Lawmakers Introduced Rail Road Shipping Bill Addressing Delays and High Costs

Lawmakers Introduced Rail Road Shipping Bill Addressing 

Top lawmakers from the House Transportation and Agriculture Committees have introduced the “Freight Rail Shipping Fair Market Act”, a legislative package to reauthorize the Surface Transportation Board (STB) and address the delays and high costs that have plagued shipper operations for over six months.  These delays have often forced manufacturers and producers to temporarily halt production or seek costly alternatives, thereby increasing costs to consumers.

The bill was introduced on Aug. 2 by the Chair of the Subcommittee on Railroads, Pipelines and Hazardous Materials, Donald Payne, Jr. (D- NJ), Chair of the House Committee on Transportation and Infrastructure Peter DeFazio (D- OR), Chair of the House Committee on Agriculture David Scott (D- GA), and Chair of the Subcommittee on Livestock and Foreign Agriculture Jim Costa (D- CA).

The bill would require rail contracts to include standards for service delivery and appropriate remedies for failure to meet those standards.  It would significantly expand the STB’s authority to regulate railroads by requiring adequate equipment, track, and personnel when the agency declares a service emergency. The legislation would also encourage the STB to issue more fines on railroads to incentivize their behavior and directs the STB to conduct an updated study on freight railroad competition.

 

EPA Changes Policy on Manufacturers “Exiting the Market” for TSCA Testing 

On August 5, EPA issued new guidance, “Policies Regarding Manufacturers and Processors Subject to TSCA Section 4(a) Testing,” that amends two policies currently being contested by two companies in federal court. Policy 1 states that “companies engaged in manufacturing activities for a chemical substance during the five years prior to the projected signature date or effective date of a Section 4(a) action (i.e., a rule, consent agreement, or order) will generally be included in the scope of the action. However, EPA may apply a longer or shorter period of time when appropriate in specific cases.”   Policy 2: “Section 4 actions will not include an option to cease manufacturing as a means to satisfy the requirements of the action. Test orders issued in January 2021 included this option. This change rescinds a Trump-era order that previously allowed companies to exit the market to avoid conducting chemical testing as required by TSCA section 4 orders. The guidance also says that EPA is not bound by the document and can depart from these policies based on reasoned consideration as it deems appropriate in the future.

EPA justifies the change in its policy by stating that it “generally believes it is appropriate to account for variability in manufacturing activities by considering recent manufacturers to be subject to TSCA Section 4(a) testing responsibilities even if those companies are not actively engaged in manufacturing at the moment the action is issued or during the period of time in which testing obligations must be fulfilled.” EPA further noted that the 2021 policy stems from the intent to “encourage the lowering of overall production and processing of a potentially risky substance” and also to align the test order policy with the Trump EPA’s 2018 TSCA fees rule for existing chemicals evaluations, which allowed companies to exit the market in order to avoid paying the fee.  That reasoning differs from what they made in the second round of testing orders in March, where EPA said they were.

Both Lanxess Corp. and M.A. Global Resources have filed challenges to block the March test orders over the market exit issue. The companies are discussing with EPA whether a federal court has jurisdiction to hear the case now that the agency has dropped that policy. In a June filing, Lanxess Corp. argues that EPA does not recognize that it exited the market in response to the 2021 test order it received for o- DCB and, therefore should not have to respond to the 2022 order for the same chemical. M.A. Global Resources, Inc. says it once “imported a sample-sized amount of o- DCB” in 2019 for research purposes and certified to EPA in 2021 that it had ceased manufacturing.

Notably, on May 23, the Vinyl Institute was the first to file a broader challenge to the same March test orders in the U.S. Court of Appeals for the District of Columbia. VI is challenging EPA’s lack of justification and substantial evidence for mandating live-animal testing and its refusal to consider other options or already-available-data before requesting new data.

 

EPA Reorganizes Drinking Water Office

EPA has reorganized its Office of Ground Water and Drinking Water (OGWDW). According to the agency’s website, it has created a new Drinking Water Capacity and Compliance Assistance Division. A director has not yet been named, but Ron Berman is the deputy director. The Drinking Water Protection Division has been renamed the Drinking Water Infrastructure Development Division, with Anita Thompkins remaining director.  The Water Security Division has been renamed the Water Infrastructure and Cyber Resilience Division, with David Travers, is still the director.

The new structure coincides with several important policy changes and programs the Office is implementing and overseeing. EPA is beginning to distribute tens of billions of dollars in water funding appropriated through the 2021 Infrastructure Investment and Jobs Act (IIJA) and increasing need for compliance with existing, new, and upcoming drinking water rules. EPA is also preparing to develop several high-profile drinking water policies in the coming years that could increase compliance challenges for water utilities.

 

EPA Publishes Guidance on Lead Service Line Inventories

On August 4, the EPA released its guidance on lead service line inventories. The guidance is intended to assist public water systems with financing applications and implementing the Infrastructure Investment and Jobs Act (IIJA), which funds the Drinking Water State Revolving Fund (DWSRF) for lead service line (LSL) identification, planning, design, and replacement. LSL projects may also be funded from the General Supplemental DWSRF fund of $11.7 billion as well as annual base appropriations for the DWSRF. The IIJA requires that 49 percent of the funds provided through the DWSRF General Supplemental Funding and the DWSRF Lead Service Line Replacement Funding be awarded as grants and forgivable loans to disadvantaged communities. EPA encourages water systems to begin inventorying and replacing service lines as soon as possible. EPA emphasizes that given the many benefits of lead service line replacement (LSLR), water systems should not wait until their inventory is complete to begin replacement efforts. “In fact, conducting replacements while developing the inventory can have synergistic effects that enhance inventory development while accelerating and increasing the efficiency of replacement programs.”

 

Senate Passes Infrastructure Reduction Act Before August Recess

Members of the House and Senate Lawmakers are on recess until September after a couple of eventful weeks in Washington. The Senate on Aug. 6 passed (51-50) the Inflation Reduction (IRA) Act, the Democrats’ budget reconciliation package for climate, taxes, and health care. The House will return tomorrow to vote on the bill, which is expected to pass and be sent to the President for his signature. The surprise reconciliation deal between Senate Majority Leader Chuck Schumer (D-NY) and Senator Joe Manchin (D-WV) originally imposed a 15 percent minimum tax on large corporations and a proposal to narrow the so-called carried interest loophole. After intense lobbying by industry and the help of Senator Krysten Sinema (AZ), the carried interest proposal was removed and the Senator was able to push through some changes to the corporate minimum tax to ease manufacturers’ concerns. Democrats added a 1 percent excise tax on stock buybacks to offset some of the revenue. These changes secured Sinema’s support, giving Democrats the 50 votes they needed to pass the bill, with Vice President Kamala Harris’ vote tipping the scales.

Democrats were forced to drop one of their core provisions after the Senate parliamentarian ruled that they could not include their proposal, which would have penalized drugmakers whose prices are rising faster than inflation in the private insurance market. The ruling resulted in tens of billions less in federal savings than Democrats had hoped for. Republicans also succeeded in stripping out a $45 million Environmental Protection Agency (EPA) “slush fund” to carry out several sections of the Clean Air Act to regulate greenhouse gases and a $35 cap on insulin on the private market. The bill includes a three-year extension of Obama Care subsidies, inflation rebates for Medicare patients, Medicare Part D reforms, and for the first time, the government will be able to directly “negotiate” prices for Medicare prescription drugs. This essentially means that a 95 percent excise tax will be imposed on prescription drugs unless manufacturers accept government-set price controls.

The energy subtitle would make the single largest investment in climate change to date by providing over $369 billion in funding and tax credits to promote clean energy use and security, increase electric vehicle production, invest in new technologies, and reduce carbon emissions by about 40 percent by 2030. Much of this investment will be incentivized through production and investment tax credits.  Our detailed summary of the legislative package and what it means for the vinyl industry can be found here.