TSCA Reform May Have Implications for Vehicle Replacement Parts
In recent weeks, Congress has considered a number of bipartisan efforts to amend the Toxic Substances Control Act (TSCA), 15 U.S.C. § 2601 et seq, and reform the manner in which the EPA regulates the distribution and use of chemical substances that EPA determines pose an “unreasonable risk to health or to the environment.” We focus here on two aspects of the bipartisan proposals that have important implications for automotive suppliers.
First, both the House “discussion draft” of the TSCA Modernization Act of 2015, and the Senate Committee version approved on April 28, include an important exemption from TSCA regulation for certain replacement parts. Under this provision, TSCA would be amended to require that before the EPA can restrict the use of any chemical substance, it must exempt from the new restrictions “replacement parts that are manufactured prior to the effective date of the rule for articles that are first manufactured prior to the date of publication in the Federal Register of the rule unless the Administrator finds such replacement parts contribute significantly to the identified risk.” Thus, under this version of the proposed legislation, aftermarket suppliers could inventory products which contain a newly banned substance so that repair parts could continue to be available for a vehicle during its useful life, as long as those parts were manufactured before the effective date of the rule.
A competing version of the provision, and one supported by the Alliance of Automobile Manufacturers, would broaden this proposed exemption further to cover all replacement parts, regardless of when manufactured, as long as the materials with which the parts were produced “were acceptable when the vehicle was designed, certified, and warranted, even if manufactured after the effective date of a restriction on use of a chemical contained in those parts.” (See April 14, 2015, Alliance testimony before the House Energy and Commerce Subcommittee on Environment and the Economy.) This distinction could be very meaningful for automotive suppliers depending upon EPA’s upcoming TSCA regulatory efforts.
As an example, we do know that the State of California has now concluded that phthalates commonly used in soft plastic components of automotive products, including DINP, DIDP, DBP, and DEHP, allegedly cause cancer or developmental or other reproductive harm. These phthalates are frequently found in Plastisol®, gaskets, automotive hoses, vinyl seat covers, steering wheel covers, and many other vehicle components. If EPA similarly concluded that phthalates had an impact on human health sufficient to regulate their use or distribution under TSCA, EPA could move to ban the use of phthalates in new automotive products. If the replacement parts exemption to TSCA were implemented, at least the automotive aftermarket would be able to continue to make available throughout a vehicle’s useful life repair products which employ such substances in gaskets, hoses or other parts initially designed for use in that vehicle. However, in the absence of such an exemption, it is possible that certain replacement parts would not continue to be available for repairs when needed by vehicle owners, which could negatively impact the vehicle repair market.
It remains to be seen whether the final draft of the TSCA Modernization Act will be amended to enlarge the scope of the exemption, as the Alliance supports, or to restrict or remove the discussion draft’s current exemption language allowing suppliers and retailers to stockpile inventory of replacement parts made with substances newly regulated by TSCA.
Another legislative provision that may find its way into a TSCA reform bill and be helpful to both vehicle original equipment and aftermarket manufacturers is a new proposal for federal preemption of State efforts to regulate the same chemical substances. On April 28, a Senate Committee approved a provision which requires states to refrain from regulating, or “pause,” for five years after the State has identified a substance as a concern in order to allow EPA to study and/or regulate the substance. An earlier version of the bill had required a seven-year “pause” by state regulators, and this five-year provision was seen as a compromise. Automotive suppliers with sales in California, especially, are familiar with that state frequently getting ahead of federal regulators with respect to regulatory efforts, sometimes necessitating that suppliers have two product versions: a 49-state version and a California version. This provision is designed to give EPA time to carefully consider whether and how to regulate a particular substance before a state regulator finalizes what may be an inconsistent regulatory proposal.
We will continue to monitor the TSCA Modernization Act and its impact on motor vehicle clients as it navigates through Congress. If you have any questions, please feel free to contact the authors of this alert or any member of Arent Fox’s Automotive group.