Frequent Questions about TSCA Fees for EPA-Initiated Risk Evaluations
The following frequent questions are intended to clarify the requirements associated with the TSCA Fees Rule. They should be used for informational purposes only and are not a substitute for the TSCA Fees Rule. You should carefully review the regulations located at 40 CFR Part 700.45 for specific information on how to comply with TSCA Fees Rule requirements. If you need assistance after reviewing these questions, please contact us. Last updated December 2020.
Rulemaking Announcement and No Action Assurance
- Why is EPA announcing its intention to propose exemptions to the TSCA Fees rule?
- What is the expected timing for this rulemaking?
- Is EPA considering any other changes to the TSCA Fees Rule as part of this rulemaking?
- What does the “No Action Assurance” mean?
- Do entities in the three categories in the planned regulatory change still have to self-identify during the comment period closing on June 15, 2020?
- Are entities in the three categories impacted by the planned regulatory change still responsible for paying a portion of the risk evaluation fee?
- What should I do if I’ve already self-identified as a manufacturer, but fall into one of the three categories in the planned regulatory change?
- What should I do if I’ve been identified on a Preliminary List, but fall into one of the three categories in the planned regulatory change?
- What should I do if I fall into one of the three categories in the planned regulatory change, but have NOT yet self-identified and was NOT identified on a Preliminary List?
- What constitutes an “article” for purposes of the planned regulatory change?
- What constitutes a “byproduct” for purposes of the planned regulatory change?
- What constitutes an “impurity” for purposes of the planned regulatory change?
Entities Subject to Fees
Reporting in CDX
“Small Business Concerns”
- When calculating the number of employees of a manufacturing entity for comparison to the size standard (and possible qualification as a small business concern), the rule specifies that, inter alia, the employees of “all parent companies” must be included in the calculation. For a manufacturing entity (“M1”), is this count limited to its immediate parent company (“P1”) (owning or controlling 50 percent or more of a company's voting stock or other equity rights in M1 – 40 CFR 704.3), or would it also include the employees of P1’s “parent” company (“P2”) (owning 50% or more of equity rights in P1)?
- NAICS codes are determined by an entity’s “primary industry.” An entity’s size (for “small business entity” purposes) is determined by the number of its employees plus, inter alia, the employees of “all parent companies.” The “primary industry” (and NAICS) of the larger enterprise represented by including “all parent companies” may be different than the primary industry of the original entity considered alone (e.g., the US importer/distributor subsidiary of a foreign chemical manufacturer has a different NAICS if considered alone than it would if considered to be a part of the larger enterprise of its included parent). Please clarify whether the applicable size standard is determined by the primary industry (NAICS) of the immediate ‘manufacturer’ of the risk evaluation substance, or by the primary industry of the larger enterprise representing “all parent companies” of the immediate ‘manufacturer,’ whose employees will be counted against the size standard
Final Lists of Responsible Fee Payers
Joint Liability and Enforcement
- At what point is a new entrant to the market for the manufacture of a designated high-priority chemical able to enter that market for the first time without incurring liability for a share of the corresponding risk evaluation fees? Is it the day after the preliminary list of manufacturers is published? The day after the final list is published?
- In the event a single fee consortium is not established for a risk evaluation substance, and EPA sets per capita fees for small business entities and others, please confirm that a company listed on the Final List can fully satisfy its fee obligation to EPA by paying the applicable per capita fee, even if other listed persons fail to pay their shares when due.
- If a manufacturer does not initially recognize that it manufactured a particular high-priority chemical until after the Final List is published (and the applicable fee has been allocated by EPA), does that company continue to have liability for a share of the fee, or is the Final Listing the final allocation of fee expense, and the late discoverer is liable only for failure to timely provide notice?
Rulemaking Announcement and No Action Assurance
1. Why is EPA announcing its intention to propose exemptions to the TSCA Fees rule?
Based on stakeholder concerns regarding the practicalities of self-identifying under the TSCA Fees Rule given broad definition of “manufacture” and the lack of exemptions, EPA announced its intention to propose exemptions from the TSCA Fees Rule for three categories of manufacturers subject to EPA-initiated Risk Evaluation fees and associated requirements: 1) importers of articles containing one of the twenty high-priority substances; 2) producers of one of the twenty high-priority substances as a byproduct; and 3) producers or importers of one of the twenty high-priority substances as an impurity. EPA also issued a “No Action Assurance” for three categories of manufacturers subject to TSCA fee requirements for the twenty ongoing EPA-initiated risk evaluations. In December 2020, EPA proposed revisions to the current rule to address these issues.
2. What is the expected timing for this rulemaking?
In December 2020, EPA proposed revisions to the current rule to address these issues.
3. Is EPA considering any other changes to the TSCA Fees Rule as part of this rulemaking?
As part of the same rulemaking effort, EPA may also consider any necessary adjustment to fee amounts and potential additional improvements to the overall TSCA Fees Rule scope and structure. EPA will consider feedback received on TSCA Fees Rule to date and expects to further engage with stakeholders as required in TSCA section 26.
4. What does the “No Action Assurance” mean?
Consistent with the planned regulatory change (i.e., to propose exemptions from the TSCA Fees Rule for EPA-initiated risk evaluation for three categories of manufacturers), EPA is exercising its enforcement discretion, as a bridge to the final revised rule, regarding the self-identification requirement. The three categories of manufacturers are: 1) importers of articles containing one of the twenty high-priority substances; 2) producers of one of the twenty high-priority substances as a byproduct; and 3) producers or importers of one of the twenty high-priority substances as an impurity. Thus, the gency will not pursue enforcement action against entities in the three categories for failure to self-identify under the TSCA Fee Rule. Learn more about the no action assurance.
5. Do entities in the three categories in the planned regulatory change still have to self-identify during the comment period closing on June 15, 2020?
EPA is no longer expecting the three categories of “manufacturers” of one of the twenty high-priority substances to self-identify under the TSCA fees rule. EPA is exercising its enforcement discretion consistent with the planned regulatory change and will not pursue enforcement action against entities in those three categories for failure to self-identify. However, if an entity in one of the three categories has been identified in a Preliminary List, they should certify in CDX before the close of the comment period on June 15, 2020, that they fall into one of those categories to avoid identification on EPA’s final list. See question #8.
6. Are entities in the three categories impacted by the planned regulatory change still responsible for paying a portion of the risk evaluation fee?
It depends. Entities identified on a final list of responsible fee payers are subject to a portion of the TSCA fee for the risk evaluation activity. See 40 C.F.R. § 700.45(b)(7)-(8). EPA will develop the Final Lists of responsible fee payers based on information received during the current comment period. Each Final List will be published no later than concurrent with publication of the final risk evaluation scope document. If an entity self-identifies to EPA as a manufacturer of one of the twenty high-priority substances, EPA will include the entity on the Final List, and that entity will be responsible for a portion of the risk evaluation fee. Entities included on a Preliminary List in error must certify as such to EPA to avoid being identified in the Final List. Likewise, an entity in one of the three categories that was listed on a Preliminary List must certify to EPA in CDX that they fall into one of those three categories and therefore should not be listed on the Final List or responsible for the risk evaluation fee. EPA has modified CDX to facilitate a new appropriate response in line with the planned regulatory change. Find instructions for reporting in CDX.
7. What should I do if I’ve already self-identified as a manufacturer, but fall into one of the three categories in the planned regulatory change?
Entities who fall into one of the three categories but have already self-identified as a manufacturer have the option to change their response in CDX before the close of the comment period on June 15, 2020. EPA has modified CDX to facilitate a new appropriate response in line with the planned regulatory change. Find instructions for amending responses in CDX.
8. What should I do if I’ve been identified on a Preliminary List, but fall into one of the three categories in the planned regulatory change?
Entities who have been identified on a Preliminary List, but fall into one of the three categories in the planned regulatory change should certify in CDX before the close of the comment period on June 15, 2020, that they fall into one of those categories, and therefore should not be listed on the Final List and not subject to the risk evaluation fee. EPA has modified CDX to facilitate a new response consistent with the planned regulatory change. Find instructions for reporting in CDX.
9. What should I do if I fall into one of the three categories in the planned regulatory change, but have NOT yet self-identified and was NOT identified on a Preliminary List?
For those who fall into one of the three categories but both (1) were not identified on a preliminary list and (2) have not yet self-identified, EPA does not expect those entities to take any further action. EPA is exercising it enforcement discretion consistent with the planned regulatory changes and will not pursue enforcement action against these entities for failure to self-identify. Additionally, EPA expects to use self-identification information to develop the final list of responsible fee payers and only those entities on the final list will be subject to the risk evaluation fee.
10. What constitutes an “article” for purposes of the planned regulatory change?
Article means a manufactured item (1) which is formed to a specific shape or design during manufacture, (2) which has end use function(s) dependent in whole or in part upon its shape or design during end use, and (3) which has either no change of chemical composition during its end use or only those changes of composition which have no commercial purpose separate from that of the article, and that result from a chemical reaction that occurs upon end use of other chemical substances, mixtures, or articles; except that fluids and particles are not considered articles regardless of shape or design.
11. What constitutes a “byproduct” for purposes of the planned regulatory change?
Byproduct means a chemical substance produced without a separate commercial intent during the manufacture, processing, use, or disposal of another chemical substance or mixture.
12. What constitutes an “impurity” for purposes of the planned regulatory change?
Impurity means a chemical substance which is unintentionally present with another chemical substance.
Entities Subject to Fees
1. In situations where one company has contracted with another company to manufacture a chemical, who would be responsible for meeting the TSCA Fees Rule requirements associated with EPA-initiated risk evaluations, including the requirement to self-identify and pay the fee?
The TSCA Fees Rule requirements for EPA-initiated risk evaluations apply to manufacturers of the chemical substance. In the situation described, the company actually producing or manufacturing the chemical would be responsible for meeting the requirements. The manufacturer and the company contracting for the manufacture may, nonetheless, come to a separate agreement on cost sharing responsibilities.
2. For imports of a high-priority chemical substance that involve multiple entities such as a local import broker acting at the request of another U.S. company, who is responsible for meeting the requirements of the TSCA Fees Rule for EPA-initiated risk evaluations?
The TSCA Fees Rule requirements for EPA-initiated risk evaluations apply to manufacturers of the chemical substance, including importers. EPA has generally defined “importer” to mean any person who imports a chemical substance, including a chemical substance as part of a mixture or article, into the customs territory of the United States. “Importer” includes the person primarily liable for the payment of any duties on the merchandise or an authorized agent acting on his or her behalf. See also 40 CFR 704.3. Where multiple entities involved in the import activity meet the definition of “importer”, only one must report for purposes of the TSCA Fees Rule. If none of those entities report, the EPA may hold each such person liable for failure to do so. The entity that self-identifies as the importer will be liable for payment of one portion of the fee. However, the importer and other entity(s) involved may come to a separate agreement on cost sharing responsibilities.
3. Do the TSCA Fees Rule requirements for EPA-initiated risk evaluations apply to importers of foods, drugs, cosmetics, or other items that are excluded from the definition of “chemical substance” under TSCA section 3 but contain the High-Priority chemical undergoing risk evaluation?
No. Under TSCA section 3, any food, food additive, drug, cosmetic, or device (as such terms are defined in section 201 of the Federal Food, Drug, and Cosmetic Act [21 U.S.C. 321]), when manufactured, processed, or distributed in commerce for use solely as a food, food additive, drug, cosmetic, or device, is excluded from the definition of “chemical substance,” and therefore not subject to TSCA Fees Rule requirements. Import of chemicals for multiple uses (that includes at least one use not excluded under the definition in Section 3) or for which uses are unknown are subject to the TSCA Fees Rule requirements.
4. If an entity manufactures (including import) a chemical designated as a “high-priority substance” for export only from the US, would that entity be subject to section 26(b) risk evaluation fees?
If the chemical is manufactured (including imported) for export only and conforms to the requirements of TSCA §12(a), the entity is not subject to the TSCA Fees Rule.
5. If an entity produces formaldehyde as a byproduct of a combustion process, is that activity subject to the TSCA Fees Rule requirements?
Production of a chemical substance – as a byproduct or otherwise – generally constitutes “manufacture” under TSCA. However, as indicated in the Agency’s March 25, 2020 announcement, the Agency intends to consider proposing an exemption to the TSCA Fees Rule for the production of a high-priority substance (e.g., formaldehyde) as a byproduct. In addition, as a bridge to the expected final revised TSCA Fees Rule, EPA issued a “No Action Assurance” for entities that – among other activities - produce a high-priority chemical as byproduct. As such, EPA will not pursue enforcement action against entities that produce a high-priority substance as a byproduct for failure to self-identify under 40 CFR 700.45(b)(5).
Reporting in CDX
1. I am a manufacturer of a high-priority chemical. How do I fulfill my obligation to self-identify in CDX?
EPA’s TSCA Fees Website (“Reporting and Paying Fees” section) provides useful resources for companies seeking to complete these requirements. See https://19january2021snapshot.epa.gov/tsca-fees. For those unfamiliar with reporting in CDX, there are instructions and guides for how to set up a new account. In addition there are step-by-step instructions for completing the “initial response” to self-identify or certify for an EPA-initiated Risk Evaluation here: https://19january2021snapshot.epa.gov/tsca-fees/instructions-how-complete-self-identification-and-other-certifications-cdx-epa-initiated.
2. A company certifies “no manufacture” in CDX. Are they prevented from manufacturing the high-priority chemical in the future?
A certification of “no manufacture” means that the entity has not manufactured (including imported) the high-priority substance at any time in the five-year period preceding publication of the Preliminary List. There is no future-oriented commitment.
3. A company certifies “cessation” in CDX and has no intent to manufacture/import for the next five years. However, the company cannot rule out the possibility of importing one or more high-priority substances in the next five years. Is there a process for a company to change its certification with EPA after all TSCA Fees reporting deadlines have passed, if the company wishes to import a high-priority substance within the next five years after certifying they would not do so?
A certification of “cessation” means that the entity (1) did manufacture in the five-year period preceding publication of the Preliminary List, but ceased that manufacture prior to the cutoff date in the rule (i.e., the day prior to the start of the prioritization process for the chemical) and (2) commits to not manufacture the chemical for five years into the future from the date of certification. For those that certify as to “cessation,” there is no process for amending that response after the end of the comment period. If that company has ceased manufacture but wishes to retain flexibility to potentially manufacture (including import) a high-priority substance in the next five years, they should not certify as to “cessation.”
4. What do I have to do if my entity was erroneously on a Preliminary List?
If your entity was included on a Preliminary List by mistake (i.e., not a manufacturer under TSCA), the entity is required to certify to EPA in CDX that they have not manufactured/imported the high-priority chemical in the five years preceding publication of the Preliminary List (and therefore are not responsible for the fee). In this scenario, the appropriate response option is “certification of no manufacture." Find instructions for reporting in CDX.
5. I am a manufacturer who has manufactured a high-priority substance in the 5 years preceding publication of the preliminary list, but ceased manufacture of the chemical prior to the cutoff date in the TSCA Fees rule (March 2019) other than manufacture in the three categories impacted by the Agency’s rulemaking announcement and “No Action Assurance” (i.e., import of the chemical in an article, import or production of the chemical as an impurity, or production of the chemical as a byproduct). I can also commit to not manufacturing the chemical in the future five years, other than manufacture in those same three categories. What should I do to be removed from this final list and not be required to pay a portion of the risk evaluation fee?
In light of the rulemaking announcement, EPA does not expect to identify entities who otherwise meet the criteria for “cessation” except for manufacture or potential manufacture in one of the three categories - and who certify as such in the “Additional Information” field in CDX - on the final lists of responsible fee payers. Only manufacturers who are listed on the final list are subject to the applicable fee. Manufacturers who meet these criteria should take the following actions when reporting in CDX:
(1) Self-identify as a manufacturer in CDX
(2) Make the following certification in the “Additional Information” field under the Response Information tab in the CDX Form:
“I certify that the company has ceased manufacturing/importing the chemical substance prior to initiation of the prioritization process for the chemical substance (March 21, 2019) other than manufacture in one or more of the following three categories: (1) production of the chemical as a byproduct, (2) import or production of the chemical as an impurity, and (3) import of the chemical in an article. I further certify that the company will not manufacture or import the chemical substance again, other than manufacture in one or more of those same three categories, for at least five years from the date of this certification in CDX. The company should not be identified on the final list of fee payers subject to fee obligations for this activity.”
6. I am a manufacture of an high-priority substance chemical and received an invoice. How do I submit payment in CDX?
The “Reporting and Paying Fees” section of EPA’s TSCA Fees Website provides useful resources for companies seeking to complete these requirements including step-by-step instructions for accessing CDX and submitting payments.
“Small Business Concerns”
1. When calculating the number of employees of a manufacturing entity for comparison to the size standard (and possible qualification as a small business concern), the rule specifies that, inter alia, the employees of “all parent companies” must be included in the calculation. For a manufacturing entity (“M1”), is this count limited to its immediate parent company (“P1”) (owning or controlling 50 percent or more of a company's voting stock or other equity rights in M1 – 40 CFR 704.3), or would it also include the employees of P1’s “parent” company (“P2”) (owning 50% or more of equity rights in P1)?
For purposes of determining whether or not one qualifies as a “small business concern” under the TSCA Fees Rule, you must count the employees of all parent and subsidiary companies within the corporate chain. Additional information on small businesses and TSCA fees is available on our website here: https://19january2021snapshot.epa.gov/tsca-fees/tsca-fees-and-small-businesses
2. NAICS codes are determined by an entity’s “primary industry.” An entity’s size (for “small business entity” purposes) is determined by the number of its employees plus, inter alia, the employees of “all parent companies.” The “primary industry” (and NAICS) of the larger enterprise represented by including “all parent companies” may be different than the primary industry of the original entity considered alone (e.g., the US importer/distributor subsidiary of a foreign chemical manufacturer has a different NAICS if considered alone than it would if considered to be a part of the larger enterprise of its included parent). Please clarify whether the applicable size standard is determined by the primary industry (NAICS) of the immediate ‘manufacturer’ of the risk evaluation substance, or by the primary industry of the larger enterprise representing “all parent companies” of the immediate ‘manufacturer,’ whose employees will be counted against the size standard.
For purposes of determining whether you meet the definition of “small business concern” at 40 CFR 700.43, the company should apply the NAICS code and corresponding employee threshold of the manufacturer of the high-priority chemical, not the NAICS code of the parent company. If the NAICS code of a manufacturer or processor is not represented in the table, it will be considered small if it has 500 or fewer employees See 40 CFR 700.43.
Final Lists of Responsible Fee Payers
1. What is the process if EPA lists a company on the Final List (i.e., determines a fee is due and whether the company is or not a small business concern), and the company disagrees with the listing (e.g., not a manufacturer, improperly labeled as not a small business concern)?
There is currently no process in the TSCA Fees Rule for appeal or dispute of the Final List of responsible fee payers. The purpose of issuing the Preliminary List and requiring self-identification and other certifications is to ensure that the Final List is comprehensive and accurate. Companies should complete the required reporting in CDX before the end of the comment period (June 15, 2020), and reach out to EPA with any questions. The Final List will determine which companies are obligated to pay a portion of the TSCA risk evaluation fee. EPA’s proposed revisions to the TSCA fees rule would allow EPA to modify the Final List after its publication.
Joint Liability and Enforcement
1. At what point is a new entrant to the market for the manufacture of a designated high-priority chemical able to enter that market for the first time without incurring liability for a share of the corresponding risk evaluation fees? Is it the day after the preliminary list of manufacturers is published? The day after the final list is published?
For a company that has never manufactured the high-priority chemical, they may begin to do so on the day after the publication of the preliminary list and avoid requirements associated with the TSCA Fees Rule.
2. In the event a single fee consortium is not established for a risk evaluation substance, and EPA sets per capita fees for small business entities and others, please confirm that a company listed on the Final List can fully satisfy its fee obligation to EPA by paying the applicable per capita fee, even if other listed persons fail to pay their shares when due.
Where individual manufacturers not associated with a consortium are assigned a portion of the TSCA Risk Evaluation fee by EPA, those manufactures are only responsible for paying their respective portion of the fee.
3. If a manufacturer does not initially recognize that it manufactured a particular high-priority chemical until after the Final List is published (and the applicable fee has been allocated by EPA), does that company continue to have liability for a share of the fee, or is the Final Listing the final allocation of fee expense, and the late discoverer is liable only for failure to timely provide notice?
Only the entities identified on the Final List are responsible for payment for a portion of the TSCA Risk Evaluation Fee. Companies that fail to timely self-identify and are subsequently not identified on the Final List are liable only for the violation of the self-identification provisions of the TSCA Fees Rule at 40 CFR 700.45(b)(5).