IMPACT+ POLICY

REPORTFor the Specialty & Fine Chemicals Industry

FALL 2018 Edition

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FALL 2018 • Impact + Policy Report for the Specialty and Fine Chemicals Industry

IMPACT + POLICY REPORT

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This was an extraordinarily productive and successful year for SOCMA’s advocacy.Thanks to the full engagement of the issues committees and government relations team,SOCMA has meaningfully moved the needle on policies critical to the specialtychemical industry.

The fall 2018 edition of Impact + Policy Report recaps SOCMA’s legislative andregulatory initiatives for the year, highlighting via timeline SOCMA’s endeavors,successes and areas of ongoing engagement moving into 2019.

What happens in Washington, DC, directly affects business conditions and growthopportunities for SOCMA members, making advocacy especially important duringthis time of uncertainty and change.

STRATEGIC DIRECTION & PRIORITIES A recent survey conducted with the SOCMA membership revealed opportunities torefresh the direction of SOCMA’s advocacy and enhance its value to members. Theresulting heatmap of members’ issue priorities will dictate efforts to be more proactiveand aligned with the industry’s evolving interests and concerns.

KEY 2018 PRIORITIES Securing CFATS Reauthorization: With funding for the

Chemical Facility Anti-Terrorism Standards expiring inJanuary 2019, SOCMA is working closely with congressional

lawmakers and Department of Homeland Security personnel toensure reauthorization of the program. SOCMA has advocated

for legislative language to feature recognition of industry stew-ardship programs such as SOCMA’s ChemStewards, main-

taining notice and comment rulemaking for any proposedchanges to Appendix A chemicals of interest, and a multi-

year extension to the program. With legislation nowpending in Congress, SOCMA aims to get reautho-

rization passed while under a very tight legislativecalendar for the remainder of the year.

Getting MTB Across the Finish Line: Since its expirationin 2012, SOCMA has worked to renew the Miscellaneous

Tariff Bill through meetings, letters and calls to Congress.Specialty and fine chemical manufacturers import variouschemical intermediates unavailable domestically, making

tariff relief critical to the industry. After extensive advocacyby SOCMA, importers are now able to receive relief on

eligible imports under the MTB Act of 2018. Chemicalsmake up more than 1,000 of the nearly 1,700 products

now eligible for tariff relief, making passage a notablewin for the industry. In order to receive relief, Customs

Brokers must reference HTS 9900 numbers onimport declarations.

Shielding Chemicals from Tariffs: With tariffs on 1,517Chinese-origin chemical products already in effect and talk

of more on the way, the U.S. chemical industry faces severedisproportionate economic harm. SOCMA has twice testifiedand filed extensive comments with the U.S. Trade Representa-

tive (USTR) to petition for the removal of tariffs on productsmembers import. Dozens of members provided SOCMA

with hundreds of specific chemicals for which reason-able sourcing alternatives to China do not exist. These

efforts proved worthwhile when USTR finalized itsthird tranche of tariffs and nearly half of the

delisted tariff lines were chemicals. With tranche3 rates expected to increase from 10 to 25% in

January 2019, SOCMA will continue to assistmembers with tariff exclusion requests once

procedures are established by USTR.

Improving New TSCA: SOCMA remains activeand engaged on all aspects of New Toxic SubstanceControl Act implementation. 2018 brought a numberof important TSCA issues to the fore, including theInventory Reset process, the establishment of userfees, challenges within the New Chemicals Program,and the unfolding prioritization and risk evaluationprocess. SOCMA has worked to guarantee theseEPA regulatory initiatives allow manufacturersto commercialize new chemicals effectively,protect confidential business information,and ensure the evaluation of chemicalsin commerce is a transparent, risk-basedprocess.

Supporting a New NAFTA: On November 30,The United States, Mexico and Canada agreed toa revised trade pact known as the United States-Mexico-Canada Agreement (USMCA). SOCMA longadvocated for the continued existence and modern-ization of North American trade relations, and thisoutcome is exceedingly positive for the specialtychemical industry. The agreement promotesgreater regulatory cooperation and growthpotential in the region. Many favorable rulesremain intact like the chemical reactionrule, mixtures and blends rule, purificationrule and sample rule. Since Congresswill ultimately have to vote on theagreement, SOCMA will continueto advocate for ratification.

PRIORITY ISSUES HEAT MAP

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FALL 2018 • Impact + Policy Report for the Specialty and Fine Chemicals Industry

2018 TIMELINE

JANUARY FEBRUARY MARCH

MAY APRILAPRILJUNE

SOCMA advises EPA to implementa transparent and scientificallyrobust approach for identifyinghigh and low priority candidatesubstances for prioritization.

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TSCA

TSCA•••••••••••

SOCMA urges EPA to re-introducescreening level risk assess-ments for new chemicals andto comply with PMN statutoryreview deadlines.

SOCMA joins the Board of theChemical Sector CoordinatingCouncil, providing influence toshape CFATS legislation andthe future of the program.

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CFATS

SOCMA and its members engagein more than 75 meetings withlawmakers & congressionalcommittees, urging reautho-rization of the CFATS program,passage of the MiscellaneousTariff Bill, and the moderniza-tion of NAFTA.

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FLY-IN

TRADE•••••••••

USTR delists all pigment andpharmaceutical chemical inter-mediates from List 1 tariffs, perSOCMA's request.

SOCMA provides public testimonyto the House Committee onEnergy and Commerce in sup-port of an extension of CFATS.

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CFATS

SOCMA testifies before theSection 301 Committee of theU.S. International Trade Com-mission (USITC) to oppose List1 tariffs and communicate theburdens of chemical supplychain modification.

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TRADE

TRADE•••••••••

SOCMA comments on proposed25% tariffs on $34B worth ofChinese goods (List 1) and advo-cates for delisting of members’pigment and pharmaceuticalchemical intermediates.

SOCMA advises the SenateHomeland Security and Gov-ernment Affairs Committee onthe need to reauthorize theCFATS program.

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CFATS

RMP•••••••••

SOCMA attends signing of theRMP Reconsideration proposedrule to rescind or modify certainprovisions of the 2017 Amend-ments rule.

SOCMA argues in a legal briefthat EPA properly authorizedthe use and applicability ofconfidentiality claims for activechemicals in connection withthe Inventory Rest process.

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TSCA

TSCA•••••••••

SOCMA petitions EPA to improve itsuser fees rule by reducing fees fornew chemical activities; imple-menting an employee-based sizestandard for small businesses; andclarifying refund, reporting andconsortia provisions.

SOCMA meets with the EPAAdministrator to express concernabout EPA’s excessive precaution-ary approach to New Chemicalsunder LCSA, flagging the slowpace of reviews and overlyconservative risk determinations.

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TSCA

SOCMA advises SBA on majorissues and concerns with theTSCA User Fees Rule.

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TSCA

RMP•••••••••

SOCMA meets with and advisesthe Office of Management andBudget on EPA’s RMP reconsid-eration rule.

SOCMA advises on the properscope of TSCA CBI disclosure tostate, tribal and local govern-ments; environmental, healthand medical professionals; andemergency responders.

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TSCA

SOCMA advises the US GovernmentAccountability Office regardingthe CFATS program strengths,weaknesses, and progress for areport requested by the SenateCommittee on Homeland Securityand Governmental Affairs.

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CFATS

SOCMA urges DHS not to extendthe CFATS Personnel SuretyProgram to Tier 3 and Tier 4facilities, advising insteadfor an effectiveness and aconsistency review of PSP onTier 1 and 2.

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CFATS

SOCMA meets with EPA toaddress upcoming CERCLAfinancial assurance rulemakingthat will impact the chemicalindustry.

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CERCLA

SOCMA meets with HouseEnergy and Commerce staff toexpress concerns about EPA’simplementation of the NewChemicals Review Program.

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TSCA

SOCMA meets with EPA Assis-tant Administrator for Policy todiscuss support for delay ofthe RMP Amendments rule tofacilitate reconsideration.

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RMP

CFATS•••••••••••

SOCMA forms a coalition withother interested trade associ-ations to advance legislativelanguage to include an industryrecognition program in CFATS.

RCRA•••••••••••

SOCMA meets with EPA andDOJ to address problems withEPA’s hazardous waste finalrule that could inadvertentlysubject non-compliant gen-erators to multiple RCRA viola-tions and serious penalties.

TSCA•••••••••••

SOCMA forms a Task Force todevelop the specialty chemicalindustry response to the TSCAuser fees rulemaking.

TSCA•••••••••••

SOCMA advises EPA on itsapproach for assigning andapplying unique identifiers toreplace confidential chemicalidentities in TSCA submissions.

RCRA••••••••••

D.C. Circuit Court issues decisionsupporting SOCMA’s petitionto strike down unnecessaryaspects of the Generator-Controlled Exclusion under theDefinition of Solid Waste(DSW) rule.

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FALL 2018 • Impact + Policy Report for the Specialty and Fine Chemicals Industry

JULY AUGUST SEPTEMBER

OCTOBERNOVEMBER

SOCMA presents to DHS Officeof Infrastructure Protectionleadership on the importanceof consistent implementationand enforcement of the CFATSprogram.

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CFATS

SOCMA issues support for revisedRMP requirements for third-party compliance audits, safertechnology and alternativesanalysis, and public availabilityof sensitive chemical facilityinformation.

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RMP

SOCMA presents at the ChemicalIndustry Councils of Californiaand Illinois on EPA’s ongoingdenial of the RCRA MPU exclusion.

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RCRA

SOCMA hosts member webinar,“Navigating U.S-China Tariffs,What Specialty ChemicalManufacturers Need to Know.”

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TRADE

RCRA•••••••••••

SOCMA meets with EPA AssociateAdministrator for Policy todiscuss and seek resolution tothe EPA regions’ sudden rejectionof the RCRA ManufacturingProcess Unit (MPU) exclusionduring facility inspections.

RCRA•••••••••••

SOCMA facilitates calls betweenEPA and SOCMA members thatare negatively impacted by thedenial of the RCRA MPU Exclusion.

CWA•••••••••••

SOCMA advises EPA on implementingappropriate and data-driven CleanWater Act hazardous substancesspill prevention requirements.

OSHA•••••••••••

SOCMA advises OSHA to removeits E-Recordkeeping requirementthat establishments with 250 ormore employees submit data fromtheir 300 logs and 301 reports onan annual basis.

TRADE•••••••••••

In the face of 10/25% tariffs onan additional $200B worth ofChinese goods, SOCMA againtestifies before the Section 301Committee of the USITC to com-municate burdens of chemicalsupply chain modification.

2018 TIMELINE CONT.SOCMA comments extensivelyon proposed 10/25% tariffs on$200B worth of Chinese goods,petitioning for the delisting ofnumerous specific chemicalproducts imported by members.

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TRADE

SOCMA and ACC discuss tariffburdens and sector-specificimpacts to the specialty chemicalindustry on Chemical Weekwebcast, “What the Trade WarMeans for the Chemical Industry.”

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TRADE

TSCA•••••••••

SOCMA argues in legal brief thatEPA has authority to excludesome conditions of use andfocus on those that present thegreatest potential risk to humanhealth and the environment.

TRADE•••••••••

USTR issues List 3 tariffs; 45%of the delisted tariff lines arechemicals, providing dozensof SOCMA members with im-mediate relief.

CAA••••••

SOCMA participates in a publichearing on EPA’s proposedrevisions for regulating appli-ances containing substituterefrigerants.

SOCMA delivers presentation onthe New Chemicals Program toEPA and SBA, arguing for improve-ments to reduce delays, improvetransparency, and complete PMNreviews within statutory deadlines.

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TSCA

Final TSCA User Fees rule released.Provisions SOCMA requestedfor consortia building, refundsand an update of the smallbusiness definition are featuredin the rule.

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TSCA

RCRA••••••

SOCMA meets with EPA ActingAdministrator Wheeler to bringthe RCRA MPU exclusion issueto his attention and requestresolution.

EPA announces approach for thepre-prioritization of chemicalsubstances for risk evaluation.The approach aligns with SOCMArecommendations for high-throughput and scientificallyrobust risk screenings.

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TSCA

CFATS•••••••••

CFATS legislation is introduced inCongress, and includes SOCMApriority for multi-year reautho-rization and recognition of industrystewardship programs such asChemStewards.

SOCMA petitions EPA to updatethe CDR small business sizestandard, and urges revision ofthe 2,500lb reporting thresholdfor chemicals subject to TSCASection 5 restrictions to easereporting burdens.

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TSCA

TSCA•••••••••

SOCMA advises EPA on theprioritization of the TSCA WorkPlan, requesting the agencynot pre-determine that all 73Work Plan Chemicals will becomecandidates for high-prioritydesignations.

SOCMA advises EPA to rescind itsextension of refrigerant man-agement regulations, includingleak repair and maintenancerequirements to non-exemptsubstitute refrigerants.

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CAA

•••2019 ••

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MEMBER ALERT:A MESSAGE FROM ROBERT HELMINIAK, SOCMA VP, LEGAL & GOVERNMENT RELATIONS

RCRA Top Priority for SOCMAThe potential elimination of the Resource Conservation and Recovery Act (RCRA) Manufacturing Process Unit (MPU) Exclusionis a significant issue impacting the specialty chemical industry in 2018. According to the longstanding exclusion, hazardous wastecreated in the manufacturing unit is not considered as such until removed from the unit. This exclusion is used by virtually everyspecialty chemical manufacturer as well as many other manufacturing industries.

In recent months, EPA has declined to grant the MPU exclusion to companies, which has led to significant violations and fines.Without the exclusion, companies would be required to change their equipment labeling and their manufacturing processes, whichcan be extremely detrimental and financially catastrophic. This EPA policy change came with no warning, and more and moremembers are being impacted each month.

In response, SOCMA has formed a coalition of members to work on the issue and is relaying information to other industries toform a broader coalition. SOCMA is also working with EPA’s Offices of Policy, Land and Emergency Management, and Enforcementand Compliance Assurance to resolve the issue.

RCRA is a top priority for SOCMA as the association closes out 2018 and moves forward into 2019. Members should expect to hearmore about this issue as SOCMA presses EPA to resolve these regulatory and legal concerns for specialty chemical manufacturers.

If you are being directly impacted by this issue, please do not hesitate to contact me at helminiakr@socma.com, or 571-348-5107.

Society of Chemical Manufacturers & Affiliates 1400 Crystal Drive, Suite 630 • Arlington, VA 22202

phone. 571-348-5100 • www.socma.comIMPACT+ POLICY REPORT