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By Christopher R. Bryant, Lynn L. Bergeson, and Margaret R. Graham

Facing a government shutdown, late on April 30, 2017, lawmakers reached agreement on a spending bill that funds the federal government through September 2017, which is the end of Fiscal Year (FY) 2017. 

President Trump’s budget blueprint sought to slash EPA’s coffers by some 31 percent (and more if certain programs were eliminated from the base).  The deal reached by lawmakers, however, would essentially fund EPA at its current levels and retain current staff levels.  The bill appropriates $8.058 billion for EPA, paring a little over $80 million -- about one percent -- from EPA’s FY 2016 budget. 

Programs targeted for elimination by President Trump remain funded, at least through September, when Congress will face another budget showdown.  For example, the bill funds the Great Lakes Restoration Initiative, the Chesapeake Bay Program, and lead elimination programs. 

While EPA’s budget is generally unchanged, the bill does contain several policy riders.  It would require EPA to treat air emissions from forest biomass as carbon neutral.  EPA also would not be allowed to regulate manure and similar agricultural byproducts as wastes under the Resource Conservation and Recovery Act (RCRA), and the bill would bar EPA from requiring Clean Water Act (CWA) permits for certain agricultural practices.  The legislation also prohibits funding to regulate lead content of ammunition, ammunition components, and fishing tackle under the Toxic Substances Control Act (TSCA) or any other law.

Senate Report No. 114-281 on the pending FY 2017 budget deal and an accompanying explanatory statement also address specifically TSCA, the Integrated Risk Information System (IRIS), and nanomaterials.  The specific language is below.

  • Toxic Substances Control Act Modernization -- The Committee notes that legislation to modernize the Toxic Substances Control Act [TSCA] was recently approved by both the Senate and the House of Representatives. This bill includes language that will enable the EPA to collect and spend new fees to conduct additional chemical reviews, consistent with TSCA modernization legislation. Those fees are expected to be $25,000,000 per year once the program is fully implemented. The Congressional Budget Office estimates that in fiscal year 2017, fee collections will begin several months after the beginning of the fiscal year and will total $4,000,000. This bill also includes language ensuring that new fee collections will supplement, not supplant, appropriated resources for these activities.
  • Integrated Risk Information System -- The Committee is aware of efforts by the Agency to implement the 2011 National Academy of Science’s [NAS] Chapter 7 and 2014 NAS report recommendations for the Integrated Risk Information System [IRIS] but remains concerned that the recommendations have not been fully implemented. In published appendices that accompany final IRIS assessments, EPA has detailed some of the Agency’s deficiencies in meeting the NAS high-priority reforms. The Committee directs the Agency to convene an interagency working group to be Co-Chaired with the Office of Information and Regulatory Affairs and to include relevant executive branch stakeholders to review compliance with the NAS recommendations in IRIS assessments issued since the 2014 NAS report. The working group shall focus specifically on transition from the use of single point estimates of hazard and exposure to presenting more complete information on the distribution of estimated hazards, exposures, and/or risks, including central tendency values; on processes for evaluating study quality, relevance, and risk of bias; the use of a transparent and reproducible weight-of-evidence process for applying scientific findings; the selection of an adverse outcome; and the use of default linear low-dose extrapolation and other default modeling approaches to hazard determinations. The Committee directs the Agency to issue a report to the Committees of Appropriations of the House and Senate on the findings of the working group and the implementation plans of its findings within 180 days of enactment of this act. The working group report shall also include a timetable for EPA’s full implementation of the NAS recommendations for all IRIS assessments issued since the 2014 NAS report.
  • Nanomaterials Research -- The Committee notes the increased capabilities that the Food and Drug Administration [FDA] has developed to study environment, health, and safety of nanomaterials [nanoEHS] within FDA’s Jefferson Laboratory Campus, including the National Center for Toxicological Research, and its consolidated headquarters at White Oak, Maryland. The FDA can and should be more involved in nanoEHS research with other agencies, particularly in activities involving human health. Out of the amounts appropriated, the [EPA} Administrator shall seek to involve the FDA in nanoEHS research to the maximum extent possible, including participation in EPA funded research.

 

By Lynn L. Bergeson, Richard E. Engler, Ph.D., and Margaret R. Graham

On April 25, 2017, the U.S. Environmental Protection Agency (EPA) issued two notices in the Federal Register expressing its determination that 28 new chemical notifications are “not likely to present an unreasonable risk of injury to health or the environment.”  82 Fed Reg. 19044 (Statement of Findings for December 2016); 82 Fed. Reg. 19046 (Statements of Findings for February 2017).  The statements of findings list premanufacture notices (PMN) and microbial commercial activity notices (MCAN) regarding new polymer and biodegradable chemicals submitted to EPA under Section 5 of the Toxic Substances Control Act (TSCA).  The notices listed in the December 2016 statement of findings are:

The notices listed in the February 2017 statement of findings are:

Commentary

The publication of these two notices fulfills EPA’s obligation under TSCA Section 5(g) to publish its findings; all of these determinations had previously been posted to the EPA website.  It is to EPA’s credit that EPA has made its determinations public as soon as practicable by posting those determinations on its website.  We recognize that publication in the Federal Register often lags behind EPA’s decisions because of resource constraints and competition with other Federal Register notices.  We are pleased to see new chemicals cleared for production.

Nevertheless, EPA’s pace of approving new chemicals for the marketplace has slowed tremendously since enactment of TSCA reform.  Furthermore, these notices do not provide any line of sight on the reasons contributing to the delays, or EPA’s resolution of these issues.  To date, EPA has only published its final determinations for substances with low concerns for heath and ecological hazards.  With only 28 new chemicals approved from the time period of December 1, 2016, to February 28, 2017, EPA will need to work much faster to even come close to its annual average number of 700-800 PMN reviews and keep the backlog of cases under review from continuing to grow.


 

By Christopher R. Bryant and Lynn L. Bergeson

According to press reports, Nancy Beck, Ph.D., DABT has been hired as the Principal Deputy Assistant Administrator for the U.S. Environmental Protection Agency’s (EPA) Office of Chemical Safety and Pollution Prevention (OCSPP).  Dr. Beck holds a doctorate in environmental health from the University of Washington.  For the past five years she served as the Senior Director for Regulatory Science Policy at the American Chemistry Council (ACC).  For a decade prior to ACC, she was an analyst within the White House’s Office of Management and Budget (OMB).

Despite Dr. Beck’s compelling credentials, the appointment has displeased some stakeholders.  Dr. Beck has been a staunch critic of how EPA conducts chemical risk assessments and its Integrated Risk Information System (IRIS).  President Trump is proposing to eliminate IRIS; it thus is unlikely that Dr. Beck would revive or rely upon it in implementing the recently revised Toxic Substances Control Act (TSCA).  Less than two months ago, Dr. Beck provided testimony before the Senate Homeland Security and Government Affairs Subcommittee on Regulatory Affairs and Federal Management calling for changes to EPA’s risk assessment processes. 


 

By Christopher R. Bryant and Lynn L. Bergeson

A trio of recent internal U.S. Environmental Protection Agency (EPA) memoranda are providing insight into how EPA intends to implement President Trump’s review and potential pogrom of EPA regulations.  Virtually no program or regulation appears to be secure from the chopping block.  Many stakeholders in industry and other sectors may be alarmed to see programs that are of benefit to them assigned a slot in the guillotine.  Supporters of these programs, thus, would be wise to educate senior EPA officials to help them understand the benefits of those programs or regulations, and save them from elimination.  These internal memoranda demonstrate that the regulatory dismantling of EPA’s programs is being robustly carried out by EPA.  Those stakeholders who wish to save a program benefitting their interests should act immediately to educate EPA.  The three memoranda are:

  • March 21, 2017, Memorandum -- FY 2018 President’s Budget:  Major Policy and Final Resources Decisions;
  • March 24, 2017, Memorandum -- Executive Order 13777:  Enforcing the Regulatory Reform Agenda; and
  • March 24, 2017, Memorandum -- Improved Management of Regulatory Actions.

More information on these memoranda are available in our full memorandum Internal EPA Memoranda Outline Approach for Regulatory Deconstruction; Stakeholders Have the Opportunity to Seek to Protect Programs at Risk.

On Wednesday, April 12, 2017, from 11:00 a.m. to 12:30 p.m. (EDT), the American Bar Association’s Section of Environment, Energy, and Resources will be hosting a teleconference on this very topic, entitled “What Happens Now at EPA: Assessing the Executive Orders and Upcoming Regulatory Reform.”  Registration is available online.  


 

By Lynn L. Bergeson and Margaret R. Graham

On March 1, 2017, President Trump’s Executive Order (EO) 13777, Enforcing the Regulatory Reform Agenda, issued on February 24, 2017, was published in the Federal Register. 82 Fed. Reg. 12285.  This EO follows closely on the heels of his previous EO concerning government regulations (EO 13771), but is different in that it is intended to further and enforce President Trump’s EO as well as EO’s issued in prior administrations, instead of creating an entirely new set of directives.  EO 13777 directs the head of every agency (except those receiving a waiver) to designate an agency official as its Regulatory Reform Officer (RRO), who will “oversee the implementation of regulatory reform initiatives and policies to ensure that agencies effectively carry out regulatory reforms,” including the following initiatives and policies:

  • EO 13771 of January 30, 2017 (Reducing Regulation and Controlling Regulatory Costs), regarding offsetting the number and cost of new regulations;
  • EO 12866 of September 30, 1993 (Regulatory Planning and Review), as amended, regarding regulatory planning and review;
  • Section 6 of Executive Order 13563 of January 18, 2011 (Improving Regulation and Regulatory Review), regarding retrospective review; and
  • The termination, consistent with applicable law, of programs and activities that derive from or implement EOs, guidance documents, policy memoranda, rule interpretations, and similar documents, or relevant portions thereof, that have been rescinded.

The EO also establishes Regulatory Reform Task Forces (RRTF), consisting of the agency RROs and other designated agency officials, which will evaluate existing regulations and make recommendations to the agency head regarding their repeal, replacement, or modification. Each RRFT is tasked with identifying regulations that:

  • Eliminate jobs, or inhibit job creation;
  • Are outdated, unnecessary, or ineffective;
  • Impose costs that exceed benefits;
  • Create a serious inconsistency or otherwise interfere with regulatory reform initiatives and policies;
  • Are inconsistent with the requirements of Section 515 of the Treasury and General Government Appropriations Act of 2001, or the guidance issued pursuant to that provision, in particular those regulations that rely in whole or in part on data, information, or methods that are not publicly available or that are insufficiently transparent to meet the standard for reproducibility; or
  • Derive from or implement EO’s or other Presidential directives that have been subsequently rescinded or substantially modified.

Within 90 days of the EO, the RRTFs are also directed to provide a report to the agency head detailing the agency’s progress toward the following goals:

  • Improving implementation of regulatory reform initiatives and policies pursuant to Section 2 of this order; and
  • Identifying regulations for repeal, replacement, or modification.

Agencies that generally issue very few or no regulations may be eligible for a waiver, but the agency head must file a request with the Director of the Office of Management and Budget (OMB) for a waiver, and waivers can be revoked at any time.  More information on EO 13771 and OMB’s Guidance on same is available in our blog items EPA Issues Report to Congress on Implementing Amended TSCA Provisions, President Trump Issues Memo and Order on Reducing Federal Regulations and OMB Issues Guidance on Implementation of “One In, Two Out” Executive Order.         


 

Charles M. Auer and Oscar Hernandez, Ph.D. 

The U.S. Environmental Protection Agency’s (EPA) Office of Chemical Safety and Pollution Prevention (OCSPP) announced on its website on February 9, 2017, that it has established the Science Advisory Committee on Chemicals (SACC).  EPA was required to form the SACC within one year after enactment of the Frank R. Lautenberg Chemical Safety for the 21st Century Act.  The timing is interesting given that the deadline for public comments on the nominees was January 9, 2017, and the EPA Administrator appointed the 18 experts a mere eight days later on January 17 (a full five months ahead of the Congressional deadline), yet the announcement was held until its posting, over three weeks later, on February 9.  It thus is the case that the Obama Administration took very prompt steps to ensure that formation was completed during its period in office, perhaps in an effort to select a membership more to its liking and preferences. 

Based on our quick review of the affiliations of the 18 experts selected for the SACC, this seems to be the case.  Of the members, nine are associated with academic institutions, four with industry (with two from the pharmaceutical industry, one from a trade association (Toy Industry Association), and one a former Dow Chemical Company employee currently with Underwriters Laboratories), two with non-governmental institutions (American Cancer Society and the Humane Society), and three with federal and state government.  While there are no members hailing from an environmental advocacy group, similarly there are no members currently affiliated with a chemical company.

Regarding backgrounds, there is an emphasis on expertise associated with exposure and response research on susceptible populations, with nine members having explicit or related expertise on this topic, six of which are experts from academia.  In contrast, the panel does not seem to include a breadth of experience in exposure or risk assessment.  There are two members who previously chaired EPA’s Children’s Health Protection Advisory Committee, a group that in our view is better known for advocacy than rigorous science.    

As many readers will know, the chemical industry had offered critical comments on the slate of nominees that was announced by EPA in the December 9, 2016, Federal Register notice, but little consideration seems to have been given to those comments.  At a minimum, it seems self- evident that the current membership would not have been the selection made under the Trump Administration.  How all of this will play through under the new Trump Administration is yet to be seen but could get interesting.


 

By Lynn L. Bergeson, James V. Aidala, and Margaret R. Graham

On February 2, 2017, Dominic J. Mancini, Acting Administrator of the Office of Management and Budget’s (OMB) Office of Information and Regulatory Affairs (OIRA) issued interim guidance in a questions and answers format (Q&A) to implement President Trumps’s recent Executive Order (EO) regarding the costs of agency rulemaking, Memorandum:  Interim Guidance Implementing Section 2 of the Executive Order of January 30, 2017, Titled “Reducing Regulation and Controlling Regulatory Costs.”  More information on the EO is available in our blog item EPA Issues Report to Congress on Implementing Amended TSCA Provisions, President Trump Issues Memo and Order on Reducing Federal Regulations.

The OMB memorandum, issued for regulatory policy officers and executive departments and agencies and managing and executive directors of certain agencies and commissions, states that it explains three requirements specified in the EO:

  1. That every agency must identify two existing regulations to be repealed when they promulgate a new rulemaking;
  2. That there can be no incremental costs (no greater than zero) for any new regulations or for the repeal of any regulations for fiscal year (FY) 2017, unless otherwise required by law or consistent with advice provided in writing by the OMB Director; and
  3. In furtherance and in relation to # 1, if there are any new incremental costs, they will be offset by the elimination of the existing costs of at least two prior regulations.

Agencies planning to issue one or more significant regulatory action on or before September 30, 2017 (the end of FY 2017), are directed to provide:  (1) “[a] reasonable period of time before the agency issues that action, identify two existing regulatory actions the agency plans to eliminate or propose for elimination on or before September 30, 2017”; and (2) “[f]ully offset the total incremental cost of such new significant regulatory action as of September 30, 2017.” 

The memorandum’s Q&As cover 23 questions under three categories:  Coverage; Accounting Questions; and Process and Waiver Questions.  A few of the stated answers include:

  • The requirements only apply to significant regulatory actions issued between noon on January 20, 2017, and September 30, 2017;
  • New significant guidance or interpretive documents will be addressed on a case-by-case basis;
  • Regulatory actions issued before January 20 that are vacated or remanded by a court after that date will not qualify for savings, but regulatory actions overturned by subsequently enacted laws will qualify, on a general basis;
  • Costs should be measured as the opportunity cost to society, and be annualized as defined in and in accordance with OMB Circular A-4, a Memorandum on Regulatory Analysis issued in 2003;
  • Regulatory actions should be eliminated before or on the same schedule as the new regulatory action they offset (to the extent feasible);
  • Regulatory savings by a component in one agency can be used to offset a regulatory burden by a different component in that same agency; and
  • An agency that is not able to generate sufficient savings to account for its regulatory actions may submit a request to the OMB Director to request a transfer of savings from another agency. 

Commentary

This guidance about the meaning and implementation of the EO will provide greater direction to the broad goals of the Trump Administration’s desire to “reduce regulation.”  On its face, this “2 for 1” directive is a clear message to the agencies to reduce the regulatory burdens of their work, mostly regardless of the particular mission or underlying legislative requirements of the affected programs.

One obvious target of such effort is the U.S. Environmental Protection Agency (EPA), widely criticized during the Trump campaign and in the party platform as causing harm to the economy and hindering economic growth.  Like any broad campaign rhetoric that becomes more substantive as the specifics are rolled out, it is interesting to see what the possible exceptions are or to speculate where implementing the broad rhetorical goal will lead to unpredictable outcomes.  An example might be how reductions in record-keeping costs in one EPA program might offset new regulatory costs in another:  this ironically may give new internal value to some parts of EPA which have routinely been more heavy-handed in imposing regulatory requirements.  “Burdensome and unnecessary” requirements imposed by the enforcement office may be of help in the ability to propose new water program regulations -- or any number of odd fellow combinations may come to the surface. 

Other unanticipated consequences will also include those regulations that are actively supported by the affected regulated entity.  The pesticide industry is one example where a regulation establishing the allowable amount of a pesticide used on food -- the tolerance -- is essential for completing the registration process allowing the use of a new pesticide.  So this kind of regulation fosters innovation and economic return to the industry, and without this regulation, the product will not make it to market.  So the new Administration policies must allow for and distinguish between a sort of “good” regulation and a “bad” regulation -- all fitting within the broad rhetorical directive of a “2 for 1” approach to reducing regulatory burdens.


 

By Lynn L. Bergeson and Margaret R. Graham

In January, the U.S. Environmental Protection Agency (EPA) issued its initial report to Congress on its capacity to implement certain provisions of the amended Toxic Substances Control Act (TSCA).  The report, prepared by EPA’s Office of Chemical Safety and Pollution Prevention (OCSPP) for the Committees on Energy and Commerce, and appropriations of the U.S. House of Representatives, and the Committees on Environment and Public Works, and Appropriations of the U.S. Senate, was directed to be provided within six months of enactment under Section 26(m)(1) of amended TSCA.  In the report, EPA states that it anticipates “ramping up from 10 risk evaluations in FY2017 to 15 in FY2018, reaching 20 by the end of FY2019,” which is necessary “to accomplish an ongoing pace of at least 20 EPA-initiated risk evaluations underway” by the end of calendar year (CY) 2019.  EPA also provides a table on page five, Table 1: TSCA Risk Evaluations, Numbers Underway and Resources Estimates, which presents estimates for its annual costs, calculated by dividing the average lifecycle costs of the actions by the number of years the statute provides for the agency to complete those actions, and then multiplying the result by the numbers of actions required/anticipated to be underway each year.  The total annual costs range from $12.3 million for FY2017 to $35.8 million for FY2021.  The report refers to the rule to implement the fee collection provisions, stating it is “currently under development,” but does not provide any more details on when it will be issued.

On January 30, 2017, President Trump issued a Memorandum for the Heads of Executive Departments and Agencies in the Federal Register which directs federal agencies to “support the expansion of manufacturing in the United States through expedited reviews of and approvals for proposals to construct or expand manufacturing facilities and through reductions in regulatory burdens affecting domestic manufacturing.”  82 Fed. Reg. 8667.  The memo will require the Secretary of the Department of Commerce (DOC) to conduct outreach to stakeholders concerning the impact of federal regulations on domestic manufacturing and to solicit comments for 60 days concerning “Federal actions to streamline permitting and reduce regulatory burdens for domestic manufacturers.”  DOC is also instructed to coordinate this process with the Secretaries of EPA, the U.S. Department of Agriculture (USDA), the U.S. Department of Energy (DOE), and the Administrator of the Small Business Administration (SBA), among others, and within 60 days after the process is completed, to submit a report setting forth a plan to streamline federal permitting processes for domestic manufacturing and “to reduce regulatory burdens affecting domestic manufacturers,” identifying “priority actions as well as recommended deadlines for completing actions.”

Also on January 30, 2017, President Trump issued an Executive Order on reducing regulation and controlling regulatory costs casually referred to as the “one in, two out” order which states that when executive departments and agencies “publicly propos[e] for notice and comment or otherwise promulgat[e] a new regulation, [they] shall identify at least two existing regulations to be repealed.”  The order also states that no incremental costs can be accrued for any new regulations unless required by law or advised in writing by the Director of the Office of Management and Budget (OMB).  For any costs that are accrued, it is directed for them to be “offset by the elimination of existing costs associated with at least two prior regulations.”  In the order, the OMB Director is tasked with providing guidance on implementation, as well as identifying the total amount of costs allowed for each agency “in issuing new regulations and repealing regulations for the next fiscal year.”  The regulations exempt from this order are: regulations issued with respect to a military, national security, or foreign affairs function; regulations related to agency organization, management, or personnel; and other categories exempted by the OMB Director. 


 

By Lynn L. Bergeson, Carla N. Hutton, Charles M. Auer, and Oscar Hernandez, Ph.D.

On January 13, 2017, the U.S. Environmental Protection Agency (EPA) released a proposed rule that would establish a process for conducting risk evaluations to determine whether a chemical substance presents an unreasonable risk of injury to health or the environment, including an unreasonable risk to a potentially exposed or susceptible subpopulation, under the conditions of use.  The process would not consider costs or other nonrisk factors.  Risk evaluation is the second step, after prioritization, in a new process of existing chemical substance review and management established under recent amendments to the Toxic Substances Control Act (TSCA).  The proposed rule identifies the steps of a risk evaluation process, including scope, hazard assessment, exposure assessment, risk characterization, and finally a risk determination.  EPA proposes that this process be used for the first ten chemical substances to be evaluated from the 2014 update of the TSCA Work Plan for Chemical Assessments, chemical substances designated as High-Priority Substances during the prioritization process, and those chemical substances for which EPA has initiated a risk evaluation in response to manufacturer requests.  The proposed rule also includes the required “form and criteria” applicable to such manufacturer requests.  EPA posted a pre-publication version of the proposed rule on its website.  When the proposed rule is published in the Federal Register, it will begin a 60-day comment period.  This is the third foundational rule released during the week of January 9, 2017.  An in-depth memorandum on the proposed risk evaluation process, as well as memoranda regarding EPA’s proposed requirements for TSCA Inventory notification and prioritization process for reviewing existing chemicals, will be available on our website under the key phrase TSCA.


 

By Lynn L. Bergeson, Carla N. HuttonCharles M. Auer, and Oscar Hernandez, Ph.D.

The U.S. Environmental Protection Agency (EPA) is scheduled to publish a proposed rule in the January 17, 2017, Federal Register that would establish a risk-based screening process and criteria that EPA will use to identify chemical substances as either High-Priority Substances for risk evaluation, or Low-Priority Substances for which risk evaluations are not warranted at the time.  The pre-publication version of the proposed rule describes the processes for identifying potential candidates for prioritization, selecting a candidate, screening that candidate against certain criteria, formally initiating the prioritization process, providing opportunities for public comment, and proposing and finalizing designations of priority.  EPA notes that prioritization is the initial step in a new process of existing chemical substance review and risk management activity established under recent amendments to the Toxic Substances Control Act (TSCA).  Publication of the notice will begin a 60-day comment period.  More information on the final rule will be available in our forthcoming memorandum, which will be available on our website under the key phrase TSCA.


 
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