No Hints Dropped in California’s Economic Assessment of the Safer Products Law

May 31, 2013Kirsten Wallerstedt

California’s Safer Consumer Products (SCP) regulations recently underwent the required economic impact analysis in order to complete the Economic and Fiscal Impact Statement (Notice File Number Z 2012-0717-04). The expected business impact of the law was generally referred to as “unknowable,” as the number of businesses and industries that will be impacted cannot be determined until the “Priority Products” list is announced. Candidates for Priority Products are currently limited to children’s products, personal care products, and household cleaning products; this scope may change beginning in 2016. The first draft list of Priority Products list is expected to be released before October this year, according to the Department of Toxic Substances Control (DTSC).

Potential costs to affected businesses in the hundreds of thousands of dollars

Costs to businesses that produce a product that becomes listed as a Priority Product will likely include the cost to: conduct an alternatives analysis, implement a selected alternative, which could include product redesign, reformulation, or substitution of a different product, and comply with any regulatory responses imposed by DTSC. The DTSC estimates that a simple single chemical alternatives analysis could cost as little as $2,000, but that an analysis of greater complexity could cost a manufacturer in the hundreds of thousands of dollars.

Background

State law (AB 1879, Ch. 559/Stats 2008) required the DTSC to develop regulations that identify chemicals of concern and designate Priority Products. According to the DTSC, future regulations listing the Priority Products will provide consumers with better information concerning the products they purchase. As such, DTSC said in its economic impact report that it expects the cost to business to be minimal.

If a product is placed on the Priority Products list, the manufacturer or other responsible entity (in order of next-responsibility, the other entities are: the importer, the assembler, or the retailer) must perform an alternatives analysis for the product, or stop using the chemical of concern in their products. They may also instead replace the product or remove the product from California’s stream of commerce. The DTSC will report on businesses that have been identified as subject to the law and will report on the status of their response to the requirements of the legislation.

The DTSC may impose fines and penalties against responsible entities for failure to comply with the regulations. It will also publicize non compliant companies on its website.

Expected developments

As businesses that sell, distribute, supply or manufacture in California wait with bated breath for the first round of Priority Products to be released, the economic assessment did not provide many new hints to relieve any stress. The DTSC has previously announced that it will select no more than five products in the first round, which is expected to be made public before October this year. The agency also clarified that the first round of priority products will only cover products that contain chemicals that appear on both the hazardous traits list and on the exposure list, which brings the number of chemicals under consideration from 1200 down to 230. “Prioritization factors” include adverse waste, the availability of information, avoiding regulatory overlap (e.g. pesticides are already covered), and whether there are viable alternatives.

The Public Comment Period on the Fiscal and Economic Impact Statement is now open. It closes on June 6.

Resources

The Economic and Fiscal Impact Statement: http://www.dtsc.ca.gov/LawsRegsPolicies/Regs/upload/SCP-Regs-F399-April-2013-signed.pdf

Summary of the SCP regulations: http://www.dtsc.ca.gov/upload/SCPProposedRegulationsSummaryJuly2012.pdf

Complete Safer Consumer Products (SCP) Regulations information: http://www.dtsc.ca.gov/SCPRegulations.cfm