be removed from fee obligations. Conversely, companies that do handle these substances must self-identify or face the risk of significant penalties.
The potential size of the fees is hard to estimate. The EPA has determined that the HP risk evaluations will cost about $1.35 million per substance, and the costs will be distributed among all companies on the final list for each substance. The fees will vary from one substance to another depending on the number of impacted entities and a few other variables. For example, small businesses are expected to receive an 80 percent discount on fee obligations. Also, the Fees Rule allows entities to form consortia to divvy up the fees among themselves, a provision that is intended to ease compliance burdens for both the entities and the EPA. If a company does not join a consortium, then the EPA will dictate the fee amount it owes.
What do you need to do by May 27?
1. Determine whether you are a manufacturer or importer of any of the HP substances or if you are an importer of articles containing HP substances.
2. Review the preliminary lists of manufacturers and importers of HP substances as compiled by the EPA. Your company belongs on the list if it manufacturers or imports any of the substances or if it imports articles containing HP substances. At present, there are no exclusions or exemptions for articles; there is no de minimis level for reporting; there are no volume or quantity thresholds for reporting; and there are no exclusions for byproducts and impurities. Here is some guidance should you need to know how the EPA defines “manufacturer,” “importer,” or “article.”
3. If your company is listed incorrectly, then a correction notice must be submitted during the open comment period. You can submit a comment to the open docket, or IPC can do this for you.
4. If you believe that your company needs to be listed, then you are required to self-identify through the Chemical Data Exchange (CDX) system. You will need to submit at least your company’s information and a technical point of contact.
Here are some additional dates to be mindful of.
It is expected that companies will have 60 days after the release of the final scoping documents to form consortia. Impacted companies will need to determine whether they want to join any consortia and to join if they wish to do so.
Approximately 120 days after the final scoping documents are released, the TSCA fees will be due to EPA.
What else can you do?
Review the draft scoping documents for the risk evaluations. Likely beginning in April 2020, the EPA will release the draft scoping documents for each of the 20 HP substances. IPC will be tracking these documents and providing updates to its members. The scoping document is the first step in the risk evaluation process, and providing evidence-based information to the EPA about your understanding of a substance will enable the EPA to identify relevant conditions of use in the risk evaluation. Also, there should be a good correlation between uses of the HP substances that are subject to risk evaluations and those who are obligated to pay TSCA fees to support the risk evaluation.
Keep in touch with IPC. Let us know your questions, concerns, and suggestions about the TSCA fee obligations. To date, IPC has engaged with the EPA senior staff responsible for implementation of the Fees Rule to voice the electronics industry’s concerns regarding self-identification for those who import articles containing HP substances.
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