Legislative Update: Vinyl Institute Wins Key Ruling on EPA’s Chemical Testing Procedures

Vinyl Institute Wins Key Ruling on EPA’s Chemical Testing Procedures

The U.S. Court of Appeals for the District of Columbia Circuit finalized a landmark ruling establishing the Environmental Protection Agency (EPA) requirement to demonstrate the need for chemical testing orders under the Toxic Substances Control Act (TSCA). In the case Vinyl Institute (VI) v. EPA, the court found that the EPA did not meet the necessary requirements for one of its 2022 test orders on 1,1,2-trichloroethane (1,1,2-TCA), as it failed to adequately explain its decision-making process or justify the need for the specific tests. While the court avoided imposing stringent new requirements on the EPA, it emphasized that the agency must provide more transparency and rationale in the public record for future testing orders. Both parties have indicated they will not seek further appeals, and the EPA has confirmed it will comply with the court’s mandate.

Vinyl Institute President and CEO Ned Monroe hailed the ruling as a “roadmap” for future collaboration with the EPA on regulatory actions, ensuring that science and data are thoroughly considered.  “We are happy with the U.S. Court of Appeals decision. We will continue to partner with EPA to ensure that applicable science and comprehensive data are available for all regulatory actions involving the vinyl industry,” Monroe said in a statement to Inside TSCA. “Moving forward, this provides a clearer roadmap where EPA will proactively engage with stakeholders early in their processes to ensure appropriate and accurate data collection,” he said.

The court’s ruling in Vinyl Institute (VI) v. EPA leaves uncertainty about the specific fate of the EPA’s order on 1,1,2-trichloroethane (1,1,2-TCA) and whether the ruling will impact the other eight test orders issued alongside it. These orders sought data on chemicals identified as high-priority for TSCA risk evaluation in 2019, which are still under review. Although VI and other industry groups secured a partial victory, the court set a relatively low bar for the EPA to meet when re-issuing the 1,1,2-TCA order, requiring only that it provide “substantial evidence” in the public record to support its decisions. Judge Karen Henderson’s opinion criticized the EPA for relying on non-public portions of the administrative record but suggested that the agency could have met the evidentiary standard if this information had been part of the original public record. This indicates that the EPA may be able to resolve the issue without introducing new data or analysis, potentially limiting the victory for the industry.

Three Uses of Phthalate Identified as Health Hazards in EPA Draft Evaluation

The EPA announced on September 3 that it has determined that only three out of 45 uses of the chemical diisononyl phthalate (DINP) pose an unreasonable risk to human health, according to a draft risk evaluation under the Toxic Substances Control Act (TSCA). DINP, which is commonly used in the production of polyvinyl chloride (PVC) and other products, has been linked to developmental toxicity, liver damage, and potentially cancer at high exposure levels. The evaluation was initiated in 2019 at the request of the chemical industry, alongside an assessment of another similar compound, DIDP.

Of the three flagged uses, one poses a risk to consumers through exposure to dust from vinyl flooring, carpet backing, and other construction materials containing DINP, which is particularly harmful to children under five. The other two uses involve risks to workers exposed to mists from spray adhesives or paints, which could lead to inhalation of concentrated amounts of the chemical. However, the EPA found no current DINP products used in high-pressure sprays and has requested public input on this uncertainty.

The agency opened a 60-day public comment period, with comments due on November 4. After that, it will consider potential restrictions or bans on uses deemed to present unreasonable risks.

Congressional Schedule to Focus on CR Before Recessing at the End of September

Congress is scheduled to return from the August recess next week with only three weeks on the legislative calendar to negotiate a deal to continue government funding before the end of the fiscal year on September 30. The House and Senate are scheduled to recess again on Oct. 1, not returning until after the elections. House Speaker Mike Johnson (R-LA) intends to schedule a vote next week on a Continuing Resolution (CR) to fund the federal government at current levels until March 2025.  Notably, this CR also includes the SAVE Act—requiring proof of U.S. citizenship to vote in a federal election—as part of the funding extension.

Calendaring a vote on the CR and the SAVE Act together presents several uncertainties surrounding this GOP House-led proposal. It is unclear whether the measure will secure the necessary 218 votes in the House, and even if the CR does pass the House, it will be “dead on arrival” in the Senate due to concerns over both the duration of the CR and the inclusion of the SAVE Act. The contours of the funding negotiations will become clearer once Members return to Washington and can discuss such matters in person and amongst themselves.

Though a government shutdown is unlikely, it remains a possibility. It is more likely that a CR of an undetermined duration will be enacted on or around September 30. Congress may pass an initial CR to extend funding past the November elections and then pass another CR during the lame-duck session.

On the Senate side, Senate Majority Leader Chuck Schumer (D-NY) has yet to announce his legislative agenda for the September work period.  The Senate is likely to focus on two things: government funding and nominees.  Leader Schumer will probably also seek to add an item or two to help Senate Democrats in the elections.

Kamala Harris Shifts from Progressive Stances to Broaden Electoral Appeal

Vice President Kamala Harris formally accepted the Democratic nomination for President on August 22 and has slowly begun rolling out her policy platform, emphasizing economic proposals aimed at the middle class. Notably, Harris has distanced herself from several of her previous far-left positions in an attempt to broaden her appeal and soften the criticisms from conservatives. Among her most significant reversals are her prior support for a ban on fracking and her initial push to repeal the 2017 Tax Cuts and Jobs Act (TCJA). Instead, she offers a set of populist economic proposals intended to resonate with middle-income voters, focusing mainly on housing and tax reform.

One key component of her housing agenda involves addressing America’s housing shortage by proposing the construction of 3 million new housing units over four years. Additionally, she aims to offer $25,000 in down payment assistance credits and provide tax incentives to builders who focus on constructing homes for first-time buyers.

On the tax front, Harris proposes making the Child Tax Credit (CTC) permanent, increasing it from $2,000 to as much as $3,600 for children aged two through five and expanding it to $6,000 for families with infants. Harris has also committed to maintaining President Biden’s pledge not to raise taxes on those earning less than $400,000 annually and has voiced her support for extending key provisions of the TCJA if elected.

In a nod to business interests, Harris recently announced a series of tax policy proposals, including a more modest increase in long-term capital gains taxes than what President Biden had initially proposed. For individuals making over $1 million, Harris suggests raising the top capital gains rate to 33%, which includes a 5% surcharge, while keeping Biden’s additional tax on investment income. This marks a shift from her previous endorsement of Biden’s aggressive tax agenda, which would have nearly doubled the long-term capital gains tax rate to 44.6%.

For small businesses, Harris would expand the tax deduction for start-up expenses from $5,000 to $50,000 and set a goal of 25 million new small-business applications during her first term. She also promises to reduce barriers to small business tax deductions and address occupational licensing obstacles that have made it harder for new businesses to get off the ground.

However, many of Harris’ policy proposals face a steep uphill battle in Congress, as most would require Democratic majorities in both the House and Senate to pass. While control of the House will likely follow the outcome of the presidential election, the Senate poses a significant challenge for Democrats this year. All seven of the most competitive Senate races involve either a Democratic incumbent seeking re-election or an open seat vacated by a retiring Democratic senator. With Senator Joe Manchin (I-WV) deciding not to seek re-election in heavily Republican West Virginia, the GOP is poised to take that seat, which could result in a 50-50 split in the Senate. Democrats would then need to win the presidency and all remaining competitive Senate races to retain control, a tall order given the political landscape.

One critical race to watch is Senator Jon Tester’s (D-MT) contest. He is trailing his Republican opponent, Tim Sheehy, by approximately five points in a state that overwhelmingly voted for Trump in 2020. Senator Sherrod Brown (D-OH), another vulnerable Democrat, leads by only five points in Ohio, making him another critical figure in the battle for Senate control.

The final sprint to Election Day on Nov. 5 includes at least one televised debate against former President Donald Trump on September 10. The campaigns will also participate in a vice presidential debate on Oct. 1, with both  Republican Ohio Senator JD Vance and the Democrat Minnesota Gov. Tim Walz accepting.

Republican States Challenge Biden’s Methane Emission Regulations at Supreme Court

Republican officials from 24 states have requested that the Supreme Court block a Biden administration initiative aimed at reducing methane emissions, a potent greenhouse gas. Led by Oklahoma, the states are challenging a rule by the EPA, which went into effect earlier this year. The EPA estimates the regulation will reduce methane emissions from oil and gas operations by nearly 80% by 2038. The states argue that the EPA’s requirement for states to develop emission reduction plans within two years is unrealistic and accuses the agency of unfairly targeting the oil and gas industry.

This legal challenge is part of a broader effort by Republican-led states to contest Biden administration environmental regulations. Many of these states have recently filed similar emergency appeals against other environmental rules, including those addressing power plant and mercury emissions. A Washington, DC, appeals court previously denied a request to pause the methane regulation. The Supreme Court, which has a history of siding with conservative challenges to environmental regulations, will likely take weeks to consider the request. Earlier, a 5-4 Supreme Court decision overturned Biden’s efforts to reduce air pollution between states, underscoring the court’s ongoing influence over climate and environmental policy.

EPA Tightens Reclassification Rules for Major Air Toxics Sources, Defers Key Safeguards

The EPA issued a final rule on September 4, tightening conditions for “major” air toxics sources seeking to reclassify as less regulated “area” sources, particularly for facilities emitting persistent and bioaccumulative pollutants. However, the rule defers finalizing proposed safeguards to prevent air quality backsliding, leaving that for future consideration. While the rule maintains that major sources can reclassify under certain conditions, it prevents those emitting seven specific hazardous pollutants from doing so, ensuring they remain subject to stricter emissions controls under the Clean Air Act. The EPA backtracked on making pollution limits federally enforceable, citing ongoing evaluation of public comments on the proposal. This move modifies the Trump-era “Major MACT to Area” (MM2A) rule, which allowed major sources to reclassify after reducing their potential to emit, and signals EPA’s continued focus on preventing emissions increases from reclassified sources.

The EPA’s new rule applies only to future reclassifications of major air toxics sources to avoid retroactive legal challenges. It also does not require facilities that have already reclassified to comply with stricter emissions standards. The rule focuses on facilities emitting seven hazardous air pollutants, barring them from reclassifying to less regulated “area” sources. However, the EPA has delayed action on proposed safeguards to prevent reclassified sources from increasing emissions, disappointing environmentalists and Democratic states that supported more stringent rules.

Industry groups oppose the EPA’s current rulemaking, arguing that the “once-in, always-in” policy, which requires facilities to retain Maximum Achievable Control Technology (MACT) even after reclassifying as smaller sources, is unnecessary. They assert that most facilities do not remove costly MACT controls once they are installed, and the EPA has provided no evidence to suggest otherwise. Furthermore, these groups contest the EPA’s legal interpretation that major sources must maintain the same emissions limits after reclassifying to “area” source status, arguing that the Clean Air Act imposes no such obligation. The EPA bases its proposal on its interpretation of the requirement to “consider controls” under the Act’s definition of a major source, which it says means facilities cannot raise emissions above current levels if they reclassify. However, industry groups disagree with this interpretation. In light of the Supreme Court’s ruling in Loper Bright Enterprises v. Raimondo, which limits judicial deference to agency interpretations of ambiguous statutes, courts may not be compelled to side with the EPA’s view in future legal disputes.