Legislative & Regulatory Issues

There are many legislative and regulatory issues that face the specialty chemical industry. Other hot topics include:

 

Toxic Substances Control Act Reform

As the groundbreaking bipartisan Toxic Substances Control Act (TSCA) reform bill, the Chemical Safety Improvement Act (CSIA), stalls in the Senate, Chairman John Shimkus (R-IL) of the House Energy and Commerce Committee Subcommittee on Environment and the Economy has introduced a version of a TSCA reform bill in the form of a discussion draft, the Chemicals in Commerce Act.  Click here to access the draft and summary. 

The Senate bill, introduced last year by Senator David Vitter (R-LA) and the late Senator Frank Lautenberg (D-NJ), has 25 co-sponsors almost evenly split between Democrats and Republicans, but due to concerns raised by Senate Environment & Public Works Chairwoman Barbara Boxer (D-CA), the bill has not picked up enough steam to get through committee. Boxer has been working with Senators Tom Udall (R-NM) and Vitter to find common ground on the issues of preemption, Proposition 65 and civil suits although the bill still has not moved. Meanwhile, House efforts continue to pick up with the emerging discussion draft and subsequent hearings in the works.

SOCMA plans to review the draft with members and will be offering perspectives to the House Energy & Commerce Subcommittee on Environment and the Economy on the draft bill.  SOCMA has worked closely with this committee on what viable TSCA reform would look like for small and medium-sized specialty chemical manufacturers. The bill is similar to the Senate Chemical Safety Improvement Act, but shorter. SOCMA applauds Shimkus and his staff for introducing a draft that the specialty chemical industry can support as a vehicle for reform and creating a process that should keep a bipartisan conversation going.

Contact Dan Newton at (202)721-4158 for more information on TSCA.

 

Miscellaneous Tariff Bill

The Miscellaneous Tariff Bill expired December 31, 2012, and Congress has yet to act on this critical piece of trade legislation that is impacting SOCMA members and chemical manufacturers of all sizes across the country.

The MTB is a compendium of separate bills, introduced individually by members of Congress, that provide duty suspensions and reductions for products manufactured in the districts they serve. Thousands of these bills are introduced every Congress, with 2,041 bills between the House and Senate currently awaiting passage. Rather than individually voting on each bill separately, they are rolled into one bill, called the MTB.

The goal of the MTB is to lower manufacturing costs by reducing the tariff obligations on products or parts that are imported and used in a manufacturing process without harming U.S. manufacturers that produce competing products. For chemical makers, the reductions would come on products like chemicals and raw materials. These are materials specialty chemical makers can’t purchase in the United States but are critical components to the products their companies manufacture.

These duty suspensions help companies compete globally by reducing manufacturing costs. The savings these companies receive as a result of duty suspensions allow them to invest in new facilities, create jobs, train workers, pass savings onto consumers, and in the case of specialty chemical makers, invent new chemistries, among other things.

In July 2013, House Ways and Means Committee Chairman Dave Camp (R-MI) and Ranking Member Sander Levin (D-MI) introduced MTB legislation, but Congress has yet to act on it despite the fact that it has strong bipartisan support in both the House and Senate. February 5, 2014, marked the 400th day manufacturers have been operating without the MTB.  Talks between the House and Senate have intensified over the past couple of months, and they are working toward a compromise to move MTB legislation forward. SOCMA is continuing to work with members of Congress and push for passage of the MTB.

If Congress does not pass the MTB, SOCMA members and other U.S. manufacturers face an ominous $748 million tax hike and $1.857 billion in economic losses over the next three years.

For more information on this issue, please contact Justine Freisleben at or (202) 721-4155.

 

Confidential Business Information

Many entities argue that over-reaching regulations hurt innovation, and nowhere is that more valid than in the industry represented by SOCMA, the specialty, batch and custom chemical manufacturing industry. The protection of chemical identity of specialty chemicals is particularly important for our sector. The specialized nature of the type of chemistry performed by SOCMA’s members is what makes this sector so unique and vital to the development of newer, greener chemicals.

SOCMA members are not large-quantity commodity manufacturers who make products for which the chemistry is already known, but are small quantity, or “batch,” manufacturers using highly specialized chemistry. They make a variety of high-value substances with unique functionalities.

Prior to establishing a market for a product, confidential business information (CBI) is of the utmost importance. As the prospects of establishing a market increase, a company may decide to submit a pre-manufacture notification (PMN) to EPA for a new chemical substance. It often takes years of effort and expense through extensive research and development just to get to this stage. Given the narrow applications for which specialty chemicals are used and the niche markets they serve, disclosure of chemical identity may be all it takes to give away a competitive advantage and result in less innovation in the U.S. In many cases, the confidentiality of chemical identity is all a specialty chemical producer has to remain in business. Simply stated, the incentive to develop greener chemicals largely disappears if prospective manufacturers know the risk is high of having their good idea being revealed.

Furthermore, more than 70 percent of SOCMA members are small and medium enterprises (SMEs), which underscores the sensitivity to proposals that would compromise competitiveness. For more information on CBI, contact Dan Newton at (202) 721-4158.

 

 

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