NACD president Byer optimistic on US regulatory reform

18 April 2017 16:17 Source:ICIS Chemical Business

Amid continuing dialogue with US government officials, the National Association of Chemical Distributors (NACD) is hopeful on changes in US policies that would benefit members, especially involving regulatory reform.

“We definitely want to see regulatory reform as government agencies have been using guidance documents as rule of law – an end-around to the regulatory process,” said Byer.

“Rulemaking is there for a reason, and all stakeholders should have a chance to comment on it, so it can be reconciled and put forward in its final form,” he added.

In 2015, the NACD joined the American Chemistry Council (ACC) in a lawsuit against the Occupational Safety & Health Administration (OSHA) for issuing new and immediate Process Safety Management (PSM) requirements through a memo that would significantly expand the number of facilities covered by the PSM standard. The suit was settled in July 2016.

Byer sees the change in US political leadership as being more business friendly and seeks to ensure agencies are following proper rulemaking procedures.

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“It sounds crazy to have a law codifying that you need to follow the law. But we want to see something in law that stipulates that if you want to change something, you have to go through the rulemaking process,” said Byer.

To this effect, the NACD supports the House-introduced Regulatory Accountability Act of 2017. Introduced on 3 January 2017, this bill would require federal agencies to “make all preliminary and final factual determinations [on rules] based on evidence” and to consider several factors, including the legal authority under which a rule may be proposed, whether other rules that may have created a problem addressed by the new rule can be changed or scrapped, alternatives to the new rule, and the potential costs and benefits associated with the new rule.

He is also encouraged by US President Trump’s executive order stating that for every new regulation created by a government agency, two must be removed.

“Our number one priority is safety and security, but we have to make sure regulations are justifiable in cost and effectiveness,” said Byer.

CONGRESSIONAL CHEMISTRY CAUCUS

Byer applauds the growth of the bipartisan Congressional Chemistry Caucus to advance the industry’s cause. The House of Representatives launched its caucus in April 2016, and on 28 March 2017, the Senate created its caucus.

Among the Senate caucus’ goals are “to underscore the importance of employing sound science to create effective public policy and to promote initiatives that encourage the development of chemical manufacturing and a new generation of chemists in the US through world-class education and research programs”.

As of mid-April, the Congressional Chemistry Caucus had 36 members in the House (11 Democrats, 25 Republicans) and nine in the Senate (five Democrats, four Republicans).

“We are getting like-minded members of Congress to join us in advancing regulatory reform,” said Byer.

While Byer is largely encouraged by the new administration’s initial efforts, the proposed elimination of the Chemical Safety Board (CSB) is another matter.

“This is disconcerting. The new leadership is doing a great job. You might not agree with the CSB, but it doesn’t mean we shouldn’t have an agency to evaluate accidents and make recommendations,” said Byer.

“It provides a substantial benefit, and it’s not good optics to eliminate it. The CSB is very much our NTSB (National Transportation Safety Board),” he added.

US BORDER TAX IMPACT

A US border adjustment tax (BAT) would hit US chemical distributors particularly hard, if implemented.

“We have concerns about the BAT – this could be challenging for members that import,” said Byer. “Many of our members import from China, Mexico and Europe, and sell primarily domestically [in the US].”

While Republicans in the House of Representatives have proposed a tax plan that includes a BAT, its viability is in doubt amid opposition among Senate Republicans and Democrats, along with major business groups such as retailers and refiners.

A BAT in its purest form would exempt all export sales from tax, while not allowing imported raw materials and cost of goods sold to be deducted as an expense. This would give companies huge incentive to manufacture in the US to export, as well as discourage imports.

The NACD would clearly prefer tax reform without a BAT. Lower taxes would free up more capital for small businesses to invest, Byer said.

By Joseph Chang