Legislative & Regulatory Issues

There are many legislative and regulatory issues facing the specialty chemical industry. But in late 2015, Miscellaneous Tariff Bill and Toxic Substances Control Act Reform have been the top industry issues before lawmakers on Capitol Hill.

 

Miscellaneous Tariff Bill

The Senate and House of Representatives passed a number of trade bills this summer, but they left one outstanding: the Trade Facilitation and Trade Enforcement Act of 2015 (HR 644). This was the only bill with substantial differences between the House and Senate. The Senate version of the bill contained a potential process to initiate a new Miscellaneous Tariff Bill (MTB). In December, after much deliberation, the House and Senate announced a conference on the bill. Unfortunately, the Conference Report on H.R. 644 did not contain a way forward for the MTB. It did, however, include a statement on the importance of expeditiously finding a way forward consistent with House and Senate rules. SOCMA will continue to work in 2016 to reinitiate the MTB.

Some House members currently see the MTB as an earmark. Under House and Republican Conference 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 temporarily suspends a duty on imported raw materials 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 have to 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.

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.

 

Toxic Substances Control Act Reform

After swift passage of the TSCA Modernization Act of 2015 (H.R. 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) after it passed out of the Environment and Public Works (EPW) Committee earlier in the year with a 15-5 vote.

S. 697 continues to enjoy strong bipartisan support with 60 co-sponsors, a filibuster-proof number, but it has yet to reach the Senate floor. Senators Richard Burr (R-NC) and Kelly Ayotte (R-NH) held up the vote in hopes of attaching reauthorization for the Land and Water Conservation Fund as an amendment. After several months of obstruction, the issue was finally resolved via an omnibus spending agreement that would be temporarily reauthorize the Land and Water Conservation Fund for 3 years. Senator Burr has since agreed to allow for S. 697 to move forward. Now, however, there are indications that Senator Barbara Boxer (D-CA) may hold things up for reasons that are not clear, but likely involving preemption. The hope all along has been to have an expeditious two-hour debate followed by a vote, but this would first require “unanimous consent.” 

Because there are noticeable differences between both Senate and House bills, 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. 

SOCMA supports both House and Senate bills and continues to advocate for a swift 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 arguably more implementable by EPA and does not risk “unfixing” the areas of TSCA that work, or could work better.

All indications suggest TSCA reform will happen in this Congress — the question remains when.

For more information, please contact Dan Newton at (202) 721-4158.

 

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