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.

EPA is developing an integrated data system for information on chemical substances; there will be full public access to all nonconfidential information, and confidential data will be protected.

TESTING

First testing standards developed under Section 4 will be directed to determining whether chemical substances are oncogens, or tumor-causing substances.

The standards will have a tier or hierarchical approach.

Testing requirements for teratogenic effects are in the planning stage. Interagency Testing Committee's (ITC) initial report to EPA (October 1977) recommended that priority consideration be given to requiring testing of four individual chemicals (chloromethane, hexachloro-1,3-butadiene, nitrobenzene, and toluene) and six groups (alkyl epoxides, alkyl phthalates, chlorinated benzenes, mono- and di-, chlorinated paraffins, cresols, and xylenes); by October 1978, EPA must initiate action to require the recommended testing or explain why it is not acting.

EPA has proposed regulations under Section 8(d) to require industry to submit results of relevant health and safety testing already performed on chemicals included in ITC's October 1977 report.

EPA will propose testing standards directed to specific effects; the standards will apply to various substances, as appropriate.

Second Interagency Testing Committee report issued April 10-recommends priority testing consideration for another four individual chemicals and four groups of chemicals: acrylamide, aryl phosphates, chlorinated naphthalenes, dichloromethane, halogenated alkyl epoxides, polychlorinated terphenyls, pyridine, and 1,1,1-trichloroethane; by April 1979, EPA must initiate action or explain its reasons for not doing

SO.

EPA is examining FDA's Good Laboratory Practices and the Office of Pesticide Programs' testing guidelines for possible use under TSCA.

ESTABLISHMENT OF PREMANUFACTURE NOTIFICATION

EPA will publish guidelines under Section 5 indicating the information it considers necessary to evaluate the risks associated with various classes of chemical substances.

Development of a system for reviewing under way reviewing premanufacture notification is in anticipation of the beginning of notification in December 1978 (30 days after publication of inventory).

Rules for "significant new uses" will follow development of premanufacture notification requirements.

REGULATION OF CHEMICAL SUBSTANCES

PCB regulation I (marking and disposal) was promulgated February 17, 1978. PCB regulation II (implementing ban on manufacture and use in any way other than totally enclosed manner) is expected to be proposed later this spring.

Regulations on aerosol uses of chlorofluorocarbons were promulgated March 17 in a joint action with the Food and Drug Administration and the Consumer Product Safety Commission.

Over the next several months EPA will investigate reduction of emissions from non-aerosol sources (e.g., air conditioners, refrigerators, solvents), although eventual regulation will be under the Clean Air Act not TSCA.

Regulatory process to ban PBBs under way; final action expected next fall.

Ongoing reviews of high-volume, high-toxicity chemicals will produce other candidates for regulation over the next 6-9 months.

EPA will run pilot program to provide funds for public participation in rulemaking in connection with PCB II regulations.

STATE "GRANTS"

$1.5 million is available in fiscal year 1978 and fiscal year 1979, which will probably be provided as contracts in accordance with OMB guidance.

Funds will be used in a few States for priority programs for chemical risks for which EPA is unable or not likely to take action.

Criteria for these funds are now being developed and will be proposed shortly; award of funds is expected within 6 months.

INDUSTRY ASSISTANCE OFFICE

Established a little over a year ago to provide technical and other nonfinancial assistance to industry on TSCA requirements, Agency policy, and industry compliance, as required by Section 26.

Actions in the past year:

Have answered over 450 Congressional inquiries, 90-95 percent of which have been industry related (central issues have been CFCs, PCBs, PBBs, and inventory reporting regulations.); have received average of 3,000 routine letters per month requesting forms, instructions, and general and technical information, and have responded to over 5,000 total, excluding candidate list requests;

Have responded to nearly 3,000 telephone requests for assistance in the past year, plus over 3,500 telephone calls received on the toll-free number in the 2 months of operation (about 20 percent for technical information);

Mailing list of 25,000 manufacturers/processors, environmentalists, citizens developed; 10,000 candidate lists and addenda mailed; 83,000 forms mailed (almost half Form C);

Have held over 750 personal meetings with trade associations and industry representatives (about 10 per week), over 50 speeches to associations and industry groups; and

Planned and helped conduct 32 TSCA inventory training seminars in 28 cities between February 27 and March 17, reaching over 3,000 industry representatives.

RELATIONS WITH OTHER AGENCIES

Interagency Regulatory Liaison Group (IRLG)—

Was formed by EPA, FDA, OSHA, and CPSC in August 1977 to facilitate their combined effectiveness in conducting chemical hazard activities;

Eight working groups have been formed on (1) regulatory development, (2) testing standards and guidelines, (3) information exchange, (4) risk assessment, (5) methodologies for epidemiological studies, (6) coordination of enforcement and compliance strategies, (7) research needs, and (8) interagency communication and public education;

The results of these specific initiatives, which are currently ongoing, will be used to develop coordinated and integrated approaches in these areas; and In addition, the four agencies have begun to coordinate their activities in the 10 Federal Regions.

Toxic Substances Strategy Committee

Formed by CEQ in response to President's environmental message on coordination of interagency toxic substances research and regulatory activities; Serves as principal forum for development of Administration initiatives on government-wide toxic substances strategy and policy;

Sixteen agencies are members, all who have toxic substances responsiblities, plus IRLG; and

Will address (1) advancement of scientific and technical understanding of toxic chemical problems, (2) data management, (3) use of information and research in regulatory and policy decisionmaking, and (4) establishment of mechanisms and priorities for Federal response to toxic chemical hazards (priority is principles on carcinogenesis).

Section 10(b)(1) Interagency Data Committee

Charge is to establish an EPA system for collection, dissemination to other Federal agencies, and use of data under TSCA;

Basis will be EPA/CEQ survey of Federal agencies' toxic substances data needs and systems last year;

About 18 Federal agencies invited to participate; and

First meeting was February 28.

Section 8 Interagency Review Group

Informal interagency group to review, evaluate, and make recommendations on information gathering rules under Section 8;

Six agencies-EPA, CPSC, FDA, OSHA, NIOSH, NCI; and

Have met to review Section 8(e) substantial risk policy and Section 8(d) health and safety rules.

TSCA Interagency Testing Committee—

EPA is a member and provides support as required under Section 4(e); Purpose is to recommend chemical substances for priority testing under TSCA;

Initial recommendations were for four chemicals and six groups in October 1977-second list in early April 1978 recommended another four individual chemicals and four groups of chemicals; and

Recommendations are to be revised at least every 6 months; list not to exceed 50 chemicals.

CONCLUSIONS

By end of fiscal year 1979, all aspects of TSCA program in operation-although not each at full capacity.

Priorities are being set to direct implementation.

Initially more emphasis will be placed on obtaining and analyzing information than on writing specific control regulations.

Information is needed for nonregulatory control and for regulation under other authorities as well as under TSCA.

Fiscal year 1979 will concentrate on:

Premanufacture notification system;

Making priority-setting and information systems operational;

Developing testing standards and regulations;

Conducting hazard assessments; and

Promulgating reporting and recordkeepng requirements.

TSCA STRATEGY-DISCUSSION DRAFT FOR TSCA ADVISORY COMMITTEE

PURPOSE

This document sets out to define general principles that will guide EPA's implementation of the Toxic Substances Control Act (TSCA). Some of these principles are already in use, helping to determine early actions under TSCA. Others are in more rudimentary form, to be developed over the course of implementing the Act. Taken together, these principles are basic elements of an evolving TSCA strategy.

Of necessity the strategy outlined here is preliminary. For example, the highly important principles for setting priorities and selecting chemical substances for investigation are stated in general terms. To develop more specific criteria EPA must make complex, controversial choices, based on the experience of EPA and others responsible for regulating chemical hazards and a systematic effort to interpret this experience.

This document is written for a particular audience rather than the general public. It is directed toward the people responsible for implementing TSCA, and for others with an informed interest in the matter, such as Congressional staff, and representatives in industry, labor, and environmental groups. It assumes general familiarity with TSCA and with EPA activities so far, and focuses on important issues involved in implementing the Act. Some of these issues have been settled, at least provisionally, but others remain unresolved, or have hardly even been addressed. With the understanding that the TSCA strategy will evolve with experience, EPA presents this document as a starting point for all participants in the early implementation of the Act.

FUNDAMENTAL ELEMENTS OF TSCA STRATEGY

The Toxic Substances Control Act charges EPA with responsibility to identify chemical substances that present an unreasonable risk to human health or the environment and to take appropriate regulatory actions to minimize the risks. The reach of the law is extremely broad. It encompasses over 70,000 chemical substances manufactured for commercial purposes and four million substances now in research or development.

With a mandate of such dimensions selection is imperative. EPA must define principles for selecting chemical substances for investigation and determining priorities for regulatory actions. This necessity is underscored by the resources available for implementing TSCA. The EPA staff responsible for implementing and enforcing TSCA is currently less than 350. Staff and resources will increase, but even with a staff of 700 EPA could not possibly address the vast number of chemical substances in commerce equally all at one time. Establishing priorities for actions under the law is thus a first, fundamental element in TSCA strategy.

A related element is to use actions under TSCA to further effective control of toxic substances under other laws. Regulation under TSCA is only one of several ways to reduce the risks from chemical substances; many other laws, such as the Clean Air Act and the Occupational Safety and Health Act complement TSCA's authority. Test data and other information developed under TSCA's sections 4 and 8 may make a critical contribution to actions under these other authorities. To the extent possible, priorities for testing and reporting requirements under TSCA will reflect those needs.

Moreover, TSCA strategy should encourge actions by industry, beyond the actions directly required by regulation, to minimize the risks from chemical substances. Many firms have already begun further testing and review of the potential hazards of existing chemical substances without any specific requirement by EPA to do so.