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.
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?
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.
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://www.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://www.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 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://www.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.
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).