Small Manufacturer Definition Update for Reporting and Recordkeeping Requirements Under the Toxic Substances Control Act (TSCA) Section 8(a), 31986-31996 [2020-10435]

Agencies

• ENVIRONMENTAL PROTECTION AGENCY

[Federal Register Volume 85, Number 103 (Thursday, May 28, 2020)]
[Rules and Regulations]
[Pages 31986-31996]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-10435]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 704 and 712

[EPA-HQ-OPPT-2018-0321; FRL-10008-14]
RIN 2070-AK57


Small Manufacturer Definition Update for Reporting and 
Recordkeeping Requirements Under the Toxic Substances Control Act 
(TSCA) Section 8(a)

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: EPA is finalizing amendments to the definition of small 
manufacturer, including a new definition for small government, in 
accordance with the Toxic Substances Control Act (TSCA). Changes to the 
small manufacturer definition impact certain reporting and 
recordkeeping requirements established under TSCA. EPA is also 
finalizing other minor changes.

DATES: This final rule is effective June 29, 2020.

ADDRESSES: The docket for this action, identified by docket 
identification (ID) number EPA-HQ-OPPT-2018-0321, is available at 
https://www.regulations.gov or at the Office of Pollution Prevention and 
Toxics Docket (OPPT Docket), Environmental Protection Agency Docket 
Center (EPA/DC), West William Jefferson Clinton Bldg., Rm. 3334, 1301 
Constitution Ave. NW, Washington, DC. The Public Reading Room is open 
from 8:30 a.m. to 4:30 p.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 https://www.epa.gov/dockets.
    Please note that due to the public health emergency the EPA Docket 
Center (EPA/DC) and Reading Room was closed to public visitors on March 
31, 2020. Our EPA/DC staff will continue to provide customer service 
via email, phone, and webform. For further information on EPA/DC 
services, docket contact information and the current status of the EPA/
DC and Reading Room, please visit https://www.epa.gov/dockets.

FOR FURTHER INFORMATION CONTACT: 
    For technical information contact: Tyler Lloyd, Chemical Control 
Division (7405M), Office of Pollution Prevention and Toxics, 
Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, 
DC 20460-0001; telephone number: (202) 564-4016; 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 potentially affected by this action if you manufacture 
(defined by statute at 15 U.S.C. 2602(9) to include import) chemical 
substances, including byproduct chemical substances, and are subject to 
either of the following: (1) Reporting under the TSCA Chemical Data 
Reporting (CDR) requirements at 40 CFR part 711 or (2) TSCA reporting 
and recordkeeping requirements at 40 CFR part 704 or other TSCA 
reporting requirements which reference the small manufacturer standards 
at 40 CFR 704.3. Any use of the term ``manufacture'' in this document 
will encompass ``import'' and the term ``manufacturer'' will encompass 
``importer'' unless otherwise stated.
    The potentially regulated community consists of entities that 
produce domestically or import into the United States chemical 
substances listed on the TSCA Inventory. The Agency's previous 
experience with TSCA section 8(a) data collections has shown that most 
respondents affected by this collection activity are from the following 
North American Industrial Classification System (NAICS) code 
categories:
     Chemical manufacturing or processing (NAICS code 325); and
     Petroleum and coal products manufacturing (NAICS code 
324).
    The NAICS codes have been provided to assist you and others in 
determining whether this action might apply to certain entities. To 
determine whether you or your business may be affected by this action, 
you should carefully examine the applicable provisions at 40 CFR 711.8. 
If you have any questions regarding the applicability of this action to 
a particular entity, consult the technical contact person listed under 
FOR FURTHER INFORMATION CONTACT.

B. What is the Agency's authority for taking this action?

    TSCA section 8(a)(1) authorizes EPA to promulgate rules under which 
manufacturers and processors of chemical substances must maintain such 
records and submit such reports as EPA may reasonably require (15 
U.S.C.

[[Page 31987]]

2607(a)(1)). TSCA section 8(a) generally excludes small manufacturers 
and processors of chemical substances from the reporting (reporting and 
recordkeeping) requirements established in TSCA section 8(a). However, 
EPA is authorized by TSCA section 8(a)(3)(A)(ii) to require TSCA 
section 8(a) reporting and recordkeeping from small manufacturers and 
processors with respect to any chemical substance that is the subject 
of a rule proposed or promulgated under TSCA sections 4, 5(b)(4), or 6; 
that is the subject of an order in effect under TSCA section 4 or 5(e); 
that is subject to a consent agreement under TSCA section 4; or that is 
the subject of relief granted pursuant to a civil action under TSCA 
section 5 or 7.
    TSCA section 8(a)(3)(B) requires EPA, after consultation with the 
Administrator of the Small Business Administration (SBA), to prescribe 
by rule the standards for determining the manufacturers and processors 
which qualify as small manufacturers and processors. In 1988, EPA 
established the general TSCA section 8(a) small manufacturer definition 
for use in other rules issued under TSCA section 8(a), which are 
codified at 40 CFR 704.3. TSCA section 8(a)(3)(C) requires EPA, after 
consultation with the SBA Administrator and no later than 180 days 
after June 22, 2016, to review the adequacy of those standards and, 
after providing public notice and an opportunity for comment, make a 
determination as to whether revision of the standards is warranted. 
Pursuant to TSCA section 8(a)(3)(C), in the Federal Register of 
November 30, 2017, EPA announced that it determined that revision of 
these standards is warranted (82 FR 56824) (FRL-9968-41).
    TSCA section 8(a)(5) requires EPA, to the extent feasible when 
carrying out TSCA section 8, to not require unnecessary or duplicative 
reporting and to minimize the cost of compliance for small 
manufacturers and processors.

C. What action is the Agency taking?

    EPA is finalizing an amendment to update the size standards 
definition for small manufacturers for reporting and recordkeeping 
requirements under TSCA section 8(a). In addition to updating the 
definition for small manufacturers, EPA is finalizing a definition for 
small governments as proposed. EPA is also finalizing as proposed a 
technical correction to the small manufacturer reference at 40 CFR 
704.104 for Hexafluoropropylene oxide, which only includes a rule-
specific small processor definition and not a small manufacturer 
definition. When reviewing the small manufacturer size standards, EPA 
found this to be an inadvertent error. As originally promulgated, 40 
CFR 704.104 included the small manufacturer standard via the cross 
reference in 40 CFR 704.104(c)(2) to the exemption provisions in 40 CFR 
704.5, which was lost when the exemptions at 40 CFR 704.5 were amended 
and the necessary corresponding change was not made at 40 CFR 
704.104(c)(2) (52 FR 41297, October 27, 1987 (FRL-3280) and 53 FR 
51717, December 22, 1988 (FRL-3368-1)). Lastly, EPA is finalizing the 
proposed update to the current small manufacturer definition in the 
Preliminary Assessment Information Rule (PAIR) rule at 40 CFR 712.25 to 
align it with the updated small manufacturer definition at 40 CFR 
704.3. Further details of these amendments are in Unit II.
    Because the small manufacturer size standard under TSCA section 
8(a) impacts the CDR rule more than other TSCA section 8(a) reporting 
rules at this time, EPA included amendments to the small manufacturer 
definition and revisions to CDR as one proposed rule (84 FR 17692; 
April 25, 2019 (FRL-9982-16)). However, as stated in the proposed rule, 
EPA recognizes that the changes to the small manufacturer definition 
will also apply to 8(a) rules other than CDR and EPA is now finalizing 
these amendments as two separate actions.

D. Why is the Agency taking this action?

    EPA previously determined that revision of the TSCA section 8(a) 
size standards for small manufacturers is warranted (82 FR 56824, 
November 30, 2017 (FRL-9968-41)). TSCA section 8(a)(3)(C), which was 
amended in 2016, requires EPA, after consultation with the 
Administrator of the SBA, to review the adequacy of the standards for 
determining which manufacturers and processors qualify as small 
manufacturers and processors for purposes of TSCA sections 8(a)(1) and 
8(a)(3). EPA's determination, supporting documents, and comments 
received can be found at https://www.regulations.gov under docket ID No. 
EPA-HQ-OPPT-2016-0675. In response to the determination, EPA proposed 
an update to the small manufacturer definition as part of the proposed 
rule entitled ``TSCA Chemical Data Reporting Revisions and Small 
Manufacturer Definition Update for Reporting and Recordkeeping 
Requirements Under TSCA Section 8(a),'' issued in the Federal Register 
on April 25, 2019 (84 FR 17692 (FRL-9982-16)).
    In reviewing the TSCA section 8(a) size standards for small 
manufacturers, EPA also decided to add a definition for small 
governments in order to reduce report burden for governments reporting 
under CDR. Additionally, when reviewing the small manufacturer size 
standards, EPA found an inadvertent error in the small manufacturer 
reference at 40 CFR 704.104 for Hexafluoropropylene oxide and is taking 
the opportunity to correct that error. Lastly, EPA is updating to the 
current small manufacturer definition in the PAIR rule at 40 CFR 
712.25, which has not been updated since it was established in 1982, in 
order to align it with the definition at Sec.  704.3.

E. What are the estimated incremental impacts of this action?

    EPA evaluated the costs and benefits of modifying standards for 
small manufacturers with regard to CDR and other TSCA section 8(a) 
reporting. This analysis, which is available in the docket, is 
discussed in Unit II. and is briefly summarized here (Ref. 1).
    The modified standards for small manufacturers affect some TSCA 
section 8(a) rules, including CDR. These rules use the TSCA section 
8(a) small manufacturer definition to identify the entities exempted 
from reporting or subject to other reduced reporting requirements. The 
amendments are expected to have the greatest impact on CDR and could 
affect the need to submit, or the number of chemicals reported in, a 
CDR report for a given site. As discussed in the proposed rule, there 
is no measurable impact to other current TSCA section 8(a) rules either 
because EPA has not received any chemical reports for the rule for an 
extended period of time or because the rule uses a different definition 
that is not being changed by this amendment (see Unit IV.A. of the 
proposed rule for a more detailed discussion (84 FR 17692; April 25, 
2019)). The amendments, discussed in detail in Unit II., result in a 
cost savings.
    1. Impact of amendments to the small manufacturer definition. The 
final amendment is estimated to eliminate CDR reporting entirely for 
127 industry sites and reduce reporting by eliminating the need to 
report at least one chemical for additional 173 industry sites (Ref. 
1). The final amendment is an update of the current two-standard 
definition (see Unit II.A.). For sites that are considered small under 
the first standard ($120 million and 100,000 lbs), it is possible to be 
considered small for chemical substances with production volumes below 
100,000 lbs and not small for

[[Page 31988]]

chemical substances with production volumes above 100,000 lbs, even 
when the site's total annual sales are less than $120 million. Such 
sites will continue to report the chemical substances with production 
volumes over 100,000 pounds. For sites considered small under the 
second standard ($12 million) and sites considered small for all of 
their chemical substances under the first standard, such sites will be 
eliminated entirely from reporting. This reduction in reporting is in 
addition to the sites already not reporting because they meet the 
current small manufacturer definition.
    Under the amended definition, incremental future CDR reporting 
cycle burden reductions and cost savings are estimated at 92,000 hours 
and $7.0 million, respectively, over a four-year CDR reporting cycle 
(Ref. 1). On an annualized basis, using a 3 percent and 7 percent 
discount rate over a 10-year period yields net annualized incremental 
cost savings of $1.7 million and $1.7 million per year, respectively 
(rounding to two significant figures results in the same number) (Ref. 
1).
    2. Impact of adding a small government definition. The following 
government entities reported under CDR during the 2016 reporting 
period: One site owned by the U.S. Federal Government, four foreign 
government-owned sites, seven municipalities, one county-level public 
utility district, and one tribal entity. In total, for the 2016 CDR 
reporting period, EPA identified 14 government entities who reported to 
CDR. Under this final amendment to add a small government definition 
and based on information from the 2016 CDR submission period, four of 
these government entities would be exempt from the need to report. The 
burden and cost savings associated with the exempted entities, in 
future reporting cycles, are included in the estimates for the final 
definition with incremental future CDR reporting cycle burden reduction 
and cost savings estimated at 440 hours and $34,000 respectively, over 
a four-year CDR reporting cycle (Ref. 1). On an annualized basis, using 
a 3 percent and 7 percent discount rate over a 10-year period yields 
net annualized incremental cost savings of $8,000 and $7,900 per year, 
respectively (Ref. 1).

II. Modifications to Small Manufacturer Definition and Size Standards

    EPA is finalizing modifications to the TSCA section 8(a) small 
manufacturer size standards, following EPA's determination on November 
30, 2017 that revision to the current size standards is warranted (82 
FR 56824). These final standards apply to TSCA section 8(a) rules 
unless a different standard is identified in the regulatory text of a 
particular rule. The current chemical-specific TSCA section 8(a) rules 
that use the small manufacturer definition listed in 40 CFR 704.3 are: 
Sec. Sec.  [thinsp]704.25 (11-Aminoundecanoic acid); 704.33 (P-tert-
butylbenzoic acid (P-TBBA), p-tert-butyltoluene (P-TBT) and p-tert-
butylbenzaldehyde (P-TBB)); 704.45 (Chlorinated terphenyl); 704.95 
(Phosphonic acid, [1,2-ethanediyl-bis[nitrilobis-(methylene)]]tetrakis- 
(EDTMPA) and its salts); and 704.175 (4,4'-methylenebis(2-
chloroaniline) (MBOCA)). As proposed on April 25, 2019 (84 FR 17692), 
EPA is also finalizing a TSCA section 8(a) definition for small 
government entities, finalizing a technical correction to the small 
manufacturer reference at 40 CFR 704.104 for hexafluoropropylene oxide, 
and finalizing an update to the current small manufacturer definition 
in the PAIR rule at 40 CFR 712.25, in order to align it with the 
definition at Sec.  704.3.

A. Scope and Content of the Final Small Manufacturer Definition Update

    For the TSCA section 8(a) small manufacturer definition update, EPA 
is finalizing an update to the current definition based on inflation. 
This definition applies to chemical manufacturers (including 
importers), but not to chemical processors. Because the amended 
definition predominantly impacts the CDR, in which reporting is 
required by manufacturers and not processors, EPA believes it is not 
necessary to develop a definition of ``small processor'' for purposes 
of TSCA section 8(a) at this time and that it is best to continue the 
past practice of developing definitions for small processors on a rule-
by-rule basis, as applicable.
    All data in this preamble correspond to impacts to the 
manufacturing portion of the chemical industry, as evaluated for the 
CDR. The final definition is as follows:
    Small manufacturer definition. When EPA proposed the update to the 
current small manufacturer definition (84 FR 17692; April 25, 2019), 
EPA inflated the current definition based on 2017$. EPA is now 
finalizing the definition based on 2018$, to ensure that the definition 
is as up-to-date as possible at the time of finalization. EPA applied 
the same economic analysis for updating the definition with 2018$ that 
is used in the proposal (84 FR 17692; April 25, 2019). EPA is basing 
the update of the current two-standard definition at 40 CFR 704.3 on 
inflation by adjusting the sales standard level for the first part from 
$40 million to $120 million (originally proposed as $110 million) and 
for the second part from $4 million to $12 million (originally proposed 
as $11 million). The impacts of this option are provided in Unit I.E.2. 
The final definition is set out in the regulatory text below.
    Under CDR, sites that meet the small manufacturer definition are 
exempted from reporting either for the full site (based on the second 
standard) or for particular chemical substances (based on the first 
standard), unless the chemical substance the site is manufacturing 
(including importing) is the subject of one of certain TSCA actions: A 
rule proposed or promulgated under TSCA section 4, 5(b)(4), or 6, or an 
order in effect under TSCA section 5(e), or relief that has been 
granted under a civil action under TSCA section 5 or 7. As part of this 
rule, EPA is finalizing as proposed the amendment to add TSCA section 4 
orders to the list of certain TSCA actions. The authority to issue 
section 4 orders was added to TSCA when the statute was amended in 
2016.
    Relative to the 2016 reporting period, EPA estimates that the 
updated definition will eliminate reporting entirely for 127 industry 
sites that reported under the 2016 CDR and will reduce reporting by 
eliminating the need to report at least one chemical for an additional 
173 industry sites that reported under the 2016 CDR (Ref. 1). Overall, 
1,248 chemical reports from industry sites will no longer be submitted 
to CDR. In sum, the use of the inflation adjustment definition results 
in a reduction of two percent of sites, an overall reduction of three 
percent of chemical reports, and a reduction of 0.09 percent of total 
volume reported (Ref. 1).
    Inflation index. The current small manufacturer definition at 40 
CFR 704.3 specifies that EPA will use an inflation index for purposes 
of determining the need to update the two standards comprising the 
definition. On April 25, 2019, EPA proposed an amendment to use the 
Gross Domestic Product (GDP) deflator, or implicit price deflator, 
instead of the Producer Price Index (PPI) for Chemical and Allied 
Products, when determining the need to adjust the total annual sales 
values. As discussed in the proposal, the GDP deflator is less volatile 
and is broader than the PPI for Chemicals and Allied Products, and 
therefore EPA believed it would be a better measure for considering 
future updates to the revenue size standards. After considering 
comments on this proposed amendment, however, EPA will not be 
finalizing the change to GDP

[[Page 31989]]

as an inflation index. While GDP is less volatile, EPA now recognizes 
that PPI for Chemicals and Allied Products is a better overall 
accounting of chemical manufacturers that would be subject to reporting 
under TSCA section 8(a) because it directly reflects the chemical 
manufacturing sector as opposed to the U.S. economy as a whole. Instead 
of using the GDP deflator as proposed, EPA will amend the small 
manufacturer definition at 40 CFR 704.3 to use a five-year average for 
the PPI for Chemicals and Allied Products when determining if the small 
manufacturer definition warrants adjustment. This change will better 
protect against volatility while continuing to be representative of the 
chemical manufacturers that fall under the small manufacturer 
definition. The regulated community had an opportunity to comment on 
EPA's desire to change to an indicator that was less volatile. 
Commenters did not comment that changing to a less voltile indicator 
would be unfavorable but rather commented on which indicator would be 
best suited for determining if an update was warranted. EPA believes 
that the change to a 5-year average PPI will be beneficial to the 
regulated community. In any given year PPI could change drastically. By 
taking a 5-year average of PPI, EPA could ensure that uncharacteristic 
market swings do not unduly influence EPA's decision to update the 
small manufacturer definition. Further discussion of this change can be 
found in the Response to Public Comment in Unit III.
    Small government definition. EPA is also finalizing as proposed a 
definition for small government. EPA is adding a small government 
definition to reduce the reporting burden for governments that may lack 
necessary resources. EPA will use the same definition for small 
government as the Regulatory Flexibility Act (5 U.S.C. 601(5)): A small 
governmental jurisdiction is the government of a city, county, town, 
township, village, school district, or special district with a 
population of less than 50,000. State and tribal governments are not 
considered small governments.
    EPA estimates 33 government sites report under CDR in a four-year 
cycle. Under the added definition of small government, reporting will 
be eliminated entirely for four government sites with an associated six 
chemical reports.
    Application of standards. The size standards in this final rule 
will apply to all manufacturers of chemical substances subject to TSCA 
section 8(a) reporting and recordkeeping rules, unless a different 
standard is identified in the regulatory text of a particular TSCA 
section 8(a) rule. TSCA section 8(a) rules with different definitions 
than the current small manufacturer definition at 40 CFR 704.3 are: The 
nanoscale rule at 40 CFR 704.20; certain chemical-specific rules at 40 
CFR 704.43 (chlorinated naphthalenes) and 40 CFR 704.102 
(hexachloronorbornadiene); and the Preliminary Assessment Information 
Rule (PAIR) at 40 CFR part 712. EPA is finalizing an amendment to the 
current small manufacturer definition in the PAIR rule at 40 CFR 712.25 
to use the updated small manufacturing definition at Sec.  704.3. As 
explained in the proposal (84 FR 17692; April 25, 2019), the other TSCA 
section 8(a) rules noted previously will retain small manufacturer 
definitions different than the small manufacturer definition at 40 CFR 
704.3. Additionally, because of an inadvertent error, there is 
currently no applicable definition of ``small manufacturer'' in 40 CFR 
704.104 (hexafluoropropylene oxide); EPA is finalizing a correction to 
cross reference the small manufacturer definition at 40 CFR 704.3, as 
discussed in the proposal, to correct this error.

B. Agency Objectives

    Compliance with TSCA section 8(a) reporting and recordkeeping 
requirements involves the expenditure of time, money, and personnel 
resources. These costs have particular impact on entities that have 
limited financial and personnel resources, such as smaller 
manufacturers. These smaller manufacturers tend to have fewer 
administrative personnel and less capability for data compilation and 
recordkeeping than larger manufacturers.
    The information collection authority of TSCA section 8(a) reflects 
Congressional recognition of EPA's need for sufficient data from the 
chemical industry to enable the Agency to effectively carry out its 
TSCA obligations. EPA has concluded that if a manufacturer produces a 
subject chemical in substantial quantities, it is inappropriate to 
exempt that company from TSCA section 8(a) reporting requirements. 
Production data is valuable to EPA as an indicator of potential for 
chemical exposure and high-volume chemical production reflects a 
greater potential for environmental release. For this reason, EPA is 
maintaining the annual production or importation volume modifier of 
100,000 lb at any individual site owned or controlled by the 
manufacturer or importer for the first part of the updated small 
manufacturer definition.
    The standards should not prevent TSCA section 8(a) reporting of 
information that is representative of manufacturers of different sizes. 
Manufacturers of different sizes have varying amounts of capital 
available, and therefore may utilize different production processes, 
techniques, and equipment. Different methods of production may cause 
the potential for chemical exposure to vary among manufacturers of 
different sizes. It is important for the Agency to be able to monitor 
these differences. To ensure that EPA will receive information from a 
representative portion of manufacturers regulated under TSCA section 
8(a), the structure of the definition and levels of the size standards 
have been designed to allow the Agency to obtain production, use, and 
exposure data from a variety of manufacturers.
    A final objective for the standards is that they be easily applied 
by both industry and the Agency. The updated small manufacturer 
definition uses readily available data. These data enable 
identification of companies which are small manufacturers. The 
standards can also be easily enforced because the selected criteria for 
the small manufacturer definition will enable EPA to monitor compliance 
with the exemption. For further discussion of EPA's methodology and 
considerations for developing the size standards in this final rule, 
see Unit IV. of the proposed rule (84 FR 17692; April 25, 2019) and 
Unit III. of this action.

III. Response to Public Comment

    The Agency reviewed and considered all comments received on the 
proposed rule. EPA received ten public comments pertinent to the small 
manufacturer definition update, which included comments from chemical 
manufacturers, chemical distributors, electric utilities, scrap metal 
recyclers, petroleum industry representatives, biotechnology companies, 
and environmental organizations. Copies of all comments are available 
in the docket for this action (EPA-HQ-OPPT-2018-0321). A discussion of 
the comments germane to this rulemaking and the Agency's responses 
follows.
    1. Comment. Two commenters supported the proposed update to the 
current two-standard definition at 40 CFR 704.3. (Docket IDs: EPA-HQ-
OPPT-2018-0321-0089, EPA-HQ-OPPT-2018-0321-0102.)
    Response. EPA acknowledges the comment.
    2. Comment. Four commenters requested that EPA implement a variable 
employment-based size

[[Page 31990]]

standard for CDR and TSCA section 8(a) that uses different industry 
specific standards defined by NAICS codes, similar to the final rule 
for Fees for the Administration of the Toxic Substances Control Act 
(fees rule) (83 FR 52694, October 17, 2018 (FRL-9984-41)), which is 
based on the SBA definition for small business, as opposed to the 
current two-standard revenue-based definition. One commenter further 
stated that EPA should finalize an employment-based size standard for 
CDR reporting with the addition of a 100,000 lb volume modifier. 
Commenters stated that using a definition similar to that in the fees 
rule would provide consistency and ``more accurately reflect the 
business size of companies in the chemical industry.'' Another 
commenter noted that the EPA's economic analysis for the proposed rule 
(Ref. 2) shows that the ``SBA Only'' definition would provide the least 
regulatory burden. The same commenter requested to know why a 
``definition that is variable and maintained by another agency would be 
unwieldy.'' (Comment IDs: EPA-HQ-OPPT-2018-0321-0091, EPA-HQ-OPPT-2018-
0321-0096, EPA-HQ-OPPT-2018-0321-0097, EPA-HQ-OPPT-2018-0321-0104.)
    Response. Using a variable employment-based size standard similar 
to the fees rule leads to a reduction of information that would hamper 
EPA's ability to carry out the Agency's obligation under TSCA. As 
discussed in the proposal, EPA examined the utility of several criteria 
for ``small'' including a definition based on SBA's definition for 
small businesses. EPA's decision to finalize the update to the small 
manufacturer definition as proposed (using 2018$ rather than 2017$) is 
a result of EPA balancing Agency data needs under TSCA section 8(a) for 
implementing TSCA against the burden imposed on the regulated 
community. EPA also considered comments on the 2017 determination and 
the 2019 proposed rule, held multiple meetings with SBA to obtain 
input, and developed new analyses to understand the impact of the 
updated definition on the CDR requirements.
    The economic analysis for the proposed rule (Ref. 2) evaluated an 
unmodified SBA-based definition (``SBA Only'') in addition to SBA-based 
definitions that included production volume modifiers of 100,000 lb, 
50,000 lb, and 25,000 lb (SBA+100k, SBA+50k, SBA+25k). The purpose of 
the production volume modifier was similar to its purpose in the 
existing definition: To balance the need to minimize the reporting and 
recordkeeping burden on small manufacturers with EPA's need for 
exposure-related information that will be reported under TSCA section 
8(a). EPA's analysis found that using SBA standards in isolation 
results in a large loss of information, approximately 20% of chemical 
reports and 24% of sites, in addition to those already not reported to 
CDR as a result of the current definition (``Baseline'') (See Ref. 2, 
Table ES-1). While this option provides the least regulatory burden, it 
also creates the greatest loss of data to the Agency. EPA determined 
that losing such a large amount of information would hamper EPA's 
ability to effectively carry out and implement the requirements of 
TSCA.
    EPA calculated the loss of reports for chemicals on the TSCA Work 
Plan for Chemical Assessments to be 23% for SBA Only, 7% for SBA+100k, 
and 3% for the inflation definition. The TSCA Work Plan, originally 
released in 2012 and updated in 2014, identified a work plan of 
chemicals for further assessment under TSCA. 2016 amendments to TSCA 
require that at least 50 percent of all chemical substances undergoing 
risk evaluation come from the 2014 update to the Work Plan, until the 
Work Plan chemical list is exhausted. Disproportionate losses of 
reporting on TSCA Work Plan chemicals constitute a potential loss of 
information necessary for key Agency decisions. Again, EPA determined 
that losing an additional 23% or 8% of information on TSCA Work Plan 
chemicals would hamper EPA's ability to effectively carry out and 
implement the requirements of TSCA.
    Prior to finalizing this final rule, EPA updated its analysis of 
the reporting impact of the updated small manufacturer definition, as 
well as the potential reporting impacts of alternative small 
manufacturer definitions. In the updated analysis, EPA compared the 
final rule's inflation adjusted small manufacturer definition to the 
TSCA fees rule's small manufacturer definition with a series of 
production volume modifiers. The calculated impacts remained largely 
unchanged from the proposed to final rule. (See the supporting 
document, Economic Analysis for the Final Rule on the TSCA Section 8(a) 
Small Manufacturer Definition Update for a more in-depth analysis (Ref. 
1)). These impacts of the various alternative small manufacturer 
definitions were part of the basis for deciding to finalize the updated 
definition as proposed (updated with 2018$ rather than 2017$).
    In deciding to finalize the updated definition as proposed (updated 
with 2018$ rather than 2017$), EPA considered the practicality of 
implementing any potential definition. SBA's variable definition is 
developed and managed by SBA, and EPA cannot simply cite SBA's 
definition. As was done with the TSCA fees rule, EPA would need to 
finalize an SBA-based definition in part or in whole as part of its own 
regulations. While EPA adopted parts of the SBA definition for the fees 
rule, CDR and the fees rule operate differently for small 
manufacturers. Under the fees rule, small manufacturers pay a reduced 
fee but are still subject to the same requirements as large 
manufacturers. Under the CDR rule, however, small manufacturers are 
completely exempt from reporting. Given the differences in impact that 
a small manufacturer definition has for the fees rule and CDR, EPA 
carefully considered the balance between a reduction in burden and the 
loss of data from small manufacturer reporters when updating the TSCA 
section 8(a) small manufacturer definition.
    As stated, under the fees rule, small manufacturers pay a reduced 
fee (i.e., a reduction of burden) while for CDR small manufacturers are 
completely exempt from reporting (i.e., an elimination of burden). 
While both the fees rule and CDR are implemented under TSCA, they have 
different purposes. The purpose of the fees rule size standards is for 
apportionment of fees between small and large entities in the context 
of the implementation of new provisions for TSCA sections 4, 5, and 6. 
This purpose does not include any data quality and data availability 
consequences, which are part of CDR considerations. EPA uses CDR data 
to support risk screening, risk assessment, chemical prioritization, 
risk evaluation, and risk management activities, among other 
activities. This information allows EPA to develop an understanding of 
the types, amount, end uses, and possible exposure to chemicals in 
commerce.
    Additionally, the SBA definition is used to define the largest size 
a business can be to participate in government contracting programs and 
compete for contracts reserved or set aside for small businesses. 
Applications for these programs are reviewed on a case-by-case basis 
and a determination is made if a business qualifies. For the CDR rule, 
however, the small manufacturer definition is self-implementing. EPA 
does not make a determination on whether a company is exempted as a 
small manufacturer or is required to report to CDR, prior to CDR 
reporting. For CDR, it is up to the manufacturer to determine if the 
small manufacturer definition applies. A small manufacturer definition 
differentiated by NAICS codes could be difficult to

[[Page 31991]]

apply for reporters because CDR imposes site-based reporting 
requirements and multiple NAICS codes could apply to a given site. To 
apply a small manufacturer definition differentiated by NAICS codes, 
the reporter would have to select a single NAICS code. For importers 
and domestic manufacturing sites with multiple activities to which 
multiple NAICS codes could apply, this can pose a problem for the 
reporter and EPA. If the manufacturer chooses an incorrect code that 
results in no reporting of chemical data, then EPA would not be aware 
that the company is involved in chemical manufacturing. EPA would have 
difficulty determining if an appropriate NAICS code was selected for a 
given site that has multiple applicable NAICS codes, and, consequently, 
would have difficulty determining if a site is appropriately exempted 
from reporting due to qualification as a small manufacturer based on 
the choice of NAICS code. EPA believes the current revenue and 
production volume approach is more amenable to compliance monitoring 
and believes that it would be more difficult to determine the 
appropriate NAICS classification for a company because often multiple 
NAICS apply to a site.
    For these reasons, EPA has decided to finalize the updated small 
manufacturer definition as proposed (updated with 2018$ rather than 
2017$), instead of finalizing an employee-based size standard.
    3. Comment. In addition to broadly updating the small manufacturer 
definition to an employment-based size standard for all manufacturers 
subject to reporting under TSCA section 8(a), two commenters 
specifically asked that EPA use the SBA size standard for the utility 
sector. One commenter went on to state that ``EPA should incorporate 
the SBA size standard of 750 employees as the definition of `small 
manufacturer' for NAICS 221112, fossil fuel electric power generation; 
or define `total sales' for NAICS 221112 as only including sale of 
electricity from coal-fired generation.'' (Comment IDs: EPA-HQ-OPPT-
2018-0321-0105, EPA-HQ-OPPT-2018-0321-0104.)
    Response. EPA is finalizing a standardized two-part revenue-based 
small manufacturer definition that applies to all chemical substance 
manufacturers. Given the difficulties that EPA has already described in 
implementing a small manufacturer standard defined by industry sector, 
EPA does not believe that the Agency should adopt industry-specific 
standards. If EPA made specific standards for one industry, it would 
need to consider additional standards for other industries that 
requested a standard different from those in the general TSCA section 
8(a) small manufacturer definition, which would result in a complex and 
unworkable definition. That being said, EPA did conduct an analysis of 
the CDR submitters from utilities sites (government and industry) and 
also considered the public commenters' recommendation to use the SBA 
size standard for NAICS code 221112, fossil fuel electric power 
generation. From this analysis, EPA found that CDR reporters represent 
a variety of utilities, one of which is electricity generation. NAICS 
code 221112 does not have high representation in CDR and is not the 
most often used electricity NAICS.
    EPA disagrees with the concept of relying only on sales associated 
with a subset of the production of the reportable chemical substance. 
As described in Unit II.B., the purpose of the small manufacturer 
exemption is to reduce (or eliminate) the burden of compliance for 
those entities that have limited financial and personnel resources. 
Reducing the sales of a company to only a subset of its revenue does 
not identify the companies that have such limited resources.
    4. Comment. One commenter requested that EPA implement a third 
standard, in addition to the proposed two-part revenue-based standard, 
for the small manufacturer definition under TSCA section 8(a). The 
commenter asked that this third standard be an employee-based size 
standard combined with a production limit, specifically ``a small 
manufacturer definition of 500 or fewer employees, as defined by the 
U.S. Small Business Administration Office of Advocacy, if annual 
production (including import) volume of the particular substance does 
not exceed 100,000 lbs. at any individual site.'' (Comment ID: EPA-HQ-
OPPT-2018-0321-0102)
    Response. EPA disagrees with the comment. Adding a third standard 
using a different metric than the first two standards would unduly 
complicate the definition because companies would not only have to 
identify their company sales volume, but would also have to determine 
the number of employees. If EPA added a standard of 500 or fewer 
employees to the proposed SMD definition, another 34 sites (1%) and 829 
reports (2%) would be eliminated. The additional loss of information 
incurred as a result of adding this third standard would hamper EPA's 
ability to effectively carry out and implement the requirements of 
TSCA. Due to the need to balance the reduction of the reporting and 
recordkeeping burden on small manufacturers with EPA's need for 
exposure-related data, EPA would need to adjust the third standard in 
such a way that it would not result in additional losses of 
information. Thus, adding a third standard would introduce additional 
complexity but without further reducing burden or information received 
by EPA. See the response to Comment 2 for further discussion.
    5. Comment. Two commenters recommended that EPA retain the use of 
the PPI for Chemicals and Allied Products in future updates of the size 
standard threshold instead of changing to GDP when determining if an 
update to the TSCA section 8(a) small manufacturer size standards is 
warranted. (Comment IDs: EPA-HQ-OPPT-2018-0321-0096, EPA-HQ-OPPT-2018-
0321-0102.)
    Response. After reviewing the comments received, EPA decided that 
it will not finalize the change to Gross Domestic Product (GDP) as an 
inflation index. Instead, EPA will amend the small manufacturer 
definition at 40 CFR 704.3 to use a five-year average of the PPI for 
Chemicals and Allied Products when determining if the small 
manufacturer definition warrants adjustment. EPA proposed the change to 
GDP because a GDP deflator is less volatile and is broader than the PPI 
for Chemicals and Allied Products, and therefore EPA believed it to be 
a better measure when considering an update to the revenue size 
standards in the proposed definition. While GDP is less volatile, EPA 
now recognizes that PPI for Chemicals and Allied Products is a better 
overall accounting of chemical manufacturers that would be subject to 
reporting under TSCA section 8(a) because it directly reflects the 
chemical manufacturing sector as opposed to the U.S. economy as a 
whole. By using a five-year average of PPI for Chemicals and Allied 
Products, EPA will be able to protect against volatility while 
continuing to account for the chemical manufacturers that fall under 
the small manufacturer definition.
    6. Comment. Three commenters requested that EPA change the 
production volume modifier. Two commenters requested that EPA remove or 
raise the 100,000 lb production volume modifier used as part of the 
first standard for TSCA section 8(a) small manufacturer definition. 
Another commenter asked that EPA evaluate the impacts of decreasing the 
100,000 lb production volume modifier. One commenter asked that EPA 
show ``why 100,000 lbs. is an appropriate modifier and consult with the 
SBA on this

[[Page 31992]]

threshold.'' Additionally, the commenter asked that the Agency 
``consider a volume modifier with an employee-based standard.'' One 
commenter stated that, with no change in the existing 100,000 lb 
modifier, the proposed increases of annual company sales thresholds are 
unlikely to provide regulatory relief from reporting for small scrap 
metal recyclers. The commenter further stated that while the 100,000 lb 
limit made sense when inorganic chemical substances were exempt from 
reporting (before 2003), the threshold has not made sense since 
inorganic chemical manufacturers became subject to reporting under IUR/
CDR because inorganic chemicals are denser than organic chemicals and 
the production volume threshold is quickly reached. To support their 
public comments, the commenter provided excerpts from industry 
testimonies made during the 1975 Senate hearings on pending TSCA 
legislation. (Comment IDs: EPA-HQ-OPPT-2018-0321-0097, EPA-HQ-OPPT-
2018-0321-0100, EPA-HQ-OPPT-2018-0321-0111).
    Response. EPA disagrees that the production volume modifier should 
be changed (either raised or lowered) or that industry-specific 
modifiers should be developed. EPA has updated the revenue thresholds 
for the small manufacturer definition based on changes to the value of 
the U.S. dollar as a result of inflation. There is, however, no 
corresponding basis for adjusting the production volume modifier. In 
developing the initial small manufacturer standard, EPA included a 
production volume modifier to ensure that chemical substances 
manufactured or imported at high volumes were reported to EPA. The 
commenters have provided no support to indicate that the 100,000 lb 
threshold requires updating as a result of changes to the chemical 
manufacturing sector.
    Regarding industry-specific modifiers, such as for the scrap metal 
industry, EPA believes that it would be difficult and resource 
intensive for EPA to establish, administer, and update industry- or 
chemical-specific modifiers that align with the 100,000 lb threshold. 
As stated in EPA's response to Comment 2, EPA does not feel it is 
appropriate to have small manufacturer standards that are 
differentiated by industry. Please see EPA's full response to Comment 2 
for further discussion.
    7. Comment. One commenter asked that EPA justify why EPA chose to 
``to round its inflation adjustment of the threshold by two significant 
figures--from $112 million to $110 million for the first standard and 
$11.2 to $11 million for the second standard.'' (Comment ID: EPA-HQ-
OPPT-2018-0321-0096.)
    Response. EPA used two significant figures instead of three 
significant figures for the levels of the revenue standards. EPA does 
not consider the additional precision to be merited based on the type 
of information being used to make the inflation adjustment. The 
underlying data used for inflating the revenue standard does not 
support the use of more than two significant figures. Since proposing 
the updated small manufacturer definition, however, EPA has decided to 
use 2018$ as the basis for inflation rather than 2017$, to ensure that 
the definition is as up-to-date as possible at the time of 
finalization. EPA is basing the update of the current two-standard 
definition at 40 CFR 704.3 on inflation by adjusting the sales standard 
level for the first part from $40 million to $120 million (originally 
proposed as $110 million) and for the second part from $4 million to 
$12 million (originally proposed as $11 million).
    8. Comment. EPA received one comment on statutory and executive 
order reviews. The commenter emphasized that tribal consultation under 
Executive Order 13175, and EPA's 1984 Indian Policy, should have been 
carried out by this rulemaking. (Comment ID: EPA-HQ-OPPT-2018-0321-
0092)
    Response. EPA disagrees that a tribal consultation was necessary 
for this rule. EPA stated in Unit VII.G of the proposed rule that this 
rule would not have tribal implications because it is not expected to 
have substantial direct effects on tribal governments, on the 
relationship between the Federal Government and the Indian tribes, or 
on the distribution of power and responsibilities between the Federal 
Government and Indian tribes as specified in Executive Order 13175 (65 
FR 67249, November 9, 2000). EPA concluded that the impacts of the rule 
would not significantly nor uniquely affect the communities of tribal 
governments. Thus, EPA determined that Executive Order 13175 did not 
apply to this rule.
    Even though EPA determined that Executive Order 13175 did not 
apply, EPA conducted tribal outreach on the TSCA Chemical Data 
Reporting Revisions and Small Manufacturer Definition Update for 
Reporting and Recordkeeping Requirements Under TSCA Section 8(a) from 
May 2019 through August 2019 to provide information to tribes on the 
proposed rule and to obtain feedback. Two nationwide outreach sessions 
were also conducted, and tribal comments were accepted through August 
30, 2019. In addition, EPA developed supplemental background 
information to further explain the proposed actions to tribes. EPA 
previously responded to this comment in the Response to Public Comments 
for the TSCA Chemical Data Reporting Revisions for Reporting and 
Recordkeeping Requirements under TSCA Section 8(a) (Ref. 4).
    9. Comment. One commenter requested that EPA ``commit to updating 
the size standard threshold every time the inflation index has risen by 
20% or more from the last adjustment.'' The commenter points out that 
the proposed rule does not obligate EPA to update the small 
manufacturer definition. The commenter asks that EPA make future 
updates to the small manufacturer definition automatic. (Comment ID: 
EPA-HQ-OPPT-2018-0321-0096)
    Response. EPA appreciates the comment but does not feel that such a 
commitment is necessary. While the updated small manufacturer 
definition at 40 CFR 704.3 does not establish a timeline or obligation 
for updating the small manufacturer definition in the future, the 2016 
Amendments to TSCA require that EPA review the adequacy of the size 
standards no less than once every 10 years. The requirements under TSCA 
will lead to routine reevaluation of the small manufacturer definition 
under section 8(a). Committing to an automatic update, as requested, 
would bind EPA to making the adjustment when PPI changed 20% and would 
disallow any future flexibility. Instead, future updates to the small 
manufacture definition will follow the requirement at TSCA section 
8(a)(3)(C), which require EPA to review the standards every ten years, 
in addition to changes in PPI. Other factors that EPA may consider 
include changes in SBA's definition, inflation, and other economic or 
global factors that may have impacted chemical manufactures. The 
factors EPA considers are made on a case-by-case basis. As required by 
TSCA, EPA will consult with SBA when updating the definition.
    10. Comment. One commenter stated that with respect to the 93 fewer 
reporting sites, EPA did not show which part of the modified revenue 
definition applied. The commenter stated that ``if all or the majority 
of the sites are now exempt due to the first standard of $11 million, 
the purpose of having a second prong is unclear.'' (Comment ID: EPA-HQ-
OPPT-2018-0321-0097).
    Response. As stated in the economic analysis, the structure of the 
definition was designed for effective targeting of small manufacturers 
(Ref. 1). Note that the information from baseline conditions for this 
question is unmeasured (i.e., CDR does not receive

[[Page 31993]]

reports from these manufacturers). Nonetheless, not all sites that are 
exempted are expected to meet the conditions of the Second Standard of 
annual sales less than $12 million. EPA considered the increment of the 
changes in the proposed rule via the 93 fewer reporting sites (now 
calculated to be 127 using an updated analysis); EPA found that 
although a larger portion of sites incur exemption via the Second 
Standard compared to the First Standard, there is a non-trivial portion 
of sites that incur exemption via the First Standard (Refs. 3 and 4).
    11. Comment. Two commenters specified that EPA needs to better 
determine the information loss resulting from a revised small 
manufacturer definition. One commenter stated that the ``definition 
update would result in less data collected by EPA and thus less 
information available to the public on the chemical substances in their 
environment.'' Another commenter said that EPA was not required to base 
the update to the small manufacturer definition on inflation but had 
the discretion to update the standards to best meet the goals of TSCA. 
Additionally, the commenter believes that ``EPA has failed to evaluate 
whether and how the proposed standards will affect its ability to 
implement the law effectively, contrary to its Section 8 mandate.'' 
Lastly, the commenter pointed out that updating the definition will 
have minimal economic benefits. (Comment IDs: EPA-HQ-OPPT-2018-0321-
0092, EPA-HQ-OPPT-2018-0321-0100)
    Response. EPA appreciates the comment but disagrees that EPA has 
not adequately evaluated the impacts of the updated small manufacturer 
definition. EPA, however, does agree that EPA was not required to base 
the update to the small manufacturer definition on inflation, yet EPA 
believes the decision to do so best meets the goals of TSCA. As shown 
in the Economic Analysis for the proposed rule (Ref. 2), EPA considered 
the impact the updated small manufacturer definition would have on the 
number of companies reporting, number of sites reporting, number of 
chemical reports received, number of chemicals in chemical reports, 
total volume of all chemicals in chemical reports, number of full 
reports, number of chemical reports received covering chemicals that 
are intended for products used by children, and the number of chemical 
reports received covering chemicals on the 2014 update to the TSCA Work 
Plan. EPA selected the last two parameters in particular as important 
data for effective implementation of TSCA.
    Under CDR, manufacturers of chemicals with consumer uses must 
further identify whether a chemical is present in or on any product 
intended for use by children. EPA uses this information to inform its 
analysis of chemicals that are of concern due to their potential impact 
on children's health. The loss of such reporting would decrease the 
amount of information EPA has regarding chemicals used in children's 
products, which EPA has worked to retain while balancing relief to 
small manufacturers. Further, the 2014 update to the TSCA Work Plan 
plays an important role in the new prioritization and risk evaluation 
processes under TSCA (Ref. 5). TSCA requires that 50 percent of all 
chemical substances on which risk evaluations are conducted be drawn 
from the 2014 update to the TSCA Work Plan, meaning that EPA will need 
to draw at least 50 percent of High-Priority Substance candidates from 
that list. By operation of this statutory directive, all TSCA Work Plan 
chemicals will eventually be prioritized (82 FR 33753, July 20, 2017, 
FRL-9964-24). Information on manufacture, processing, and use of these 
chemicals through TSCA section 8(a) reporting will support 
prioritization and EPA's evaluations of these chemicals. The loss of 
chemical reports on Work Plan chemicals may affect the timeliness and 
quality of EPA's risk evaluations.
    Lastly, EPA considered several approaches, including approaches by 
SBA and others, when amending the small manufacturer definition. The 
discussion is further documented in Appendix B of the Economic Analysis 
(Ref. 1). EPA considered alternative small business definitions used by 
U.S. Federal Government agencies, including other small business 
definitions used by EPA, with a focus on the purpose of the small 
business size standards and the approach used to establish them.
    12. Comment. One commenter asked that the updated small 
manufacturer definition not apply to mercury reporting under CDR. This 
request was made because the mercury reporting rule promulgated by EPA 
on June 27, 2018 includes certain exemptions for persons who already 
report for mercury and mercury-added products to CDR (83 FR 30054). The 
commenter points out that EPA included this exemption because 
comparable data would be provided to EPA under the CDR rule. The 
commenter then states that this assumption may no longer be correct if 
EPA modifies the small manufacturer standards as proposed.
    Response. EPA appreciates the comment. The first reporting cycle 
for the mercury inventory closed on July 1, 2019. The Agency is 
currently assessing data received in preparation for the statutory 
deadline for publishing the mercury inventory not later than April 1, 
2020. The Agency is amenable to suggestions of ways to improve the 
reporting requirements related to mercury supply, use, and trade in the 
United States, and will take all comments under consideration for 
future program refinement.

IV. References

    The following is a listing of the documents that are specifically 
referenced in this document. The docket includes these documents and 
other information considered by EPA, including documents that are 
referenced within the documents that are included in the docket, even 
if the referenced document is not physically located in the docket. For 
assistance in locating these other documents, please consult the 
technical person listed under FOR FURTHER INFORMATION CONTACT.

1. EPA (2019). Economic Analysis for the Final Rule on TSCA Section 
8(a) Small Manufacturer Definition Update (RIN 2070-AK57). Office of 
Pollution, Prevention, and Toxics. Washington, DC. April 2020.
2. EPA (2019). Economic Analysis for the Proposed Rule on TSCA 
Section 8(a) Small Manufacturer Definition Update (RIN 2070-AK33). 
Office of Pollution, Prevention, and Toxics. Washington, DC. April 
2019.
3. EPA (2014). TSCA Work Plan for Chemicals Assessments: 2014 
Update. https://www.epa.gov/sites/production/files/2014-02/documents/work_plan_chemicals_web_final.pdf. Retrieved January 30, 2018.
4. EPA (2020). TSCA Chemical Data Reporting Revisions for Reporting 
and Recordkeeping Requirements under TSCA Section 8(a).
5. EPA (2018). EPAB CDR Database Statistics Report (General Report 
and Special Reports on Inorganics and Government/Industry). Office 
of Pollution Prevention and Toxics, Economic and Policy Analysis 
Branch. September 2018.
6. EPA (2018). Information Collection Request Proposed Addendum to 
Chemical Data Reporting under the Toxic Substances Control Act (TSCA 
section 8(a)) (EPA ICR No. 1884.12; OMB Control Number 2070-0162). 
September 2018.

V. Statutory and Executive Order Reviews

    Additional information about these statutes and Executive orders 
can be found at https://www.epa.gov/laws-regulations/laws-and-executive-orders.

[[Page 31994]]

A. Executive Order 12866: Regulatory Planning and Review and Executive 
Order 13563: Improving Regulations and Regulatory Review

    This action is a significant regulatory action that was submitted 
to the Office of Management and Budget (OMB) for review under Executive 
Order 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, 
January 21, 2011). Any changes made in response to OMB recommendations 
have been documented in the docket for this action as required by 
section 6(a)(3)(E) of Executive Order 12866.
    EPA prepared an economic analysis of the potential costs, cost 
savings, and benefits associated with this action. A copy of the 
economic analysis, entitled Economic Analysis for Final Rule on the 
TSCA Section 8(a) Small Manufacturer Definition Update (Ref. 1), is 
available in the docket and is briefly summarized in Unit I.E.

B. Executive Order 13771: Reducing Regulation and Controlling 
Regulatory Costs

    This action is considered an Executive Order 13771 deregulatory 
action. Details on the estimated cost savings on this final rule can be 
found in the Economic Analysis.

C. Paperwork Reduction Act (PRA)

    This final rule does not impose a new or revised information 
collection activities, but the changes in the definitions impact the 
burden estimates associated with existing reporting and recordkeeping 
rules because the respondent universe changes. EPA has therefore 
submitted an addendum to the existing Information Collection Request 
(ICR) for approval to OMB under the PRA, 44 U.S.C. 3501 et seq. (Ref. 
6). The existing ICR is identified under EPA ICR No. 1884.11 and 
approved under OMB Control No. 2070-0162. The ICR Addendum is 
identified under EPA ICR No. 1884.12, a copy of the ICR Addendum in the 
docket for this rule, and is briefly summarized here.
    Respondents/affected entities: Entities potentially affected by 
this ICR include companies manufacturing (including importing) chemical 
substances listed on the TSCA Inventory and regulated under TSCA 
section 8.
    Respondent's obligation to respond: Mandatory.
    Estimated number of respondents: 5,660.
    Frequency of response: Reporting under CDR occurs every four years. 
The next CDR collection will occur in 2020.
    Total estimated burden: A reduction of 23,014 hours per year from 
the total burden currently approved. Burden is defined at 5 CFR 
1320.3(b).
    Total estimated cost: A reduction of $1,760,578 per year, includes 
$0 annualized capital or operation and maintenance costs.
    For TSCA section 8(a) reporting outside of CDR, including the TSCA 
section 8(a) Preliminary Assessment Information Rule (PAIR) (OMB 
control number 2070-0054) or any of the existing chemical specific TSCA 
section 8(a) rules, EPA did not estimate incremental burden and cost 
either because EPA has not received any chemical reports under those 
rules for an extended period of time, or because the rule uses a rule 
specific definition that is not being changed by this final rule. For 
these reasons, no change is expected in the impacted universe of 
respondents, respondent burden or respondent cost for the PAIR or other 
chemical specific TSCA section 8(a) rules and no ICR addendums in these 
cases are needed. The technical correction for hexafluoropropylene 
oxide also did not change the respondent universe, burden or cost that 
would need to be captured in an ICR addendum.
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for the 
EPA's regulations in 40 CFR are listed in 40 CFR part 9. When OMB 
approves this ICR addendum, the Agency will announce that approval in 
the Federal Register.

D. Regulatory Flexibility Act (RFA)

    Pursuant to section 605(b) of the RFA, 5 U.S.C. 601 et seq., I 
certify that this action will not have a significant economic impact on 
a substantial number of small entities. The small entities subject to 
the requirements of this action are manufacturers and importers of 
chemical substances, including byproduct chemical substances, and are 
subject to either of the following: (1) Reporting under the TSCA 
Chemical Data Reporting (CDR) requirements at 40 CFR part 711 or (2) 
TSCA reporting and recordkeeping requirements at 40 CFR part 704 or 
other TSCA reporting requirements which reference the small 
manufacturer standards at 40 CFR 704.3. The Agency has determined that 
no currently exempt small manufacturers will become newly subject to 
any current TSCA section 8(a) rules under the new TSCA section 8(a) 
small manufacturer definition, because all manufacturers that are 
currently exempt will remain exempt under the final definition. 
Moreover, the updated definition allows exemptions for certain current 
reporters, thereby eliminating their reporting burden. EPA also notes 
that there are no adverse small entity impacts to small government 
entities because under the final rule, all entities defined as small 
for purposes of small government assessment are the same entities that 
are newly eligible to take the small government exemption and eliminate 
their CDR reporting burden entirely. A small amount of incremental 
burden will be incurred for rule familiarization and is less than 1% of 
revenues for each small parent company. Details of this analysis are 
presented in the Economic Analyses (Ref. 1).

E. Unfunded Mandates Reform Act (UMRA)

    This action does not contain an unfunded mandate of $100 million or 
more as described in UMRA, 2 U.S.C. 1531-1538, and will not 
significantly or uniquely affect small governments. According to the 
information derived using the 2016 CDR, there are government entities 
that report to CDR, including: Seven municipalities, one county-level 
public utility district, and one tribal entity. However, under the 
changes finalized by this action, four of the municipalities will be 
exempt, with the remaining entities incurring a minimal average 
incremental burden and cost per site at about 0.1 hours and $8 per 
year, respectively. Consequently, impacts will not exceed $100 million 
for all governments.
    In sum, the final rule is not expected to result in expenditures by 
State, local, and Tribal governments, in the aggregate, or by the 
private sector, of $100 million or more (when adjusted annually for 
inflation) in any one year. Accordingly, this final rule is not subject 
to the requirements of sections 202, 203, or 205 of UMRA.

F. Executive Order 13132: Federalism

    This action will not have federalism implications. It will not have 
substantial direct effects on the states, on the relationship between 
the National Government and the states, or on the distribution of power 
and responsibilities among the various levels of government as 
specified in Executive Order 13132 (64 FR 43255, August 10, 1999). 
Thus, Executive Order 13132 does not apply to this action.

G. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    This action will not have tribal implications because it is not 
expected to have substantial direct effects on

[[Page 31995]]

tribal governments, on the relationship between the Federal Government 
and the Indian tribes, or on the distribution of power and 
responsibilities between the Federal Government and Indian tribes as 
specified in Executive Order 13175 (65 FR 67249, November 9, 2000). 
According to the information presented in the economic analysis for the 
TSCA section 8(a) small manufacturer definition update (Ref. 1), one 
tribal entity reported during the 2016 CDR collection. Under the final 
rule, this entity is estimated to incur a minimal average incremental 
burden and cost per site at about 0.5 hour and $36 per year, 
respectively. Consequently, EPA has concluded that the impacts of the 
final rule will not significantly or uniquely affect the communities of 
tribal governments. Thus, Executive Order 13175 does not apply to this 
final rule.

H. Executive Order 13045: Protection of Children From Environmental 
Health and Safety Risks

    EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997), 
as applying to those regulatory actions that concern environmental 
health and safety risks that EPA has reason to believe may 
disproportionately affect children, per the definition of ``covered 
regulatory action'' in section 2-202 of the Executive Order. This 
action is not subject to Executive Order 13045 because it does not 
concern an environmental health risk or safety risk.

I. Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use

    This action is not a ``significant energy action'' as defined in 
Executive Order 13211 (66 FR 28355, May 22, 2001) because it is not 
likely to have a significant adverse effect on the supply, 
distribution, or use of energy.

J. National Technology Transfer and Advancement Act (NTTAA)

    Because this action does not involve any technical standards, NTTAA 
section 12(d), 15 U.S.C. 272 note, does not apply to this action.

K. Executive Order 12898: Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations

    This action will not have high and adverse human health or 
environmental effects on minority populations, low-income populations, 
and/or indigenous peoples as specified in Executive Order 12898 (59 FR 
7629, February 16, 1994).
    The final rule is directed at manufacturers (including importers) 
of chemical substances. All consumers of these chemical products and 
all workers who come into contact with these chemical substances could 
benefit if data regarding the chemical substances' health and 
environmental effects were developed. Therefore, it does not appear 
that the costs and the benefits of the final rule will be 
disproportionately distributed across different geographic regions or 
among different categories of individuals.

VI. Congressional Review Act (CRA)

    Pursuant to the CRA (5 U.S.C. 801 et seq.), EPA will submit a 
report containing this rule and other required information to the U.S. 
Senate, the U.S. House of Representatives, and the Comptroller General 
of the United States prior to publication of the rule in the Federal 
Register. This action is not a ``major rule'' as defined by 5 U.S.C. 
804(2).

List of Subjects in 40 CFR Parts 704 and 712

    Chemicals, Confidential business information, Environmental 
protection, Hazardous substances, Reporting and recordkeeping 
requirements.

    Dated: May 11, 2020.
Alexandra Dapolito Dunn,
Assistant Administrator, Office of Chemical Safety and Pollution 
Prevention.

    Therefore, 40 CFR chapter I, subchapter R, is amended as follows:

PART 704--[AMENDED]

0
1. The authority citation for part 704 continues to read as follows:

    Authority: 15 U.S.C. 2607(a).


0
2. Amend Sec.  704.3 as follows:
0
a. Add, in alphabetical order, the definition for ``Small government''.
0
b. Remove the definition of ``Small manufacturer or importer'' and add 
the definition of ``Small manufacturer'' in its place.
    The additions read as follows:


Sec.  704.3  Definitions.

* * * * *
    Small government means the government of a city, county, town, 
township, village, school district, or special district with a 
population of less than 50,000.
* * * * *
    Small manufacturer means a manufacturer (including importer) that 
meets either of the following standards:
    (1) First standard. A manufacturer (including importer) of a 
substance is small if its total annual sales, when combined with those 
of its parent company (if any), are less than $120 million. However, if 
the annual production or importation volume of a particular substance 
at any individual site owned or controlled by the manufacturer or 
importer is greater than 45,400 kilograms (100,000 lbs), the 
manufacturer (including importer) will not qualify as small for 
purposes of reporting on the production or importation of that 
substance at that site, unless the manufacturer (including importer) 
qualifies as small under paragraph (2) of this definition.
    (2) Second standard. A manufacturer (including importer) of a 
substance is small if its total annual sales, when combined with those 
of its parent company (if any), are less than $12 million, regardless 
of the quantity of substances produced or imported by that manufacturer 
(including importer).
    (3) Inflation index. EPA shall make use of the Producer Price Index 
for Chemicals and Allied Products, as compiled by the U.S. Bureau of 
Labor Statistics, for purposes of determining the need to adjust the 
total annual sales values and for determining new sales values when 
adjustments are made. EPA may adjust the total annual sales values 
whenever the Agency deems it necessary to do so, provided that the 
five-year average of the Producer Price Index for Chemicals and Allied 
Products has changed more than 20 percent since either the most recent 
previous change in sales values or May 28, 2020, whichever is later. 
EPA shall provide Federal Register notification when changing the total 
annual sales values.
* * * * *

0
 3. Amend Sec.  704.104 by revising paragraph (c)(2) to read as 
follows:


Sec.  704.104  Hexafluoropropylene oxide.

* * * * *
    (c) * * *
    (2) Persons described in Sec.  704.5(a) through (f).
* * * * *

PART 712--[AMENDED]

0
4. The authority citation for part 712 continues to read as follows:

    Authority: 15 U.S.C. 2607(a).


0
5. Amend Sec.  712.25 by revising paragraph (c) to read as follows:


Sec.  712.25   Exempt manufacturers and importers.

* * * * *
    (c) Persons who qualify as small manufacturers (including 
importers) in respect to a specific chemical substance listed in Sec.  
712.30 are exempt. However, the exemption in this paragraph (c) does

[[Page 31996]]

not apply with respect to any chemical in Sec.  712.30 designated by an 
asterisk. A manufacturer is qualified as small and is exempt from 
submitting a report under this subpart for a chemical substance 
manufactured at a particular plant site if it meets the definition for 
small manufacturer in Sec.  704.3 of this chapter.
* * * * *
[FR Doc. 2020-10435 Filed 5-27-20; 8:45 am]
BILLING CODE 6560-50-P