Attachment 1

Prepublication Copy Notice:
The EPA Acting Administrator signed the following Federal Register document on September
27, 2018:
Title: Fees for the Administration of the Toxic Substances Control Act
Action: Final Rule
FRL: 9984-41
Docket No.: EPA-HQ-OPPT-2016-0401

This is a prepublication version of the document that EPA is submitting for publication in the
Federal Register. While the Agency has taken steps to ensure the accuracy of this
prepublication version of the document, it is not the official version of the document for
purposes of public comment or judicial review. Please refer to the official version of the
document that will appear in a forthcoming Federal Register publication.
Once the official version of the document publishes in the Federal Register, the prepublication
version of the document posted on the agency’s internet will be replaced with a link to the
document that appears in the Federal Register publication. At that time, you will also be able
to access the on-line docket for this Federal Register document at http://www.regulations.gov.
For further information about the docket and, if applicable, instructions for commenting, please
consult the ADDRESSES section in the front of the Federal Register document.

BILLING CODE 6560-50-P
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 700, 720, 723, 725, 790 and 791
[EPA-HQ-OPPT -2016-0401; FRL-9984-41]
RIN 2070-AK27
Fees for the Administration of the Toxic Substances Control Act
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
SUMMARY: As permissible under section 26(b) of the Toxic Substances Control Act
(TSCA or the Act), EPA is establishing fees applicable to any ·person required to submit
information to EPA under TSCA section 4; or a notice, including an exemption or other
information, to be reviewed by EPA under TSCA section 5; or who manufactures (including
imports) a chemical substance that is the subject of a risk evaluation under TSCA section
6(b). This final rulemaking describes the final TSCA fees and fee categories for fiscal years
2019, 2020, and 2021 , and explains the methodology by which the final TSCA fees were
determined. It identifies some factors and considerations for determining fees for subsequent
fiscal years; and includes amendments to existing fee regulations governing the review of
premanufacture notices, exemption applications and notices, and significant new use notices.
As required in TSCA section 26(b), EPA is also establishing standards for determining which
persons qualify as "small business concerns" and thus would be subject to lower fee
payments. Requiring manufacturers and processors of certain chemical substances to pay a
fee for specific fee-triggering events under TSCA sections 4, 5, and 6, will defray part ofthe
EPA cost of administering TSCA.

18T-0232

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DATES: This final rule is effective on [insert date 1 day after date ofpublication in the
Federal Register].
ADDRESSES: The docket for this action, identified by docket identification (ID) number
EPA-HQ-OPPT-2016-0401, is available at http://www.regulations.gov or at the Office of
Pollution Prevention and Toxics Docket (OPPT Docket) in the Environmental Protection
Agency Docket Center (EPA/DC), West William Jefferson Clinton Bldg., Rm. 3334, 1301
Constitution Ave. NW., Washington, DC 20460-0001. The Public Reading Room is open
from 8:30a.m. to 4:30p.m., Monday through Friday, excluding legal holidays. The
telephone number for the Public Reading Room is (202) 566-1744, and the telephone number
for the OPPT Docket is (202) 566-0280. Please review the visitor instructions and additional
information about the docket available at http://www.epa.gov/dockets.

FOR FURTHER INFORMATION, CONTACT: For technical information contact: Mark
Hartman, Immediate Office, Office of Pollution Prevention and Toxics, Environmental
Protection Agency, 1200 Pennsylvania Ave., NW. , Washington, DC 20460-0001; telephone
number: (202) 564-3810; email address: [email protected].

For general information contact: The TSCA-Hotline, ABVI-Goodwill, 422 South
Clinton Ave. , Rochester, NY 14620; telephone number: (202) 554-1404; email address:

[email protected].
SUPPLEMENTARY INFORMATION:
I. Executive Summary
A. Does this Action Apply to Me ?
You may be affected by this action if you manufacture (including import), distribute
in commerce, or process a chemical substance (or any combination of such activities) and are

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required to submit information to EPA under TSCA sections 4 or 5, or if you manufacture a ·
chemical substance that is the subject of a risk evaluation under TSCA section 6(b). The
following list ofNorth American Industry Classification System (NAICS) codes is not
intended to be exhaustive, but rather provides a guide to help readers determine whether this
document applies to them. Potentially affected entities may include companies found in
major NAICS groups:
• Chemical Manufacturers (NAICS code 325),
• Petroleum and Coal Products (NAICS code 324), and
• Chemical, Petroleum and Merchant Wholesalers (NAICS code 424).
If you have any questions regarding the applicability of this action, please consult the
technical person listed under FOR FURTHER INFORMATION CONTACT.
B. What is the Agency 's Authority for Taking this Action?
The Toxic Substances Control Act (TSCA), 15 U.S.C. 2601 et seq., as amended by
the Frank R. Lautenberg Chemical Safety for the 21st Century Act of 2016 (Pub. L. 114-182)
(Ref. 1), provides EPA with authority to establish fees to defray a portion of the costs
associated with administering TSCA sections 4, 5, and 6, as amended, as well as the costs of
"collecting, processing, reviewing, and providing access to and protecting information about
chemical substances from disclosure as appropriate under TSCA section 14." EPA is
finalizing this rule under TSCA section 26(b), 15 U.S.C. 2625(b).

C. What Action is the Agency Taking?
Pursuant to TSCA section 26(b), EPA is finalizing a rule to establish and collect fees
from manufacturers (including importers) and, in some cases, processors, to defray some of
the Agency' s costs related to activities under TSCA sections 4, 5, and 6, and collecting,

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processing, reviewing, and providing access to and protecting information about chemical
substances from disclosure as appropriate under TSCA section 14. EPA is also fmalizing
standards for determining which persons qualify as small business concerns and thus would
be subject to lower fee amounts. TSCA section 26(b)(4) requires that EPA, in setting fees,
establish lower fees for small businesses.
D. Why is the Agency Taking this Action?
The 2016 amendments to TSCA authorize EPA to establish fees to defray a portion of
the costs of administering TSCA sections 4, 5, and 6 and collecting, processing, reviewing,
providing access to, and protecting information about chemical substances from disclosure as
appropriate under TSCA section 14. Pursuant to the final rule, the Agency will collect
payment from manufacturers who: are required to submit information under TSCA section 4;
are required to submit a notice, exemption application, or other information under TSCA
section 5; or manufacture a chemical substance that is the subject of a risk evaluation under
TSCA section 6(b). The Agency will also collect payment from processors in limited
scenarios, i.e., where a processor submits a Significant New Use Notice (SNUN) under
TSCA section 5; or where a fee-triggering TSCA section 4 activity is tied to a SNUN
submission by a processor. These fees are intended to achieve the goals articulated by
Congress by providing a sustainable source of funds for EPA to fulfill its legal obligations to
conduct activities such as designating applicable substances as High- and Low-Priority,
conducting risk evaluations to determine whether a chemical substance presents an
unreasonable risk of injury to health or the environment, requiring testing of chemical
substances and mixtures, and evaluating ~d reviewing new chemical submissions, as
required under TSCA sections 4, 5 and 6, as well as and collecting, processing, reviewing,

5

and providing access to and protecting information about chemical substances from
disclosure as appropriate under TSCA section 14.
E. What are the Estimated Incremental Impacts of this Action?

EPA has evaluated the potential incremental economic impacts ofthis final rule. The
Agency analyzed a three-year period, since the statute requires EPA to reevaluate and adjust,
as necessary, the fees every three years. The Economic Analysis (Ref. 2), which is available
in the docket, is briefly summarized here and discussed in more detail in Unit IV.
The annualized fees collected from industry are approximately $20 million, excluding
fees collected for manufacturer-requested risk evaluations. Total annualized fee collection
was calculated by multiplying the estimated number of fee-triggering events anticipated each
year by the corresponding fees. EPA estimates that section 4 fees account for less than one
percent of the total fee collection, section 5 fees for approximately 43 percent, and section 6
fees for approximately 56 percent.
Total annual fee collection for manufacturer-requested risk evaluations is estimated to
be $1.3 million for chemicals included in the 2014 TSCA Work Plan (TSCA Work Plan)
(based on two requests over the three-year period) and approximately $3.9 million for
chemicals not included in the TSCA Work Plan (based on three requests over the three-year
period).
EPA estimates that 18.6 percent of section 5 submissions will be from small
businesses that are eligible to pay the section 5 small business fee because they meet the
definition of "small business concern." Total annualized fee collection from small businesses
submitting under section 5 is estimated to be $339,000 (Ref. 2). For sections 4 and 6, reduced
fees paid by eligible small businesses and fees paid by non-small businesses may differ over

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the three-year period that was analyzed, since the fee paid by each entity is dependent on the
number of entities identified per fee-triggering event. EPA estimates that average annual fee
collection from small businesses impacted by section 4 and section 6 would be
approximately $7,000 and $926,000, respectively. For each of the three years covered by this
rule, EPA estimates that total fee revenue collected from small businesses will account for
about 6 percent of the approximately $20 million total fee collection, for an annual average
total of approximately $1.3 million. For fees paid through consortia for activities under
section 4 and 6, since consortia will be required to pay the full fee amount, general industry
firms that are not eligible for reduced fees will pay more to ensure the fee is covered.
Therefore, although more firms are eligible for small business discounts under the SBA
definition used in the final rule, the total annual fee revenue estimate remains relatively
stable at approximately $20 million.
Total social cost represents the total burden a regulation will impose on the economy.
It can be defined as the sum of all opportunity costs incurred as a result of the regulation. The

opportunity cost incurred by industry to carry out these activities is the foregone value of the
time (burden) and investments required to comply with rule. Total social cost for this final
rule does not include the fees collected from industry by EPA, as these fees are considered
transfer payments. Rather, total social cost includes the opportunity costs incurred by
industry, such as the cost to read and familiarize themselves with the rule; determine their
eligibility for paying reduced fees ; register for CDX; form, manage and notify EPA of
participation in consortia; notify EPA and certify whether they will be subject to the action or
not; and arrange to submit fee payments via Pay.gov. Total social costs also include the
additional costs to EPA to administer fee assessment and collection for TSCA sections 4, 5,

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and 6, and collecting, processing, reviewing, and providing access to and protecting
information about chemical substances from disclosure as appropriate under TSCA section
14. The total annualized opportunity cost to industry is approximately $231 ,000 and the
additional annualized Agency cost is approximately $7,000, yielding a total annualized social
cost of approximately $238,000.
II. Background

A. Statutory Requirements for TSCA Fees
The proposed rule provides a robust overview ofthe history of fees under TSCA and
the 2016 amendments to TSCA (83 FR 8212, February 26, 2018) (FRL-9974-31). TSCA
authorizes EPA to establish, by rule, fees for activities under TSCA sections 4, 5 and/or 6. In
so doing, the Agency must set lower fees for small business concerns and establish the fees at
a level such that they'll offset 25% of the Agency' s costs to carry out a broader set of
activities under sections 4, 5, and 6 and of collecting, processing, reviewing, and providing
access to and protecting from disclosure as appropriate under section 14 information on
chemical substances under TSCA. In addition, in the case of a manufacturer-requested risk
evaluation, the Agency is authorized to establish fees sufficient to defray 50% of the costs
associated with conducting a manufacturer-requested risk evaluation on a chemical included
in the TSCA Work Plan for Chemical Assessments: 2014 Update , and 100% of the costs of
conducting a manufacturer-requested risk evaluation for all other chemicals. TSCA now
requires fee revenue to be deposited into a new dedicated TSCA fund intended to ensure that
resources are made available to the Agency to defray some of the costs that EPA incurs in
carrying out activities under sections 4, 5, and 6, and of collecting, processing, reviewing,
and providing access to and protecting from disclosure as appropriate under section 14

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information on chemical substances under TSCA. EPA is also required in TSCA section
26(b)(4)(F) to review and adjust the fees established in this rule every three years, and to
consult with parties potentially subject to fees when the fees are reviewed and updated to
reflect changes in program costs.
B. Overview of Final Rule
Pursuant to TSCA section 26(b), this final rule establishes fees for certain activities
under TSCA sections 4, 5, and 6 to defray approximately 25% of the costs to carry out a
broader set of activities under these sections of TSCA and of collecting, processing,
reviewing, and providing access to and protecting from disclosure, as appropriate under
TSCA section 14, information on chemical substances under TSCA. In addition, the final
rule establishes fees for risk evaluations requested by manufacturers to defray 50% or 100%
of the costs, depending on whether the chemical is listed on the TSCA Work Plan or not,
respectively.
After consideration of public comments, EPA is finalizing a number of provisions
from the proposed rule without modification, including the general methodology for
calculating fees (except in the case of manufacturer-requested risk evaluations), the program
cost estimates, the eight proposed fee categories, the fee amounts, the allowance of payment
of fees through consortia, the discounted fees for small business concerns, and the provision
of refunds under certain circumstances.
Based on consideration of public comments, the final rule also includes certain
modifications and clarifications related to the proposal. For example, in response to
comments, the final rule includes a new process for identifying manufacturers subject to fee
obligations for TSCA section 4 test rules and TSCA section 6 EPA-initiated risk evaluations,

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including publication of a preliminary list, opportunity for public comment, selfidentification, and/or certification of no manufacture, and publication of a final list defining
the universe of manufacturers obligated to pay. The final rule also reflects modifications to
the proposed methodology for calculating fees for manufacturer-requested risk evaluations,
the timing for consortia formation, payment due dates, and the standard for small business
concerns. Finally, the final rule provides the additional clarity requested by commenters in
areas including: the allocation of fees in complex multi-payer scenarios, the estimation of
program costs and activity level assumptions, and the circumstances for providing refunds.
The content of the final rule and these changes are discussed in greater detail in Unit III.
III. Discussion of the Final Rule and Response to Comments

A. Purpose and Applicability
As described in 40 CFR 700.40, the purpose of the fmal rule is to establish and collect
fees from manufacturers (including importers) and processors to defray a portion of EPA' s
TSCA implementation costs. The rule applies to manufacturers who are required to submit
information under TSCA section 4, manufacturers and processors who submit certain notices
and exemptions under TSCA section 5, and to manufacturers who are subject to risk
evaluation under TSCA section 6(b), including manufacturers who submit requests for risk
evaluation under TSCA section 6(b)(4)(C)(ii).

B. Entities Subject to Fees
Although EPA has authority to collect fees from both manufacturers and processors
of chemical substances, the final rule focuses fee collection primarily on manufacturers. EPA
will collect fees from processors only when processors submit a SNUN or test-marketing
exemptions (TME) under section 5, when a section 4 activity is tied to a SNUN submission

10

by a processor, or when a processor voluntarily joins a consortium and therefore agrees to
provide payment as part of the consortium. This approach is consistent with the proposed
rule and with most comments received. Although a few commenters urged EPA to allocate
more of the fee burden to processors, EPA is declining to do so at this time. EPA believes the
allocation primarily to manufacturers, and, in limited circumstances, to processors, is an
appropriate balance as required in TSCA. As noted in the proposal, the effort of trying to
identify relevant processors for all fee-triggering actions would be overly burdensome and
EPA expected many processors would be missed. Generally limiting fee obligations to
manufacturers is the simplest and most straightforward way to assess fees for conducting risk
evaluations under TSCA section 6 and most TSCA section 4 testing activities. Furthermore,
EPA expects that manufacturers required to pay fees will have a better sense of the universe
of processors and will pass some of the costs on to them.
C. Identifying Manufacturers Subject to Fee Obligations

The proposed rule suggested that EPA would use Chemical Data Reporting (CDR)
data to identify manufacturers subject to fee obligations, but would also rely on selfidentification from other manufacturers not subject to CDR reporting requirements. EPA also
proposed to include a "manageable approach" in the final rule for identifying manufacturers
subject to fees for TSCA section 4 and 6 activities, and r.equested public comment in this
area. See 83 FR 8212, 8216. EPA also requested comment on whether to adopt a process that
would allow time for public input before finalizing a list. A number of commenters agreed
that such a process was necessary, and EPA is codifying a process in the final rule to provide
the necessary clarity and certainty for those potentially subject to fees.
I . In general. EPA intends the process to include publication of a preliminary list that

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identifies manufacturers (based on information available to EPA through CDR reporting and
other sources), a public comment period (to allow for self-identification, correction of errors,
and certification of no-manufacture and no intention to manufacture in the next five years),
and publication of a fmallist defining the universe of manufacturers responsible for payment.
Further, EPA will follow this process for only two fee-triggering events: TSCA section 4 test
rules and TSCA section 6 EPA-initiated risk evaluations. EPA believes that for all other feetriggering events, the relevant manufacturer(s) will already be apparent to the Agency and a
specific identification process will not be necessary. This process is not necessary for TSCA
section 5 activities, TSCA section 4 enforceable consent agreements (ECAs), or TSCA
section 6 manufacturer-requested risk evaluations as manufacturers are self-identified
through those activities. The process is also not necessary for TSCA section 4 test orders, as
EPA will ultimately select the manufacturer(s) subject to the order prior to or during the
development of the order.

2. Data sources. To compile the preliminary list, EPA will use the most up-to-date
information available, including information submitted to the Agency (e.g., information
submitted under TSCA sections 5(a), 8(a) (including CDR), 8(b), and to the Toxics Release
Inventory) as well as other information available to the Agency, such as publicly available
information (e.g., Panjiva) or information submitted to other agencies to which EPA has
access (e.g., U.S. Custom and Border Patrol data). To be able to include the most recent CDR
data (collected every four years) and to account for annual or other typical fluctuations in
manufacturing (including import), EPA will use five years of data submitted or available to
the Agency to create the preliminary list. Although some commenters suggested looking
back a greater or fewer number of years, EPA believes that a five-year period enables EPA to

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utilize a number of data sources described earlier and increase accuracy.

3. Publication ofpreliminary list. EPA will publish this preliminary list in the
Federal Register concurrently with a relevant milestone for each action. For risk evaluations
initiated by EPA under TSCA section 6, the preliminary list will be published at the time of
final designation of the chemical substance as a High-Priority Substance. For test rules under
TSCA section 4, the preliminary list will be published with the proposed test rule.

4. Public comment period. Publication of the preliminary list will be followed by a
comment period of no less than 30 days, during which manufacturers and the public will
have the opportunity to correct errors, self-identify as a manufacturer, and/or certify to
already having exited the market and that they will not return for a period of 5 years. EPA
believes this process is largely consistent with comments on the proposal encouraging EPA
to publish a preliminary list and engage with stakeholders to identify others who may be
missing, correct errors, and provide an opportunity for manufacturers to be removed from the
list under certain circumstances.

5. Self-identification and certification. If a manufacturer is on the preliminary list, or
is not on the preliminary list but is a manufacturer of the chemical substance at issue, they
must report to EPA and self-identify with certain basic contact information. Although EPA
expects reporting to occur through CDX, EPA has developed a form to reflect the selfidentification statements, for reference purposes. (Ref. 9.) Manufacturers on the preliminary
list also have an opportunity to certify through CDX that (1) they have already ceased
manufacturing prior to the defined cutoff dates and will not manufacture for five years into
the future, or (2) they have not ever manufactured the chemical substance. lfEPA receives
such a certification statement from a manufacturer, the manufacturer will not be obligated to

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pay the fee. Manufacturers who are not listed on the preliminary list and otherwise believe
they can "certify out" as described previously, may choose to attest these facts to EPA.
However, if information received during the public comment period would prompt the
addition of manufacturers to the final list, EPA will first notify those manufacturers.
Manufacturers who plan to cease manufacture in the future (but have not yet done so), or
those who have already ceased but may re-enter the market within the next five years, would
not be permitted to certify out, and would still be subject to the fee obligation. The cutoff
date (i.e., the date by which manufacture must have ceased in order to certify out) for an
EPA-initiated risk evaluation is the date upon which the prioritization process is initiated for
that chemical (i.e., approximately 9-12 months before the risk evaluation begins and 9-12
months before the preliminary list is published). The cutoff date for a TSCA section 4 test
rule is the date upon which the proposed test rule is published. EPA chose an earlier cutoff
date for risk evaluations to provide greater assurance that the manufacturer has exited the
market and will not return for five years. Numerous commenters expressed concerns that
some manufacturers may only temporarily stop manufacture to avoid potentially significant
fee obligations, and subsequently return to the market. The earlier cutoff date provides an
extra measure of protection against that scenario. See paragraph 7 for additional discussion
regarding free riders and late entrants.
6. Publication offinal list. After the comment period for the preliminary list of
.
.
entities subject to a fee obligation, EPA will make any associated updates or corrections, and
then publish a final list of manufacturers. This list will indicate if any manufacturers were
identified in error, any additional manufacturers that were identified through the comment
period and/or reporting form, and if any manufacturers have certified that they have already

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ceased manufacture prior to the cutoff date described earlier and will not manufacture the
subject chemical substance for five years into the future. The final list will be published
concurrently with the final scope document for risk evaluations initiated by EPA under
TSCA section 6, and with the final test rule under TSCA section 4.

7. Free riders and late entrants. A number of commenters raised concerns about the
potential for manufacturers to exit the market shortly before or during the fee-triggering
event, and avoid their fee obligations. Commenters expressed further concern about those
same manufacturers re-entering the market shortly after the fee-triggering event, thereby
getting a "free ride." Other commenters suggested that EPA also impose fees on "late
entrants" (i.e., manufacturers who enter the market after the fee-triggering event has
concluded), and reallocate fees accordingly, and provide partial refunds as appropriate. EPA
believes that the identification process will help prevent the problems identified by some
commenters regarding free riders and manufacturers who may otherwise too easily exit and
reenter the market to avoid fee obligations. Specifically, the final rule requires
manufacturers to self-identify, and, for those who have exited the market, certify that they
will not manufacturer for at least 5 years or face penalties for violating TSCA. For chemicals
with ongoing uses, there is no requirement for new market entrants to provide notice to EPA.
Furthermore, it is impracticable for EPA to administer fees to such late entrants by
reallocating fee amounts, collecting additional monies, and providing partial refunds to
previously identified manufacturers. Those entities who truly begin to manufacture during or
after the fee event would not be subject to fees, late charges or other penalties, but this is
consistent with how TSCA operates in the new chemicals context: new manufacturers, not
subsequent chemical manufacturers, are required to submit PMNs and pay fees and

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subsequent manufacturers are not obligated to reimburse a PMN submitter.
Existing manufacturers who fail to identify themselves as required by this rule is a
prohibited act under TSCA section 15(1) and therefore subject to a penalty under TSCA
section 16. EPA views each day of failed identification by a manufacturer past the payment
due date as a separate event subject to penalty. Likewise, manufacturers who falsely certify
to having ceased manufacture and/or notre-initiating manufacture within five years will also
be subject to penalty.
D. Methodology for Calculating Fees
For the proposed rule, EPA calculated fees by estimating the total annual costs of
administering TSCA sections 4, 5, and 6 (excluding the costs of manufacturer-requested risk
evaluations) and of collecting, processing, reviewing, and pr<:>viding access to and protecting
from disclosure as appropriate under TSCA section 14; identifying the full cost amount to be
defrayed by fees under TSCA section 26(b) (i.e., 25% ofthose annual costs); and allocating
that amount across the fee-triggering events in TSCA sections 4, 5, and 6, weighted more
hea\rily toward TSCA section 6 based on early industry feedback. EPA specifically requested
comment on this .methodology. While a number of commenters generally supported the
allocation as an appropriate balance of fees amongst activities in TSCA sections 4, 5, and 6,
many commenters offered alternative suggestions for calculating fees, such as an actual cost
approach or level-of-effort approach.
A common theme from commenters was that fees, particularly those for TSCA
section 6 activities, should more closely align with EPA's actual costs for carrying out the
specific activity on the specific chemical. Some commenters pointed to the likelihood for .
variability in costs stemming from the number of uses evaluated, extent of exposures, amount

16

of existing information such as assessments from other government bodies, the level of
contractor support necessary, the complexity and number of tests required, and other factors.
As a general matter, EPA believes it is important to track costs on a chemical and
activity basis in light of the increased responsibilities under TSCA and the need to better
understand associated new costs. The Agency is working towards building this capability
and, consistent with commenters' suggestions, expects to begin tracking actual costs on a
chemical basis as soon as feasible. EPA plans to use our time reporting system to track
employee hours and contract expenditures for each chemical undergoing risk evaluation and
at the fee category level for section 4 and 5 activities. EPA also plans to track CBI claim
review direct and programmatic support costs as well as cross cutting costs, direct costs and
indirect costs associated with section 4, 5, 6, and collecting, processing, reviewing, and
providing access to and protecting from disclosure as appropriate under section 14
information on chemical substances under TSCA. However, EPA does not currently track
costs with this level of specificity and, as with any new activity, expects there to be some
initial challenges as it works to do so. As such, EPA does not believe it would be feasible or
appropriate to implement an actual cost approach for all fee-triggering events at this time.
Furthermore, because actual costs of individual activities are unknown at this time and
unknowable in advance (i.e., every activity will be unique and bear different actual costs),
and because the fee-triggering events are a narrower subset of the activities that TSCA fees
must defray, it is unclear how EPA could ensure that an actual cost approach would yield fee
revenue sufficient to defray 25 % of the overall TSCA implementation costs associated with
section 4, 5, and 6, and collecting, processing, reviewing, and providing access to and
protecting from disclosure as appropriate under section 14 information on chemical

17

substances under TSCA, absent a better understanding of the actual costs of these new
activities. More generally, EPA has many new responsibilities under TSCA and relatively
little information and experience to inform assumptions on costs or activity levels. EPA
expects to gain valuable experience implementing this initial fee structure. Ultimately, EPA
believes this initial experience and information gained from tracking actual costs will help
EPA to continue refining methodologies for calculating fees, and 'will inform potential
revisions to the fee structure in the future. To inform these revisions EPA plans to use our
time reporting system to track employee hours and contract expenditures for each chemical
undergoing risk evaluation and at the fee category level for section 4 and 5 activities. EPA
also plans to track CBI claim review direct and programmatic support costs as well as cross
cutting costs, direct costs and indirect costs associated with section 4, 5, 6, and collecting,
processing, reviewing, and providing access to and protecting from disclosure as appropriate
under section 14 information on chemical substances under TSCA. Congress implicitly
recognized the benefit of gained experience and understanding over time by requiring EPA to
revisit the fees structure every three years. Therefore, after considering the comments, for the
final rule, EPA has determined to calculate the fees using the same approach as used in the
proposed rule for most fee categories.
EPA is, however, finalizing an actual cost approach for calculating fees for
manufacturer-requested risk evaluations. Although EPA proposed a static fee for
manufacturer-requested risk evaluations based on general cost estimates for risk evaluation
activities, upon further consideration and in light of public comments received, EPA will
include a provision in the final rule to align this fee with the actual costs of the activity as a
plain reading ofTSCA would require. Specifically, EPA will require an initial payment of

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$1 ,250,000 (for a chemical on the TSCA Work Plan) or $2,500,000 (for a chemical not on
the TSCA Work Plan), payable within 30 days after granting the request, and a final invoice
to total either 50% or 100% ofthe actual costs in line with the percentage requirements in
TSCA, or a refund to achieve these requirements, if warranted. As described in this unit,
EPA estimates the cost of a manufacturer-requested risk evaluation to be approximately
$3.88M. The initial payment amounts were calculated to capture approximately two thirds of
either 50% or 100% of that estimated cost, with the expectation that approximately the last
third would come from the final payment. This approach is well-supported in the language of
TSCA, which explicitly requires the Agency to collect a percentage of costs incurred "in
conducting the risk evaluation" (i.e., 50% or 100%, depending on whether or not the
chemical is on the TSCA Work Plan). TSCA section 26(b)(4)(D) specifies that EPA shall
establish a fee for manufacturer-requested risk evaluations sufficient to defray the full costs
(or 50% of the costs for TSCA Work Plan chemicals) and the approach being finalized is
consistent with that. Commenters had a variety of suggestions for how to implement an
actual cost approach (e.g. , multiple payments at various milestones, small upfront payments
or application fees followed by one or more additional payments, multiple payments based
on target cost estimate ranges, etc.), but EPA determined that a simple two-payment
approach - an initial payment, followed a final invoice at the conclusion of the risk
evaluation for the total remaining due, or a refund - was a fair, understandable and practical
approach in line with EPA' s goals for the rulemaking.
EPA is confident that the actual cost approach for manufacturer-requested risk
evaluations will be implementable for these activities beginning in FY19. Because fees
collected for manufacturer-requested risk evaluations do not count towards the requirement

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that fees defray 25% of overall implementation costs in TSCA section 26(b)(4)(F), there is
not a need to count manufacturer-requested risk evaluation fees towards achieving a specific
percentage of total revenue collected. Additionally, EPA continues to believe that these types
of requests will generally be less complex (i.e. , companies will request risk evaluations on
chemicals that are likely to present fewer significant risk issues) than most EPA-initiated risk
evaluations, and therefore easier/simpler to assess and track for actual costs.
E. Fee Categories

EPA proposed 8 distinct fee categories: (1) test orders, (2) test rules and (3)
enforceable consent agreements, all under TSCA section 4; (4) notices and (5) exemptions,
both under TSCA section 5; and (6) EPA-initiated risk evaluations, (7) manufacturerrequested risk evaluations for chemicals on the TSCA Work Plan, and (8) manufacturerrequested risk evaluations for chemicals not on the TSCA Work Plan, all under TSCA
section 6. Although EPA received some comment on these and other potential fee categories
as described later in this discussion, EPA is not altering these fee categories for the final rule.
The activities in these categories are fee-triggering events that result in obligations to pay
fees under this final rule.
As a general matter, EPA received very few comments on the categories proposed for
TSCA section 4 activities. One commenter expressed concern that testing requirements that
are associated with TSCA section 5 or 6 activities should not be subject to a separate TSCA
section 4 fee, otherwise it would amount to double-charging. EPA disagrees with this
characterization. Cost estimates for TSCA section 4 activities do not overlap with cost
estimates for TSCA section 5 or 6 activities, and the expenses defrayed by the fees are
different. There is a cost to the Agency to (1) develop an order, rule or consent agreement,

20

and (2) to review the data. These costs are separate from and in addition to the costs
associated with review of a TSCA section 5 notice or exemption, or undertaking a TSCA
section 6 risk evaluation.
EPA received a number of comments related to TSCA section 5 fee categories - most
pertaining to the proposed fees for low-volume exemptions (LVEs) and other exemptions. A
number of commenters sought to eliminate the exemption fee category entirely, and
particularly for LVE fees. Historically, EPA has not charged a fee for TSCA section 5
exemption applications (e.g. , LVE, low exposure/low release exemptions (LoREX), testmarketing exemptions (TME), TSCA experimental release applications (TERA), etc.). EPA' s
prior fee structure was set in 1988 and, while TSCA authorized EPA to collect fees for
exemption applications, EPA only implemented fees for PMNs, SNUNs, and MCANs. EPA
is imposing fees in this rule for all exemption submissions, except Tier I and polymer
exemptions because the expected revenue from those activities would be largely negated by
the administrative costs of collection. Some commenters suggested that fees for any
exemption application would become a barrier to research, development and innovation.
While EPA shares commenters' general concerns for impacts to innovation, EPA does not
believe the LVE fee- a onetime $4,700 cost per submission ($940 for small business
concerns) - will be a significant barrier to chemical industries seeking to introduce a new
chemical to market. There is already a regulatory exemption from the TSCA section 5 notice
requirements for those who manufacture only for research and development purposes (see 40
CFR 720.36). Another commenter asked EPA to clarify whether there would be a fee for
bona fide submissions to ascertain whether or not a chemical is on the TSCA Inventory. EPA
did not propose a fee for bona fide submissions, and there is no fee in the final rule for such

21

submissions. Moreover, if a PMN was determined not to be a new chemical substance, the
submitter would be due a full refund.
No commenters opposed the proposed fee categories for TSCA section 6 activities.
However, several suggested exclusions or discounts for those who manufacture a chemical as
an impurity or byproduct, or those who manufacturer chemicals for small, niche markets as
their revenue may be insufficient to support a risk evaluation. As indicated earlier, EPA is
not adjusting the fee categories in the final rule. TSCA requires EPA to evaluate chemicals
under their conditions of use, and conditions of use evaluated may involve manufacture of
impurities or byproducts, or chemicals used in niche market applications. As such, EPA does
not believe it would be appropriate to exclude these manufacturers from fee obligations for
TSCA section 6 activities.
Finally, EPA solicited comment in the proposed rule about the potential for additional
fee categories for other TSCA activities such as CBI claims or risk management activities. A
majority of commenters opposed fee categories or surcharges associated with submission of
CBI claims, with the exception of some who noted that requiring payment of fees could help
reduce the number of unwarranted claims. Commenters were split regarding a separate risk
management fee. Several opposed a separate fee, suggesting there was no authority in TSCA
to implement one. Other commenters encouraged EPA to include a separate fee category for
risk management activities to both place the costs of this activity on companies choosing to
use more dangerous chemicals, and to incentivize companies to move to safer chemistries.
After further consideration, EPA has determined not to add these additional categories. EPA
already accounted for both CBI and risk management activities in the baseline cost estimates
in the proposed rule, meaning that EPA will recover a portion of these costs through the other

22

fee categories. EPA believes this approach is in line with TSCA section 26, which does not
explicitly authorize EPA to assign fees for CBI claims or risk management activities. EPA
expects that the historical problem of unwarranted CBI claiming will be mitigated to a certain
extent by enhanced CBI review requirements for EPA and substantiation requirements in
TSCA. Similarly, EPA believes that the new general requirements for prioritization and
evaluation of existing chemicals will themselves be a disincentive to manufacturing
chemicals with more significant risks.
F. Program Cost Estimates and Activity Assumptions

The estimated annual Agency costs of carrying out TSCA section 4, 5, and 6, and of
collecting, processing, reviewing, and providing access to and protecting from disclosure as
appropriate under TSCA section 14 information on chemical substances under TSCA, are
approximately $80.2 million excluding the estimated cost of having 5 manufacturerrequested risk evaluations underway each year. Because the 25% cap on cost recovery does
not apply to manufacturer-requested risk evaluations, the total cost to which the cap applies
is $80.2 million. Based on these cost estimates, EPA anticipates collecting approximately
$20 million in fees not associated with manufacturer-requested risk evaluations. In addition,
the Agency intends to collect fees from manufacturers to recover 50% or 100% ofthe actual
costs incurred by EPA in conducting chemical risk evaluations requested by manufacturers.
EPA expects the amount collected will be approximately $1 .94 million per chemical for
chemicals on the TSCA Work Plan and $3 .9 million per chemical for chemicals not on the
TSCA Work Plan.
EPA determined the anticipated costs associated with TSCA sections 4, 5, and 6 of
collecting, processing, reviewing, and providing access to and protecting from disclosure as

23

appropriate under TSCA section 14 information on chemical substances under TSCA,
including both direct program costs and indirect costs (see Table 1). For fiscal year 2019
through fiscal year 2021 , these costs were estimated to be approximately $80.2 million per
year. More detail on how anticipated costs were calculated follows in Unit III.B.2.
Table 1: Estimated Annual Costs to EPA (Fiscal Year 2019 through Fiscal Year 2021)
Direct Program Costs Indirect Costs
Annual Costs
$778,000
$3,543 ,000
$2,765,000
TSCA Section 4
$22,375 ,000
$6,296,000
$28,672,000
TSCA Section 5
$34,073
,000
$9,545,000
$43,618,000
TSCA Section 6
TSCA Chemical
$3,531 ,000
$814,000
$4,345,000
Information Management
$62,744,000
$17,425,000
$80,178,000
Total:
Notes: Numbers may not add due to rounding. The indirect cost rate for Office of Chemical
Safety and Pollution Prevention is estimated at 28.14% for the purposes of this analysis.
After estimating the annual costs of administering TSCA section 4, 5, and 6, and of
collecting, processing, reviewing, and providing access to and protecting from disclosure as
appropriate under TSCA section 14 information on chemical substances under TSCA, the
Agency had to determine how the costs would be allocated over the narrower set of activities
under TSCA section 4, 5 and 6, which trigger a fee. The Agency took an approach to
determining fees that tied the payment of fees to individual distinct activity types or "feetriggering events". This allows allocation of costs more equitably among the activity types
and their related costs.

1. Program costs. To determine the program costs for implementing TSCA sections
4, 5, and 6, of collecting, processing, reviewing, and providing access to and protecting from
disclosure as appropriate under TSCA section 14 information on chemical substances under
TSCA, the Agency accounted for the intramural and extramural costs for activities under
these sections. Intramural costs are those costs related to the efforts exerted by EPA staff and
management in operating the program, collecting and processing information and funds,

24

conducting reviews, and related activities. Extramural costs are those costs related to the
acquisition of contractors to conduct activities such as analyzing data, developing IT systems
and supporting the TSCA Help Desk. The Agency then added indirect costs to the direct
program cost estimates. The Agency used an indirect cost rate of28.14% to calculate the
indirect costs associated with all direct program cost estimates for TSCA sections 4, 5, 6 and
collecting, processing, reviewing, and providing access to and protecting from disclosure as
appropriate under TSCA section 14 information on chemical substances under TSCA.
Some commenters expressed concerns that agency cost estimates and fee amounts
were too low while other commenters expressed concerns that general or specific cost
estimates, or fee amounts were too high or were not well substantiated. EPA continues to
believe that the estimates presented represent the best estimates possible given our reliance,
to the extent possible, on past experience and consideration of the additional work under the
expanded authorities in the amended statute. Given this limited experience with novel
obligations and authorities, our costs are estimates and subject to change and become more
precise over time. However, EPA informed these estimates by relying on past experience
with similar activities coupled with significant interaction and discussion with programmatic
staff and management to develop estimates.
Because of the novelty and expanded scope of many aspects of the program under
amended TSCA, EPA is not able to fully benchmark or substantiate all our estimates through
past staffing or contract budget needs for identical activities. However, EPA carefully took
into account the expanded requirements for risk evaluation, risk management, and new
chemical review activities as well as the new test order authority when developing the cost
estimates. Furthermore, EPA believes that Congress understood the uncertainty in standing

25

up a new chemical review and management program and therefore required EPA to perform
annual audits and reassess fees every three-years to allow for costs estimates and the
associated fees to be refined.
a. TSCA section 4 program costs. TSCA section 4 gives EPA the authority to require

(by rule, order, or ECA) manufacturers and processors to conduct testing of identified
chemical substances or mixtures. EPA estimated TSCA section 4 activity costs based on
prior experience with developing test rules and ECAs, reviewing study plans, and reviewing
the data received. These activity level assumptions represent EPA' s best professional
judgment on how the program will be implemented in the first 3-year fees cycle. EPA
estimates that, on average, it will undertake work associated with 10 test orders, one test rule
and one ECA each year. While ~p A expects to work on one test rule and one ECA each year,
we expect to initiate each of these activities about every other year as it takes approximately
two years to complete the work associated with both ofthese activities. While not EPA' s
current practice, these estimates represent EPA' s best estimate on the work that will be
required as a result of the 2016 amendments to TSCA, including the requirements to
prioritize chemicals for risk evaluation review and to have 20 risk evaluations underway at
all times beginning in December 2019.
EPA used historical averages of the number of affected firms per chemical from the
three most recent section 4 test rules for high production volume (HPV) chemicals (71 FR
13708, March 16, 2006) (FRL-7335-2); (76 FR 4549, January 26, 2011) (FRL-8862-6); and
(76 FR 65385, October 21 , 2011) (FRL-8885-5) and assumed an average of seven chemicals
involved per TSCA section 4 action and four affected firms per chemical. EPA based Section
4 costs on our general experience with the rulemaking process, our experience with the

26
developing an ECA for Octamethylcyclotetrasiloxane (D4) and costs associated with
reviewing information received, and administration of, the HPV Voluntary Testing Program.
EPA relied on this past experience augmented thorough a process of coordination with
programmatic staff and management to estimate the TSCA section 4 costs.
EPA' s cost estimates included a full suite of activities related to developing and
implementing actions under the TSCA section 4 authorities including development of
screening-level hazard and environmental fate information, including tests that provide
information on the toxicity of a chemical (e.g., aquatic toxicity, and mammalian toxicity).
EPA also included estimates of the costs of reviewing physical/chemical properties and
environmental fate and pathways data and tests.
Some commenters felt that EPA cost estimates were too low. However, EPA's
estimates reflect the best estimates currently available, rely on past programmatic experience,
and fully consider the information needs under amended TSCA for section 4 activities. In
addition, TSCA section 4 actions have historically included multiple chemicals per action.
EPA TSCA section 4 test orders, for example, could cover a group of similar chemicals
allowing EPA to collect information on more than 10 chemicals in a given year. Further, if
EPA learns that more activities are needed per year or that costs are higher than expected,
EPA will appropriately revise the requirements during the annual and three-year review of
fees.
Based on previous experience and expected work under TSCA as amended, EPA
assumed that testing required by test orders is likely to be completed in under a year, and test
rules and ECAs are likely to take two years to complete. To estimate the costs of reviewing
test data, we assume that on average, data will be submitted to EPA for seven chemicals in

27

each TSCA section 4 activity and that each chemical would have 4 associated companies to
test for a total of 28 firms per action.
Based on this approach, the estimated cost to the Agency of each test order is
approximately $279,000. Each test rule is estimated to cost approximately $844,000 and each
. enforceable consent agreement is estimated to cost approximately $652,000. These cost
estimates include submission review and are based on projected full-time equivalent (FTE)
and extramural support needed for each activity divided by the number of orders, rules and
ECAs EPA assumes will be worked on over a three-year period. Several of these activities
(rules and ECAs) are expected to span two years, as noted earlier so those estimates are
based on the annual estimated costs multiplied by two. The annual cost estimate of
administering TSCA section 4 in fiscal year 2019 through fiscal year 2021 is $3,543,000
(Ref. 3: Table 8).

b. TSCA section 5 program costs. TSCA section 5 requires that manufacturers and
processors provide EPA with notice before initiating the manufacture of a new chemical
substance or initiating the manufacturing or processing for a significant new use of a
chemical substance. EPA is required to review and make affirmative determinations for new
chemical submission and take risk management action, as needed.
Examples of the notices or other information that manufacturers and processors are
required to submit under TSCA section 5 are PMNs, significant new use notifications
(SNUNs), microbial commercial activity notices (MCANs), and numerous types of
exemption notices and applications (e.g. , low-volume exemptions [L VEs ], test-marketing
exemptions [TMEs], low exposure/low release exemptions [LoREXs], TSCA experimental
release applications [TERAs], certain new microorganism [Tier II] exemptions, film article

28

exemptions, etc.).
EPA' s TSCA section 5 effFile Typeapplication/pdfFile Modified2018-09-28File Created2018-09-27