Substances' four Deputy Assistance Administrators and senior representatives from other components of the Agency. The Committee met for the first time on March 31. The Deputy Assistant Administrator for Program Integration and Information has the main responsibility within the Office of Toxic Substances for implementing the decisions of the Committee and for integrating TSCA activities with other parts of EPA and with other agencies.

As Congress recognized when it enacted TSCA, there is little information on potential adverse affects, especially long-term health or environmental effects, for many chemicals in commerce. This requires us to review a large percentage of chemical substances for possible further attention on the basis of such general factors as chemical class, production, and use.

We are establishing a system to select chemical substances for priority attention under TSCA. Two general criteria have been set for this purpose; (1) toxicity, including potentially adverse health and environmental effects; and (2) exposure. In the first years of TSCA implementation, EPA plans to devote substantial resources to developing information on chemical substances and the risks some of them pose, or may pose, to public health and the environment. To start gathering this information, we have promulgated regulations under sections 8 (a) and (b) to compile a list of chemical substances and establish a profile of the chemical industry (what substances are manufactured, where, and in what quantities).

As you know, section 8(a) requires the Adminstrator to promulgate rules governing compilation of the inventory_required by section 8(b) not later than 180 days after the effective date of TSCA. EPA proposed rules in March 1977. In between the proposal and scheduled promulgation in July 1977, the Administrator of EPA changed. Because the inventory reporting regulations were the first major action under TSCA, Mr. Costle took a personal interest in insuring that they were consistent with the new Administration's strategy for implementing TSCA. In a letter to Chairman Staggers in June 1977, we explained the decision to expand the reporting requirements to include site and production-volume information in order to establish a base line for implementation. As a consequence, we had to repropose the regulations in August 1977 to allow public comment on the expanded scope of the requirememts. In December 1977, the regulations were made final and reporting has begun.

Most domestic manufacturers and importers of chemical substances have until May 1, 1978, to report. We estimate that it will take at least 7 or 8 months to process the forms received. Our ability to process the forms depends in large measure on the quality of the submissions from industry. Although our contractor, the Chemical Abstracts Service, was unable to process many of the first forms they received from manufacturers without seeking further clarification or requiring resubmission, more recent forms contain a far smaller percentage of errors. We attribute this increase in quality in part to the 28 inventory compliance training seminars we conducted in various cities in February and March. These sessions and a toll-free telephone number we have provided for direct assistance presumably have helped to minimize incorrect inventory reporting.

Once the inventory data are available, we will be in a position to systematically select chemical substances and classes of chemical substances for further attention based on their relative production volumes or other factors. In addition, the data will be useful in responding to emergency situations and quickly identifying possible sources of exposure to specific chemical substances.

Guidance we have published under section 8(e) is also expected to improve our ability to identify and address priority substances. Specifically, this guidance encourages manufacturers to establish an internal reporting procedure to insure that EPA will receive expeditiously information indicating that chemical substances may prevent a substantial risk to health or the environment. We already have received and reviewed over 125 substantial risk notices.

Under section 8(d), we have proposed that manufacturers and processors of chemical substances recommended for testing by the Interagency Testing Committee submit unpublished health and safety studies already performed on these substances. In general, we plan to review results of tests already performed before requiring manufacturers and processors to perform additional tests.

Testing standards being developed under section 4 will, where possible, take a tier or hierarchical approach, with simple, relatively short-term tests preceding more complex, long-term tests. The results of selected cell-culture screening tests, for example, will help determine which substances require progressively longer, more expensive, whole-animal or other tests for possible human health, animal, and environmental effects. We have solicited public comments on the Interagency Testing Committee's initial recommendations under section 4(e) regarding 10 chemicals

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and classes of chemicals and plan to do so shortly for the 8 additional substances recommended on April 10, 1978. By October 1978, we will either initiate action to require testing for the first committee candidates to explain our reasons for not doing so, as TSCA mandates. We have until April 1979 to respond to the second set of recommendations.

We are especially concerned about quality control in test data submitted to EPA under TSCA. To insure consistently high-quality data, our testing standards under section 4 will incorporate standards for good-laboratory practices consistent with those developed by the Food and Drug Administration (FDA). As you know, recent investigations indicate that data developed on a significant number of pesticide chemicals by a major independent testing laboratory may be unreliable. These investigations highlight the importance of insuring quality control in the development of data.

Clearly one of our most critical tasks during the rest of this year is developing guidelines and internal review mechanisms under section 5 for premanufacture notification of new chemical substances. We will publish rules under section 5(d) spelling out the content of notices for new chemical substances. In addition, we are planning to issue guidelines on what information EPA considers necessary to evaluate the risks associated with various classes of chemical substances. Eventually, there will be section 4 testing rules for the effects and classes of substances of greatest concern, so that any new chemical substance in specified classes will be subject to those requirements before manufacture.

The United States' policy on reviewing new chemical substances has significant ramifications for international chemical trade. Accordingly, we are working closely with the Organization for Economic Cooperation and Development (OECD) and the Eurpoean Community (EC) to develop compatible requirements for screening new chemical substances. The Administrator and his counterparts from 15 other key industrial nations met in Stockholm 2 weeks ago (April 11-13) to discuss this and other aspects of international toxic substances control. At this meeting, the nations agreed to initiate several additonal activities directed to the development of consistent standards for good laboratory practices, confidentiality problems, common definitions of key terms, and other important issues concerning international control of toxic substances.

I am happy to report that cooperation on toxic substances control is occurring within our own government, too. In addition to the Interagency Testing Committee required under section 4, TSCA either implicitly or explicitly requires other forms of close coordination among Federal agencies. In response to the requirement in section 10(b), an Interagency Toxic Substances Data Committee met for the first time on February 28. The objectives of this Committee are to establish an efficient system for the retrieval of toxicological and other scientific data available in Federal government files and to insure that data collected under TSCA are easily accessible, with proper safeguards, to other agencies responsible for regulating toxic substances. Further, we have an agreement with the National Cancer Institute involving coordination of cancer research, including developing short-term screening tests for health and environmental effects, conducting epidemiological and monitoring studies, and performing basic research on the mechanisms of carcinogenesis.

Last August the heads of the four Federal agencies primarily responsible for regulating chemical substances-EPA, the FDA, the Occupational Safety and Health Administration, and the Consumer Product Safety Commission-formed the Interagency Regulatory Liaison Group (IRLG). The principals and their staff representatives are continuing to meet regularly to coordinate efforts in the following areas: testing standards, epidemiology, risk/benefit assessment, information sharing. research planning, regulation development, compliance and enforcement, and interagency communication and public education on toxic substances.

I would like to turn to the subject of chemical regulation under section 6. While much of our initial effort in implementing TSCA is aimed at information gathering, we have taken and plan to take several actions aimed at controlling the production, distribution, use, and disposal of specific chemical substances or classes of substances. As you know, our first action was to promulgate regulations on the labeling and disposal of polychlorinated biphenyls (PCBs). The second phase of PCB regulations, implementing the ban on manufacture and use in any way other than in a totally enclosed manner, is expected to be proposed later this spring.

While section 6(e) sets forth a timetable for labeling and disposal of PCBs and phasing out of their manufacture, processing, distribution in commerce, and use, we were unable to meet this schedule. Briefly, the primary reasons for this were lack of sufficient staff and experience in promulgating regulations under section 6. As I have already mentioned, we have expanded our staff, selected a Deputy Assistant

Administrator for Chemical Control to be in charge of regulations under sections 5, 6, and 7, and promulgated rules setting forth procedures under section 6(c). These factors and our initial experience should greatly contribute to our ability to take regulatory actions in the future.

In a joint action with the Food and Drug Administration and the Consumer Product Safety Commission, we will ban most aerosol uses of chlorofluorocarbons (CFC's). Over the next several months, EPA will investigate ways to reduce CFC emissions from non-aerosol sources such as air conditioners, refrigerators, and solvents.

We are currently evaluating what regulatory action may be warranted by the risks presented by polybrominated biphenyls (PBB's). Ongoing reviews of highvolume, high-toxicity chemicals, including the 15 designated last spring, will produce other candidates for regulation over the next 6 to 9 months.

We have encouraged extensive participation by industry, environmental, labor, and other groups in the development of regulations under TSCA. Further, EPA will run a pilot program to fund public participation in rulemaking in connection with the second phase of PCB regulations.

As a final comment on our implementation of TSCA, I would like to mention our research and development program for Fiscal Years 1978 and 1979. Assistant Administrator for Research and Development Stephen Gage and I recently agreed on an $8-million program involving research in the areas of health and ecological effects, transport and fate, analytical methods, and industrial processes. A key objective is the development of rapid, reliable, and economical testing procedures that can be used as screens in assessing chemical health risks. In addition, the Office of Research and Development will provide technical support in monitoring and other areas. This component of the program will involve $2.4 million in fiscal year 1979.

I would like to turn now to the two bills before the Subcommittee:

Mr. Costle testified before Congress on Title I of S. 1531 as it was being considered by the Senate in April 1977. I share his concern for those who may be physically affected by a chemical contamination incident and for those who are economically affected by a State or Federal decision to impound or condemn food products contaminated by chemical substances of mixtures. As the Administrator stated at that time, however, we do not think EPA is the correct Agency to administer this kind of a system. I want to reemphasize what Mr. Costle stressed earlier: EPA has limited expertise for this purpose, and we do not believe TSCA is the proper law under which to provide this assistance. More generally, however, we have unresolved questions concerning the entire proposal for a Federal indemnification program. As Mr. Costle noted, the indemnification issue is one that will be studied under section 25 of TSCA. That study will examine the indemnification issue with respect to chemical producers and others that may be economically harmed by EPA under any law the Agency administers.

The President's budget requested $46.5 million for Fiscal Year 1979 under section 29 of TSCA. This figure represents an increase from $16 million authorized in fiscal year 1978 and does not include another $12.7 million requested under separate authorization for research and development purposes. Therefore, we believe that an authorization of $50 million will be sufficient for fiscal year 1979. We have just begun the process of zero base budgeting for Fiscal Year 1980 and are not now in a position to offer specific suggestions for an authorization level.

With respect to the proposed amendment granting the Administrator authority "to prescribe such rules as are necessary to carry out his or her functions under this Act," EPA has found similar authority useful under the Federal Water Pollution Control Act (section 501(a)), the Clean Air Act (section 301(a)), and the Federal Insecticide, Fungicide, and Rodenticide Act (section 25(a)). Under these statutes, EPA has used general rulemaking authority to clarify problems that were unanticipated at the time of enactment and for which EPA's specific rulemaking authority was not clear. From our experience, general rules have provided a means to reduce uncertainty for both the industry and the public. Because the requirements of the Administrative Procedure Act applies to these rules, they provide for a greater degree of due process than issuance of guidelines, for example. The Administration plans to review this issue further as we gain experience under TSCA.

Finally, I am prepared to comment briefly on H.R. 9616, a bill to establish a compensation system for victims of toxic substances pollution. As you know, this Administration is very interested in developing nonregulatory means to curtail pollution and to promote environmentally sound practices by industry. This bill proposes a complex new mechanism to compensate victims of toxic substances. While I concur in the concepts that innocent victims should receive speedy redress

of damages and that the manufacturer responsible for the injury must pay, I reserve judgment on any specific approach until the underlying issues and alternatives have been more fully explored. Our main concern will be to insure that any compensation scheme does not reduce incentives to control exposure to harmful chemicals-either through voluntary measures or in compliance with rules under TSCA for other Federal laws.

Thank you.

IMPLEMENTING THE TOXIC SUBSTANCES CONTROL ACT: WHERE WE STAND

MANDATE

TSCA gives EPA authority to identify and control harmful chemicals: those already in commerce and new chemical substances prior to their commercial manufacture.

Responsibilities under TSCA include:

Requiring industry to provide information about the production, distribution, use, exposure and health and environmental effects of chemicals;

Requiring industry to test potentially harmful chemicals for health and environmental effects; and

Controlling chemicals that pose an unreasonable risk to health or the environment.

SCOPE

As many as 70,000 chemical substances are currently in commerce. Perhaps 1,000 new chemical substances will be introduced into commerce annually.

Characteristics of U.S. chemical industry:

Annual sales exceeded $113 billion in 1977;

Chemical and allied products account for approximately 7.5 percent of the total U.S. manufacturing output;

An estimated 115,000 establishments involved in manufacturing and/or processing chemical products are affected by TSCA;

The U.S. Chemical and Petroleum Refinery industries employ about 1.6 million persons-the 170 largest companies account for over 80 percent of total industry employment.

The United States maintained a trade surplus in chemicals of $6 billion in 1976 and 1977, while the overall U.S. trade deficit for these years was $5.8 and $26.7 billion.

BUDGET FOR TSCA

Fiscal year 1978 budget for toxic substances abatement and control is $22.9 million; $41.6 million requested for fiscal year 1979; as contrasted with $7 million in fiscal year 1977.

Fiscal year 1978 budget for toxic substances enforcement is $2.3 million; $4.6 million requested for fiscal year 1979; as contrasted with $0.2 million in fiscal year 1977.

Fiscal year 1978 budget for toxic substances research and development is $3.6 million; $10.5 million requested for fiscal year 1979; as contrasted with $1.4 million in fiscal year 1977.

IMPLEMENTATION STRATEGY

Discussion draft sent to Administrator's Toxic Substances Advisory Committee for review on January 31, 1978-addresses some of EPA's key principles and plans for initial implementation.

Key elements EPA considers fundamental to TSCA strategy in the early stages of implementation:

Defining priorities for selection of chemical substances for early action; Using actions under TSCA to further effective control of toxic substances under other laws;

Encouraging actions by industry, beyond the actions directly required by regulation, to minimize risks from chemicals;

Administering the several provisions of TSCA in a coherent, integrated way;

and

Considering the total risks of toxic substances, including global risks. Basic objectives of initial implementation activities:

Developing the organization and staff necessary to carry out EPA's responsibilities under TSCA;

Defining methods for assigning priority to chemical substances for investigation and regulation;

Initiating actions for information gathering under Sections 4 and 8;

Establishing mechanisms for premanufacture notification of new chemical substances; and

Taking selective regulatory actions under Section 6.

ORGANIZATION AND STAFF

EPA is or will be developing several major new systems critical to implementation of TSCA;

Mechanisms for effective review of new chemical substances under Section 5;
Data systems for efficient retrieval; and

Toxic Substances Priorities Committee, including senior representatives from other components of EPA.

TSCA Abatement and Control staff in the Office of Toxic Substances currently numbers about 150 persons: 221 positions authorized for fiscal year 1978 (includes 31 in Regions), plus 6 for management; 428 requested for fiscal year 1979 (includes 46 for Regions), plus 40 for management; and 99 actual for fiscal year 1977.

Enforcement has approximately 15 positions at Headquarters and another 18 are being filled now in the Regions: 48 positions authorized for fiscal year 1978; 85 requested for fiscal year 1979; and 3 actual in fiscal year 1977.

Research and Development is nearly fully staffed as fiscal year 1978 positions were reprogrammed from other ORD programs: 45 positions authorized for fiscal year 1978; 60 requested for fiscal year 1979; and 10 actual for fiscal year 1977.

DETERMINING PRIORITIES

A major immediate objective to develop a systematic method for selecting chemical substances for investigation or for regulatory action under TSCA.

In all decisions, risk will be determined by considering both the toxicity of a substance and its estimated exposure.

Chemical substances that may produce chronic health effects will take higher priority than those that produce acute effects.

EPA will emphasize those whose effects are either irreversible or slowly reversible and debilitating: e.g., oncogenic, mutagenic, teratogenic, and neurotoxic effects. With respect to cardiovascular, respiratory, immunological, dermatological, and reproductive effects, EPA will determine priorities based on the severity and irreversibility of the effects.

EPA will rely on validated test methods that are generally accepted by scientists. EPA will give high priority to the environmental effects of substances that are widely dispersed into the environment and either indirectly threaten human health, affect commercially important species, or significantly disrupt eco-systems.

INFORMATION GATHERING UNDER SECTION 8

Initial inventory reporting regulations have been promulgated under TSCA Section 89(a) to compile a list of chemical substances as required by TSCA Section 8(b) and to establish a profile of the chemical industry (what substances are being manufactured where and in what quantities).

The chemical substances inventory is expected to be completed by end of 1978 (120 days allowed for reporting after regulations promulgated, another 6-8 months required for data compilation for final inventory list).

Premanufacture notification will begin 30 days after publication of the initial inventory for all new chemical substances into the United States.

Processors may add to the initial inventory during special 210-day reporting period.

Proposed guidance on Section 8(e), reporting of substantial risk information, was published in September; final policy statement published on March 16.

EPA is analyzing several options for reporting requirements in the near future. Additional information on substances already identified as candidates for regulatory action;

Use and exposure information on subtances known to be produced in substantial quantities and used for high-exposure purposes; and

Reporting on substances subject to testing requirements under Section 4. EPA is planning to propose general rules for reporting production, use, byproducts, exposure and other information under Section 8(a); after the general rules are promulgated, EPA would apply them in subsequent rules to individual substances.