Listen to this post

On February 21, 2024, the US Environmental Protection Agency (EPA) released its final rule adjusting the fees it collects under the Toxic Substances Control Act (TSCA). EPA is required under TSCA Section 26 to review and, if necessary, adjust the fees every three years to ensure that funds are sufficient to defray part of the costs of administering TSCA. While EPA has significantly increased TSCA fees for manufacturers, importers, and processors of chemicals, it has also finalized new, key exemptions from fee requirements. These new fees will be effective on April 22, 2024.

TSCA allows EPA to establish fees to annually defray up to 25 percent of its costs for carrying out the following TSCA activities: administration of TSCA Section 4 (test rules, consent agreements, and orders), TSCA Section 5 (new chemicals), TSCA Section 6 (EPA-initiated risk evaluations for existing chemicals); and TSCA Section 14 (confidential business information). Anticipating that the annual costs to administer the TSCA program in FY 2024 through FY 2026 will be over $146 million, EPA plans to collect approximately $36.69 million in fees from industry.

EPA imposes fees on persons required to submit information under Section 4 of TSCA and Section 5 notices and on companies subject to Section 6(b) risk evaluations. Companies should pay attention in particular to risk evaluation fees and how EPA will divide them between companies who manufacture, import, and process chemicals under risk evaluation.

In the case of manufacturer-requested risk evaluations (MRREs), the fees are intended to defray 50 percent of the costs associated with conducting the MRRE on a chemical included in the TSCA Work Plan and 100 percent of the costs of conducting the MRRE for all other chemicals.

EPA first proposed changes to TSCA fees in 2021 and issued a supplemental proposal in 2022. EPA has increased TSCA fees because it claims the fee revenues have been about half of what it estimated when it established fees in 2018. EPA is also adjusting fees to account for the additional resources needed for anticipated TSCA implementation efforts—including efforts to reduce the backlog of new chemical reviews and to complete the forthcoming existing chemical risk evaluation and risk management rules. For FY 2024-2026, EPA anticipates it will need funding for 383 full-time equivalent employees and over $55 million in contract dollars.

The table below shows how EPA increased the various TSCA fees.

New TSCA Fees and Timelines 

Fee CategoryPrevious Fee AmountFinal New  Fee Amount Previous Timing of PaymentsFinal New Timing of Payments
TSCA Sec. 4
Test order$11,650 ($2,320 for small businesses)$25,000 ($5,000 for small businesses)Within 120 days after effective date of test orderWithin 180 days after effective date of test order
Amended test orderNoneNoneN/AN/A
Test rule$35,080 ($7,020 for small businesses)$50,000   (same fee for small businesses)Within 120 days after effective date of test ruleWithin 180 days after effective date of test rule
Enforceable consent agreement (ECA)$27,110 ($5,470 for small businesses)$50,000 (same fee for small businesses)Within 120 days after signing ECAWithin 120 days after signing ECA
TSCA Sec. 5 
PMN and consolidated PMN$19,020 ($3,330 for small businesses)$37,000 ($6,480 for small businesses)UpfrontUpfront
SNUN
MCAN and consolidated MCAN
TSCA Sec. 5 Exemptions
LoREX$5,590 ($1,120 for small businesses)$10,870 ($2,180 for small businesses)UpfrontUpfront
LVE
TME
Tier II exemption
TERA
Film Articles
Bona Fide NoticesNoneNoneN/AN/A
Notice of Commencement (NOC)NoneNoneN/A 
TSCA Sec. 6
EPA-initiated risk evaluation$1,605,000 ($320,000 for small businesses)Two payments resulting in $4,287,000 ($857,000 for small businesses)Within 120 days of publishing the final scope of risk evaluation  Two installments: first of 50% 180 days after EPA publishes final scope of risk evaluation; second of 50% 545 days after EPA publishes final scope of risk evaluation
Manufacturer-initiated risk evaluation on a chemical included in the TSCA Work Plan50% of total actual costs with a $1,490,000 initial paymentTwo payments of $1,414,924, with final invoice to recover 50% of actual costs (same for small businesses)Initial payment- within 30 days of EPA granting request, followed by a final invoice at the end of the risk evaluation  Three installments: first 180 days after EPA provides the submitting manufacturer notice that it has granted the request; second 545 days after EPA provides submitting manufacturer notice that it has granted request; final 30 days after EPA publishes final risk evaluation
Manufacturer-initiated risk evaluation on a chemical not included in the TSCA Work Plan100% of total actual costs with a $2,970,000 initial paymentTwo payments of $2,829,847 with final invoice to recover 100% of actual costs (same for small businesses)Same as aboveSame as above

Other Important Changes 

EPA also finalized several important changes to its procedures for issuing refunds, what entities can be exempt from TSCA fees, and how to allocate fees when there are multiple companies subject to a fee for testing under TSCA Section 4 and EPA-initiated risk evaluations under TSCA Section 6.

Refunds

EPA initially proposed to allow for a 20 percent refund of PMN fees if the submitter withdrew the PMN 10 or more business days after the beginning of the applicable review period but prior to EPA initiating risk management on the chemical substance. EPA decided not to finalize this proposal due to concerns with imposing an additional burden on EPA to undertake the process of issuing the refund and providing the submitter with the relevant documents. The current fee rule maintains full refunds for notices that were not required, or where EPA fails to make a determination on the notice within the applicable review period, unless EPA determines the submitter unduly delayed the process. EPA also provides a 25 percent partial refund if a notice is withdrawn within the first 10 business days of the applicable review period. 

TSCA Test Rules and EPA-Initiated Risk Evaluations Fee Exemptions

Manufacturers and importers are exempt from paying the fee for test rules and EPA-initiated risk evaluations if they meet one of the five exemptions on or after the “certification cutoff date” and do not conduct manufacturing/import outside of those exemptions after the certification cutoff dates. Note the cutoff date for TSCA test rules is the day prior to publication of the proposed test rule, and the cutoff date for EPA-initiated risk evaluations is the day prior to initiation of the prioritization process for the applicable chemical substance. There are five exemptions:

  1. Import of articles containing the substance;
  2. Production of the substance as a byproduct that is not later used for commercial purposes or distributed for commercial use;
  3. Manufacture of the substance as an impurity;
  4. Manufacture of the substance as a non-isolated intermediate; and
  5. Manufacture of small quantities of the substance solely for research and development.

Manufacturers are also exempted from fee requirements if they meet the below exemption for the five-year period preceding the publication of the preliminary list and do not conduct manufacturing/importing outside of this exemption during the five-year period preceding publication of the preliminary list:

  • Manufacture of the substance in quantities below a 1,100-pound annual production volume (for substances subject to test rules) or 2,500 pounds annually (for substances subject to EPA-initiated risk evaluations), unless all manufacturers of that substance manufacture that substance in quantities below that annual production volume, in which case this exemption is not applicable.

These fee exemptions are only available if the manufacturer/importer will meet one or more of the exemptions in the successive five years and will not conduct manufacturing outside of the exemptions in the successive five years (for exemptions 1-5) or will meet the exemption in the successive five years (for exemption 6).

Self-Identification Process for TSCA Test Rule and EPA-Initiated Risk Evaluation Fee Payers

Manufacturers/importers of chemicals in the previous five years must submit a self-identification to EPA, irrespective of if they are included on the preliminary list. These entities can respond by certifying cessation of manufacture/import, certification of no manufacture, or certification of meeting an exemption. Companies that do not make any of these certifications must submit production volume for the applicable substance for the three calendar years prior to publication of the preliminary list. Note that companies must provide production volume information even if they are claiming the low volume exemption (exemption 6 listed above). EPA will then publish the final list of manufacturers subject to fees concurrently with the final scope document for risk evaluations initiated by EPA under Section 6, and with the final test rule for test results under Section 4.

Consortia and Division of Fees

For consortia formed to pay a testing requirement under TSCA Section 4, the consortium must identify a principal sponsor and notify EPA within 90 days (increased from 60 days) of the publication of the final test rule, the effective date of the test order, or the signing of an enforceable consent agreement.

If multiple companies are subject to fees under Section 4 (testing) or Section 6(b) (EPA-initiated risk evaluations), EPA will determine the portion of the fee to be remitted by each company. Fee distribution aligns with the total number of manufacturers and/or processors of the substance, with lower fees for small businesses. For EPA-initiated risk evaluations, the fees will be in proportion to the total number of manufacturers and their reported production volume for the substance, with lower fees for small businesses.

When companies subject to fees form a consortium and others do not, EPA calculates a “base fee” by dividing the total fee by the total number of manufacturers. Small businesses not associated with any consortium or part of an all-small business consortium receive an 80 percent discount from the base fee. EPA will then calculate the total remaining fee and the total number of remaining manufacturers sharing it, adjusting for discounted fees and the number of small businesses identified. This remaining fee is then redistributed equally for testing consortia or reallocated based on production volume for EPA-initiated risk evaluation consortia, with the top 20th percentile of manufacturers paying 80 percent of the fee.

Processors to Pay Fees for TSCA Test Orders and Enforcement Consent Agreements (ECAs)

The original fee rule required manufacturers and importers to pay fees only for TSCA Section 4 test orders and ECAs. EPA now requires fee payments by processors identified in the test orders and ECAs who submit information. When no manufacturers receive a test order or ECA, requiring fee payments by processors allows EPA to recoup the costs of administering those test orders and ECAs.

Export-Only Manufacturers

Although EPA initially proposed that manufacturers who exclusively export chemicals subject to EPA-initiated risk evaluations pay fees, EPA decided not to finalize that proposal, aligning with existing TSCA programs. Therefore, EPA is not requiring export-only manufacturers to make payments to defray the costs of the risk evaluations.

For more information on TSCA fees, please contact Hunton’s Chemicals Team.