TSCA Inventory Update Rule
April 8, 2010In our experience, compliance with the Toxic Substances Control Act (TSCA) is frequently inadvertently overlooked by companies, particularly those for which bulk chemical manufacturing may not be their primary line of business or that are mid-market firms. TSCA has a lot of different components, including requirements related to the introduction of new chemical substances into commerce.
This note is focused on a narrow, but important, aspect of TSCA compliance: Inventory Update Reporting (IUR). Why? Because the IUR requirements are changing and reporting for 2010 will be required, which means if you are subject to IUR and aren't focused on it already, now might be a good time to get caught up.
What's IUR?
EPA explains that the "purpose of the IUR program is to collect quality screening-level, exposure-related information on chemical substances and to make that information available for use by EPA and, to the extent possible, to the public" (see http://www.epa.gov/opptintr/iur/pubs/guidance/basic.html). The IUR regulations were issued under section 8(a) of TSCA, are found at 40 C.F.R. part 710, and were last updated back in 2005 (see 70 Fed. Reg. 75059).
The IUR regulations require certain companies that manufacture, import, or process chemical substances for commercial purposes to meet certain reporting and recordkeeping requirements (40 C.F.R. 710.1). Failure to meet these requirements may result in civil penalties and criminal prosecution.
"Chemical substances" that are subject to the IUR regulations are "any organic or inorganic substance of a particular molecular identity, including any combination of such substances occurring in whole or in part as a result of a chemical reaction or occurring in nature, and any chemical element or uncombined radical" (40 C.F.R. 710.3(d)). The following substances are not "chemical substances," however: (i) mixtures, (ii) tobacco or tobacco products; (iii) certain radioactive and/or nuclear materials; (iv) food, food additives, drugs, cosmetics or devices; (v) pesticides; and (vi) pistols, firearms, revolvers, shells and cartridges. Determining the chemical substances that are regulated involves both art and science, and it goes without saying that a close reading of the regulations is required.
Regulated persons were last required to report specified information for each chemical substance that the person manufactured (or imported) for commercial purposes in an amount of 25,000 lbs. or more at any one site during calendar year 2005 (40 C.F.R. 710.52). The information to be reported is specified in the IUR regulations and was required to be submitted during the period August 25, 2006 to March 23, 2007 (40 C.F.R. 710.53).
Next Reporting Cycle
The IUR regulations require reporting every 5 years, so since the last reporting period was 2005, we're currently in the next reporting year (2010). Information for 2010 must be reported during the period June 1, 2011 to September 30, 2011 (40 C.F.R. 710.53).
The Regulations Are Changing
Despite the fact that we already are in a reporting year for purposes of the IUR program, EPA is poised to publish changes to the IUR regulations that are expected to impact current reporting requirements. Possible changes to the IUR regulations include: (i) elimination of upper threshold to collect processing and use information; (ii) inclusion of multi-year production volume information; (iii) information collection frequency every 4 years, instead of the current 5 year cycle; (iv) electronic reporting; and (v) various modifications to required data elements.
Furthermore, the partial exemption that inorganic chemicals used to enjoy is no longer in effect for the 2010 reporting cycle. At a minimum, this will impact inorganic chemical manufacturers.
What Should You Do?
We recommend that companies comply with the current IUR regulations despite the fact that they will be changing in the near future, and in a way that impacts current reporting obligations. Companies further, of course, should pay close attention when the new regulations are proposed. If they result in draconian changes, it is possible that some allowances may be allowed for companies that will struggle to comply due to EPA's late release of the rule changes.
Companies that historically have orbited around TSCA but for whatever reason were never required to report under the IUR regulations may wish to dust off their copies of the statute and regulations because it is possible that the new regulations will broaden the scope of reporting. Just because you were not regulated in the past doesn't mean that you will not be regulated in the future.
And what should you do if you failed to report for 2006 back in 2006/2007? EPA's web site helpfully reminds companies that, under the agency's self-disclosure policy, once a violation has been discovered, a company has 21 days from the time of that discovery to disclose the violation in writing to EPA.