&EPA
United States
Environmental Protection
Agency
Office of Pesticides and
Toxic Substances
Washington DC 20460
EPA 560/12-80-006
Toxic Substances
Support Document
Regulatory Analysis:
Premanufacture Notification
and Review Procedures
Proposed Rule, Section 5
Toxic Substances Control Act
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EPA - 560/12 80-006
REGULATORY ANALYSIS
PROPOSED PREMANUFACTURE NOTIFICATION
AND REVIEW PROCEDURES
TOXIC SUBSTANCES CONTROL ACT
SECTION 5
OCTOBER 1980
CHEMICAL CONTROL DIVISION
OFFICE OF TOXIC SUBSTANCES
U.S. ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
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PREFACE
Executive Order 12044, "Improving Government Regulations,"
directs each executive agency to adopt procedures to improve
existing and future regulations. An important provision of this
order is that agencies consider and analyze meaningful
alternatives before regulations are issued. For all significant
regulations with major economic consequences, agencies must
conduct a regulatory analysis, in which they carefully examine
alternative approaches. The U.S. Environmental Protection Agency
(EPA) described its plan for implementing the Executive Order,
and listed criteria for conducting regulatory analyses, in the
FEDERAL REGISTER of May 29, 1979 (44 FR 30988).
In this document, EPA presents a draft Regulatory Analysis
of proposed rules implementing section 5 of the Toxic Substances
Control Act (TSCA). Section 5 of TSCA requires manufacturers and
importers to notify EPA 90 days before they manufacture or import
a new chemical substance for commercial purposes. Section 5 also
requires persons to notify EPA 90 days before they manufacture,
import, or process a chemical substance .for a significant new
use, as determined by rule. EPA proposed regulations to
implement section 5 requirements, and to establish premanufacture
notice and review procedures, in the FEDERAL REGISTER of January
10, 1979 (44 FR 2242), October 16, 1979 (44 FR 59764), and August
15, 1980 (45 FR 54642). These rules will have an impact on major
segments of the chemical industry, and they will affect the
introduction of new chemical substances into commerce.
Therefore, EPA has determined that the rules meet the criteria of
its own guidelines and of Executive Order 12044 for a regulatory
analysis.
The draft Regulatory Analysis examines the major
alternatives that EPA considered in developing section 5 rules
and explains the rationale for EPA's choice among the
alternatives. EPA has based the analysis in part on the work of
two contractors, Arthur D. Little, Inc. (ADL) and ICF
Incorporated (ICF), which prepared economic impact analyses of
major parts of the proposed rules. The studies by Arthur D.
Little, "Impact of TSCA Proposed Premanufacturing Notification
Requirements" (December 1978) and "Estimated Costs for
Preparation and Submission of Reproposed Premanufacture Notice
Form" (September 1979) have already been published and are
available from the Industry Assistance Office of the EPA Office
of Toxic Substances. EPA published a summary of ICF's proposed
methodology in the FEDERAL REGISTER of June 10, 1980 (45 FR
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39450), and it is now publishing the IGF report, "Economic Impact
Analysis of Proposed Section 5 Notice Requirements," together
with the draft Regulatory Analysis. The proposed Economic Impact
Analysis and additional copies of this draft Regulatory Analysis
are available from the Industry Assistance Office.
EPA encourages interested members of the public to submit
written comments on the draft Regulatory Analysis and the
proposed Economic Impact Analysis. EPA will consider these
comments when preparing the final versions of these documents and
the final section 5 rules. The final analyses will be published
when the section 5 rules are promulgated early in 1981. Comments
should bear the identifying notation OPTS-50018 and be addressed
to: Document Control Officer (TS-793), Office of Toxic
Substances, Room E-477, Environmental Protection Agency, 401 M
Street SW, Washington, DC 20460. For further information,
contact:
John B. Ritch, Jr., Director,
Industry Assistance Office (TS-799),
Office of Toxic Substances,
Environmental Protection Agency,
401 M Street SW,
Washington, DC 20460,
Toll free: 800-424-9065,
In Washington: 554-1404.
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TABLE OF CONTENTS
Preface iii
I. Introduction 1
II. Major Issues 11
A. Reporting Requirements 11
B. Confidentiality 21
C. Incomplete Submissions 28
D. Customer Contact 32
E. Importer Definition 36
F. Importer Contact of Foreign
Manufacturers and Suppliers 41
G. Exporters 45
H. Supplemental Reporting 48
I. Processor Notification 53
J. Possession or Control 61
III. Comprehensive Program Options 65
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I. INTRODUCTION
A. Purpose of TSCA
The Toxic Substances Control Act of 1976 gives the
Environmental Protection Agency broad authority to regulate the
manufacture, processing, distribution in commerce, use, and
disposal of chemical substances. In doing so, it fills a major
gap in U.S. environmental and toxic-chemical regulation.
Previous laws limited Federal regulation of hazardous substances
to particular uses (for example, as drugs, pesticides, or
consumer products) or to particular conditions of exposure (for
example, exposure to hazardous substances in the workplace or to
air and water pollutants). TSCA, however.- makes possible the
regulation of toxic substances in all phases of their commercial
life cycle. It gives EPA the authority to regulate certain
hazards not readily controlled by other laws, and it enables EPA
to control hazardous substances early in their life cycle.
In TSCA, Congress took a preventive approach to the
regulation of chemical substances. v. A major focus of the Act is
to prevent harm to health and the environment, rather than to
address hazardous situations only after the damage has been
done. This approach not only protects humans and the environment
more effectively than an approach directed only at existing
hazards, but it allows for more efficient and economical
regulation. If hazardous substances are controlled early in
commercial development, or before they enter commerce, the direct
cost to the regulated industry, to labor.- and to the economy in
general will be low. This preventive approach is embodied in
particular in section 5 of the Act, which gives EPA the authority
to review risks associated with new chemical substances before
they enter commerce and risks associated with new uses of
existing chemical substances that the Agency has determined to be
"significant new uses."
B. Scope of Section 5
Section 5 of TSCA requires chemical manufacturers and
importers to notify EPA at least 90 days before manufacturing or
importing a new chemical substance for a commercial purpose. New
chemical substances are those that are not on the TSCA Chemical
Substance Inventory, first published on June 1, 1979, as the
Initial Inventory, and supplemented on July 30, 1980, by a
Revised Inventory. In addition, under regulations proposed on
August 15, 1980 (45 FR 54642), persons would be required under
section 5 to notify EPA if they intended for the first time to
process substances for TSCA commercial purposes that were
manufactured or imported for purposes exempt from TSCA reporting.
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Once EPA receives a section 5 notice, the Agency has 90 days
to review it, unless for good cause it extends the review period
under section 5(c) for up to an additional 90 days. During the
review period, EPA may act under section 5(e) or 5(f) to regulate
the production or use of the new chemical substance. Section
5(e) authorizes EPA to prohibit or limit the manufacture,
processing, distribution in commerce, use, or disposal of a new
chemical substance until the submitter provides sufficient
information for an evaluation of its health and environmental
effects. The Agency can take this action if it determines that
the available information is insufficient fox a reasoned
evaluation and either (1) the substance may present an
unreasonable risk of injury to health or the environment, or (2)
the substance will be produced in substantial quantities and
there may be significant or substantial exposure to the
substance. Under section 5(f), EPA may regulate a new chemical
substance if it finds that there is a reasonable basis to
conclude that the manufacture, processing, distribution in
commerce, use, or disposal of the substance will present an
unreasonable risk of injury to health or the environment.
If EPA or a Federal court has not banned manufacture,
processing, or import of the chemical substance during the review
period, these activites may begin, subject to limits or testing
requirements imposed during the review period. At that time, the
substance is added to the Inventory. Thereafter.- any person may
manufacture or import the substance without giving notice to the
Agency.
Premanufacture notification requirements went into effect on
July 1, 1979, 30 days after the publication of the Initial
Inventory. An Interim Policy, published by EPA in the FEDERAL
REGISTER of May 15, 1979 (44 FR 28558) governs the submission and
review of notices until final rules are issued. EPA proposed
rules and notice forms to implement a premanufacture notification
and review program in the FEDERAL REGISTER of January 10, 1979
(44 FR 2242), and reproposed the rules and forms in part in the
FEDERAL REGISTER of October 16, 1979 (44 FR 59764). EPA has also
proposed processor notification rules in the FEDERAL REGISTER of
August 15, 1980 (45 FR 54642). These rules would require that
persons notify EPA 90 days before they process substances which
were previously exempt from TSCA reporting.
The draft Regulatory Analysis discusses the major issues
that arose in developing these proposals, the alternative
approaches to their resolution that EPA considered, and the
rationale for EPA's choice among the alternatives. The proposed
rules will be promulgated early in 1981. The final Regulatory
Analysis will be published at the same time.
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C. Section 5 Rulemaking
1. Possible Components of a Section 5 Rulemaking
In proposing these rules, EPA considered the possibility of
a broad rulemaking fully implementing section 5. Such a
rulemaking could include: (1) Clarification of the nature and
scope of reporting obligations, (2) Instructions on what
information must be submitted in section 5 notices, (3) An
explanation of Agency procedures for reviewing and acting on
notices, (4) Procedures for exempting certain chemical substances
from all or part of section 5 requirements, and (5) Procedures
for following up new chemical substances after they have entered
commercial production. The rules proposed on January 10, 1979,
October 16, 1979, and August 15, 1980, address the first three
elements; the other two elements will be the subject of later
rulemakings.
In addition, the premanufacture notification program could
include guidance for premanufacture testing, discussed in the
FEDERAL REGISTER notice "Discussion of Premanufacture Testing
Policy and Technical Issues: Request for Comment," published on
March 16, 1979 (44 FR 16239). This guidance would not provide
mandatory requirements for premanufacture testing.
a. Clarification of reporting obligations. A section 5
rulemaking might clarify the nature and scope of the notice
obligation, giving submitters a clear understanding of the extent
of their responsibilities under section 5. Simply citing the
language of the statue in many cases would not provide clear
guidance. Under the Interim Policy of May 15, 1979, which
generally uses this approach, EPA has often been required to
answer industry questions on notice requirements and to clarify
its interpretation of the Act. In a more extensive rulemaking,
EPA could explain in detail its interpretation of the Act instead
of responding to individual inquiries. In addition, the rules
could explain the scope of reporting obligations. For example,
they could specify who should submit a notice as an "importer,"
and they could define the extent to which submitters would be
obligated to ask customers for information on processing, distri-
bution in commerce, use, or disposal of new chemical substances.
In this way, the rules would promote a consistent EPA approach
and reduce uncertainty. This was the approach that EPA took in
the January, October, and August proposals.
b. Information requirements. Section 5(d) of TSCA
requires that notices include test data in the possession or
control ot the submitter, and, insotar as it is known to or
reasonably ascertainable by the submitter, information on
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chemicaSL identity; proposed categories of use; proposed volume of
production; byproducts resulting from manufacture, processing,
use, or disposal; workplace exposures; and manner or method of
disposal. In a section 5 rulemaking, EPA could define
information requirements by citing the relevant sections of the
Act; it could provide a narrative explanation of these
requirements and possibly require other information related to
exposure throughout the life cycle of the substance; or it could
provide a notice form to clarify and provide a standard format
for the information described in the narrative explanation.
Under the Interim Policy, EPA has found that the first
alternative does not provide adequate guidance to submitters, and
in many cases this approach does not give the Agency enough
information to evaluate possible risks associated with new
chemical substances. In the second alternative, the Agency could
clarify such terms as "test data" and "disposal," and it could
specify the submission of other information necessary for an
evaluation for example, information on exposure associated
with consumer uses. The Agency could also develop notice forms
to accompany the rule. These forms would allow clearer
instructions on what information the submitter would have to
include in the notice, and they would greatly facilitate EPA's
review of notices within the short time allowed by the Act. EPA
proposed such forms in the January and October rules.
c. Explanation of Agency procedures. The rules could
describe the procedures by which the Agency would review, and
possibly act on, notices. in this way, the rules would provide
submitters with a clear idea of what they could expect, and they
would eliminate some of the uncertainty surrounding the
submission of a notice. The rules could establish policy and
procedures for handling confidential information; for processing
and reviewing notices, including a policy on incomplete
submissions; tor securing additional data from the submitter or
other persons during the notice period; and ror using the
regulatory authorities ot sections Me; and 5(±). Again, this is
the approach that EPA has adopted in its proposed rules.
d. exemption policy. The rule could establish a
comprehensive exemption policy under section 5(h), including
exemptions for test marketing, for research and development, and
for substances determined not to present an unreasonable risK ot
injury to health or the environment. The January proposal
discusses the research and development exemption under section
5(h)(3), which exempts persons who manufacture or process a new
chemical substance solely tor research and development "in small
quantities." But it does not specifically define the terms ot
the exemption, including the meaning of "small quantities." The
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Agency may in future rulemakings establish numerical or other
more precise definitions of small quantities for specific
substances or groups of substances.
The proposed rule also discusses test marketing exemptions,
which are granted upon a showing that the test marketing of the
substance will not present an unreasonable risk of injury to
health or the environment. The proposed rule, however, does not
fully define the requirements for a test marketing exemption, nor
does it specify the procedures by which EPA will review test
marketing exemption applications. Under the Interim Policy, EPA
has found that the absence of a framework for test marketing
exemptions can impose a burden on the submitter. In a future
rulemaking, EPA may clarify the test marketing exemption and
possibly develop a test marketing application form.
EPA also has the authority to develop an exemption policy
under section 5(h)(4). This section allows the Agency, upon
application and by rule, to exempt manufacturers or importers
from all or part of the section 5 requirements if it determines
that the manufacture, processing, distribution in commerce, use,
and disposal of a new chemical substance will not present an
unreasonable risk to health or the environment. In the future,
EPA may propose procedures for exempting substances under this
section.
e. New-chemical followup program. A section 5
rulemaking could establish a new-chemical followup program. Such
a program would allow EPA to obtain information on selected new
chemical substances after they have entered commercial
production, and to reassess certain new chemical substances
before they are produced for new uses that may significantly
increase their risk to human health or the environment. EPA
could establish the program under two TSCA authorities: the
section 8(a) reporting authority and the section 5(a)(2)
significant new use authority.
Although the proposed rules do not implement followup
procedures, EPA will soon propose significant new use rules for
specific new chemical substances. These proposed rules will
require persons to notify EPA 90 days before they manufacture or
process the substances subject to the rules for a significant new
use, as defined by the rules. EPA is also developing a model
significant new use rule and a model section 8(a) reporting rule
that can be applied to specific new substances of concern. The
Agency will publish an Advance Notice of Proposed Rulemaking for
these model rules in the near future. The model rules will
include notification and review procedures, information
requirements, and definitions of possible significant new uses.
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EPA will apply these model rules to specific new chemical
substances in abbreviated rulemakings. The Agency may also apply
the model significant new use rule to existing chemicals as an
interim measure before it develops a general framework for using
the significant new use authority for existing chemicals.
f. Testing guidelines. As discussed in the January
proposal and the Discussion of Premanufacture Testing and Policy
Issues of March 16, 1979, EPA could publish premanufacture
testing guidance. Such guidance would recommend the types of
data generally needed for premanufacture risk assessment and
appropriate test methods for developing these data. EPA has
decided to publish premanufacture testing guidance consistent
with the premarket "base set" of data developed by the
Organization for Economic Cooperation and Development (OECD).
This testing guidance will be published in the FEDERAL REGISTER
in the near future.
2. Components of Proposed Rulemaking
The section 5 rules proposed on January 10, 1979, October
16, 1979, and August 15, 1980, are limited in scope; they specify
information requirements, provide notice forms, clarify the
nature of the reporting obligation, and explain Agency procedures
for reviewing and acting on notices. EPA has not proposed a
comprehensive exemption policy, or a new-chemical followup
program. These will be the subject of later rulemakings. This
limited approach to section 5 rulemaking will ensure an effective
premanufacture review program, without delaying the promulgation
of rules until all issues surrounding possible section 5
rulemakings have been resolved.
The major provisions of the proposed approach are summarized
below. EPA is considering alternatives to each of these
provisions; the alternatives, and EPA's rationale for its
preferred approach, are discussed in this draft Regulatory
Analysis.
a. Reporting requirements. EPA prefers the approach of
the October 16 reproposal. In this approach, submitters would be
required to complete a limited form, asking for information on
chemical identity, manufacturing process, occupational exposure,
environmental release and disposal, and commercial user and
consumer exposure. They would also submit all test data in their
possession or control and a description of any other data known
to or reasonably ascertainable by them. EPA would select
substances of concern for detailed review on the basis of
information in the notices. For the few substances subject to
such a review, EPA could require additional data from the
submitter or certain other persons under the supplemental
reporting authority described below.
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b. Confidentiality. There are four issues involving
confidentiality: (1) How the submitter claims information
confidential; (2) When he must substantiate his claims; (3) How
EPA will handle confidential information in public notices; and
(4) When EPA will disclose confidential chemical identity as data
underlying a health and safety study.
In the preferred approach, submitters would assert claims of
confidentiality by linking the information claimed confidential
to certain categories of information established by EPA. The
submitter would be required to substantiate all confidentiality
claims at the time the notice was submitted. Confidential
information would be masked by generic names or descriptions in
section 5(d)(2) and other public notices. Confidential chemical
identity that is underlying data to a health and safety study
would not be disclosed until commencement of manufacture. The
Agency, however, is also considering the possibility of
protecting chemical identity for a set period after manufacturing
begins.
c. Incomplete submissions. On January 10, EPA proposed
an approach to incomplete submissions that divided deficiencies
into major and minor categories. If the deficiency was major
(for example, failure to supply known or reasonably ascertainable
information required by the form), EPA would not review the
submission, and the notice period would not start. If the
deficiency was minor (for example, typographical errors that make
answers to any questions unclear or ambiguous), the notice period
would be suspended until the deficiency was corrected. If the
submitter corrected the deficiency within 30 days, EPA would
start the review clock at the point where it stopped. If the
deficiency was not corrected, EPA could return the notice as
incomplete and stop the review. EPA is also considering a
narrower set of criteria for determining that a notice does not
meet the requirements of the Act. Under this alternative, EPA
would not stop the review period if it found minor deficiencies
in a notice. The January 10 proposal did not include appeal
procedures for submitters; the Agency, however, is considering
such procedures for the final rule.
d., Customer contact. Frequently, customers will have
information on the processing, uses, and disposal of new chemical
substances that is not known to the notice submitter. This
information might be necessary for EPA's evaluation. To secure
the information, EPA prefers an alternative approach discussed in
the Preamble to the October 16, 1979, reproposal. As described
in the Preamble, this approach would require the submitter to
indicate in the notice the number of customers who had made a
firm commitment to purchase the substance for a use unknown to
him. The submitter would also be required to estimate the
percentage of production volume that these customers would
purchase in the first three years of manufacture.
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e. Definition of importer. Importers as well as
manufacturers are subject to the notice requirements of section
5. EPA prefers a broad definition of importer, proposed on
January 10, 1979, which includes all possible parties in an
import transaction. On September 23, 1980, EPA published a
clarification of this definition, which would require that the
"principal importer" submit the notice (45 FR 63806).
f. Importer contact of foreign manufacturers/suppliers
EPA proposes that importers be required to contact foreign
manufacturers and suppliers, who would be asked to submit a
Foreign Manufacturers/Suppliers Form. This approach was
originally proposed on January 10. EPA is now considering an
abbreviated form, which might be modeled on the October 16 form,
or which might be still further reduced so that it asks only for
health and safety data and risk assessments.
g. Exporters. On January 10 and October 16, EPA
proposed that manufacturers of chemicals solely for export be
required to submit a section 5 notice. The notices would not
include information on uses and exposure occurring outside of the
United States.
h. Supplemental reporting. In certain cases, EPA may
require additional information from the submitter, from potential
processors, or from other persons during the review period in
order to complete its evaluation. EPA prefers the approach to
supplemental reporting of the October 16 reproposal. In this
approach, the Agency could require, under a section 8(a) or 8(d)
letter-writing authority, that certain persons during the review
period provide specified types of information necessary for
assessing the potential risk of a new chemical substance. The
submitter of the notice, processors, manufacturers or importers
of reactants of unknown composition, and persons who have
relevant health and safety studies could be subject to
supplemental reporting under this authority. Persons could
appeal the reporting requirement to EPA, and the Agency could
only exercise the supplemental reporting authority durihg the
review period.
i. Processor reporting. In EPA's preferred approach,
proposed on August 15, 1980, persons would be required to notify
the Agency 90 days before they processed substances which were
previously exempt from TSCA reporting. Specifically, this
requirement would apply to processors of chemical substances
manufactured without a commercial purpose (byproducts);
substances manufactured or imported for research and development
or test marketing; substances manufactured or imported as
pesticides, tobacco or tobacco products, nuclear materials,
firearms or ammunition, foods, food additives, drugs, or
cosmetics; and substances manufactured before January 1, 1975,
and not processed after that date or reported for the TSCA
Inventory.
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j. Possession or control. Section 5 requires that
notice submitters include in their notices test data that was in
their "possession or control." In the January 10 proposal, EPA.
defined "possession or control" to mean in the possession or
control of (1) the submitter, or (2) any subsidiary, parent
company, or subsidiary of the parent company, if the subsidiary,
parent company, or subsidiary of the parent company was involved
in commercializing the new chemical substance. Information is in
the possession or control of a company if it is in company files,
commercially available data bases to which the company has
purchased access, or files maintained by employees associated
with the commercial development of the new chemical substance.
3. Economic Impact of Proposed Rules
To evaluate the potential economic impact of proposed
section 5 notice requirements, EPA requested that ICF
Incorporated analyze the various provisions of the proposed rules
and estimate their potential effects on the chemical industry.
The ICF report, "Economic Impact Analysis of Proposed Section 5
Notice Requirements," served in part as a basis for this draft
Regulatory Analysis. The Economic Impact Analysis is being
published along with the Regulatory Analysis.
The ICF analysis incorporates the estimated costs for
preparation of the October 16 proposed form originally developed
by Arthur D. Little ("Estimated Costs for Preparation and
Submission of Reproposed Prernanufacture Notice Form, " September
1979). The cost of completing the mandatory sections of the
forms would range from $1,000 to $8,900 and costs for asserting
and substantiating confidentiality from $900 to $6,400 (pp. 30,
33). However, ICF concluded that these costs are not the major
source of the economic impact; rather, the indirect costs
associated with uncertainty would generally outweigh the direct
costs of complying with notice requirements. These indirect
costs would reflect uncertainty about direct costs, possible
trade secret disclosure, and possible restrictions on the use of
new chemical substances.
According to the ICF analysis, section 5 requirements are
likely to cause a short-run decrease in the number of new
chemicals introduced as chemical companies shift their activities
into "safe" chemicals. There may be a disproportionate burden
for smaller companies, both because the volume of their new-
chemical sales is lower and therefore produces fewer profits over
which to absorb notice filing costs and because they may lack the
legal and technical expertise to comply efficiently with section
5 requirements (pp. x, 98-100). The study concludes that the
notice requirements will have the greatest effect on innovative
segments of the chemical industry; products most likely to be
affected are catalysts, surfactants, cyclic intermediates,
rubber-processing chemicals, plasticizers, miscellaneous
synthetic organic chemicals, adhesives and sealants,
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miscellaneous industrial inorganic chemicals, and plastics and
resins (p. ix). Current data, however, do not allow quantitative
estimates to be made of the effects of section 5 requirements on
businesses of different sizes, different segments of the chemical
industry, or the general rate of chemical innovation. According
to the IGF analysis, it is doubtful that, even if the data were
available, accurate quantitative predictions could be made.
4. Benefits of Proposed Approach
The proposed section 5 rules will establish clear, effective
notification requirements and review procedures that will promote
an efficient EPA. review of new chemical substances. 3y
presenting information in a standard format, the forms will allow
EPA to determine rapidly whether a notice meets the statutory
standard, to decide whether a substance requires detailed review
or whether more information is needed for an adequate review,
and, if necessary, to support regulatory action under sections
5(e) and 5(f). Without these rules, it would be difficult for
EPA to conduct adequate reviews within the 90-day, or at most
180-day, review period.
In addition, the rules will give notice submitters a clear
understanding of EPA's interpretation of key provisions of
section 5 and of Agency notice review procedures. In doing so,
they will greatly reduce uncertainty about the scope and nature
of the Agency's prernanufacture review program. For example, by
defining such terms as "possession or control" and "importer,"
the rules will indicate who must report and how extensive the
notices must be. In addition, the notice forms will lighten the
burden for industry in the long run, once submitters have become
familiar with the format and questions. Companies will not have
to develop their own formats, and they will know exactly what
information they must supply. As a result, submitters will be
able to avoid costly delays due to submitting insufficient
information.
Above all, the proposed rules will serve a fundamental
purpose of TSCA and of section 5 to protect humans and the
environment froia unreasonable risks associated with new chemical
substances. The rules will allow EPA to conduct prompt reviews
of the hundreds of notices that it will receive every year, and
when necessary to take regulatory action against substances of
concern before they have harmed humans or the environment. The
proposed approach, which will give EPA a minimum of information
necessary for an adequate review, is the most consistent with the
statute and with the needs of the Agency, the chemical industry,
and the public.
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II. MAJOR ISSUES
A. Reporting Requirements
Section 5(a) of TSCA requires manufacturers and importers to
notify EPA 90 days before they manufacture or import a new
chemical substance for a commercial purpose. In addition, EPA
has proposed that certain processors be subject to section 5
notice requirements (see Section II(I), Processor Notification).
Section 5(d) of TSCA requires that notices submitted under
5(a) include, insofar as it is known to or reasonably
ascertainable by the submitter, certain information on chemical
identity, use, and exposure listed in section 8(a)(2) and any
test data in the submitter's possession or control. The
submitter must also include a description of any other data
concerning environmental and health effects known to or
reasonably ascertainable by him. Section 5 notices, supplemented
by any other information obtained by EPA, form the basis of EPA's
review of new chemical substances. Therefore, they should
contain enough information for EPA to make a reasoned evaluation
of risks associated with a substance, or to determine that more
information is required for such an evaluation.
EPA has considered four approaches to implementing section 5
reporting requirements. The approaches differ in cost to the
submitter and EPA and in level of detail required in a notice.
They are presented below in order of increasing guidance to the
submitter and increasing amount of information that EPA is likely
to receive in the initial notice. In developing its proposed
approach, EPA sought a process that would permit effective,
consistent review and provide a basis for further regulation,
without unduly burdening either the Agency or the submitter. For
this reason, EPA prefers Option 3, the October 16 reproposal.
1. Options Considered
Option 1 "Do Nothing"
TSCA does not require EPA to issue premanufacturing
notification rules. EPA could consider section 5 to be self-
implementing and publish no guidelines or rules implementing the
section. The Act provides some direction on the scope and
applicability of the notice requirements, the information that
must be included in the notices, the length of the notice review
period, and the Agency's authority to regulate new substances.
Under the "do-nothing" option, the argument would be that the Act
is self-explanatory and that its instructions are sufficient to
allow the mandated review.
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Option 2 Minimum Guidance
Under Option 2, EPA would provide minimum guidance to
establish general notification procedures and to clarify its
interpretation of major provisions of the Act. The guidance
would define section 5's applicability to importers, exporters,
and processors; define the content of notices that met
requirements of the statute; and outline procedures for handling
confidential material. EPA would also specify categories of
information it would require in the notices. Submitters,
however, would have flexibility in choosing the format and level
of detail of submissions so long as they were consistent with the
Agency's general guidance. EPA partially adopted this approach
in its Interim Policy, published May 15, 1979 (44 FR 28564). In
the Economic Impact Analysis, the cost of submitting a notice
under a minimum guidance policy in the long run is estimated to
range from $1,011 to $7.486.
Option 3 -- Limited Form
Under this option, EPA would establish notification and
review procedures, and it would require submitters to complete a
limited notice form. The form would not include all the
information that EPA could require under the Act, but only
information sufficient in most cases for an initial review of a
new chemical substance. The form, however, would also include a
section of optional questions. During the review, EPA would
identify substances for more detailed evaluation and possible
regulatory action. If EPA needed more information from the
submitter or from certain other persons for this detailed
evaluation, it could obtain the information through its proposed
supplemental reporting authority (see Section II(H), Supplemental
Reporting). Instructions to the form would clarify information
requirements and certain important provisions of the Act.
Submitters could include in their notices additional information
that they thought the Agency should consider in its review.
EPA proposed a limited form in the October 16, 1979,
reproposal. Arthur D. Little (ADL) estimated that the costs of
completing the mandatory sections of this form would range from
$1,155 to $8,925. In commenting on the January 10 proposal, the
Chemical Manufacturers Association (CMA) recommended an even more
limited form. ADL estimated,that completing the mandatory
sections of the CMA form would cost from $955 to $5,550.
Option 4 - Detailed Form
In this approach, proposed January 10, 1979, EPA would
specify notification and review procedures and require the
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submission of a form. In the January 10 form, the Agency
attempts to collect information in sufficient detail for further
regulatory action under sections 5(e) or 5(f). The detailed form
also contains an optional section. Under this approach, the
Agency would specify which optional data would be most useful for
its review. Detailed instructions would accompany the form. ADL
estimated that the cost to complete mandatory sections of the
January 10 form would range from $3,740 to $22,160.
The estimated costs of submitting mandatory information
under Options 2, 3, and 4 are summarized in Table II-l.
TABLE II-l
ESTIMATED COSTS OF FULFILLING MANDATORY REPORTING REQUIREMENTS
Option Cost
Option 2: Minimum Guidance3 $ 1,011- 7,486
Option 3:
CMA Formb 955- 5,550
October 16, 1979 reproposal" 1,155- 8,925
Option 4:
January 10, 1979 proposal0 3,740-22,160
aICF, Economic Impact Analysis, Appendix A
bADL, Estimated Costs of Reproposed Premanufacture Notice Form
CADL, Impact of TSCA Proposed Premanufacturing Notification
Requi rements
2. Discussion
If the Agency adopted Option 1, it would not publish a
clarification of the Act or regulations to implement section 5.
Each notice submitter would interpret the terms of the Act.
Under this option, the initial burden on submitters might be low,
because they could notify EPA in the manner they considered least
costly and most expedient. Because of the uncertainty associated
with this approach, however, the burden on EPA and industry might
be great in the long run.
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The disadvantages of this approach, and of Option 2, have
become clear during the operation of the premanufacture review
program since it began in July 1979. The program has been
operating under the Interim Policy of May 15, 1979. EPA
recommends the use of the reproposed notice form, but does not
make it mandatory. Under this policy, EPA has received more than
200 notices. From these notices, the Agency has concluded that
the language of the Act by itself does not provide sufficient
guidance and that submitters often do not provide known or
reasonably ascertainable information necessary for an adequate
review. In a few cases, EPA has returned submissions as
incomplete, a time-consuming action for both the submitter and
the Agency- The resulting delay may cost the submitter his
competitive advantage since the review period does not begin
until a complete notice is submitted. In many other cases, EPA
has found it necessary to go back to the submitter for
information that should have been included in the initial
notice. In such cases, EPA may have to extend the 90-day review
period under section 5(c) to have enough time for an adequate
review. Even when requests for more information do not lead to
an extension of the review period, they require considerable
Agency and industry resources.
In addition, the uncertainty that accompanies Option 1
imposes a substantial burden on the submitter. Without
regulations implementing section 5, industry would have no
guidance on the nature or scope of EPA's premanufacture review
procedures. Submitters could learn only through experience what
data EPA considered necessary for its review; how the Agency
interpreted key provisions of the Act; and when it might seek
additional information during the review period, either
voluntarily or under section 8 or 5(e).
The cost of Option 1 is difficult to estimate, because the
information submitted would depend on the submitter's
interpretation of the requirements of the Act, and on the
submitter's estimates about what information EPA would consider
acceptable. The initial costs might be low, but in this case the
likelihood of delay might be great. The cost of delay, and of
the general uncertainty associated with this option, could slow
new chemical innovation. The economic well-being of submitters,
the growth of the industry, and its competitiveness with foreign
industry might be affected.
To avoid the problems of Option 1, which depends on the
submitter's interpretation of the Act, the Agency could publish
minimum guidance, as in Option 2. More appropriate information
might be submitted under this approach, improving the quality of
the Agency's review, reducing the number of incomplete notices,
and reducing the number and frequency of EPA requests for
additional information. Reporting guidance for submitters would
continue to be flexible. This approach would eliminate some of
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the uncertainty under Option.1 and thus reduce delay and other
costs. In many respects, this approach was adopted in the
Agency's Interim Policy-
Despite the advantages of this approach, EPA has found that
minimum guidance does not eliminate inconsistent presentation of
data. Under the Interim Policy, many submitters have chosen to
use the October 16 form, in full or in part. Where they have
not, the notices are submitted in different formats. The Agency
must then expend limited resources organizing information for its
review. These resources would be better spent on the review
itself. Given the statutory time constraints, the quality of
review may suffer. Inconsistent format and content also make it
difficult for the Agency to develop a data base, which could be
used in the future analysis of individual substances and in
assessing the program as a whole.
To reduce the burden on the Agency and to ensure that it
receives the data needed for its review, EPA could develop a
notice form together with an instructions manual. Options 3 and
4 take this approach. The forms and instructions would specify
requirements more exactly than minimum narrative guidance could,
and they eliminate much of the uncertainty of the other
options. Consistent format allows the submitter to establish
information gathering and formatting procedures to minimize
cost. In addition, EPA has found under the Interim Policy that
the use of the October 16 form expedites and promotes the
consistency of Agency review. The frequency of delays because of
incomplete submissions is minimized, and additional information
requests during the review period occur less often and are more
focused.
For these reasons, EPA prefers the use of forms, as in
Options 3 and 4. Forms can vary in the amount and level of
detail of required information and in the type of optional
material. In general, the more data the Agency receives, the
higher the quality of its review, but the greater the initial
cost to the submitter. At the same time, the more detailed the
form, the less likely it is that EPA will have to go back to the
submitter for further information, but the more likely it is that
the submitter will provide EPA with information not needed for
its review. In developing a form, EPA has attempted to balance
its needs for conducting an adequate review against the burden to
submitters of reporting unnecessary information.
A notice form could require information sufficient for a
detailed review and possibly for regulatory action under section
5(e) or 5(f), it could require information sufficient for only an
initial screening, or it could simply organize information
explicitly required by the Act. In January 10, 1979 (Option 4),
EPA took the first of these three approaches; in October 16, 1979
(Option 3), it took the second.
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Proposed January 10 form; The notice form proposed in
January required information on the identity of the submitter;
and the specific identity of the new chemical substance; and
information on production, use, and human and environmental
exposure. Submitters were also required to include test data in
their possession or control. In addition, the form had a lengthy
optional section.
The costs of filling out the mandatory sections of the
January 10 form were broken down by EPA's economic contractor,
Arthur D. Little. These costs, excluding costs of asserting and
substantiating confidentiality, are given in Table II-2.
TABLE II-2
ESTIMATED COSTS OF COMPLETING MANDATORY JANUARY 10 FORM
Section of Form Cost
Part I: General Information $ 840- 2,860
Part II: Risk Assessment Data
Section A: Physical and Chemical
Properties, Environmental Fate
Characteristics, and Effects
Data 900- 4,300
Section B: Exposure from
Manufacture 800- 6,400
Section C: Exposure from
Processing Operations 600- 6,400
Section D: Exposure from
Consumer Use 600- 1,700
Total 3,740-22,160
Source: ADL, Impact of TSCA Proposed Premanufacturing
Notification Requirements, p. V-17.
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Many industry commenters suggested that the January 10 form
was excessive in scope and in level of detail. They argued that
much of the data required in the form would not be available at
the time of submission, that the cost of developing data would
impose an unreasonable burdeji on submitters, and that EPA lacked
the statutory authority to require much of the information in the
form. Several industry commenters submitted alternative forms,
which generally reflected a narrower interpretation of EPA's
statutory authority and its data needs. CMA, for example,
recommended a form that reduced both the scope and the level of
detail. Among other changes, the CMA form made optional
questions concerning workplace concentrations, manufacturing
process information, rates and amounts of release, and consumer
exposure.
Proposed October 16 form; In response to these comments,
EPA proposed a revised form on October 16 (Option 3), in which it
reduced the data requirements of the January 10 form. These
reductions do not reflect a determination by EPA that it lacks
statutory authority to require additional information. Rather,
they reflect two major objectives: (1} To obtain adequate
information to permit at least a preliminary assessment of the
risks associated with the manufacture, processing, distribution
in commerce, use, and disposal of a new chemical substance, and
(2) To achieve this objective at a minimum cost to persons
submitting notices. In revising the notice form, EPA considered
the minimum information and level gf detail necessary for a
preliminary assessment, the likely'availability of such
information, and the associated costs.
Arthur D. Little estimates for completing the mandatory
sections of the October 16 form, not including costs of asserting
and substantiating confidentiality, are given in Table II-3.
This revision reduced the cost of the January 10 proposed
form by 50-60%, significantly lessening the burden on industry
although still providing EPA with sufficient information to make
an initial screening of new chemical 'substances. In the October
reproposal, EPA rejected the minimum information form recommended
by CMA. This form further reduces the cost of reporting by 20-
30%, but it does not provide information in areas critical to
EPA's evaluation of new chemical substances.
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TABLE II-3
ESTIMATED COSTS FOR COMPLETING MANDATORY OCTOBER 16 FORM
Section of Form Cost
Part I: General Information $ 275-2,125
Part II: Human Exposure and
Environmental Release
Section A: Industrial Sites
Controlled by Submitter 275-2,100
Section B: Industrial Sites
Controlled by Others 0-1,200
Section C: Consumer Exposure 0- 800
Part III: List of Attachments
a. Physical/chemical properties 150- 600
b. Health and environmental
effects data 300-1,400
Part IV: Federal Register Notice 75- 300
Clerical costs 80- 400
Total 1,155-8,925
Source: ADL, Estimated Costs for Preparation and Submission of
Reproposed Premanufacture Notice Form, p. 38.
Comparison of information required by forms; Information on
manufacturing processes can be used to illustrate the different
levels of detail in the various forms, and to explain the
differences in cost. The January 10 proposed form required the
submitter to provide a detailed schematic flow diagram
illustrating each manufacturing and processing operation he
intended to conduct (Part I, Section E). According to ADL
(Impact of TSCA Proposed Premanufacturing Notification
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Requirements, p. V-10), this diagram would require 4-40 technical
hours ($100-$!,000) to prepare, plus 2-8 clerical hours and 2-4
legal and managerial hours. In the reproposal, in an effort to
simplify the form and reduce the reporting burden, EPA deleted
several specific requirements. The revised form does not require
description of the type of process equipment, the components of
each process stream, and process parameters. Rather, it requires
a simplified block diagram (Part 2, Section A, Subsection 2) that
provides a basic understanding of the manufacturing process
necessary to identify potential exposures. According to ADL,
this abbreviated diagram would require 1-24 technical hours ($25-
$600) to complete, plus several clerical and managerial hours
(Estimated Costs for Preparation and Submission of Reproposed
Premanufacture Form, p. 34).
The block diagram as proposed in October considerably
reduces the burden on the submitter. EPA, however, believes that
it cannot eliminate a mandatory block diagram entirely, as the
CMA form does. In its review of notices under the Interim
Policy, EPA has found the block diagram necessary to make
qualitative estimates of potential workplace exposure; to make
quantitative estimates of the amount of new chemicals and
byproducts released; to validate estimates provided in other
parts of the form; and to provide supplemental information where
no data are provided in other parts of the form (for example, on
composition of release streams or the amount released to the
environment). Under the Interim Policy, when EPA has not
received a block diagram in a notice, Agency reviewers have in
most cases found it necessary to draw one themselves on the basis
of 1- to 2-hour telephone conversations with the submitter. In
most of these cases, the necessary information was readily
available to the submitter. It clearly would have been more
efficient and less expensive if the submitter had provided the
diagram in the first place.
In other ways, the information requirements of the January
10, the October 16, and the CMA form bear essentially the same
relationship. The January 10 form, for example, requires
specific estimates of the magnitude, duration, and frequency of
worker exposure. The revised form requires significantly less
detailed estimates and provides ranges for reporting workplace
concentrations. The CMA form makes all information on workplace
concentrations optional. In the same way, the January 10
proposed form requires specific estimates of environmental
release data, including stack parameters, concentrations, and
daily and hourly discharge rates. The October 16 proposed form
requires only total release estimates. The CMA form confines
quantitative release estimates to an optional section.
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In all these areas, EPA reduced the reporting burden in the
January proposal without seriously reducing its ability to make
an initial assessment of the risks associated with new chemical
substances. In cases where EPA needs additional information for
a more complete assessment of risk, the Agency would require
supplemental reporting. However, to reduce the requirements
further, as in the CMA form, would severely restrict EPA's
ability to make even an initial assessment and would lead to
frequent requests for further information.
One major cost in both the January 10 and the October 16
proposed forms is the retrieval, organization, and attachment of
health and safety data. ADL estimated that providing health and
safety data in the January form would cost from $900 to $4,800.
In the October reproposal, EPA significantly reduced this cost by
eliminating specific questions on evaluations and assessments of
test data in the section on physical and chemical properties and
health and environmental effects (Part II, Section A). In its
place, the form requires submitters to attach this information
with the notice. The cost of submitting these attachments, would
range from $450 to $2,000, according to ADL estimates.
In reducing the cost of providing health and safety data,
the revised form has not changed in any way the basic requirement
in section 5(d)(l)(B) of TSCA that the submitter include in the
notice all health and safety data in his possession or control.
Because of the statutory requirement to submit these data, any
reporting scheme would involve these costs. The October
reproposal, in fact, reduces the costs of retrieval,
organization, and submission of health and safety data to a
minimum. Because of this, the costs of providing health and
safety data under Option 3 are no greater to the submitter than
those of Option 1 or 2.
3. Preferred Approach
EPA's preferred approach is Option 3, the "limited form"
option, using the October' 16 reproposed form. This form will
supply information necessary for a preliminary assessment of
risks associated with most new chemical substances. The cost of
completing the form will not be substantially greater than
supplying information under Option 2, and costs will decrease as
submitters become more familiar with the form. Although
innovation might be slowed initially, long-run costs will be
minimized once procedures for reporting have been established.
The increased certainty about what data must be submitted will
mean fewer delays, fewer and more specific supplemental data
requests, and more efficient Agency review. EPA's burden will be
minimized by established review procedures; more complete and
consistent review will result.
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Option 3, with the October 16 reproposed form, balances the
cost of compliance for industry with EPA's need for detailed
analysis. A limited form with guidance is sufficient for an
initial screen of new chemical substances, and it reduces the
burden on the industry by concentrating on those chemicals that
clearly warrant further regulation. Only if EPA needs additional
data will the expense of obtaining it be incurred. The use of a
limited form is the most cost-effective approach to achieving
Congress's goal of protecting the public from risks associated
with new chemical substances without unduly impeding or creating
unnecessary economic barriers to technological innovation.
B. Confidentiality
The confidentiality of information submitted to EPA is one
of the most controversial issues associated with this
rulemaking. EPA, mindful of both public and industry interests
as well as procedures that would unnecessarily burden the Agency,
has proposed a category approach to confidentiality. In this
approach, submitters would assert and substantiate claims of
confidentiality by linking the information claimed confidential
to certain categories of information established by EPA. The
disclosure policy regarding chemical identity as part of health
and safety studies reflects this attempt at balancing conflicting
interests as well. The following section discusses various
approaches EPA considered to accomplish the goals of public
disclosure and protection of traditional trade secret
information.
1. Mechanics
The mechanics of confidentiality are the procedures for
asserting and substantiating claims of confidentiality. EPA
considered three options -- Option 1, the January 10 proposal;
Option 2, the October 16 reproposal; and Option 3, the approach
of the Interim Policy of May 15, 1979. The Agency has stated
that, under any of the options, documentation submitted to
substantiate confidentiality claims may be treated as
confidential business information.
Option 1 January 10 Proposal
Submitters claim each confidential item individually by
checking a box adjacent to the entry on the form. Submitters can
also claim information confidential in attachments to the form.
They would do this by designating the information as confidential
on the attachment and providing a copy of the attachment with the
information claimed confidential deleted so that this copy could
be placed in the public file.
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Submitters would substantiate claims of confidentiality for
chemical identity and health and safety study information by
answering two series of questions. Other information claimed
confidential in the notice would be substantiated by the
submitter when requested by the Agency.
Option 2 October 16 Reproposal
In the October 16 reproposal, submitters could assert claims
of confidentiality by category. Submitters would assign items to
the categories provided by the Agency by answering questions that
explained the reason for including this information in the
category. Substantiation Would be by category of information as
well; submitters could substantiate most claims by signing a
certification statement on the form. However, they would have to
substantiate chemical identity and information that did not fall
within the categories provided by the Agency by responding to a
series of questions.
Option 3 Minimum Guidance
Under Option 3, the submitter asserts his claims of
confidentiality by clearly identifying confidential business
information in the notice. Substantiations would not have to be
submitted with the notice. Where EPA required substantiation, it
would ask the submitter by letter a series of questions on each
category of information claimed confidential. The submitter
would substantiate the claims by responding to the questions
within 15 days.
Discussion and Preferred Option
Although there are many variations of these options,
described in Part II of the Economic Impact Analysis, these three
options represent the basic choices available to the Agency.
In the October 16 reproposal, EPA explained that revision of
the January 10 proposal was based on Agency experience with
notices submitted under the Interim Policy, comments received on
the January 10 proposal, the frequency of Freedom of Information
Act (FOIA) requests, the need for Agency review of
confidentiality claims, and Agency consideration of public and
private interests in disclosure. The Act itself, in section 14,
indicates a Congressional emphasis on disclosure of health and
safety data and nondisclosure of traditional trade secret
information. The category and substantiation scheme reflects
this Congressional intent by placing a light burden on industry
to claim and substantiate information of a commercial nature
while requiring a more detailed substantiation for information
relevant to health and safety information.
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As noted in the Economic Impact Analysis (p. 126), the total
amount of information required under the January and October
approaches does not differ significantly. However, the January
10 proposal requires the submitters to expend greater effort in
substantiating a claim, because they generally must answer more
substantiation questions; the October 16 reproposal with its
category and linkage approach, requires greater effort in
asserting a claim. EPA prefers the second approach because it
focuses the submitter's attention on the relationship among his
confidentiality claims, which may make it unnecessary for him to
make as many claims to protect his proprietary interests. Option
2 also provides a basis for a less duplicative substantiation.
In Option 2, the Agency designated categories of information
based on the information most commonly claimed as confidential
since the premanufacture program began. For information that EPA
has included in a category, the submitter may assert his claim by
marking a single box X rather than by searching through the forms
and individually marking every piece of related information to be
claimed confidential. If the information has not been included
in the category by EPA, the submitter marks the item separately
and explains how its disclosure would reveal confidential
business information.
By using the category approach, Option 2 significantly
reduces the information required for substantiation and allows
the submitter to avoid duplication. Also, under Option 2 EPA will
review all substantiations for items in a notice at one time.
Under Option 1, EPA might receive requests for different
information in the same notice at different times. This would
necessitate several reviews of the same notice by EPA.
The different degrees of burden for substantiation reflect
different balances between the interest of industry in protecting
proprietary information and the public's interest in protecting
itself and in effectively participating in the review process.
Option 2 would eliminate the need for submitters to supply
additional substantiation information to the Agency, which would
reduce costs and time delays. This approach is also intended to
lessen the submitters' uncertainty as to the kind of
substantiation the Agency would find acceptable and upon which it
would make a determination not to release data claimed
confidential. The unstructured approach of the January 10
proposal (Option 1) may seem to involve lower initial costs, but
the increased cost due to submitter's uncertainty about Agency
standards, the need for repeated Agency contact to determine the
basis of the submitter's claims, and the submitter's need to
provide additional information all increase these initial
costs. Therefore, EPA prefers Option 2, the October 16 proposal.
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2. Timing of Substantiation
Whichever format was provided for asserting and
suostantiating claims ot confidentiality, the Agency would also
nave to decide when to require the substantiation. EPA has
considered three approaches to this issue.
Option 1 January 10 Proposal
The January 10 proposal requires that submitters
substantiate health and safety study information and chemical
identity with the notice. Other items can be substantiated when
EPA requests it, although EPA encourages submitters to
substantiate all claims of confidentiality when the notice is
submitted.
Option 2 Section 5(d}(2) Notice Option
This option requires substantiation of claims of
confidentiality for chemical identity, categories of use, and
test data at the time the notice is submitted. EPA, therefore,
would know whether the information could be published in the
5(d)(2) notice. Other information, if claimed confidential,
would have to be substantiated if requested, although again EPA
encourages substantiation with the notice.
Option 3 October 16 Reproposal
Tne reproposal requires substantiation of all information
claimed confidential when the notice is suomitted.
Discussion and Preferred Option
The preferred scheme, Option 3, places emphasis on the
timely release of data necessary for public oversight while
safeguarding traditional trade secret data. As the proposed
Economic Impact Analysis states, substantiating all types of
information claimed confidential in the notice at the time of
submission by the October procedures (Option 3) is less costly to
the submitter than narrative substantiation under the other
options. Not only is Option 3 less costly to the industry, but it
provides many benefits to the Agency as well as the public. It
allows the Agency to review all claims at once and to see the
pattern and rationale behind confidentiality claims, giving the
Agency insight into the needs of the chemical industry. It
eliminates the need for multiple requests for information and
provides clear guidance to industry regarding Agency standards
for disclosure of nonconfidential information. The short notice
review period provided by section 5 and the interest Congress
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displayed in public participation in the review process dictate
an approach that will allow the Agency to review claims of
confidentiality in a timely manner. Without substantiation in
the notice, the Agency would never be in a position to release
nonconfidential data to the public so that it could participate
in the notice review process. Finally, the Agency needs
substantiation information at submission to reply promptly to
Freedom of Information Act (FOIA) requests. Commenters on the
October 16 reproposal suggested that FOIA requests would be
infrequent, and therefore early substantiation would be
unnecessary. In fact, since the premanufacture review program
began in July 1979, public interest groups have regularly made
FOIA requests for notices. For all these reasons, therefore, EPA
proposed substantiation at the time the notice is submitted.
3. Generic Information
If submitters claim information of particular public
interest as confidential, the Agency has proposed that "generic"
or masked information be provided to the public so that at least
some information is available. Some of the Agency's earliest
section 5(d)(2) notices were totally devoid of information, which
made public participation in review of those notices
impossible. The following options have been considered:
Option 1 January 10 Proposal
The January 10 proposal required submitters t,o develop a
generic name for chemical identity according to Agency
instructions. If categories of use were claimed confidential,
generic descriptions of that information would also be
required. EPA did not give specific guidance about an acceptable
generic or masked category of use description.
Option 2 October 16 Reproposal
Procedures for developing four types of masked information
are provided in the reproposal: manufacturer's identity,
categories of use, chemical identity, and physical and chemical
properties. If these procedures do not provide adequate
protection for information claimed confidential by the submitter,
the submitter may provide alternative masked information suitable
for public disclosure either in the FEDERAL REGISTER or in the
public docket.
Option 3 No Masked Data
Under this option, EPA would not require generic substitutes
for confidential data. No masked data would be published in the
FEDERAL REGISTER or placed in the public docket.
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Discussion and Preferred Option
Section 5(d)(2) of TSCA lists certain information that EPA
must publish in the FEDERAL REGISTER 5 days after receipt of a
premanufacture notice. It is clear that the purpose of this
notice is to inform the public that a notice on a new chemical
substance has been submitted for review and that the public
should come forward with any information it has about the
substance and participate in Agency review.
Option 3 does not provide adequate notice to the public.
Option 1, as noted in the comments to the January 10 proposal,
does not give sufficient guidance as to categories of use
information, nor does it give the submitter the flexibility to
provide generic information unique to his confidential business
needs. Option 2 provides sufficient information for the initial
notice to the public while recognizing the industry1s need to
protect confidential information. As the proposed Economic
Impact Analysis notes, Option 2, with clear guidance as to what
generic descriptions will meet Agency standards, is the most
effective approach for reducing industry uncertainty and concerns
about any arbitrariness in the Agency's treatment of generic or
masked information.
4. Disclosure of Chemical Identity
The Agency1s January 10 proposal included an approach for
disclosing chemical identity that has been claimed confidential.
As the Agency noted on January 10, chemical identity is
underlying data to a health and safety study. However, EPA
recognizes the special significance this information may have,
especially during the early stages of development of the new
chemical substance. EPA considered three options regarding
timing of disclosure of chemical identity. Consistent with
section 14(b), under all the options EPA would not disclose
chemical identity if it revealed confidential process information
or proportions of a mixture.
Option 1 -- Disclosure at the time of notice submission
Under this option, chemical identity would be published in
the section 5(d)(2) notice announcing receipt of the
premanufacture notice, and health and safety data would be made
available to the public. At commencement of manufacture, the
chemical identity would be entered on the Inventory and would not
be masked by a generic name.
Option 2 January 10 Proposal
Because of the special importance of chemical identity, the
January 10 proposal provided that it would not be disclosed until
commencement of manufacture. The chemical identity would go on
the Inventory at commencement of manufacture and would not be
masked by a generic name.
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Option 3 Disclosure at Distribution in Commerce
Several commenters suggested that chemical identity should
not be disclosed until distribution, which would be sometime
after manufacture for a commercial purpose. Under this approach,
a generic identity would be initially entered on the Inventory;
after distribution began, the chemical identity would go on the
Inventory.
Discussion and Preferred Option
Section 14(b) provides that data from health and safety
studies may be disclosed to the public notwithstanding the non-
disclosure provisions of section 14(a). The legislative history
and scientific practice argue that chemical identity is part of a
health and safety study; as such it should be disclosed.
However, section 14(a) also indicates the concern for protection
of proprietary data. Therefore, the Agency prefers a compromise
position that would prevent disclosure during the early stages of
development and commercialization, and that would protect
confidential chemical identity until the time of manufacture or
some reasonable time thereafter. The January 10 proposal (Option
2) provides an approach that is consistent with this policy.
This approach limits access to data that the public would have
under Option 1, but the Agency hopes to reduce the effect of this
limitation by providing meaningful generic information indicating
the toxicologically significant aspects of the molecular
structure of the chemical identity claimed confidential.
Option 3 has some of the advantages of Option 2, but it
creates uncertainty because the "commencement of commercial
distribution" is difficult to define, and it would require
submitters to notify EPA when they first distributed a substance
commercially as well as at commencement of manufacture. To
eliminate these difficulties, EPA is considering the possibility
of protecting the confidentiality of chemical identity underlying
a health and safety study for a set time after commencement of
manufacture for example, six months by which time the
manufacturer would have had adequate time to begin commercial
distribution. With this modification, the submitter would not
have to notify EPA at commercial distribution. This approach,
however, would still have some disadvantages of Option 3. EPA
would have to conduct an additional review of confidentiality
claims when the substance was first distributed commercially to
determine if disclosure of chemical identity would reveal
confidential processes or proportions of a mixture. This
approach also postpones the public's access to these data to a
point at which it may be less likely to prevent exposure or
distribution of the new chemical substance. EPA solicits public
comment on the appropriateness of this approach as an alternative
to the January 10 proposal.
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C. Incomplete Submissions
A prernanufacture notice must meet certain explicit
standards. If the submission does not meet these standards, it
is incomplete and the 90-day review period will not start.
Section 720.34 of the January 10 proposal explained EPA's
interpretation of section 5 notice standards, classified various
types of deficiencies, and described the procedures EPA will
follow in handling deficient notices. The proposed criteria for
defining incomplete submissions are drawn either directly from
TSCA or from other parts of the proposed premanufacture
notification rules.
In developing its approach to incomplete submissions, EPA
has considered the four options discussed below.
1. Options Considered
Option 1 January 10 Proposal
In section 720^34 of the January 10 proposal, EPA identified
two kinds of deficiencies: (1) Major deficiencies that prevent
the review period from starting; (2) Minor deficiencies or errors
that stop the clock during the notice period. The distinction
between major and minor deficiencies is determined by certain
criteria set out in the proposal. If EPA identifies a major
deficiency in a submission at any time during the review period
such as failure to supply information required in the notice
form if it is known to or reasonably ascertainable by the
submitter the Agency may return the submission. In this case,
EPA would consider no notice to have been submitted. When a
submission was received that did meet the criteria, the 90-day
review period would begin.
If EPA identifies a minor deficiency, within 30 days after
receipt of a submission it may request a submitter to correct the
deficiency. Examples of minor deficiencies are failure to date
the notice or a typographical error that renders an entry" unclear
or ambiguous. The Agency will suspend the review period until
the submission is corrected. If the submitter does not make the
correction within 30 days, EPA may determine that the submission
does not meet the standards of the Act. Also, if EPA discovers
during or after the review period that the submitter provided
false or misleading information, EPA can treat the submitter as
not having complied with the notice requirements of section 5.
Therefore any manufacture or import may be in violation of TSCA
and subject to penalities of sections 15 and 16.
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Option 2 Appeal Procedures
Option 2, a modification of Option 1 reflecting concerns
expressed by industry, narrows EPA's criteria for determining
that a submission does not meet the standards of the Act. Under
this option, EPA would notify the submitter within 30 days of
receipt of a submission if it was incomplete (major deficiency),
or if it contained errors (minor deficiency). If the submission
was incomplete, the notice review period would not begin until
the deficiencies were remedied. Submitters could appeal an EPA
finding that a submission did not meet the Act's requirements.
For errors, the review would not stop, although submitters would
be encouraged to correct the errors.
Option 3 Case-by-Case Approach
Taking a case-by-case approach, EPA could find a submission
insufficient to fulfill the requirements of section 5. However,
no formal criteria or procedures would govern EPA's treatment of
such submissions. If EPA found a submission incomplete, the
review period would not start, and the submitter would not have
any formal avenues of appeal. For errors in the submissions
(e.g., typographical mistakes), EPA would take the same action as
in Option 2.
Option 4 No Incomplete Submission Provisions
Under this option, if the submitter did not file a notice
that met the Act's standards, EPA could require information under
the proposed supplemental reporting authority. Commenters on the
January 10 proposal also suggested that EPA could control the
substance under section 5(e) pending the submission of the
necessary information.
2. Discussion
Options 1 and 2 outline the criteria that EPA uses in
determining whether a submission meets the statutory
requirements. Notices must fulfill these criteria when submitted,
or be corrected in a timely manner, before the review period
begins. Under Option 3, submitters would also have a strong
incentive to submit notices that meet the requirements of the
Act, although they would not have clear guidelines about how EPA
interpreted these requirements. The incentive of submitters to
correct major deficiencies would be the same as in Options 1
and 2. Under Option 4, EPA could only request that deficient
submissions be corrected. If submitters did not respond, EPA
could use its proposed supplemental reporting authority or, in
some cases, issue a section 5(e) order requiring additional
data. However, these actions would expend considerable EPA
resources, and the notice review period might be interrupted or
extended.
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Submissions in Options 3 and 4 are not held up to explicit
criteria, and no clear distinction is made between major
omissions and errors. In Option 4, there would be no guidance
for submitters who must correct their notices. Without published
criteria and procedures, industry would be uncertain about how
submissions would be treated, and the possibility of
inconsistency in Agency actions would increase.
Option 4 presents several special problems. If a person
failed to submit a complete notice, EPA would accept the
submission for review. However, to obtain the necessary
information, the Agency might extend the notice period up to 90
additional days under section 5(c), issue a section 8(a)
supplemental reporting requirement, or, in some cases, issue a
section 5(e) order. Delays associated with these actions might
have an adverse effect on the submitter's production schedule and
marketing plans.
All four options will involve out-of-pocket expenses to
prepare notices. The submitter would incur additional expenses
under Options 3 and 4 if EPA required supplemental reporting or
otherwise took action to get information. Option 2 carries an
additional cost if submitters appeal an EPA decision that
submissions do not meet statutory requirements; however, the
right to appeal protects them from arbitrary action.
EPA's initial costs under Options 1, 2, and 3 are greater
than under Option 4 because under these options the Agency must
review notices for compliance. Option 3 perhaps involves the
greatest initial cost for EPA because the Agency will have to
handle notices on a case-by-case basis without formal criteria.
Option 4 would at first involve the fewest EPA resources. But,
potentially, it could be the most expensive for both EPA and
industry, if EPA frequently used the supplemental reporting
authority or otherwise took action to get information that should
have been included in the initial submission.
Costs to society are highest with Options 3 and 4. EPA may
not have enough resources to review and take action against
incomplete submissions on a case-by-case basis. Therefore, under
Option 3 the Agency may miss deficiencies in certain submissions,
and therefore fail to learn of important information on
potentially hazardous chemicals. In Option 4, submitters who
fail to provide complete submissions might be subject to
supplemental reporting rules or other action. However, EPA would
be able to take relatively few of these actions. Thus, the
Agency may pass over some problem chemicals for which deficient
submissions are made; the public and the environment would
suffer. Because Options 1 and 2 impose standards on submitters
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and commit EPA to reviewing section 5 notices for deficiencies,
there is less chance that EPA will be unable to gather adequate
information to evaluate potentially harmful chemical substances.
3. Preferred Option
EPA prefers an approach that sets out the criteria that
submissions must meet for the notice review process to begin.
Submitters, therefore, know the requirements, and the costs of
preparing complete notices are well defined. Submitters will
also know the delay likely to result from submitting information
that does not meet the requirements. As explained earlier, costs
to EPA are likely to be lower under options that set out clear
standards for notices.
Options 1 and 2 incorporate the statutory requirements that
a notice include certain information. A submitter is not in
compliance with this section if his submission does not contain
that information, as long as it is known to or reasonably
ascertainable by him. An incomplete submission prevents EPA from
conducting a proper assessment. Option 3 does not provide clear
guidelines, and Option 4 does not provide any procedures to act
on incomplete submissions. In this case, the content of notices
would depend on industry's interpretation of the statute. EPA
does not believe that Congress intended industry to make its own
interpretations of the Act. Moreover, TSCA requires the
submitter to provide the information specified; it does not place
the burden on EPA to extract it.
Option 1 and Option 2 are similar, but Option 1 places the
burden on the submitter, not EPA, to correct the submitter's
errors in notices. Under Option 1 EPA can stop the review clock
until the submitter corrects "minor deficiencies" affecting the
clarity of the notice. This should not be burdensome to the
submitter, because the deficiencies would be minor like a
failure to date the notice and therefore easy to correct.
EPA, of course, will not require the submitter to correct every
error, but only those that make the notice unclear. Under Option
2, EPA would notify the submitter of the error within 30 days,
but the review clock would not stop. The submitter would have
less incentive to correct the error promptly. As a result, the
burden for interpreting any ambiguity caused by the error would
fall on EPA. Finally, the purpose of EPA's data-gathering
authority under sections 8 and 5(e) is not to gather information
necessary for an initial screen, but to require additional data
based on the information initially provided.
Option 2, however, provides significant benefits for
submitters. Under this option, EPA must notify submitters of a
deficiency within 30 days of receipt of a submission. Therefore,
submitters would know quickly if their notices met the minimum
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standards of the Act, and they would not be faced with the
possibility that EPA could stop the review period after that
time. Also, submitters could appeal an EPA finding that a
submission did not meet the standards of the Act. EPA requests
comments on this approach and other approaches to determine that
submissions meet the requirements to begin the notice review
period.
D. Customer Contact
Section 5 must contain certain information on processing and
uses that is known to or reasonably ascertainable by the
submitters. In some cases, submitters may not know about
proposed methods of processing or uses, but this information is
generally known to their customers. To get this information for
a notice, submitters may have to contact potential customers.
EPA considered four options for defining the extent of the
submitters' obligation to contact and gather information from
customers.
1. Options Considered
Option 1 -- Provide Information from All Potential Customers
Option 1, section 720.20(e) of the January 10, 1979,
proposal, requires notice submitters to contact persons who they
have reason to believe would purchase the new chemical
substance. Submitters must ask potential customers to complete a
Processing and Consumer Use Form. The Form requests information
on exposure and environmental release resulting from processing,
use, and disposal. In addition, submitters must list in their
notices the names and addresses of the customers they contacted,
and they must identify the persons who provided them information
or who were sending it directly to EPA. Customers may claim any
information they provide confidential.
Customers are under no legal obligation to respond to the
submitter's request for information. When customers do not
respond promptly, or when they do not respond at all, EPA does
not expect submitters to delay sending their section 5 notices.
Failure of customers to provide information either to the
submitter or to EPA does not affect the beginning of the notice
review period.
Two exceptions apply to these mandatory customer contact
requirements. Submitters may contact a sample of customers if
they believe that a significant number of customers will provide
duplicative information. And submitters need not contact any
person who they believe will not provide substantive information
required in the notice form.
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Option 2 Report Number of Persons with Firm
Commitment to Purchase Substance for Unknown Uses
and Volume of Substance to be Sold to These Persons
Option 2 was discussed in the October 16 reproposal as an
alternative to Option 1. Option 2 has no mandatory customer
contact provision, no customer list, and no Processing and
Consumer Use Form. Instead, submitters are required only to
report the number of committed customers intending to use the
substance in ways not known to them and to report the percentage
of production volume allocated to those customers during the
first three years of production. The customer definition is
narrowed from that of Option 1 to persons who have contracted to
purchase, submitted a purchase order for, or made a firm
commitment to purchase the new chemical substance for uses
unknown to the submitter.
Under this option, if EPA needs additional use information,
it can go back to the submitter for the names and addresses of
the customers. EPA. can then contact the customers. These
contacts will be limited to situations where EPA needs
information for a detailed assessment.
Option 3 Provide Information in Option 2 Plus a
Customer List
Option 3 is Option 2 with a customer list added. It was
also discussed in the October 16 reproposal as an alternative to
Option 1. Submitters must include with their notices a list of
customers who have contracted to purchase, submitted a purchase
order for, or made a firm commitment to purchase the new chemical
substance. EPA may contact prospective customers directly when
it finds that use information or other information in the section
5 notice is not adequate to assess potential exposure.
Option 4 No Mandatory Customer Contact
Option 4 eliminates the customer contact provisions.
Submitters are under no obligation to send a customer list to
EPA, or to ask customers to submit information on uses of the
chemical substance. However, submitters still are required to
complete section B of the reproposed form, "Industrial Sites
Controlled by Others." In this option, as in Options 2 and 3,
EPA, not the submitter, will obtain customer use information when
it is needed for detailed review.
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2. Discussion
Option 1 is the most costly option for submitters. The
comprehensive definition of customers, which includes potential
customers as well as those who have made a firm commitment to
purchase, will require submitters to keep up-to-date files on
committed customers and customer contacts. Many companies may
not ordinarily keep such records. Thus, submitters may incur
additional expenses to have this information on hand. Submitters
will also incur costs to contact customers.
Submitters in Option 2 and 3 will also incur certain
administrative costs, but these costs will be less than in
Option 1. With the customer definition narrowed to committed
customers, these options should not in most cases increase
recordkeeping costs for submitter. Generally, the customer
information requested in Options 2 and 3 is in a company's
records. Submitters will only have to prepare and submit this
information. (Under Option 3, submitters may incur the cost of
preparing a customer list.) Under Option 4, submitters have no
obligation to submit customer information, and therefore will
incur no costs associated with mandatory customer contact.
Because there is no Processing and Consumer Use Form in Options
2, 3, and 4, submitters will not incur the costs of contacting
customers. Instead, EPA will incur these costs.
Option 2 is less expensive to submitters than Option 3
because it requires them to give EPA the names and addresses of
customers only when the Agency needs to contact them for use
information which EPA may require for chemicals subject to
detailed review. Since only a small percentage of new substances
undergo detailed review, submitters in most cases under Option 2
will not have to provide EPA with a customer list. Under Option
3, however, submitters are required in every case to send a
customer list with their section 5 notice. Therefore, they may
incur the expense of providing EPA information unnecessary for
its review.
Although Option 4 does not require submitters to contact
customers or to submit customer information, submitters may still
incur expenses associated with customer information. Under this
option, EPA will have to go to submitters for customer
information needed for its review. Some submitters may provide
EPA with this information voluntarily. In other cases, EPA may
have to take action under the proposed section 8(a) supplemental
reporting authority to get information from either the submitter
or processors.
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Option 1, which requires customer contact, should eliminate
delays when customers voluntarily submit the Processing and
Consumer Use Form. Under Options 2, 3 and 4, EPA will have to
get use information from customers, possibly leading to delays in
the review process that may affect the introduction of new
chemicals into commerce. Delay is more likely in Options 2 and 4
than in 3, because in these options EPA must go first to the
submitter to get the names of customers before it contacts
them. This will not be necessary in Option 3 because the
submitter is required to provide a customer list. If a submitter
or customer is reluctant to provide EPA with information, the
action EPA takes to obtain this information may make it necessary
to extend the review period under section 5(c).
Initial costs to customers are likely to be greatest under
Option 1, because in most cases they will be asked to complete a
Processor and Customer Use Form. On the other hand, delays are
likely to occur less often under this option. Under Options 2,
3, and 4, EPA will request customer information only on chemicals
undergoing detailed review. Customers in the no-mandatory-
contact options, therefore, will not in every case incur costs to
provide EPA with use information.
Customers face the risk of trade secret disclosure when they
provide use information to the submitter (Option 1) or to EPA
(Options 2, 3, and 4)- This threat to confidentiality may affect
customers' responsiveness, especially if Option 1 is adopted.
The fear of disclosure of the customer lists in Options 1 and 3
may also affect customers' responsiveness.
Administrative costs to EPA and the likely extent of its
efforts to obtain customer information must be considered in an
evaluation of the options. Option 1 requires the least effort,
because the submitter is responsible for contacting customers.
But Option 1 may involve the highest administrative costs for EPA
because the Agency must file, maintain, and protect the
confidentiality of customer information on a routine basis,
although it may need this information for only a small percentage
of chemicals. In Options 2, 3, and 4, EPA will incur lower
recordkeeping costs. The cost is highest for Option 3, where
submitters are required to include customer lists with their
section 5 notices.
The potential costs to society are greatest under Option 4.
Because it will receive less customer information, EPA will be
less able to protect health and the environment from the
introduction of hazardous substances. Despite their differences,
Options 1, 2, and 3 each give EPA the means to identify customers
and to gather enough information to decide if detailed review is
necessary. In this regard they afford greater protection to
society than does Option 4.
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3. Preferred Option
EPA prefers Option 2. Customer use information is usually
necessary only for detailed review. Because EPA expects a small
percentage of chemicals to undergo detailed review, it does not
believe it is necessary to collect this information routinely, as
would be done in Option 1. EPA also believes that it does not
routinely require a customer list, which Option 3 provides.
However, EPA does need enough customer information to determine
whether processing and use is likely to cause a problem, or
whether more information is needed. Option 3 would generally
provide EPA with this information in the initial notice; Option 4
often would not.
EPA believes the information required from submitters under
Option 2 gives the Agency adequate information for its initial
review of new chemical substances. It would give EPA an
understanding of how complete the use information is in the
notice. In combination with other information in the notice, the
customer information under Option 2 will help EPA decide whether
or not to ask for additional use information from the submitters'
potential customers. If EPA determines that it needs additional
information, it can contact submitters and ask them to provide
the names and addresses of their customers.
Option 2 is less burdensome to industry than Options 1 and
3. In Option 2, EPA will request more information only when it
is necessary for detailed review, and the Agency will generally
carry the burden of contacting the customer. Thus, submitters,
their customers, and EPA would not be responsible for routinely
gathering and maintaining information that is usually not
necessary in the initial evaluation of a chemical substance.
Also, EPA would not have to maintain files and protect the
confidentiality of unused information, as it would under Option 1
and to a lesser degree under Option 3.
E. Importer Definition
Section 3(7) of TSGA defines "manufacture" to include
"import." Therefore, importers are subject to all requirements
of the Act that apply to manufacturers, including the notice
requirements of section 5. In developing a proposed definition
of importer for the purposes of section 5, EPA took into account
the fact that import transactions vary in the number of parties
involved and the methods of import. Some parties in the import
process may be unaware of important information about the
chemical substance, and, in some cases, no one party may know all
the information of concern to EPA. Therefore, EPA has attempted
to develop a definition that will ensure that the person who
knows the most about an imported substance will be required to
submit a notice.
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EPA considered five alternative definitions of importer in
this rulemaking. The major options are discussed below.
1. Options Considered
Option 1 Consignee
This option designates one person, the consignee, as
responsible for notifying EPA of intent to import a new chemical
substance. The consignee is the person to whom the goods are
delivered. He may be any person, including a retailer or an
agent, involved in the import transaction.
Option 2 Consignee, Who Would Obtain Information
from Other Persons
Option 2 is the same approach as Option 1, but it also
requires the consignee to contact other persons for information
needed to complete the section 5 notice. These other persons
include users and processors who can be identified and any
agents, customhouse brokers, or importers of record. These
persons would provide the consignee with the information, or they
could send it directly to EPA. They would, however, be under no
obligation to report the information to the consignee or EPA.
Option 3 Any Party Involved in the Import Transaction
Option 3 is the definition of importer in the January 10,
1979, proposal. This broad definition, adapted from the
definition of the U.S. Customs Service of the Treasury
Department, requires "any person who imports" to file the
notice. Importers include the person primarily liable for the
payment of duties, the consignee, the importer of record, the
actual owner, and any transferee. Under the January 10
definition, each of the persons listed is responsible for
ensuring that a notice is submitted to EPA. The definition does
not identify one person responsible for submission of the notice.
Option 4 Principal Importer Responsible for Notice
Submission
Option 4 was published in the FEDERAL REGISTER of September
23, 1980 (45 FR 63606) as a clarification of the January 10
definition (Option 3). This option uses the broad definition of
importer in Option 3, but it specifies that the "principal
importer" submit the section 5 notice. The principal importer is
the first person who, knowing the new chemical will be imported,
selects the chemical substance and the total amount to be
imported. This person is likely to be a processor, user, or
distributor of the chemical.
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Option 5 -- Any Person Who Imports, or Knowingly Causes
to be Imported, a Chemical Substance
Under this option, the importer is defined as any person who
imports, or knowingly causes to be imported, a chemical
substance. A person placing an order for a chemical substance in
a domestic transaction would not "knowingly cause" the import of
the substance unless he controlled the terras and conditions of
import.
3. Discussion
As EPA stated in the Support Document accompanying the
January 10, 1979 proposal, the importer definition should
designate the person, or persons, who know the most about the
nature and use of the import. Options 1 and 2 fail to do this.
Instead they identify the consignee as the person responsible for
submitting the notice. The consignee is often a retailer or
agent, persons who ordinarily do not know information on the
imports that is useful or necessary for an initial screen. If
they did not know this information, or it was not reasonably
ascertainable, they would not have to submit it.
Option 2 addresses this problem by requiring the submitter
(the consignee) to ask for information from other parties,
including future users and processors. Although the Option 2
submitter is often not the most knowledgeable party, he may
obtain information valuable for EPA's review from others. Under
Option 1, submitters may also find it useful to seek information
from other more knowledgeable parties. However, without the
requirement, they are less likely to do so.
Under Option 3, SPA ensures that the most knowledgeable
person will be involved in the submission by making all parties
to the import transaction responsible for notification. The
notice submitted under this option would include all required
information known to or reasonably ascertainable by any of the
parties to the transaction. If this definition is properly
implemented by importers, it should provide a complete notice
with information sufficient for an initial screen by EPA.
However, the Option 3 approach may not be easy to
implement. When several parties are responsible for preparing a
submission, or contribute to its preparation, it may be
incomplete. This may occur because of a disagreement among the
parties, or because certain parties do not cooperate and provide
necessary information. (The same problem can occur in Option 2,
under which the consignee is obligated to contact other
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persons. It can also occur in Options 1 and 5 if the consignee
or person knowingly causing import asks other persons for
information.)
Commenters on the January 10 proposal argued that, by not
naming a principal party responsible for submission, the Option 3
approach might not serve EPA's purposes. EPA would have no
guarantee that the most knowledgeable person would be actively
involved in the preparation of the notice, or that the parties to
the transaction would cooperate effectively. In response to
these comments, EPA is considering Option 4, which would not
change the definition in Option 3, but would clarify it by
specifying that only the "principal importer" be responsible for
submitting the notice. Since the principal importer is the party
who selects the imported substance and is usually a processor,
user, or distributor of the chemical, information necessary for
EPA's review should be known to or reasonably ascertainable by
him.
Option 5 does not identify a specific party in the import
transaction as primarily responsible for submitting the notice.
The person who "imports or knowingly causes" a substance to be
imported can be any one of several parties (e.g., agents,
brokers). These persons do not necessarily know much about the
chemical and its properties. Therefore, this alternative does
not achieve EPA's goal that the most knowledgeable person submit
the notice.
Commenters on the January 10, 1979, proposal also raised the
issue of the responsibility of the notice submitter and others
associated with the preparation of the notice under the joint-
submission options. The Preamble to the January proposal states
that, under the importer definition (here Option 3), each of the
persons listed is responsible if he imports a substance for which
EPA has not received a notice. However, it is not clear whether
all parties to an import transaction share responsibility for the
accuracy of the information in a notice, regardless of which one
submits it. Option 2 also poses a liability question with
respect to the adequacy and accuracy of the information. The
consignee in this alternative gathers information for submission
from future processors, users, and distributors and from persons
actually involved in the import transaction. The consignee would
be responsible for providing a complete submission; the consignee
and others who contributed to the preparation of a notice would
share in the liability if the information they provided was not
accurate.
An advantage of joint notice submission, if it works
properly, however, is the sharing of costs to prepare the notice
by the persons involved in the import transaction. In Option 2
the consignee collects information from other parties. The cost
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of gathering and preparing this information, therefore, is shared
by these persons, thus reducing the consignee's financial
burden. Under Option 3, where all the parties are involved in
the notice process, the responsibility for preparing the notice
is presumably shared by the various parties. The disadvantages
of this arrangement is the possibility of duplication of
information and effort. With responsibilities spread among
several persons, total costs may be greater than if one party is
responsible for preparing and submitting the notice.
Under Options 1, 4, and 5, one importer party carries the
burden of financing the submission. This is particularly
burdensome to importers in Options 1 and 5, since the consignee
and the person knowingly causing import are not necessarily the
persons who know the most, or can most reasonably ascertain,
information required by EPA for its review. If they gather
information from other persons, their costs will be higher than
those incurred by the principal importer (Option 4).
The risk of disclosure of trade secrets is possibly greater
in Options 2 and 3, the joint-submission options. In Option 2, a
consignee is responsible for gathering information from other
persons. Information may be disclosed when he transfers it to
EPA. In Option 3 all the named parties share responsibility for
submitting a notice; therefore it is possible that confidential
business information may be revealed during preparation.
Importers under Options 1, 2, 3, and 5 may wish to delay
their notices until they have obtained information from other
parties. If they do, they will have to delay import. But if
they submit their notices before securing certain information,
the review may be delayed. For example, if they cannot
adequately identify the new chemical substance, EPA will find
that the submissions do not meet statutory requirements. In this
case, the review process will not begin. If they do not provide
other information necessary for review, EPA may use the proposed
section 8(a) supplemental reporting authority or, in some cases,
section 5(e) to require importers to provide the necessary
information. However, these actions expend EPA resources, and
they involve delays that may have an adverse effect on the
importers.
A disadvantage of the definitions in Options 1, 2, and 5 is
that they are inconsistent with the U.S. Customs Service
definition and with other definitions of importer under TSCA.
Options 3 and 4, however, are consistent with the Customs Service
definition, although broader, and with other TSCA definitions.
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3. Preferred Option
EPA prefers the definition of importer in Option 3, which it
proposed on January 10, 1979, and recently clarified in a notice
in the FEDERAL REGISTER. This definition is consistent with
other TSCA definitions and with the U.S. Customs Service
definition. Option 3 makes all parties to the import transaction
responsible. Under this option, EPA may be more likely to
receive a submission that provides enough information for its
review. If each party is responsible, each will have a strong
incentive to see that any notice submitted is complete and
accurate. The requirement should not be excessively burdensome,
since submitters will only be required to submit information
known to or reasonably ascertainable by them. On the other hand,
because no single importer is designated as the submitter, this
option may not serve EPA's purposes, as explained earlier.
Therefore, the Agency is also considering Option 4, which
clarifies the definition so that it requires the "principal
importer" to submit the notice. In the notice of clarification,
EPA solicited comment on this option.
F. Importer Contact of Foreign Manufacturers/Suppliers
To prepare a section 5 notice sufficient for an adequate
review, importers of new chemical substances may need assistance
from foreign manufacturers or suppliers. This requires a
cooperative arrangement in which the foreign manufacturer
supplies the information that the importer lacks. Since the
foreign chemical industry is not regulated by the U.S.
premanufacture program, its role in this process is voluntary.
Cooperation by foreign industry will depend in part on the
benefits the manufacturer expects to derive from entering the
U.S. market, the relationship of the importer to the
manufacturer, the availability of the information to the
manufacturer, the resources needed to provide the information,
and the manufacturer's concern over the risk of trade secret
disclosure, which in part could result from differences between
U.S. and foreign law protecting confidentiality.
The cooperativeness of foreign manufacturers and suppliers
may depend on the availability of requested information and the
extent of their concern for confidentiality. As the Economic
Impact Analysis indicates, most foreign manufacturers are located
in the European Economic Community and Japan. Although there are
certain differences in their notification programs, the information
requirements for new chemical substances in these countries
generally are or will soon be similar to those under TSCA.
However, foreign manufacturers may be reluctant, for reasons of
availability, cost, or confidentiality, to cooperate with the
importer.
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Foreign manufacturers can protect trade secrets from
disclosure during transit by submitting them directly to EPA.
Nevertheless, there may be conflicts between their interests in
secrecy and EPA's and the U.S. public's information needs.
Therefore, foreign manufacturers, who are not legally obligated
to comply with EPA's requirements, may sometimes be reluctant to
submit information to EPA under section 5. Obviously, the
absence of U.S. legal authority over foreign manufacturers is a
controlling factor in contacts between U.S. importers and foreign
manufacturers. EPA will depend on cooperation of foreign
industry for this part of the premanufacture notification program
to function.
Although the participation of foreign manufacturers and
suppliers is voluntary, EPA can require that importers contact
these persons and request that they submit information. EPA
evaluated four approaches to the issue of importer contact of
foreign manufacturers and suppliers.
1. Options Considered
Option 1 -- Mandatory Contact and January 10 Foreign
Manufacturers/Suppliers Form
In this option, importers would be required to ask foreign
manufacturers and suppliers to complete the Foreign
Manufacturers/Suppliers Form proposed on January 10, 1979.
Option 2 Mandatory Contact and Shortened Form
Importers would be required to ask foreign manufacturers and
suppliers to complete a Foreign Manufacturers/Suppliers Form
consistent with changes in the domestic form proposed in the
October 16, 1979, reproposal.
Option 3 Mandatory Contact for Health and Environmental
Effects Data
Importers would be required to contact foreign manufacturers
and suppliers for health and environmental effects data and risk
assessments.
Option 4 No Mandatory Contact
Importers would not be required to contact foreign
manufacturers or suppliers.
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2. Discussion
The four approaches considered by EPA fall into two basic
categories: mandatory contact and no mandatory contact. The
mandatory contact alternatives, Options 1, 2, and 3, each require
the importer to contact the foreign manufacturer. They differ in
the amount of information the importer requests. The burden on
the foreign manufacturer to provide information decreases from
Option 1 to Option 3. Under Options 1 and 2, the importer
provides the foreign manufacturer with a Foreign Manufacturers/
Suppliers Form, which he would complete and submit to the
importer or directly to EPA. This form is shorter than the form
that U.S. manufacturers and importers submit under section 5. It
includes questions on manufacturer and supplier identity,
chemical identity, production and marketing data, physical-
chemical properties, and health and environmental effects data;
it does not include questions on occupational exposure, consumer
exposure, or environmental release. Under Option 3, the foreign
manufacturer sends to EPA only health and environmental effects
data and risk assessments.
Under Option 4, the importer is under no obligation to
contact foreign suppliers and manufacturers. This approach works
well for importers who do not require additional information for
their notices. It poses a problem, however, for importers who
need information for a complete submission. If the importer does
not know the chemical identity, he will have to contact the
foreign supplier or manufacturer for that information, regardless
of a no-mandatory-contact provision. If he sends a section 5
notice to EPA without chemical identity, EPA would not consider
the notice complete and the review period would not begin.
Under the mandatory contact options (Options 1, 2, and 3),
the importer will incur out-of-pocket expenses to contact foreign
suppliers and manufacturers. Submitters under Option 4 may also
incur these out-of-pocket expenses if they believe that foreign
suppliers or manufacturers have information necessary for their
notices, but they will not be required to do so. Under all four
options, if submitters do not include enough information for an
adequate review, EPA may require more information under its
proposed supplemental reporting authority, or it may prohibit or
limit the import of the substance under section 5(e) pending the
submission of additional data. These actions are most likely to
occur under Option 4, which does not require that the importer
contact foreign suppliers or manufacturers; they are least likely
with Options 1 and 2.
Foreign manufacturers and suppliers will incur costs if they
submit information under any of the options. Of the mandatory-
contact options, Option 1 will be the most costly, Option 3 the
least. The Foreign Manufacturers/Suppliers Forms in Option 1 and
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2 will be less extensive than the domestic forms proposed on
January 10, 1979, and October 16, 1979, respectively; the costs
of filling them out will be correspondingly less. Under all
these options, submissions by foreign manufacturers and suppliers
are voluntary.
Foreign manufacturers and suppliers would incur a
nonmonetary cost because of the risk of trade secret
disclosure. This risk would decrease from Option 1 to Option 4,
because the amount of information submitted to EPA would probably
decrease. In each option, there may be a conflict between EPA's
and the U.S. public's need for information and the foreign
manufacturer's desire to protect confidential business
information. Because EPA cannot compel foreign manufacturers or
suppliers to provide information under T3CA, the deciding factor
for this problem is the marketplace whether or not the foreign
manufacturer or supplier will forego his U.S. market because of a
concern for confidentiality.
Benefits to society will depend on how much information EPA
receives in the section 5 notice. The more information available
to EPA, the more thorough the risk assessment, and the greater
the protection of human health and the environment. Since Option
1 and 2 ask for more information than do the other options, they
are more likely to benefit society. Under Option 3, EPA would
not receive much of the information requested in Options 1 and 2,
but it would receive health and environmental effects data and
risk assessments, which are likely to be the most useful
information. EPA would be least likely to receive data under
Option 4.
3 . Preferred Option
Foreign manufacturers and suppliers may have information
necessary for EPA's review. Under Option 4, the importer is
under no obligation to contact these persons, and therefore EPA
may not learn of information that would affect its review. For
this reason, EPA believes that a mandatory contact provision is
necessary and did not propose Option 4.
The major difference in Options 1, 2, and 3 is the amount of
information requested from the foreign manufacturer. Option 1
requires the most, Option 3 the least. The forms for foreign
manufacturers and suppliers in Options 1 and 2 correspond to the
domestic forms proposed on January 10 and October 16. Because
EPA now favors a limited form for domestic manufacturers, it
believes that the Foreign Manufacturers/Suppliers Form should not
exceed the October 16 requirements. It prefers Option 2, which
would require the submitter to ask foreign manufacturers and
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suppliers to complete a limited form consistent with the October
16 reproposed form. However, the Agency solicits comments on
whether Option 3, which requires submitters to ask foreign
manufacturers and suppliers only for health and safety data and
risk assessments, would meet its needs.
G. Exporters
Section 12(a) of TSCA provides that the Act applies to
chemical substances manufactured solely for export if EPA finds
that they will present an unreasonable risk to health or the
environment within the United States. Therefore, if the
manufacture or processing of a new chemical substance presents
such a risk for example, as a result of worker exposure or
release to the environment EPA would be authorized to control
it, preferably before the risk occurred. In the proposed
rulemaking, EPA has considered three alternative approaches to
premanufacture notification for new chemical substances
manufactured solely for export: exporter notification under
section 5, exporter reporting under section 8(a), and no exporter
reporting.
1. Major Options
Option 1 Exporter Notification under Section 5(a)
Under this option, proposed on January 10 and October 16,
EPA would require section 5 notices from manufacturers producing
new chemical substances solely for export. Submitters would not
provide information on uses and exposures occurring outside the
United States. They would complete the exporter form proposed on
October 16.
Option 2 Exporter Reporting under Section 8(a)
This option would require exporters to submit a report under
section 8(a) containing the same information required in the
Option 1 exporter notice. The notice would be filed 90 days
before first manufacture. Companies with annual sales of less
than ?1 million would be exempt.
Option 3 No Exporter Notification
Persons would not be required to report the manufacture of
new chemical substances solely for export.
2. Discussion
Options 1 and 2 require that manufacturers of new chemical
substances intended solely for export notify EPA 90 days before
they begin manufacture. In Option 1, the submission would be
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under section 5, in Option 2 under section 3. In both cases, EPA
would learn that a person intended to manufacture a new substance
for export before that manufacture took place. The notices would
be similar in their information requirements; they would ask for
the information the October 16 reproposal required of
manufacturers producing a substance for the domestic market,
except that they would not request information on uses and
exposure occurring outside the United States. Under both
options, EPA would have 90 days to assess the risk and determine
the hazard, if any, posed by the new substance before manufacture
began. The similarity between Options 1 and 2 ends here.
Under Option 1, if EPA finds that an export-only chemical
poses an unreasonable risk within the United States, it can act
to prohibit or limit its manufacture, processing, distribution in
commerce, or disposal under section 5(f). If EPA requires
additional information for a reasoned evaluation, it can require
that information under its proposed section 8(a) letter
authority, or it can regulate the substance under section 5(e)
pending the development of the information. Under Option 2, EPA
would not be able to act based on these authorities, and, if the
substance were produced by a small business, which is exempt from
report under section 8(a), EPA might not learn of its
manufacture. If EPA did receive a section 8(a) notice, it would
have to rely on the rulemaking authorities of section 4, 5(a)(2),
6, or 7 to control the substance. In most cases, these rules
would require months to promulgate; in the meantime manufacture
for export could begin unrestricted. Of course, if a person
intended to manufacture the substance for a domestic use, he-
would have to submit a premanufacture notice.
The costs of preparing and submitting notices under Options
1 and 2 are similar. According to IGF estimates, costs of
submitting a section 5 export notice will range from $1,200 to
$6,900, somewhat less than the cost to complete a domestic notice
form (Economic Impact Analysis, p. 167). EPA believes that costs
of preparing a notice under section 8(a) will fall within the
same range because the report will contain essentially the same
information.
It is difficult to estimate the market size of chemicals
made solely for export, but EPA believes that it is relatively
small. According to the Economic Impact Analysis (p. 167),
solely-for-export chemicals probably do not represent a large
proportion of total business for most firms. Therefore, EPA
believes that the impact of exporter notification would be
slight. Exporters will generally have somewhat less of a
reporting burden than do other manufacturers subject to
premanufacture notification.
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EPA costs to review submissions and to protect confidential
business information are also similar under Options 1 and 2. A
difference in cost would occur, however, if EPA needed more
information, and the manufacturer did not submit it
voluntarily. Under Option 1, EPA could make a letter request
under section 8(a) or, in some cases, issue a section 5(e) order;
under Option 2 EPA would have to issue a separate 8(a) reporting
rule or a section 4 testing rule. These would require
considerably more Agency time and resources; they would involve
individual rulemakings instead of the expedited procedures
possible under Option 1.
Option 2 will narrow the universe of export-only
manufacturers who will be subject to premanufacture notification
because section 8(a) >has a small business exclusion.
Manufacturers with annual sales under $1 million will not be
required to report. This reduces the coverage under Option 2,
but it also lowers the overall costs for industry and EPA.
Under Option 3, manufacturers do not incur the cost of
reporting export-only new chemical substance to EPA. EPA,
likewise, will not have to review notices on these exports. From
EPA's and society's viewpoint, however, Option 3 is the most
costly. EPA will have no way to learn of plans to manufacture a
new chemical substance solely for export and will not have an
opportunity to evaluate the substance for any risks associated
with its manufacture in the United States. If such manufacture
does involve a hazard for example, to workers during
manufacture or to the environment as a result of waste disposal
-- EPA will learn of it only when damage occurs. The Agency,
therefore, may have difficulty in acting quickly to stop or
prevent damage to health and the environment. Society will incur
costs associated with the hazard, and will suffer damage that
might have been prevented if EPA had been notified before
manufacture began.
3. Preferred Option
EPA prefers Option 1, which combines the exporter
notification requirements proposed on January 10 and the exporter
form proposed on October 16. The Agency believes that it is
essential to take every possible step available under section 5
to prevent hazards associated with new chemical substances.
Commenters on the January 10 and October 16 proposal argued that
section 12(a) of TSCA prohibits EPA from requiring section 5
notices for new chemical substances manufactured solely for
export. Section 12(a)(1) states that, except for section 8, TSCA
does not apply to a substance that is manufactured solely for
export. This general principle, however, is qualified by section
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12(a)(2), which provides that the Act applies to such a substance
if EPA finds that it will present an unreasonable risk to health
or the environment within the United States. If EPA is not aware
that a new substance is being manufacturing domestically, the
Agency could not act to regulate the substance until a
significant health or environmental problem occurred. This is
contrary to the preventive approach to toxic substances embodied
in section 5. Therefore, when read in light of the entire
framework of TSCA, section 12 authorizes EPA to require
premanufacture notices for new chemical substances manufactured
solely for export.
The notice requirements for Options 1 and 2 are very
similar. However, the Option 2 approach does not allow EPA the
same opportunity to act on exported substances before manufacture
begins. Option 2 exporters can begin to manufacture substances
that EPA determines to be hazardous while EPA assembles the
necessary data to undertake a regulatory action. Under Option 1,
EPA will be able to act effectively in cases of unreasonable risk
before any harm has occurred.
H. Supplemental Reporting
For certain chemicals of concern, EPA may need additional
information from notice submitters or other persons during the
review period. This is likely if EPA adopts the limited
reporting requirements of the October 16 reproposal. In many
cases, submitters will provide the information voluntarily. In
others, however, they may not cooperate. In these cases, EPA
needs a way to obtain the information quickly, before it is too
late to act under section 5(e) or 5(f). EPA may also need the
authority to gather information from other persons, including
processors or persons with health and safety studies.
EPA has considered three approaches to a supplemental
reporting authority to provide information for the premanufacture
review. Options 1 and 2 require mandatory reporting; Option 3
does not.
1. Options Considered
Option 1 --January 10 Proposal
Under this option, proposed on January 10, EPA could require
certain persons to report additional information on the
manufacture, processing, distribution in commerce, use, or
disposal of a new chemical substance if that information was
necessary for an evaluation of the substance, and if it was known
to or reasonably ascertainable by those persons. The notice
submitter, potential processors of the new chemical substance,
and manufacturers or importers of reactants of unknown identity
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or composition used in the manufacture of the new chemical
substance could be subject to the requirement. The Assistant
Administrator for Pesticides and Toxic Substances or the Deputy
Assistant Administrator for Chemical Control would issue the
information requests by letter under the authority of section
8(a) during or after the review period. In addition, EPA could
require any person to submit relevant health and safety studies
of new chemical substances during or after the review period
through a supplemental reporting requirement under section 8(d).
Section 8(a) includes a small business exclusion, which, for
the purposes of supplemental reporting, was defined in the
January 10 proposal as exempting companies with annual sales of
less than $1 million. Therefore, processors of the substance and
manufacturers or importers of unknown reactants with less than
this sales volume could not be required to report. However,
original notice submitters, even if they were small businesses,
would be required to provide information that supplemented,
provided further detail on, or clarified information in the
original notice. EPA believes that small businesses can be
required under the authority of section 5 to submit information
that could have been required in the original notice. All
persons, including small businesses, could be required to submit
health and safety studies in their possession under a section
8(d) supplemental reporting requirement, because this section has
no small business exclusion.
The criteria for using supplemental reporting in this option
are broad. There is no provision to appeal the individual
letters requiring information.
Option 2 October 16, 1979, Reproposal
Option 2 (the October 16 reproposal), like Option 1,
provides a letter-writing authority under sections 8(a) and 8(d)
to get additional information necessary for Agency review of a
new chemical substance. It applies to the same persons, but
differs from Option 1 in several respects. Under Option 2,
criteria governing EPA's use of supplemental reporting are more
detailed. Option 2 also specifies the types of information EPA
may require if these criteria are met. In addition, if original
notice submitters are small businesses, they need only supply
information that explains or clarifies the premanufacture notice,
not information that supplements it. The reporting requirement
applies only during the review period; it does not extend beyond
the close of the period, as it does in Option 1. Option 2 also
provides a mechanism that allows submitters to appeal individual
requirements to supply information.
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Option 3 No Mandatory Supplemental Reporting
Option 3 does not provide for mandatory supplemental
reporting. EPA would have to rely on voluntary compliance when
it requested more information from submitters and other
persons. If they did not respond, EPA would have to issue a se-
parate section 8 rule to get the information. Or, if a substance
met the appropriate criteria, EPA could issue a section 5(e)
order prohibiting or limiting the manufacture, processing,
distribution in commerce, use, or disposal of the substance
pending the submission of the necessary information.
2. Discussion
The adoption of a limited notice form (see Section II(A),
Reporting Requirements) provides a persuasive argument for
Options 1 and 2. A comprehensive form, such as the one proposed
on January 10, 1979, generally gives information sufficient for a
detailed evaluation of a new chemical substance, if that
information is known to or reasonably ascertainable by the
submitter. Because only some new chemicals will undergo detailed
review, this comprehensive form may impose an unnecessary burden
on many notice submitters. The limited form of the October
reproposal reduces the initial burden of notice submission. With
the limited form, however, EPA needs a way to obtain more
information on chemicals of concern. Supplemental reporting
provides this. When EPA requires more information to determine
if a new chemical substance is a potential candidate for
regulatory action, it can request this information under its
proposed supplemental reporting authority-
Option 3, which has no mandatory supplemental reporting
requirement, will provide difficulties for EPA's review if a
limited form is adopted. EPA can request the information, but it
does not have the authority to enforce its request, as it does
under Options 1 and 2. Under this option, the Agency must rely
on industry cooperation.
Many commenters on the January 10 proposal (Option 1)
questioned EPA's authority to require information by letter.
They argued that rulemaking on a case-by-case basis was more
consistent with the Act. The case-by-case approach is proposed
as Option 3. Under this option, EPA would promulgate a separate
section 8(a) or 8(d) reporting rule each time the Agency needed
more information. The problem with this approach is that the 4
to 6 months required for each rulemaking would conflict with the
90-day (or at most 180-day) review period for new chemical
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substances. The time needed to promulgate an individual rule for
a specific chemical, together with the time before EPA received
data under the rule, would exceed the statutory review
schedule. This approach would limit the usefulness of the
information received, and it would generally foreclose regulatory
action based on that information under section 5(e) or 5(f)
actions that must be taken within 135 days of receipt of a
section 5 notice.
For this reason, EPA believes that a section 8 letter-
writing authority provides a better approach. In January and
October in a rulemaking subject to notice and comment, EPA
proposed and reproposed procedures for using the authority, the
criteria for when it would be used, the kinds of information that
could be required under it, and the procedures for appeal of
individual requests for information. With this general framework
in place, EPA could secure necessary information during the
review period in an expedited fashion. The ready availability of
information, or the possibility of determining that it is
lacking, is particularly important for actions under sections
5(e) and 5(f).
Under Options 1 and 2, EPA would informally request
information from the submitter or other persons before it sent a
section 8 reporting letter. If the information was provided, EPA
would avoid further administrative costs, and the recipient of
the request would incur only the costs of preparing and sending
the information. Costs for submitters who failed to respond to
the informal request but did respond to the section 8 (a) letter
would be no higher, unless EPA as a result of the delay extended
the review period under section 5(c). Failure to respond to the
section 8(a) letter might lead to an enforcement action or
regulation of the new chemical substance under section 5(e) or
5(f). In this situation, the cost to EPA and the submitter, of
course, would be higher.
It is difficult to estimate the out-of-pocket costs of
responding to a section 8 supplemental reporting requirement.
The cost will be determined by the frequency with which EPA uses
that authority. This in turn will be affected by the level of
detail in the original submissions. The costs of the specific
responses will vary with the chemical, the person subject to the
reporting requirement, and the information requested.
Costs will be different in Options 1 and 2. Option 1 is
broader, both with respect to the situations it covers and the
information that can be requested. Therefore, out-of-pocket
costs should be higher for Option 1. The appeal procedure of
Option 2, however, will entail an additional cost. An appeal
will involve administrative costs for EPA (diverting resources
from the review of other substances) and for the appealing
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party. Nevertheless, commenters on the January 10 proposal
argued that an appeal procedure was necessary to provide the
submitter protection from arbitrary action by EPA.
Costs to industry other than out-of-pocket costs are more
difficult to measure. The introduction of new substances into
the market may be delayed if EPA extends the review period under
section 5(c) to allow for supplemental reporting. However, the
effect of this should not be great, because the substances
subject to supplemental reporting will be slated for detailed
review. In this case, the notice period would have been extended
even without the supplemental reporting requirement.
The effect of Option 3 on industry is also difficult to
assess. On the one hand, submitters will not be subject to
reporting under the section 8 letter-writing authority. However,
if they do not provide sufficient information in their notices,
and they do not later provide the information voluntarily, EPA
may be required to take more actions under sections 8 and 5(e).
This situation could be particularly detrimental to the submitter
if the information requested by EPA would have decreased the
Agency's concerns and eliminated the need for regulatory action.
To protect human health and the environment from risks
associated with new chemical substances, EPA must be able to
secure information on these substances and to act under section 5
before they have entered commercial production. Under Option 3,
which has no mandatory supplemental reporting authority, EPA
would often find it difficult to act on new substances during the
review period. In many cases, it would lack the necessary
information to support an action under sections 5(e) or 5(f).
Individual, case-specific rulemakings under section 8 to secure
the necessary information would rarely provide that information
before the review period and the possibility of acting under
section 5(e) or 5(f) had ended. Options 1 and 2, however,
ensure that EPA has the authority to get necessary information
during the review period.
3. Preferred Option
EPA did not propose Option 3, because a no-mandatory-
reporting scheme would limit its ability to fulfill the mandate
of section 5. EPA has no assurance that information will always
be given voluntarily. When it is not, the Agency will find it
extremely difficult to assess the risks of a new chemical
substance and to act on potentially hazardous new chemicals
before they cause harm to human health or the environment.
Furthermore, a supplemental reporting authority will eliminate
the need for a more extensive and burdensome section 5 notice
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form. Without section 8 letter-writing authority, EPA will lack
a way to obtain more information on an expedited basis, and a
major justification for the streamlined form will be removed.
Of the two options discussed, EPA prefers Option 2.
Although Options 1 and 2 are very similar, EPA believes that
Option 2 addresses some of the chief concerns expressed in the
comments on the January 10 proposal, while still meeting the
information needs of the Agency and the public. The January and
October proposals have provided adequate opportunity for notice
and comment by persons potentially subject to supplemental
reporting under Option 2. This option also includes an appeal
procedure, which provides individual redress for persons subject
to supplemental reporting. Option 2 further restricts the scope
of supplemental reporting by limiting it to the notice review
period, by setting forth in more detail the criteria governing
EPA's use of supplemental reporting, and by specifying the types
of information EPA can request. These changes clarify the scope
of SPA's authority for industry, and they establish specific
guidelines for the Agency.
I. Processor Notification
Manufacturers of several classes of chemicals are
specifically exempt from the Inventory and from section 5
requirements: byproducts; tobacco and tobacco products; nuclear
materials; substances used solely as pesticides, firearms,
ammunition, foods, food additives, drugs, and cosmetics; and
substances manufactured before January 1, 1975, and not processed
or reported for the Inventory. In addition, persons
manufacturing new chemical substances under test marketing
exemptions, and persons manufacturing new substances in small
quantities solely for research and development (R&D), are exempt
from notice requirements if they comply with EPA restrictions for
these activities. The substances described above are referred to
as "exempt substances" in this section.
A processor notification requirement for all exempt
substances would close a gap in the section 5 regulatory scheme
by requiring persons to submit notices to EPA if they intended to
process any exempt substance for nonexempt purposes. Without
such a requirement, a new substance manufactured or imported for
an exempt purpose (such as a pesticide) could be processed in any
quantity for a TSCA use without a report being submitted to EPA
and without prior EPA review for possible effects on health or
the environment.
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EPA has considered several alternative approaches to
resolving this issue. The approaches differ by who must report,
what activities trigger reporting, what information must be
reported, and what TSCA authorities they depend on. This section
considers four major options; other options are discussed in the
Economic Impact Analysis (Part II, Chapter 8) and the August 15,
1980, proposed processor notification rule (45 FR 54645).
1. Options Considered
Option 1 -- January 10 Proposal
This option, proposed on January 10, 1979, would require
manufacturers or importers to report the processing, use, or
distribution of certain exempt substances. Specifically, a
manufacturer or importer would have to submit a section 5 notice
90 days before he processed, used, or distributed an R&D or test-
marketed chemical in a manner inconsistent with the terms of the
exemption. Persons who did not manufacture or import an exempt
substance, but who intended to process the substance for a TSCA
commercial purpose, would not be permitted to submit a notice.
Substances reported under this option would be added to the
Inventory when commercial activity began. Mandatory notification
costs under the January 10 proposal are estimated to range from
$3,740 to $22,160 (ADL, Impact of TSCA Proposed Premanufacturing
Notification Requirements, p. V-17).
Option 2 August 1980 Proposed Processor Reporting
Under this option, proposed by EPA on August 15, 1980 (45 FR
54642), persons would be required to submit section 5 notices at
least 90 days before they processed a previously exempt
substance, as defined above, for a TSCA commercial purpose.
Processor notification would be required whether or not the
person was also the original manufacturer or importer. The
notice would include all the information required by the notice
form proposed on October 16, 1979, as well as the name of the
supplier or future suppliers of the substance. The cost of
providing mandatory information under this alternative would
range from $1,155 to $8,925 (ICF, Economic Impact Analysis,
p. 186).
EPA would require notices under the authority of sections
5(a)(l) and 5(a)(2). After the review period, if EPA did not
take action on the substance, the submitter could process it for
TSCA commercial purposes, and it would be added to the TSCA
Inventory-
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Option 3 Section 8. Processor Notification
All persons who process previously exempt substances for
TSGA commercial purposes would be required to report to EPA under
section 8(a) at commencement of processing. Section 8(a)
notices would provide company name, contact person, chemical
identity, amount of the substance to be processed, an estimate of
consumer and worker exposure, a description of categories of use,
available health and safety data, and the name of the supplier.
The cost of providing this information would range from $724 to
$4,450 (ICF, Economic Impact Analysis, p. 186).
"Small processors" are exempt from section 8(a) reporting
and would not submit notices under this alternative. Substances
reported to EPA would not be added to the TSCA Inventory when
processing began.
Option 4 August Proposal with Exemption for One-time
Processing
Option 4 would require processor reporting for exempt
substances under section 5, as outlined in Option 2. However,
the reporting requirement would be coupled with an exemption
scheme permitting the limited processing of selected chemicals.
The exemption scheme would apply to R&D and test-marketed
substances processed on a one-time basis for TSCA commercial
purposes solely as an alternative to disposal. Persons who
intended to process R&D and test-marketed substances once as an
alternative to disposal in quantities under 500 pounds would not
be required to report. Persons who intended to process such
substances once as an alternative to disposal in quantities over
500 pounds would be subject to limited reporting requirements
under section 8. These requirements would be the same as the
requirements outlined for Option 3. Substances reported under
section 8 would not be added to the Inventory when processing
began, and small businesses would be exempt from this reporting.
2. Discussion
In considering the problem of processing previously exempt
substances for TSCA commercial purposes, EPA addressed several
issues. These include: (1) Whether to require notification for
such processing, (2) What the applicability of the reporting
requirement should be, (3) If reporting was required, what data
would have to be submitted, (4) How EPA could regulate chemicals
of concern under TSCA authorities after the notices were
received, (5) Whether to add reported substances to the TSCA
Inventory, and (6) What costs would be imposed on industry and
EPA. Resolution of each of these issues played a part in shaping
the approach EPA proposed. These are discussed in turn.
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a. Notification for commercial processing of exempt
substances. If previously exempt chemicals are processed for
commercial purposes, but the processors are not permitted to
submit a notice, EPA will be unable to assess the risks
associated with that processing, or with distribution in
commerce, use, or disposal of the substance for TSCA commercial
purposes, before those activities occur. Yet these activities
might pose significant risk to health or the environment.
Therefore, EPA proposes to require reporting for commercial
processing of exempt substances. This reporting is consistent
with section 5 of TSCA, which requires the Agency to review new
chemical substances and significant new uses before manufacture
or import for commercial purposes. Many substances are exempt
from Inventory and section 5 reporting when they are manufactured
or imported, yet persons other than the manufacturer or importer
might process them for TSCA commercial purposes. By requiring
reporting before these substances are processed for TSCA
purposes, EPA will be able to review any risks they will pose, in
the same way that the Agency considers risks associated with new
chemicals to be manufactured or imported for TSCA purposes.
b. Authority for and scope of processor notification.
Under the January 10 proposal (Option 1), EPA requires section 5
notification by manufacturers and importers of R&D and test-
marketed substances before they process, distribute, or use those
substances in a way inconsistent with the terms of the
exemption. Other persons could process exempt substances for
TSCA commercial purposes without notification. EPA, however,
believes that requiring reporting for only some classes of exempt
substances is not desirable because any exempt substance could be
processed for a TSCA purpose and placed in commerce. Singling
out only R&D or test-marketed substances for reporting does not
fulfill EPA's goal of reviewing substances never reported under
TSCA before they are processed for TSCA commercial purposes.
Because the January 10 proposal (Option 1) would only require
reporting for R&D and test-marketed substances, and then only if
the processor of the substance was the manufacturer or importer,
EPA decided that this approach does not sufficiently cover all
substances of concern. The Agency prefers an option that
requires notification for all categories of substances.
EPA could issue such a rule under section 8(a) (Option 3) or
sections 5(a)(l) and 5(a)(2) (Option 2). Under Option 3, EPA
would require all processors of previously exempt substances for
TSCA commercial purposes to submit limited section 8(a) notices
at the commencement of processing. Small processors would be
exempt from reporting because section 8(a) contains a small
business exemption. Under Option 2, proposed on August 15, 1980,
EPA would require that processors, including small processors,
submit a section 5 significant new use notice at least 90 days
before processing began. EPA has assessed the factors listed in
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5 7
section 5(a)(2), and, based on this assessment, the Agency
proposed in August that the transition of chemicals from exempt
manufacture or import to nonexempt commercial processing
constituted a "significant new use" under TSCA. Therefore, under
Option 2, persons intending to process a previously exempt
substance for TSCA commercial purposes would be required to
submit a notice under section 5(a)(l)(B).
Options 2 and 3 make all categories of exempt substances
subject to reporting, if they were processed for TSCA commercial
purposes. EPA, however, is considering an exemption for one
category of processing. Option 4 would permit processing with no
notification for R&D or test-marketed substances processed in
lieu of disposal for nonexempt purposes in quantities of less
than 500 pounds. Persons processing substances under the same
circumstances in quantities of greater than 500 pounds would
submit section 8 notices, but the substance would not be added to
the Inventory. This distinction by production volume exempts
processing likely to present less of a risk, because less of the
substance would be processed. This scheme would mean that a
person would not have to dispose of a chemical that had only a
limited one-time commercial application if section 5 notification
costs were higher than the expected financial return for the
commercial application.
EPA believes that substances manufactured solely in small
quantities for R&D or for test marketing may belong in a separate
category from other exempt substances. For example, a substance
manufactured as a pesticide, food, or drug may fail in a
nonexempt commercial use, but will still have its primary use as
a pesticide, food, or drug as an alternative. However, a
substance manufactured or imported for R&D or for test marketing
may only have a nonexempt commercial use as an alternative to
disposal. In this case, processing on a one-time or limited
basis to "use up" the substance is much more likely to occur.
Several arguments can be made for allowing this processing
without EPA notification. First, use of the substance may cause
less harm to the environment than disposal. Second, if
notification costs are greater than the benefits of one-time
processing, the processor may incur an increase in overall
costs. Third, it may not be desirable to add a substance to the
Inventory if it will immediately lose its commercial status. If
other TSCA uses are later discovered, it may be more appropriate
for EPA to review the substance at that time, when more
information is available. However, there is a strong argument
for mandatory EPA notification. The "using up" of the substance
may involve significant exposure to humans and the environment.
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EPA does not now have sufficient information on the
situations in which persons process R&D and test-marketed
chemicals for commercial purposes on a one-time basis as an
alternative to disposal. Therefore, it has not proposed this
exemption, but invites further comment.
c. Information requirements. Under Option 1, EPA would
require that submitters complete the notice form proposed on
January 10, 1979 although notification would be required only
for manufacturers or importers processing an R&D or test-marketed
substance in ways inconsistent with the terms of the exemption.
In the August 1980 proposal, EPA reduced the information
requirements to those of the October 1979 form. Section II(A),
Reporting Requirements, of this Regulatory Analysis explains this
in detail. In the August proposal, however, EPA also added a few
data requirements for processors. These data were the names of
suppliers and future suppliers; descriptions of the manufacturing
processes, if known; and, for R&D substances, any information on
health or environmental risks that the submitter received under
section 720.14(a)(2) or evaluated under section 720.14(c) of the
January proposal. These additional requirements are not
burdensome and will assist the Agency in assessing the risks
associated with the commercial processing of exempt substances.
Under Option 3, which requires a limited section 8(a)
notice, EPA would reduce the reporting burden for submitters
still further. EPA, however, does not believe that such a
limited notice would provide enough information for an initial
assessment of the risks posed by a chemical.
d. Control of reported chemicals. If EPA decides to
regulate exempt substances reported under any of the various
options, it is important that these requirements be imposed
expeditiously to protect the public and the environment before
any possible harm occurs. The options would require EPA to use
different authorities to control chemicals of concern, depending
on whether the chemical was initially reported under section 5 or
section 8. As discussed more fully in Section II(G) of this
Regulatory Analysis, regulation under section 5 would be less
burdensome to EPA, and it would allow more timely action.
Under the section 5 notice options, EPA would use sections
5(e) and 5(f) to regulate chemicals that may or will present
unreasonable risks. These sections allow EPA to act by order,
with court action as necessary. Substances reported under
section 8 would not be subject to regulation under section 5(e)
or 5(f). Instead, the Agency would be forced to act on chemicals
under section 4, 5(a)(2), 6, or 7, which would entail greater
burden and, in most cases, would require considerable time to
promulgate.
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e. Addition of reported substances to the TSCA
Inventory. Under Options 3 and 4, EPA would not add previously
exempt substances to the TSCA Inventory when it received a
section 8 notice. Section 8 notices, as described earlier, might
not contain information necessary for an initial screen, even
though it was known or reasonably ascertainable. Therefore,
these notices may not provide enough information for the
evaluations that EPA wishes to conduct on exempt substances
before they are processed for nonexempt commercial purposes. For
this reason, these substances should not be placed on the
Inventory. If the substances were placed on the Inventory,
persons who intended to manufacture or import them for TSCA
commercial purposes would not notify EPA; as a result, the
substances might enter commercial production without review under
section 5. Under Option 2, the substances would be subject to
section 5 notice before they were manufactured or imported for
TSCA commercial purposes, and would go into production for these
purposes only after EPA had evaluated a full section 5 notice.
f. Reporting costs for industry. The initial costs of
submitting mandatory information under the Options 1, 2, and 3
are given in Table II-4.
TABLE II-4
ESTIMATED COSTS OF COMPLETING MANDATORY PROCESSOR FORM
Option Cost
Section 8(a) reporting (Option 2) 725- 4,450
August 15, 1980 (Option 3) 1,155- 8,925
January 10, 1979 (Option 1) 3,740-22,160
Section 8 notices would be significantly less expensive for
submitters than section 5 notices. Section 8 notices would also
impose lower postsubmission costs. Because notices would be
submitted at commencement of processing, there would be no
delay. However, section 5 notices would have to be submitted
later if a person intended to manufacture or import the
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substance for TSCA commercial purposes. If both section 8 and
section 5 notices were submitted, the cost and burden to industry
would be higher than the costs of submitting either notice alone.
Under Option 2 (August reproposal), EPA would obtain enough
information to conduct an initial assessment; if necessary, it
could then require more data on chemicals of concern through
supplemental reporting. Therefore, the August proposal reduces
the cost of section 5 notification without substantially reducing
the effectiveness of EPA's review.
The January 10 approach (Option 1) and section 8(a)
processor notice (Option 3) would involve a cost to industry not
reflected in the costs of notification. Under the January 10
approach, only processors of R&D and test-marketed substances
would be permitted to submit section 5 notices; other exempt
substances processed for TSCA commercial purposes would not be
reported and would not go on the Inventory. Under Option 3,
processors would submit section 8 notices, but the previously
exempt substances would not be added to the Inventory. In both
Options 1 and 3, therefore, persons would have to submit^ a
section 5 notice before they could manufacture or import
previously exempt substances that had been processed for TSCA
commercial purposes. If the processor was not the manufacturer
or importer, and the manufacturer learned of the commercial
processing, the manufacturer would be required to halt
distribution for the commercial purpose and submit a notice.
Under Option 2, however, the reported substances would go on
the Inventory. Processors and any other persons could then
manufacture or import the substance for nonexempt purposes
without the potential delay of notification. They would also be
able to avoid interruptions in supply that would occur in Options
1 and 3 if the manufacturer learned of the processing but did not
submit a notice.
3. Preferred Option
EPA prefers Option 2, which it proposed in August 1980.
Processor reporting as proposed offers the most effective
environmental protection because it allows EPA to review exempt
chemicals before they are processed for TSCA purposes. To assess
the risks that might be posed by these chemicals, the Agency must
require enough information to conduct an initial screen. Option 2
achieves this by requiring that processors supply the information
requested on the October 16 form, if it is known to or reasonably
ascertainable by the submitter. Also, because processors would
submit section 5 notices under Option 2, EPA will be able to
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regulate previously exempt substances processed for TSCA
commercial purposes under sections 5(e) and 5(f). The substances
would be added to the TSCA Inventory when they are processed for
commercial purposes. Finally, under this option, small as well
as large processors would report.
J. Possession or Control
Under section 5(d)(l)(.Q), a notice submitter is required to
provide any test data in his "possession or control." In the
January 10, 1979, proposal, EPA defined information in a
submitter's possession or control as information: (1) In the
submitter's own files, (2) In commercially available data bases
to which he has purchased access, or (3) In files maintained in
the course of employment by employees or other agents of the
submitter who are associated with research, development, test
marketing, or commercial marketing of the substances. This
definition is common to the four options discussed in this
section. The options, however, differ in their treatment of test
data in the possession or control of companies affiliated with
the submitter, and in the participation of these affiliated
companies in the commercial development of the new chemical
substance.
1. Options Considered
Option 1 In Possession of Subsidiaries, Parent
Company, and Parent's Subsidiaries Associated in the
Present Venture
The first option was proposed on January 10, 1979. Under
this option, ''possession or control" means in the possession or
control of the submitter, any of his subsidiaries, his parent
company, or any company that the parent company owns or controls
if the subsidiary, parent company, or subsidiary of the parent
company is associated with the submitter in the research,
development, test marketing, or commercial marketing of the
substance. Under this option, one company "owns or controls"
another company if it owns or otherwise controls at least 50
percent of the other company's voting stock.
Option 2 In Possession of Subsidiaries Associated
in the Present Venture
The second option includes data in the possession or control
of the submitter or any of his subsidiaries if they are
associated with the submitter in the research, development, or
marketing of the new chemical substance. Unlike Option 1,
however, it does not include data possessed or controlled by a
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parent company or by companies owned by a parent company, even if
the parent company or its subsidiaries are associated with the
submitter in the research, development, or marketing of the
substance.
Option 3 In Possession of Subsidiaries, Parent
Company, and Parent's Subsidiaries, Including Those
Not Associated in the Present Venture
Like the first option, Option 3 defines possession or
control to mean in the possession or control of the submitter,
any of his subsidiaries, his parent company, or any companies
owned or controlled by the parent company. Again, owning or
controlling is defined as owning or controlling at least 50
percent of a company's voting stock. However, Option 3 does not
limit the definition 'to companies associated with the submitter
in any particular venture.
Option 4 Modified Option 1
The fourth option has been considered by EPA, but is not
analyzed in the Economic Impact Analysis. Like Option 1, this
definition includes data possessed or controlled by the
submitter, any of his subsidiaries, his parent company, or any
company that the submitter or his parent company owns or
controls, if the subsidiary, parent company, or subsidiary of the
parent company is associated with the submitter in the research,
development, test marketing, or commercial marketing of the
substance. Under this option, unlike Option 1, one company "owns
or controls" another company if the parent company exercises
"control in fact" over the other company, irrespective of its
percentage of stock ownership in that company. Control in fact
would mean the direct or indirect possession of the power to
direct the management and policies of a company, whether through
ownership of voting securities, by contract, or otherwise.
2. Discussion
Under each option, submitters possess or control data in
commercially available data bases to which they have purchased
access. The cost of retrieving data from such a data base is
reasonable, and the data may be valuable to EPA. Also under each
option, submitters possess or control information in the files of
their employees and agents. This is necessary to secure relevant
data and should not be unduly burdensome to submitters.
Options 1, 3, and 4 require the submission of data possessed
by subsidiaries, parent companies, and subsidiaries of parent
companies in addition to data possessed by the submitter. This
requirement is designed to obtain sufficient data without being
unduly burdensome. Without this comprehensive approach, many
data might be missed since chemical research and testing may be
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performed by parent corporations and their subsidiaries. In
addition, if the definition did not include parent's
subsidiaries, companies could reduce reporting requirements by
effecting a corporate change from divisions to Wholly owned
subsidiaries. Because research may be performed by the foreign
affiliates of submitters, the definitions would also apply to
those companies.
Option 2 is limited to the submitter and its subsidiaries.
This definition is less burdensome than Option 1. However, it
would not reach relevant data gained through research or testing
by parent companies and their subsidiaries if that data were not
contained in the files of the submitter.
In Options 1, 2, and 3, one company is considered to own or
control another if the parent company owns or controls the
majority of voting stock of the other company. In Option 4, one
company is considered to own or control another if the parent
company exercises control in fact over the other company
irrespective of its percentage of stock ownership in that
company. This definition would reach data not reached by the
other options. It follows the approach of other statutes and
regulations, such as the Securities and Exchange Act and the
regulations implementing the Export Administration Act. The
definition could be interpreted on a case-by-case basis, using
rebuttable presumptions of control based on objective criteria.
However, because it is not a purely objective standard, this
option would be harder to administer than the other options.
Options 1, 2, and 4 limit their reach to companies
associated with the submitter in some aspect of a particular
venture. Option 3 is not limited to companies associated with
the submitter in any particular venture. Theoretically this
definition would yield the most data. However, the files of
companies not working on a venture involving the substance in
question may contain data of marginal relevance. Further, the
definition may create burdensome search requirements since, in
some cases, it would reach hundreds of companies.
3. Preferred Option
EPA prefers the definition in Option 1, which was proposed
on January 10, 1979. While the definition extends the reporting
requirement beyond the submitter, it is not unduly burdensome.
If the companies involved in the venture use an integrated search
system, the direct economic impact of the reporting requirements
will be minimal.
The preferred definition may not reach data in the
possession of companies controlled in fact by the submitter, or
data in the possession of companies legally controlled by the
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subraitter but not involved in the development of the chemical
substance. These limitations, however, are not of major
concern. In practice, companies involved in the development of a
chemical substance will assemble the most complete and current
data base. In addition, submitters would generally know of data
possessed or controlled by a company not involved in the
development of the particular chemical substance. Therefore,
they would have to describe these data in their notices. EPA
could obtain the data through a supplemental reporting
requirement under section 8(d) or by a subpoena under section
11(c). To expand the definition beyond that of Option 1 might be
unduly burdensome to affected companies. Similarly, any
expansion of the concept of corporate control beyond the majority
of voting stock ownership standard would be confusing to affected
companies and administratively burdensome to EPA.
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III. COMPREHENSIVE PROGRAM OPTIONS
The previous chapter discussed various options for resolving
each of the ten major issues in the rulemaking. EPA has
constructed three basic approaches, or Comprehensive Program
Options (CPO's), for section 5 rules by selecting one option from
each issue. The CPO's differ in the extent of guidance they
give, their scope, and their burden on industry and EPA. Not all
the options discussed in the draft Regulatory Analysis or the
proposed Economic Impact Analysis are included in the CPO's.
This does not mean, however, that they have been eliminated from
consideration for the final rules. These CPO's are intended to
serve as examples of possible programs. They illustrate the
major alternatives that EPA considered in developing proposed
section 5 rules, but they do not represent every combination of
options that the Agency has considered in the past or is now
considering.
The CPO's, which are discussed more fully in Chapter 5 of
the proposed Economic Impact Analysis, are summarized in Table
III-l. Based on the level of reporting requirements in each of
the CPO's, they are referred to in this chapter as:
CPO 1; Minimum Guidance
CPO 2; October 16 Reproposal (with processor reporting,
as proposed in August 1980)
CPO 3; January 10 Proposal
CPO 2 reflects the program proposed by EPA. The remainder of
this chapter discusses the advantages and disadvantages of each
CPO, and explains EPA's choice of CPO 2 as the most appropriate
overall program of the three.
1. Options Considered
CPO 1 Minimum Guidance
Under CPO 1, EPA offers the least guidance to industry about
reporting requirements, and costs of notification to industry
at least initial costs will probably be the lowest. Under
this CPO, EPA would not develop a form, but would give minimum
guidance to submitters about what information they would have to
report. Test data would be defined as in the "possession or
control" of the submitter if they were in his possession or
control, or in the possession or control of a subsidiary
associated with the submitter in the research, development, or
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TABLE IV-1
COMPREHENSIVE PROGRAM OPTIONS
Issue
Reporting Requirements
Confidentiality
Mechanics
Timing of
subs tanti ation
Disclosure of chemical
identity
Incomplete Submissions
Customer Contact
Importers
Foreign Manufacturers
Exporters
Supplemental Reporting
Processor Reporting
CPO 1
Minimum guidance
(Option 2)
Minimum guidance
(Option 3)
Section 5(d) (2)
notice (Option 2)
Proposal
(Option 2)
Case-by-case
(Option 3)
No mandatory contact
(Option 4)
Principal importer
(Option 4)
Health and environ-
mental effects data
(Option 3)
Section 8 (a) report
(Option 2)
Case-by-case
(Option 3)
8(a) reporting
(Option 2)
CPO 2
Reproposal
(Option 3)
Reproposal
(Option 2)
Reproposal
(Option 3)
Proposal
(Option 2)
Proposal
(Option 1)
Unknown Uses
(Option 2)
Proposal
(Option 3)
Reproposed form
(Option 2)
Proposal with
reproposed form
(Option 1)
Reproposal
(Option 2)
August proposal
(Option 3)
CPO 3
Proposal
(Option 4)
Proposal
(Option 1)
Reproposal
(Option 3)
At submission
(Option 1)
Appeals
(Option 2.)
Proposal
(Option 1)
Proposal
(Option 3)
Proposed form
(Option 1)
Proposal
(Option 1)
Proposal
(Option 1)
Proposal
(Option 1)
Possession or Control
Submitter's subsid-
iaries, same venture
(Option 2)
Corporate hier- Corporate hier-
archy, same archy, any ven-
venture (Option 1) ture (Option 3)
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marketing of the substance. Submitters would not be required to
contact customers for information. EPA would have no special
supplemental reporting authority to gather data not contained in
the notice; it could do this only through an individual section
8(a) rulemaking, or in some cases a section 5(e) order. EPA
could, however, find that a submission did not meet notice
requirements, and the review period would not begin. EPA would
make these findings on a case-by-case basis and would not publish
formal criteria or procedures.
Of the three CPO's, CPO 1 offers the greatest protection for
confidential business information, and in most cases it involves
the least cost to the submitter. At the time of submission, the
submitters would have to substantiate only claims for information
that would appear in the section 5(d)(2) FEDERAL REGISTER
notice. They would not develop generic names or descriptions
masking confidential information, and no masked information would
be published. Confidential chemical identity underlying a health
and safety study would be disclosed only after manufacture began.
Finally, CPO 1 is the narrowest of the CPO's in
applicability. As under the other CPO's, all domestic
manufacturers would report. However, only the "principal
importer," not all parties to the import transaction, would be
required to submit notices. Principal importers would have to
ask foreign suppliers and manufacturers only for health and
environmental effects data and risk assessments. Persons
manufacturing new chemical substances only for export, and
persons who processed previously exempt substances for TSCA
commercial purposes, would have to submit a section 8(a) report
rather than a section 5(a)(2) notice.
CPO 2 October 16 Reproposal
CPO 2 consists of the preferred options discussed in Chapter
II of this Regulatory Analysis. It includes the notice form,
supplemental reporting requirements, customer-information
provisions, and certain aspects of the confidentiality procedures
proposed on October 16; it also includes processor notification
proposed on August 15 and several options from the January 10
proposal that were not reproposed.
Under CPO 2, submitters would complete the October 16 notice
form. They would have to provide test data in the possession or
control of their subsidiaries, their parent companies, and their
parent companies' subsidiaries, if these companies were involved
in the research, development, or marketing of the new chemical
substance. There would be no mandatory customer contact, but
submitters would have to report the number of committed customers
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intending to use the new chemical substance in ways not known to
them. They would also be required to report the percentage of
production volume allocated to these customers during the first
three years of production.
CPO 2 includes a section 8 supplemental reporting provision,
under which EPA, by letter, could require additional information
from the submitter during the review period. The procedures and
criteria for this authority would be those proposed on October
16. Also under CPO 2, if a submission had "major deficiencies,"
EPA could find that it did not meet notice requirements, and the
review period would not begin. If the submission had "minor
deficiencies," the review clock would stqp until the deficiencies
were corrected.
The submitter would assert confidentiality claims according
to the procedures in the October proposal. He would substantiate
all information at the time of submission. Certain categories of
confidential information would be masked by generic names and
descriptions in public notices; confidential chemical identity
underlying a health and safety study would be disclosed only
after manufacture began.
The definition of importer would be the same under CPO 2 as
under CPO 1, but no specific party to the transaction would be
named as responsible for reporting. Instead, all parties would
be responsible for seeing that a notice was submitted. The
importer would be required to contact foreign suppliers and
manufacturers, and ask them to complete a limited Foreign
Manufacturers/Suppliers Form. Persons manufacturing a new
chemical substance solely for export would submit a section 5
notice. Persons intending to process a previously exempt
substance for a TSCA commercial purpose would also be required to
submit a section 5 notice.
CPO 3 January 10 Proposal
In general, CPO 3 requires the most information, and it is
the broadest in scope. Submitters would be required to complete
the January 10 notice form. They would have to seek information
from all persons who they had reason to believe would purchase
the new chemical substance. They would have to provide test data
in the possession or control of their subsidiaries, their parent
companies, and their parents' subsidiaries, whether or not these
companies were involved in the research, development, or
marketing of the new chemical substance. During the review
period, EPA would have broad supplemental reporting authority, as
proposed on January 10. Under CPO 3, EPA would stop the review
only if it identified a major deficiency in the submission during
the first 30 days of the notice review period. Submitters could
appeal an EPA finding that a submission did not meet regulatory
requirements.
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The submitter would claim confidentiality according to the
procedures in the January proposal. As in CPO 2, he would have
to substantiate all information at the time of submission;
however, the burden would be greater under CPO 3 because in most
cases he would have to answer more substantiation questions.
Again as in CPO 2, he would be required to provide generic names
and descriptions to mask confidential business information in
certain categories. Confidential chemical identity underlying a
health and safety study would be disclosed at the time of
submission.
Under CPO 3, all parties to the import transaction, not just
the principal importer, would be responsible for submitting
notices. The importer would have to contact foreign suppliers and
manufacturers and ask them to complete the detailed form proposed
on January 10. Persons manufacturing a new chemical substance
solely for export would submit a section 5 notice. Manufacturers
and importers intending to process, use, or distribute R&D or
test-marketed substances in a manner inconsistent with the terms
of the exemption would also submit a notice. EPA would not
accept notices from other processors, unless they were also
manufacturers of the substance.
2. Discussion
Chapter 5 of the proposed Economic Impact Analysis discusses
in detail the relative costs to industry of notification under
the three CPO's. The discussion divides costs into presubmission
and postsubmission costs. Presubmission costs include out-of-
pocket costs and costs of delays; postsubmission costs include
out-of-pocket costs, costs of delays, costs of potential trade-
secret disclosure, and costs of restrictive action. The
following sections of the Regulatory Analysis compare the CPO's
on the basis of the assessment of costs to industry in the
Economic Impact Analysis, as well as the contractor's and EPA's
assessment of costs to the Agency and the public.
a. Reporting and related requirements. CPO 1 imposes
the lowest initial reporting burden on industry. Because
submitters receive little guidance, they can notify EPA in the
manner they consider least costly and most expedient.
Furthermore, the amount of information they provide is limited by
the absence of a customer-contact provision, by the requirement
that foreign manufacturers submit only health and environmental
effects data and risks assessments, and by the narrow definition
of possession or control.
On the other hand, CPO 1 could involve considerable
postsubmission costs for particular submitters. Under a minimum
guidance scheme, EPA is likely to receive less information and
will have to contact the submitter more often for additional
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information. This may lead to delay as a result of extension of
the review period under section 5(c). Without supplemental
reporting, EPA would have to rely on voluntary cooperation,
individual section 8(a) rules, or, in some cases, section 5(e)
orders. To the extent that EPA. acts under section 5(e) because
it did not obtain sufficient information in the notice form, or
because it had no supplemental reporting procedures, CPO 1 will
impose a high postsubmission burden. In addition, the absence of
formal, published criteria for determining when a submission does
not meet statutory requirements will increase industry
uncertainty. Because of this absence, EPA might receive more
incomplete submissions than it would under the other CPO's, or
submitters might provide EPA more information than the Agency
needed for an initial review-
The minimum guidance approach, as discussed earlier, places
a heavy administrative burden on EPA. Under the Interim Policy,
which offers minimum guidance, EPA has found that in many cases
it must organize submitted data. It also expends considerable
resources in obtaining data that might have been submitted at
little cost initially if appropriate instructions had been
provided. Because of the EPA resources spent in these
administrative and related functions, fewer resources are
available for assessing new chemical substances. As a result,
EPA reviews may suffer in the long run.
CPO 2 and 3 provide more detailed guidance to submitters,
and they impose broader reporting requirements. The use of forms
under these CPO's would considerably ease EPA's administrative
burden and reduce industry uncertainty about what information to
submit. Standards for section 5 notices would also reduce
uncertainty. In general, under CPO 2 EPA would receive
information sufficient for an initial screen of new chemical
substances; under CPO 3, it would receive information that could
support detailed review and possibly regulatory action under
section 5(e) or 5(f). Under CPO 2, the submitter would complete
the limited October 16 form; under CPO 3, the more detailed
January 10 form. EPA would also receive more information under
CPO 3 than under CPO 2 because it requires more information from
customers and foreign manufacturers, it requires customer
contact, and it defines "possession or control" more broadly.
Because CPO 3 requires more information, it will usually
involve greater presubmission costs, while CPO 2 is likely to
involve greater postsubmission costs. Under CPO 2, EPA will
often have less information on hand in the original submission,
and therefore the Agency is more likely to seek additional
information under the proposed supplemental reporting authority
or, in some cases, section 5(e). On the other hand, the scope of
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the section 8 supplemental authority is more clearly defined in
CPO 2 than in CPO 3. For this reason, the costs and uncertainty
associated with its use would be less.
CPO 2 and 3, because they allow more efficient use of
limited EPA resources and because they provide EPA with
information adequate for an initial review, will in the long run
lead to more reliable reviews than will CPO 1. In general, the
more data EPA has available, the better the review. At the same
time, however, the more information EPA receives, the more likely
it is that some of the information may be unnecessary for the
review. In this case, submitters have borne the cost of
providing information of marginal use to EPA. For this reason,
EPA prefers the approach of CPO 2 to that of CPO 3. CPO 2
requires less information in the notice by focusing on the
information needed for an initial review. In the initial review,
EPA can identify and seek more data on substances of high
concern. This procedure will ensure a more efficient use of both
EPA and industry resources.
b. Confidentiality. CPO 1 involves the lowest initial
cost for asserting confidentiality, and it offers the greatest
protection for confidential business information. However, it
severely limits public participation in the review process. EPA
would not publish generic names or descriptions in section
5(d)(2) FEDERAL REGISTER notices, which would restrict public
oversight.- Under this CPO, delays in obtaining substantiation
for other information will also restrict public participation in
the review process.
Although the presubmission costs of CPO 1 may be low for the
submitter, it will have the highest postsubmission substantiation
costs. Under this CPO, the submitter will often have to
substantiate information not substantiated when the notice was
submitted for example, if a Freedom of Information Act (FOIA)
request is received. Since the premanufacture review program
began, public interest groups have regularly requested
premanufacture notices under the Freedom of Information Act.
Therefore, under CPO 1, submitters are likely to have to
substantiate confidentiality claims weeks or months after the
submission of a notice, when they may no longer be as familiar
with its contents. Also, because substantiations must be
submitted promptly in response to an FOIA request, they will be
more burdensome than substantiations at the time of notification.
CPO 2 and 3 will involve greater initial costs for
confidentiality claims. Submitters will have to develop generic
names and descriptions for certain categories of confidential
business information, and they will have to substantiate all
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claims at the time of submission. The burden of substantiation
under CPO 2, however, will be considerably less than under CPO 3,
because CPO 2 reduces the number of questions the submitter must
answer in substantiating claims for most types of information.
CPO 2 and CPO 3 will entail a greater risk of disclosure of
confidential business information because EPA will receive more
information. In general, the more information that is submitted,
the more information that is subject to disclosure. Also, under
CPO 3 confidential chemical identity underlying a health and
safety study will be disclosed at the time of submission.
Although CPO 2 and CPO 3 involve higher presubmission costs
than CPO 1, their postsubmission costs may be lower. If a
Freedom of Information Act request is made for information
claimed confidential in a notice, the submitter will have already
substantiated his claims. Also, CPO 2 and CPO 3 will allow
meaningful public participation, both because generic information
will be available to the public and because EPA will review
substantiation claims at the time of notification. EPA response
to Freedom of Information Act requests will not be delayed by the
substantiation process.
c. Applicability. Of the three CPO's, CPO 1 is the
narrowest in applicability. All require domestic manufacturers
to report. However, under CPO 1, only the "principal importer"
need submit a notice; CPO 2 and 3 make all parties to the import
transaction responsible for notification. Because several
importers will be involved in the submission under CPO 2 and 3,
the overall costs of submission under these options are likely to
be higher for importers. However, the costs may be shared among
the parties, and therefore involve little cost for each.
Submission costs for foreign manufacturers and suppliers will be
least under CPO 1 because importers of new chemical substances
must ask them only to supply health and environmental effects
data and risk assessments. Under CPO 2 and 3, importers must ask
for considerably more information. Under all the CPO's, however,
submissions by foreign manufacturers and suppliers are voluntary.
Under CPO 1, persons manufacturing a new chemical substance
solely for export submit a section 8(a) rather than a section 5
notice. Because of the small business exemption in section 8(a),
companies with annual sales of below $1 million would not
report. Under CPO 2, exporters submit the October 16 form; under
CPO 3, they submit the January 10 form. Because the section 8(a)
form would require the same information as the October 16 form,
presubmission costs of supplying the information would be
approximately the same under CPO 1 as under CPO 2 (except for
small businesses, who would not report under CPO 1). Other costs
associated with CPO 2 for example, the broader definition of
possession and control would make the overall costs of
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compliance higher. For exporters, presubmission costs of CPO 3
are highest. However, as described in the section on reporting
requirements, CPO 3 is likely to involve lower postsubmission
costs than CPO 2. CPO 1 will have the lowest postsubmission
costs of the three, because EPA will receive section 8(a) notices
from exporters and, therefore, will not be able to extend the
review period under section 5(c) or act under section 5(e) or
5(f). In this option, EPA could only act under section 4,
5(a)(2), 6, or 7. Because of the burden of these actions, they
would be more difficult for EPA to take.
Under CPO 1, processors of previously exempt substances for
TSCA commercial purpose would submit a limited 8(a) report. CPO 3
requires manufacturers and importers to notify EPA if they
process an R&D or test-marketed substance for purposes
inconsistent with the exemption; under CPO 2, all persons who
process exempt substances for TSCA commercial purposes must
submit a section 5 notice. Because the section 8(a) form
requires the least information, submitters under CPO 1 will incur
the lowest reporting costs. Submitters under CPO 3 will incur
the highest costs because the January 10 form is required, and
because the other notification costs associated with this CPO are
highest.
3. Preferred CPO
EPA believes that CPO 2 strikes an appropriate balance
between the burden it imposes on the chemical industry and the
needs of EPA and the public. This program will establish clear
notification and review procedures, and it will ensure that EPA
receives adequate information for an initial review of new
chemical substances. Supplemental reporting will allow EPA, when
necessary, to obtain information on substances undergoing
detailed review. By concentrating its efforts on substances of
high concern, EPA will use its resources most efficiently,
without imposing unnecessary reporting burdens on industry. The
confidentiality policy will allow the greatest degree of public
participation while still protecting confidential business
information. In this policy, EPA has provided strong protection
for traditional trade secrets, while allowing greater public
disclosure of health and safety data information important to
public participation in the review process.
CPO 1 has the advantage of allowing the submitter maximum
flexibility; it generally imposes the least reporting burden; and
it involves the least risk of disclosure of confidential business
information. EPA, however, did not propose this option for
several reasons. CPO 1 involves the highest degree of
uncertainty for the chemical industry, particularly because it
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provides minimum guidance on reporting requirements. In
addition, it offers the least protection to the public, not only
because its confidentiality procedures will make public
participation difficult, but also because EPA will find it
difficult to perform adequate reviews within the short time
allowed by the Act. The Agency will not receive enough
information for the initial review of many new chemical
substances, and it will not have procedures adequate for
gathering this information during the review period.
CPO 3 will provide EPA with the most information. This is
an advantage because, on the whole, the more information EPA has
available to it during the review period, the more reliable its
reviews will be. In addition, CPO 3 will allow the greatest
public participation. This option, however, will also impose the
highest overall cost on industry. EPA believes that these costs
can be significantly reduced without substantially reducing the
effectiveness of the program. The January 10 notice form, the
broad definition of possession or control, the customer-contact
requirements, and other elements of CPO 3 will in many cases
provide EPA with more information than it needs for an initial
screen. In CPO 2, the Agency has reduced these burdens, while
retaining adequate safeguards. Of the three program options,
therefore, CPO 2, the option EPA has proposed, provides the
greatest protection for human health and the environment
consistent with the needs and concerns of the regulated industry.
U.S. GOVERNMENT PRINTING OFFICIl 1980 341-085/4602
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50277-101
REPORT DOCUMENTATION
PAGE
l._ REPORT NO.
560/12-80-006
3. Recipient's Accession No.
«. Title and Subtitle
Regulatory Analysis: Premanufacture Notification
and Review Procedures; Proposed Rule, Section 5,TSCA
5. Report Date (date
October 1980 issue)
7.- Author(s)
8. Performing Organization Rept. No.
9. Performing Organization Name and Address
Policy and Program Development Branch (TS-794)
Office of Toxic Substances
U.S. Environmental Protection Agency
401 M St., S.W.
Washington, D.C. 20460
10. Project/Task/Work Unit No.
11. Contract(C) or Grant(G) No.
(0
(G)
12. Sponsoring Organization Name and Address
13. Type of Report & Period Covered
14.
15. Supplementary Notes
16. Abstract (Limit: 200 words)
Section 5 of the Toxic Substances Control Act (TSCA) requires
manufacturers and importers to notify EPA 90 days before they
manufacture or import a new chemical substance. New substances are
those that are not on the TSCA Chemical Substance Inventory, which was
first published on June 1, 1979, and supplemented on July 30, 1980, by
a Revised Inventory. EPA proposed regulations to implement section
5 requirements and to establish premanufacture notice and review
procedures in the Federal Register of January 10, 1979 (44 FR 2242),
October 16, 1979 (44 FR 59764), and August 15, 1980 (45 FR 54642). In
this draft Regulatory Analysis, EPA explains the rationale for its
proposal. The Regulatory Analysis also discusses the major issues
raised by the proposed rules and describes the different alternatives
the Agency considered for resolving the issues. The analysis is in
part based on the proposed "Economic Impact Analysis of Proposed
Section 5 Notice Requirements," prepared by ICF Incorporated of
Washington, D.C.
17. Document Analysis . Descriptors
b. Identifiers/Open-Ended Terms
... COSATI Field/Group
18. Availability Statement
Release unlimited
19. Security Class (This Report)
20. Security Class (This Page)
21. No. of Pages
83
22. Price
(See ANSI-Z39.18)
See instruction* on Reverse
OPTIONAL FORM 272 (4-77)
(Formerly NTIS-35)
Department of Commerce
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