EPA Proposes Major Expansion of TSCA Inventory Update Reporting Rule

August 16, 2010

EPA has proposed changes to TSCA’s Inventory Update Reporting Rule (IUR) that would significantly increase the amount of information required to be reported, the frequency of reporting, and the number of companies that would have to file an IUR report.

Currently, the IUR rule requires U.S. companies to file a report every five years for each chemical on the TSCA Inventory that they manufacture or import. The next report is due between June and September 2011 for the calendar year 2010. The threshold for filing is 25,000 pounds during the preceding calendar year. Additional information on domestic processing and use has to be reported if a company manufactures or imports more than 300,000 pounds during that year. A separate report is filed for each chemical that exceeds the threshold at each plant location.

In a proposed rule issued last Friday (August 13), EPA proposes to dramatically change the IUR rule.

More Information to be Reported

Currently, companies only have to report the amount of a chemical that they produced or imported during the preceding calendar year. For instance, in the 2011 report, a company would only report what it produced or imported during 2010. The proposed rule changes this. Instead, a company will have to report the amount it produced or imported for each year since the last filing, meaning that in the 2011 report, a company will have to report such figures for each year from 2006 through 2010.

In addition, the 300,000-pound threshold for reporting how downstream companies or consumers process or use a chemical is eliminated. Anyone who files an IUR report will have to provide such information.

Increased Reporting Frequency

Currently, an IUR report is due every five years, with the last reporting year being 2006. Starting in 2011, the IUR report will be due every four years. However, EPA is seriously considering increasing the reporting frequency even further with a strong indication in the preamble to the proposed rule that IUR reports may well have to be filed annually.

More Companies Required to File

Historically, the duty to file was based on whether the reporting threshold was met during the previous calendar year. Starting in 2015, companies will have a duty to file if the threshold is exceeded in any calendar year since the last filing. For example, if a company does not manufacture a chemical in 2011, 2012 or 2014, but makes 50,000 pounds in 2013, it will have to file an IUR report in 2015.

Electronic Reporting Mandatory

Beginning with next year’s filing, all IUR reports will have to be filed electronically. Paper filings will not be accepted.

Significant Timing Concerns

EPA does not expect to finalize this rule until next spring, shortly before the filing period begins in June. This schedule creates considerable uncertainty for companies as to what they will have to report. Comments on the proposed rule can be submitted through Oct. 12, 2010.

Non-compliance with the IUR reporting rule can lead to significant financial penalties, as each chemical at each facility is considered a separate violation. With each violation subject to a fine of approximately $22,000, a failure to report just five chemicals leads to a fine of more than $100,000. Over the last 18 months, McGuireWoods has represented three companies with regard to alleged non-compliance with the 2006 reports, one of which faced a fine of more than $400,000.

For further information regarding the proposed changes to the IUR rule, please contact the authors.