There are many legislative and regulatory issues facing the specialty chemical industry. But in 2015, Toxic Substances Control Act (TSCA) reform and trade policy have been among the top industry issues before lawmakers on Capitol Hill.
Toxic Substances Control Act Reform
After the swift passage of the TSCA Modernization Act of 2015 (HR 2576) by the House in a 398-1 vote in late June, all eyes turned to the Senate, anticipating a floor vote to be scheduled on the Frank R. Lautenberg Chemical Safety for the 21st Century Act (S. 697).
The Senate bill passed out of the Environment and Public Works (EPW) Committee earlier in the year with a 15-5 vote and continues to enjoy strong bipartisan support with 52 co-sponsors. All indications suggest this bill should pass in time — the question remains when. Senate Majority Leader Mitch McConnell (R-KY) says he is committed to getting this bill on the floor, but it will likely not happen until later in September, or possibly October, as Congress is now in August recess, and other priorities will get more attention when they go back in session.
Because there are noticeable differences between both bill, it still remains unclear how Congress will reconcile those differences. The Senate bill makes more changes to the status quo, whereas the House bill focuses on the areas of TSCA that have been the most problematic. It is possible the ranking member of the Senate EPW Committee, Barbara Boxer (D-CA), could create challenges in the process, as the bill continues to have some controversy attached to the way it handles preemption vis-à-vis the stage it would actually take effect in the Environmental Protection Agency’s (EPA’s) review of a chemical. Generally speaking, the Senate bill preempts state action once a chemical is prioritized as a high priority. The House bill would require a final rulemaking on a safety determination before preemption would kick in.
SOCMA supports both House and Senate bills and continues to advocate for an expeditious new chemicals process, strong confidential business information (CBI) protections and reasonable fees, but is inclined to view the House bill as more favorable to the membership. The House bill is also arguably more viable from a political perspective.
For more information please contact Dan Newton at (202) 721-4158.
Miscellaneous Tariff Bill
Both the House of Representatives and the Senate recently passed a number of trade bills, including Trade Promotion Authority (TPA), Trade Adjustment Assistance (TAA) and a preferences bill, which included the African Growth and Opportunity Act (AGOA) and the Generalized System of Preferences (GSP). Missing from this important trade legislation is one of SOCMA’s top priorities, the Miscellaneous Tariff Bill (MTB).
The MTB temporarily suspends a duty on an imported raw material not available in the U.S. Companies request these duty suspensions because they help lower the cost of their U.S. production, which can be significant if they must import these critical inputs from overseas. When approved by Congress, a duty suspension greatly reduces manufacturing costs not just for the company requesting it but for any manufacturer that imports those same raw materials on which duties have been suspended.
House members currently see the MTB as an earmark and are working on a solution. Under House rules, no member is permitted to introduce a bill that would suspend a duty unless there are more than 10 beneficiaries resulting from the duty suspension. In other words, the entity requesting the duty suspension would have to guarantee that 10 or more additional entities would benefit from said duty suspension before the bill could be introduced.
The MTB was included in an amendment to the Senate version of the Customs bill, and SOCMA is working to ensure this provision remains in the bill. The Customs bill outlines a new process for the MTB that would ideally restart the process in October in a more administrative way, allowing companies to submit to either the International Trade Commission, or have a member of Congress submit.
The MTB expired at the end of 2012 and has gone without passage for more than 1,000 days. Specialty chemical manufacturers are under increased pressure here at home as a result of rising costs of federal regulations and raw material prices. Resuming the MTB would provide measurable relief.
For more on the MTB or other trade issues, contact Justine Freisleben at (202) 721-4155.
RCRA Corrosivity Petition
The Environmental Protection Agency (EPA) is considering a petition filed by an environmental group that would reduce the current pH level for the Resource Conservation and Recovery Act (RCRA) corrosivity characteristic from 12.5 to pH 11.5, a 10-fold reduction, and would remove the “aqueous” designation so dusts and other non-aqueous waste streams would also fall within the ambit of the characteristic. EPA has until the end of March 2016 to make a decision on the petition.
SOCMA is currently participating in an industry coalition lobbying EPA to reject the petition. SOCMA and several other members of this group have already met with EPA to express concerns about the petition. The agency has asked for more specific information about the potential impacts of these changes from affected stakeholders by the end of August or early fall.
For more information on corrosivity or environmental issues, contact Dan Moss at (202) 721-4143.