Wednesday, April 20th, 2016

Why TSCA Reform Benefits Both the Public and the Plastics Industry

US CapitolThere’s much praise for both the House and Senate versions of the Toxic Substances Control Act (TSCA) legislation. Why? How does reforming a 40-year old piece of legislation impact an additive supplier in the value chain for an intricate piece in a larger finished product? Why should consumers be optimistic about the safety of future household products?

TSCA reform that is being negotiated by representatives from each chamber of Congress will update the 40-year-old regulatory framework to reflect today’s chemical manufacturing environment. In particular, we expect the negotiated version to overhaul the safety standards for chemicals entering the market, codify federal preemption language, and to protect confidential business information.

Here’s a look at what SPI and its members/stakeholders support:

Updated Safety Standards

TSCA will better define the safety standards that chemical manufacturers must meet so that consumers are more confident about the safety of chemicals in commerce. Costs and other non-risk factors should not be considered when evaluating the safety of a chemical. It is important TSCA consider potentially exposed subpopulations, such as children, to a chemical even under the intended conditions of use. Without these changes, it is difficult for businesses to demonstrate the safety of their products under the current, outdated regulatory system.

Federal Regulation to Preempt State Regulations

TSCA reform will reduce the need some states feel to step into the realm of chemical regulation. It’s more efficient for a company to comply with one federal regulation than it is to juggle 50 individual state regulations. The federal government recognizes this and is defining a threshold for states to implement their own regulatory standards.

Protect Confidential Business Information

Today’s TSCA reform outlines when information needs to be provided by private companies, but it also clarifies what is and is not protected. This confidence allows businesses to move forward with more innovative solutions to today’s chemical needs without worrying about disclosing trade secrets in the regulatory process.

U.S. manufacturers have made great strides in advancing chemical technology and use. These innovations make life as we know it possible. Unfortunately, the regulatory environment has not kept pace – but we expect this to change when negotiations conclude and a final bill is signed into law. We are confident that promising days lie ahead for those in the plastics industry impacted by TSCA.

Monday, April 4th, 2016

DOL Releases Final Persuader Rule

On March 23, the Department of Labor (DOL) released the final “persuader rule” which changes longstanding requirements on how employers can seek advice regarding union organizing activities and when employers and others have to disclose information to DOL. The previous rule required disclosure only from employers and others who had direct contact with employees regarding union organizing campaigns.

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The new rule will now require persuader disclosure by third-party lawyers and labor consultants educating employers on union organizing rights and collective bargaining, even if they have no direct contact with employees. Management attorneys argue that the new rule will threaten client confidentiality and hamper the ability of employers to seek advice to respond to unionization activities. The Obama Administration says that the rule will provide clarity to employees and the public without limiting what employers and consultants can say, and while informing workers of who is saying what. Exempt from disclosure is the advice from consultants and lawyers making “recommendations regarding a decision or course of conduct.” Trade associations are only exempted if they do not conduct seminars or provide materials to member companies.

The rule takes effect on April 25, 2016, and is applicable for arrangements and agreements made after July 1. The Coalition for a Democratic Workplace (CDW), of which SPI is a member, is reviewing the final rule and will challenge it in court if warranted. 

Monday, March 21st, 2016

Five Regulatory Issues to Watch in 2016

This year is proving to be packed with regulatory activity at the federal level for two big reasons: first, with Congress focused on elections, federal agencies can take actions with less scrutiny than they might’ve faced in any other year, and second, this is President Obama’s last opportunity to make lasting policy changes. Stateside, California will remain active from a regulatory standpoint this year as well, because…well…it’s California.

While SPI addresses countless issues stemming from the federal agencies’ semi-annual agendas, federal courts and the states, here is a sampling of issues that impact the plastics industry.

Foreign Supplier Verification Programs (FSVP)

The Food and Drug Administration (FDA) issued its final FSVP rule in November 2015 under the Food Safety Modernization Act (FSMA). FSVP governs food that is imported to the United States and ensures that those importing food are doing so in a manner that is as safe as possible for the American public. SPI worked with FDA to ensure that the rule would include an explicit exemption for food contact substances, but unfortunately the final rule did not provide any such exemption. By default, this means the rule encompasses food packaging. SPI members could be subject to onerous and unnecessary requirements to conduct food safety hazard assessments and audits of their foreign suppliers if they manufacture food contact substances. SPI is currently working with FDA on the issue and hopes to see some clarifying action by the agency in 2016.

Improve Tracking of Workplace Injuries and Illnesses

The pending Improve Tracking of Workplace Injuries and Illnesses rule is one of the Occupational Safety and Health Administration’s (OSHA) highest priorities. A final rule is under review at the Office of Management and Budget’s (OMB), Office of Information and Regulatory Affairs (OIRA). SPI submitted comments on the November 2013 proposal, which would require the electronic transmission (annual or quarterly, depending on the number of employees) of information that is currently recorded, but not reported, to OSHA or its designee. Significant concerns include maintaining employee confidentiality, particularly with the posting of information on a public website, as well as employer and agency resource burdens.

Combustible Dust Rule

OSHA does not have a comprehensive standard to address combustible dust, though it is now in the definition of “hazardous chemical” in the Hazard Communication Standard (HCS). Combustible dust incidents have resulted in fires and explosions, and rulemaking activity was first published in the Unified Agenda in spring 2009. The next step is seeking small business input, required under the Small Business Regulatory Enforcement Fairness Act (SBREFA), but there are continuous delays. SPI will monitor OSHA’s progress. SPI is also watching combustible dust activity under the Globally Harmonized System of Classification and Labelling of Chemicals (GHS) and comment on National Fire Protection Association (NFPA) standards 654 and 652. SPI is currently developing comments for the revision of NPFA 652, due June 29.

Risk Management Plan Rule

EPA began the rulemaking process for revisions to the Risk Management Plan (RMP) Rule with a Request for Information (RFI) in 2014. RMP requires facilities that meet threshold quantity requirements of specific regulated substances to develop plans in case there is an accidental release. After the SBREFA process, EPA released a proposed rule in February 2016. SPI will file comments. OSHA is now convening a SBREFA panel for potential revisions to the Process Safety Management of Highly Hazardous Chemicals (PSM) standard, for which OSHA issued an RFI in December 2013. SPI will continue monitoring.

California’s 75% Initiative – Manufacturers’ Challenge 

In 2011 California passed legislation that sets a non-mandatory target of a 75% reduction of solid waste to landfill through reduction, recycling, or composting by 2020. The “75% Initiative,” as it’s referred to, is being implemented by CalRecycle, the state agency that handles recycling and recovery efforts. The Manufacturers’ Challenge is a program that is intended to target packaging materials and sets a goal of a 50% reduction of packaging to landfills by 2020. SPI has submitted comments and met with CalRecycle, and also participated in the Manufacturers’ Challenge meeting, which took place on January 5, 2016. More updates on the initiative and CalRecycle’s outreach efforts to manufacturers could occur in 2016, and SPI will keep the plastics industry informed as they arise.

Thursday, February 11th, 2016

Four Reasons Why New Duty Drawback Rules Will Benefit U.S. Plastics and Other Manufacturers

The Senate approved a compromise version of the Trade Facilitation and Trade Enforcement Act of 2015 (H.R. 644) today. The bill would make American manufacturers more competitive globally by streamlining trade flows, reducing paperwork burdens for smaller shipments and, notably, making duty drawback more available to companies of all sizes.

ExportingPhotoTrade

Duty drawback is an oft-overlooked portion of U.S. trade law but it’s a powerful tool, defined as the refund, reduction or waiver of customs duties assessed or collected upon importation of an article or materials which are subsequently exported or destroyed. In English, that translates to, “if the U.S. charges a duty on something you import, but you use that imported item to produce an item that’s eventually exported, the U.S. will refund the duty it originally charged you.”

This is an especially powerful tool for plastics companies, but successfully taking advantage of it can often be too burdensome for many smaller organizations. Here are four reasons why that’s about to change, and why the new duty drawback provisions included in H.R. 644 are good for U.S. plastics.

1. The new statute makes drawback more available to companies of all sizes: successfully claiming drawback often means heavy paperwork; officials must be able to draw a clear line from the goods upon which the duty was first imposed to the exported good they eventually were a part of. Rather than tackle that process, many companies will opt to just pay the duty. The new bill, however, simplifies the process, giving more exporters an opportunity to reduce their costs with drawback.

2. It includes improvements to substitution: Part of drawback for manufacturers is the concept of substitution, which stipulates that when merchandise that’s “commercially interchangeable” with imported merchandise upon which a duty, tax or fee is levied is ultimately exported or destroyed, the exporter can claim drawback on those goods they imported. The issue is that qualifying such goods for drawback to U.S. Customs and Border Protection (CBP) is an extremely onerous, subjective process. The new drawback provisions make the concept of “commercial interchangeability” an objective matter by basing this assessment on where each imported or exported merchandise falls on the globally-accepted Harmonized Tariff Schedule of the U.S., eliminating the need for subjective interpretation on the part of CBP.Bottling Process

3. Shorter time frames: Typically drawback requires rulings and approvals prior to filing claims, but the new statute would eliminate the 6-12 month wait time that usually separates the request for approval for drawback and the date the first claim can be filed. This means companies claiming drawback can get their money quicker.

4. More time to file: Under the new statute, time frames will be simplified so instead of allowing drawback on only imported goods that were exported within three years of importation, companies can expand that time limit to five years. This would take off some of the pressure, and alleviate some of the recordkeeping burden on both CBP and on drawback claimants.

H.R. 644 is a solid bill with lots of pro-export, pro-manufacturing provisions, which is why SPI advocated for it. If the administrative hurdles, confusing time frames and arcane details have kept your company from taking advantage of duty drawback, now might be the time to take a second look.

Wednesday, December 16th, 2015

Congress: We Urge Prompt Attention to Passing the Protecting Americans from Tax Hikes (PATH) Act

CongressSunriseViewThe U.S. Congress has a great opportunity to come together and provide tax relief to both American families and the businesses in which they work.

The Protecting Americans from Tax Hikes (PATH) Act would resolve four key issues that affect plastics. Specifically, the PATH Act would:

  • Permanently extend the Research & Development Tax Credit – This has the potential to unlock a great deal of innovation in the plastics industry.
  • Extend “Bonus Depreciation” for Five Years – Bonus depreciation is an added amount of depreciation that can be claimed by a business on property it acquired and placed in service during 2015 through 2019. This facilitates new purchases of equipment.
  • Permanently Extend Section 179 “Small Business Expensing” – The bill locks in the small business expensing limitation at $500,000, lifting it from its current $25,000 ceiling.
  • Place a Two-Year Moratorium on the Medical Device Excise Tax – Due to their superior design flexibility, plastics are increasingly used in medical devices. This tax harms job creation and stymies innovation in the medical device sector.

Combined, these provisions would greatly benefit the public, and anyone who touches or is involved in the plastics’ supply chain.

We encourage both members of the U.S. House and U.S. Senate to act quickly to advance this bipartisan bill.