Feeling the Heat: Renewable Energy Under the Microscope
This article is based on a May 5th Womble Bond Dickinson webinar featuring Kristina Moore and Veronica Renzi.
The temperature is rising for the Renewable Energy Sector as well as related funding sources, such as green banks. The heat is coming from several sources, including:
An expansive fight over obligated federal funding.
Congressional investigations into companies receiving federal financial support.
The potential elimination of tax incentives augmented under the Inflation Reduction Act (IRA).
Rising tariffs.
All these issues are significant factors impacting the renewable energy sector. The IRA, passed under the Biden Administration, remains a particular target for Republican lawmakers, who seek to reclaim as much funding as they can.
Congressional Investigations Ramping Up the Temperature
Comparing it to “Gold bars sliding off the side of the Titanic,” Congressional Republicans have voiced strong objections to the rapid pace that IRA renewable energy funds were allocated.
On Jan. 27, the White House ordered the EPA to halt the spending of IRA obligated funds. Then, a little over a month later, the EPA formally referred the alleged financial mismanagement, conflicts of interests, and oversight failures regarding the Greenhouse Gas Reduction Funds to the Office of Inspector General.
In response, several IRA funding recipients have sued the EPA, seeking the release of already allocated funds. A federal judge issued a temporary restraining order barring the EPA from freezing Greenhouse Gas Reduction Fund allocations, at least until a court can consider the dispute.
However, the D.C. Court of Appeals reversed that decision, restoring the freeze to $20 billion in Greenhouse Gas Reduction Fund allocations. Arguments will be heard May 19 about the future of these funds.
On March 20, the House Oversight Committee sent a letter to the EPA indicating its intention to investigation the policies and IRA funding allocation during the Biden Administration. The letter requested a briefing with committee staff.
Various grant recipients have also received letters from Congressional committees requestion answers to questions about the Greenhouse Gas Reduction Fund.
Many have compared the current Congressional oversight climate to the Solyndra investigations in 2011. The Solyndra investigation focused on a $535 million loan guarantee issued by the U.S. Department of Energy to Solyndra, Inc. Led by the House Oversight and Energy and Commerce Committees, the inquiry sought to assess whether the government’s decision to approve the loan was warranted and to investigate whether Solyndra’s executives had misrepresented the company’s financial stability. No one wants to be that next household name because of a Congressional investigation.
Budget Reconciliation Could Change IRA Support for Sustainable Energy
Based on a budget resolution passed by both houses of Congress, Budget Reconciliation is a process by which lawmakers can avoid a Senate filibuster and pass spending measures with just 51 votes—a key tactic in this closely divided Congress.
Such a bill would include President Trump’s top priorities. These include extending the Tax Cuts and Jobs Act, which passed during his first administration and is set to expire this year.
For Congress to move forward with tax cuts, they also must find cost savings. Such offsets could target IRA sustainable energy-related production tax credit (45Y and 48E) and manufacturing tax credits (45X).
However, industries in that sector are pushing back, making their case for keeping these incentives to bolster domestic energy production to meet the rapidly growing needs of AI data centers. They also point to the need for a predictable investment climate. Companies brought jobs and investments to the U.S. based in part on these IRA tax incentives.
Even if these tax credits survive, they are likely to be modified by Congress moving forward. In terms of timeline, President Trump has requested that the Budget Reconciliation bill be on his desk by July 4. That would require the House to finish their work around Memorial Day and for the Senate to complete its steps by the end of June.
What’s Next: Challenges and Opportunities
In light of these developments, the future of renewable energy funding and the associated legislative landscape remains uncertain. The intense scrutiny from Congressional investigations, coupled with potential policy changes through budget reconciliation, has created a precarious environment for green energy stakeholders.
What happens in the coming months could determine the trajectory of renewable energy in the United States for years to come.
FTC Defers Some Click-to-Cancel Rule Enforcement to July 14, 2025
Companies with recurring payment programs with negative option terms now have until July 14, 2025, to bring their disclosure, consent, and cancellation practices into full compliance.
On May 9, 2025, the FTC issued a statement deferring full enforcement of its Negative Option Rule by 60 days, pushing back the original compliance deadline of May 14, 2025 to July 14, 2025.
This delayed enforcement applies to operational matters around the Rule’s requirements, such as making cancelation for consumers as easy as the original sign up. It does not affect the Rule’s prohibition on material misrepresentations, which went into force in January 2025.
The FTC may continue to review the Rule’s requirements and impact on businesses, but the Rule remains legally required at this time. Court challenges to the Rule by a variety of industry groups remain active, but yet unsettled.
For businesses offering negative options, whether in the form of subscriptions that auto-renew, free trials that automatically convert to a paid offering, etc., the Rule’s requirements continue to apply. See our prior alert summarizing key aspects of the Rule.
USPTO Accelerates Patent Issuance Timeline—Key Impacts for Patent Applicants and Holders
Effective May 13, 2025, the United States Patent and Trademark Office (USPTO) will implement a significant change to its patent issuance process, substantially reducing the time between issue notification and patent issuance. According to the USPTO notice, the target time to issuance will be approximately two weeks from the notice of issuance, down from the current average of three weeks. This change is part of the USPTO’s broader modernization efforts, including the adoption of electronic patent grants just over two years ago.
Key Impacts for Patent Applicants and Holders
1. Earlier Patent Issuance and Market Entry
The expedited timeline means that patentees will receive their official patent grant sooner, enabling earlier protection of their inventions. This acceleration provides earlier enforceable rights and protection for patented inventions, which can be critical for business planning, investment, and competitive positioning.
2. Adjustments to Filing Strategies for Continuing Applications
Applicants intending to file continuing applications (such as continuation, divisional, or continuation-in-part applications) must be aware that the shortened window between issue notification and issuance requires prompt filing of any continuing application. Particularly, applicants should begin consideration of whether to file a continuing application upon receipt of the Notice of Allowance rather than waiting until closer to issuance.
Moreover, the USPTO recent implemented a Continuing Application Fee (CAF) for continuing applications filed more than six years after their earliest benefit date. Thus, the practice of speculative continuing application filings may be cost prohibitive for older patent families, further reinforcing the need for earlier consideration of a continuation filing.
3. Impacts on Quick Path Information Disclosure Statements (IDS) Practice
The Quick Path IDS (QPIDS) program allows for submission of prior art references after payment of the issue fee without requiring that prosecution be reopened in certain circumstances. Each QPIDS filing does, however, require submission of a Petition to Withdraw from Issue After Payment of the Issue Fee. According to the MPEP, “[w]hile a petition to withdraw an application from issue may be granted as late as one day prior to the patent issue date, it may not be possible to avoid publication and dissemination when the petition is granted within 3 weeks of the issue date.” (emphasis added). Thus, the window to file a QPIDS request is substantially narrowed by the expedited issuance, and a QPIDS request may not be acted on if submitted after the issue notification is received.
To ensure consideration of all known prior art, Applicants should conduct a final review for any outstanding prior art or IDS needs before paying the issue fee. If new information arises after issue fee payment, immediate action is required, but there is no assurance that the QPIDS process will be successful in preventing issuance. Based on the relevance of the prior art, a continuing application may be warranted to ensure patentability over any late-discovered prior art.
Action Items for Patent Applicants and Holders
Begin review of patent applications and consider whether to file a continuing application upon receipt of the Notice of Allowance and well before paying the issue fee.
Monitor issue notifications closely and track all issue dates if a continuing application is to be filed. If necessary, consider filing a continuing application with only one claim to meet the copendency requirement and file a preliminary amendment with the full claim set thereafter.
Ensure all prior art, especially that from co-pending foreign applications, is filed before payment of the issue fee.
DOJ Announces Key Corporate Enforcement Changes & White-Collar Priorities
DOJ recently announced white-collar crime enforcement priorities and significant changes to its corporate enforcement policies (here and here). “[O]verbroad and unchecked corporate and white-collar enforcement burdens U.S. businesses and harms U.S. interests,” and “[n]ot all corporate misconduct warrants federal criminal prosecution,” according to the memo. New changes to these DOJ policies are intended to help companies navigate what to expect when making a disclosure and clarify the additional benefits that are available to companies that self-disclose and cooperate.
Priority Enforcement Areas
DOJ’s Criminal Division will prioritize investigating and prosecuting white-collar crimes in certain identified high-impact areas, as summarized below:
Health care and federal program and procurement fraud;
Trade and customs fraud, including tariff evasion;
Fraud perpetrated through variable interest entities, including securities fraud, and other market manipulation schemes;
Market manipulation including, Ponzi schemes, investment fraud, elder and servicemember fraud, and health and safety consumer fraud;
National security threats to the U.S. financial system by financial institutions and their insiders that commit sanctions violations;
Material support by corporations to foreign terrorist organizations, including recently designated cartels;
Complex money laundering, including Chinese Money Laundering Organizations, and other organizations involved in laundering funds used in the manufacturing of illegal drugs;
Controlled Substances Act and the Federal Food, Drug, and Cosmetic Act violations, including counterfeit fentanyl pills and unlawful distribution of opioids by medical professionals and companies;
Bribery and associated money laundering that impact U.S. national interests, undermine U.S. national security, harm the competitiveness of U.S. businesses, and enrich foreign corrupt officials; and
Crimes involving digital assets that victimize investors and consumers; that use digital assets in furtherance of other criminal conduct; and willful violations that facilitate significant criminal activity.
DOJ has also called for an increased investigative pace and directed prosecutors to “move expeditiously to investigate cases and make charging decisions” quickly to ensure “that [investigations] do not linger and are swiftly concluded.”
Corporate Enforcement Policy Changes
New changes to the Corporate Enforcement and Voluntary Self-Disclosure Policy (“CEP”) include the following:
For companies that satisfy all required elements from voluntary self-disclosure, to full cooperation, to timely and appropriate remediation, as well as have no aggravating circumstances, the CEP will make clear there “is a clear path to declination.” This is a marked contrast to prior guidance that entitled companies to a “presumption” of a declination.
Companies that are willing to satisfy the core criteria, but have aggravating circumstances that raise concerns for the company to voluntarily self-disclose, may still qualify for declination under the revised CEP. In these cases, the DOJ will consider “the severity of those aggravating circumstances and the company’s cooperation and remediation,” offering a potential outcome to avoid prosecution.
The revised CEP also clarifies that companies may still qualify for meaningful benefits when self-disclosing in good faith – such as a non-prosecution agreement, a 75 percent reduction in criminal fines, and no requirement to appoint a monitor – even if the disclosure is not considered timely or comes after the DOJ, without the company’s awareness, has already discovered the misconduct.
DOJ also announced revisions to the Criminal Division’s standards and policy for the selection of monitors in matters handled by the Criminal Division.
Monitorships will be limited to those cases where deemed “necessary,” including “when a company cannot be expected to implement an effective compliance program or prevent recurrence of the underlying misconduct without such heavy-handed intervention.” Specifically, the monitor selection standards will be revised to clarify “the factors that prosecutors must consider when determining whether a monitor is appropriate and how those factors should be applied,” as well as require that monitorships be “narrowly tailor[ed]…to address the risk of recurrence of the underlying criminal conduct and to reduce unnecessary costs.” Such factors prosecutors may consider include: (1) “the nature and seriousness of the conduct” and the risk of recurrence; (2) other available regulatory oversight; (3) the effectiveness of the company’s compliance program at resolution; and (4) the maturity of the company’s internal controls, including the company’s ability to test its compliance program as well as make improvements.
DOJ’s corporate whistleblower program will also undergo an evaluation to identify “additional areas of focus” that align with the Administration’s key initiatives. “[P]rocurement and federal program fraud; trade, tariff, and customs fraud; violations of federal immigration law; and violations involving sanctions, material support of foreign terrorist organizations, or those that facilitate cartels and TCOs, including money laundering, narcotics, and Controlled Substances Act violations” have all been included as areas of interest.
Takeaways
Voluntary Self-Disclosure now means “a clear path to declination” rather than a “presumption” of a declination.
Look for an uptick in False Claims Act investigations in the international trade area including, customs fraud and tariff evasion.
DOJ is requiring for prosecutors to “move expeditiously to investigate cases,” and will be actively monitoring investigation timelines and progress to ensure prompt resolution. This means that stakeholders and outside counsel will need to conduct internal investigations and make decisions quicker.
Notwithstanding the 180-day FCPA pause, bribery that enriches foreign officials and undermines U.S. business remains a priority.
Monitorships appear to now be the exception, not the rule for corporate resolutions.
Deferred Prosecution Agreements may be back given that DOJ is making clear “[n]ot all corporate misconduct warrants federal criminal prosecution.” Rather, DOJ is directing Criminal Division prosecutors to weigh “additional factors,” such as whether a company self-disclosed and fully cooperated, as well as its remediation efforts, when assessing whether to prosecute.
Companies will want to stay ahead of these developments and revised corporate enforcement policies. As we have reported, well-designed compliance programs help to mitigate not only bribery and corruption risks, but also money laundering, sanctions issues, human rights violations, and financial fraud risks. Effective and adequately resourced compliance programs also help to foster positive speak-up cultures, ensuring that employees feel comfortable to report suspected misconduct via available internal channels and reporting mechanisms. Maintaining robust internal controls make companies better equipped and prepared to flag potential misconduct early as well as navigate difficult considerations around self-disclosure. Companies should continue to evaluate their compliance programs, including the effectiveness and efficiency of their internal reporting mechanisms and internal investigations processes.
Recent Federal Developments for May 2025
TSCA/FIFRA/TRI
EPA Receives TSCA Section 21 Petitions Seeking Reconsideration Of Exemption Conditions In Final Trichloroethylene Rule: The U.S. Environmental Protection Agency (EPA) recently updated its website to include two petitions submitted under Section 21 of TSCA that seek reconsideration of exemption provisions of EPA’s final risk management rule for trichloroethylene (TCE). On March 24, 2025, PPG Industries, Inc. (PPG) submitted a petition seeking an amendment to the December 2024 final rule’s exemption for the industrial and commercial use of TCE as a processing aid for specialty polymeric microporous sheet materials manufacturing that would allow PPG to meet an interim existing chemical exposure limit (ECEL) of five parts per million (ppm) and an action level of 2.5 ppm. EPA’s May 9, 2025, letter acknowledging receipt of the petition states that it will either grant or deny the portions of the petition eligible for TSCA Section 21 within 90 days of the date the petition was received (i.e., by June 22, 2025). On April 30, 2025, the Alliance for a Strong U.S. Battery Sector (Alliance) and Microporous, LLC submitted a TSCA Section 21 petition for reconsideration of and revisions to the final TCE rule. Petitioners request that EPA revise the final rule to increase the interim ECEL to six ppm and extend the length of the duration from 20 to 25 years to account for the time required to research, develop, test, and obtain approvals for any alternative to TCE in battery-separator manufacturing. EPA’s May 9, 2025, letter acknowledging receipt of the petition states that it will either grant or deny the portions of the petition eligible for TSCA Section 21 within 90 days of the date the petition was received (i.e., by July 30, 2025). More information is available in our May 13, 2025, blog item.
EPA Announces Updates To MyPest, A Pesticide Registration Tracking App For Companies: On April 18, 2025, EPA announced updates to its pesticide registration tracking app, MyPest. EPA states MyPest allows registrants of pesticide products to monitor the status of their pesticide registration submissions in real time. The launch of the latest version of MyPest includes updates to an enhanced dashboard page with information about the registrant’s cases and products, the ability to view detailed information of each application, and the capability to communicate with EPA staff directly within the application page. According to EPA, MyPest gives pesticide registrants greater insight into the registration process and provides an easier way for them to communicate with EPA on registration packages under review. EPA believes this update will be “a significant step forward in making the regulatory process more efficient and transparent.” This work is part of EPA’s overall digital transformation strategy and process streamlining that will improve the timeliness of pesticide registration decisions. EPA states over 1,200 registrants have already signed up for MyPest. Additional updates planned for later this year include further enhancements to the user experience and detailed information on the progress of registration review cases and data call-ins.
EPA Announces Settlement To Resolve Chemical Data Reporting Requirements: EPA announced on April 23, 2025, a settlement with Miller Waste Mills, Inc. (doing business as RTP Company) to resolve violations of chemical data reporting requirements under TSCA. EPA states that the Company must pay a $112,155 civil penalty. According to EPA, Miller Waste Mills imports chemicals used in textile waste processing and thermoplastic compounds. EPA alleges Miller Waste Mills failed to submit data reports for four imported chemical substances required by law. EPA assesses chemicals produced or sold in the United States to determine potential risks to public health and the environment. The Agency also ensures that any non-confidential business information regarding the chemicals is available to the public. EPA states that the alleged violations impeded its ability to maintain accurate and updated information.
DOJ Moves For Voluntary Dismissal Of Its Appeal Of Decision Finding That Section 230 Offers Immunity To Online Retailers: On April 24, 2025, the U.S. Department of Justice (DOJ) filed an unopposed motion in the U.S. Court of Appeals for the Second Circuit for voluntary dismissal of its appeal of an October 2024 decision finding that eBay is immune from liability under Section 230 of the Communications Decency Act. USA v. eBay, No. 24-3104. As reported in our September 28, 2023, memorandum, in September 2023, DOJ, on behalf of EPA, filed a complaint in the U.S. District Court for the Eastern District of New York against eBay “for unlawfully selling, offering for sale, causing the sale of, and distributing hundreds of thousands of products” in violation of the Clean Air Act (CAA), FIFRA, and TSCA. USA v. eBay, No. 23-CV-7173. On September 30, 2024, the court granted eBay’s motion to dismiss the case, finding that:
eBay did not sell, offer for sale, or cause the sale or offer for sale of aftermarket defeat devices in violation of the CAA;
eBay did not distribute or sell pesticides in violation of FIFRA;
EPA pled facts sufficient to allege that eBay introduces methylene chloride-containing products into commerce, thus distributing them in violation of TSCA and the methylene chloride rule; and
Section 230 of the Communications Decency Act independently bars EPA’s claims.
The lower court notes that although eBay’s motion to dismiss fails under TSCA, because the court agrees with eBay’s argument that Section 230 applies, it granted eBay’s motion to dismiss. Under the Biden Administration, EPA filed a notice of appeal in the U.S. Court of Appeals for the Second Circuit on November 26, 2024.
EPA Provides Technical Support For Companies Submitting New Chemical Data: On April 25, 2025, EPA announced the availability of new resources intended to help companies with the requirements described in EPA’s December 2024 final rule governing the review of new chemicals under TSCA. According to EPA, the new materials “provide companies with clear instructions on how to include required data elements in the current system used for new chemical submissions while the agency works to update that system.” EPA’s final rule clarifies the level of detail for the data elements that submitters are required to provide with new chemical notices whenever that information is known to or reasonably ascertainable by the submitter. EPA states that “[a]s noted in the preamble to the final rule, enhancements to the Central Data Exchange (CDX) for submitting the data elements were not finalized concurrently with the amendments.” Until then, submitters can provide the required information using the existing CDX workflow. The new information on EPA’s website describes how submitters can satisfy the amended data requirements pending updates to CDX. EPA states that once it completes the CDX updates, it intends to conduct stakeholder outreach before rolling the updates out “so that users know all data elements are included in CDX and that the use of this supplemental information” will no longer be necessary.
EPA Outlines Actions To Address PFAS: On April 28, 2025, EPA outlined upcoming Agency action to address PFAS. According to EPA’s announcement, “[i]n line with Administrator Zeldin’s Powering the Great American Comeback initiative, EPA’s work in this space will advance Pillar 1: Clean Air, Land, and Water for Every American, and Pillar 3: Permitting Reform, Cooperative Federalism, and Cross-Agency Partnership.” EPA states that these actions “are guided by the following principles: strengthening the science, fulfilling statutory obligations and enhancing communication, and building partnerships.” EPA plans additional actions and decisions across its program offices to help communities impacted by PFAS contamination. Our April 29, 2025, memorandum provides the actions outlined on April 28, 2025, as well as links to our memoranda and blogs for more information.
EPA Announces Release Of Final Insecticide Strategy: On April 29, 2025, EPA announced the release of its final Insecticide Strategy (Strategy). EPA states in the Strategy that it is “intended to create a consistent, reasonable, transparent, and understandable approach to assess potential impacts and identify mitigations to reduce potential population-level impacts to listed species from the use of agricultural insecticides.” Specifically, EPA states that the Strategy identifies mitigations aimed at protecting more than 900 species listed by the U.S. Fish and Wildlife Service (FWS) that EPA considers when it registers a new insecticide or reevaluates an existing one. According to EPA, the Strategy includes a three-step framework that EPA will use when reviewing pesticide applications or when a pesticide is undergoing registration review, including how to apply mitigations when needed. The Strategy and accompanying support documents, including a Response to Comments document and an updated Ecological Mitigation Support Document describing mitigations and supporting data that inform implementation of both the herbicide and insecticide strategies, are available at EPA-HQ-OPP-2024-0299. More information on the final Insecticide Strategy is available in our May 5, 2025, blog item.
EPA Seeks Public Comment On Candidates For Peer Reviewers For Several Phthalates: EPA announced on April 30, 2025, that it is requesting public comments on candidates who are interested and available to serve as ad hoc reviewers assisting its Science Advisory Committee on Chemicals (SACC) in the peer review of the Agency’s data, methods, models, and approaches for the draft TSCA risk evaluations of dibutyl phthalate (DBP), di(2-ethylhexyl) phthalate (DEHP), and dicyclohexyl phthalate (DCHP). According to EPA, “[t]his includes the cross-phthalate technical support documents for human health benchmark dose analysis, cancer analysis, and cumulative risk analysis.” EPA states that the final selection of the ad hoc peer reviewers will depend upon the scientific expertise needed to address the SACC peer review charge and “obtaining a breadth and balance of different scientific viewpoints.” The peer review will take place at a virtual public meeting in August 2025. Comments are due May 15, 2025.
EPA notes that it is also working on risk evaluations for two other phthalates, benzyl butyl phthalate (BBP) and diisobutyl phthalate (DIBP). EPA plans to use SACC’s recommendations from the review of DBP, DEHP, and DCHP to inform the risk evaluations of BBP and DIBP because the science approaches used in the BBP and DIBP risk evaluations are consistent with the approaches used in DBP, DEHP, and DCHP. As a result, EPA does not expect to need an additional peer review.
Court Grants EPA’s Request For Abeyance, Denies EPA’s Request For Voluntary Remand In Challenge To Risk Evaluation Rule: As reported in our March 31, 2025, blog item, on March 21, 2025, the U.S. Court of Appeals for the District of Columbia Circuit heard oral argument in a case challenging EPA’s May 3, 2024, final rule amending the procedural framework rule for conducting risk evaluations under TSCA. United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (USW) v. EPA, Consolidated Case No. 24-1151. On April 30, 2025, the court issued an order denying EPA’s motion for voluntary remand and granting EPA’s motion to hold the case in abeyance. In its order, the court states that “serious question arose regarding the propriety of the court retaining jurisdiction over this case and issuing any judgment on the present record.” The court notes that as matters now stand:
EPA has advised the court that it does not intend to defend the 2024 rule. As reported in our March 14, 2025, memorandum, EPA intends to initiate further rulemaking to reexamine multiple aspects of the 2024 rule. During oral argument, EPA stated that it prefers the case be held in abeyance pending reconsideration.
Industry Petitioners (Texas Chemistry Council, American Chemistry Council, American Fuel & Petrochemical Manufacturers, and American Petroleum Institute) and Olin Corporation (as intervenor) advised the court during oral argument that they do not seek a judgment on the merits and that the parties lack adversity with respect to the 2024 rule. They also prefer that the case be held in abeyance.
Alaska Community Action on Toxics and Sierra Club, appearing as intervenors in support of EPA’s 2024 rule, asked the court to uphold the rule.
The court states that it “ha[s] substantial doubts about whether Labor Petitioners — United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO, International Association of Machinists and Aerospace Workers, AFL-CIO, and Worksafe, Inc. — have demonstrated Article III standing in accordance with our precedent and D.C. Circuit Rule 28(a)(7).”
The court granted EPA’s motion to hold the case in abeyance and directed the parties to file status reports by July 29, 2025, and at 90-day intervals thereafter. The court denied EPA’s motion for voluntary remand. Senior Circuit Judge Edwards dissented from the grant of abeyance, stating that the case “is ready for hearing and disposition by this court and any further delay is unjustified.” According to Edwards, “[i]t is quite extraordinary that nine years after the Lautenberg Amendments, questions remain as to the agency’s obligations under the statute, and no clear framework has emerged for how the agency is to assess for risk.”
Chemical Companies Petition EPA To Amend TSCA Section 8(a)(7) PFAS Reporting Rule: On May 2, 2025, a coalition of chemical companies petitioned EPA for an amendment of the TSCA Section 8(a)(7) rule requiring reporting for PFAS. Filed under TSCA Section 21 and the February 19, 2025, Executive Order on Ensuring Lawful Governance and Implement the President’s “Department of Government Efficiency” Deregulatory Initiative, the petition states that EPA’s October 2023 reporting rule should have included “the typical TSCA 8(a) reporting exemptions (e.g., by-products, impurities, articles, [research and development (R&D)] materials, and a production volume threshold)” that apply in other TSCA Section 8(a) reporting rules. The petitioners ask that EPA revise the reporting rule to exclude imported articles, R&D materials, impurities, byproducts, non-isolated intermediates, and PFAS manufactured in quantities of less than 2,500 pounds (lb.). Petitioners also request that EPA remove the requirement to submit “‘all existing information concerning the environmental and health effects’ of the chemical substance covered by” the reporting rule and instead allow “robust summaries, similar to the approach adopted by the European Chemicals Agency” (ECHA).
EAB Issues Consent Agreement And Final Order For TSCA Section 5 Violations: On May 5, 2025, the EPA Environmental Appeals Board (EAB) issued a consent agreement and final order between EPA and Cytonix, LLC (Cytonix). According to the consent agreement, in 2022, EPA inspectors discovered Cytonix’s potential noncompliance with requirements under TSCA Section 5 for a manufactured chemical substance consisting of short-chain polyfluorinated materials (Chemical A) that was developed as a replacement for a chemical substance containing long-chain (C8) perfluorinated alkyl groups. Cytonix neither admitted nor denied the specific factual allegations. Cytonix agreed to pay a civil penalty of $190,525 for the alleged violations. More information is available in our May 15, 2025, blog item.
EPA Postpones TSCA PFAS Reporting Period To April 2026: EPA published an interim final rule on May 13, 2025, that extends the dates of the reporting period for data submitted on the manufacture of PFAS under TSCA. 90 Fed. Reg. 20236. Under the interim final rule, the data submission period will begin April 13, 2026, and end October 13, 2026. Small manufacturers reporting exclusively as article importers will have until April 13, 2027, to report. According to EPA, the extension will allow it to develop and test further the software being used to collect data from manufacturers, “thereby providing critical feedback to EPA, including what additional guidance would be useful for the reporting community.” The interim final rule was effective May 13, 2025. Comments on the interim final rule are due June 12, 2025. EPA notes that while it “may reopen portions of the rule to comment regarding potential modifications,” comments regarding topics other than the commencement of the reporting period are outside the scope of this action. More information is available in our May 12, 2025, memorandum.
EPA Denies TSCA Section 21 Petition Concerning Prohibition Of Hydrogen Fluoride In Domestic Oil Manufacturing: As reported in our February 14, 2025, blog item, on February 11, 2025, community and environmental groups submitted a petition under TSCA Section 21 to EPA to prohibit the use of hydrogen fluoride in domestic oil refining “to eliminate the extreme and unreasonable risks this use presents to public health and the environment.” On May 12, 2025, EPA denied the petition, stating that the request to initiate a proceeding for a TSCA Section 6(a) rule is deficient. 90 Fed. Reg. 20575. EPA notes that the releases are described as “catastrophic, accidental, and worst-case scenarios, as well as circumstances involving extreme weather and natural disaster events.” EPA states that it has consistently maintained that “it is not appropriate for a risk evaluation in accordance with TSCA section 6(b) to consider catastrophic or accidental releases, extreme weather events, and natural disasters that do not lead to regular and predictable exposures.” According to EPA, the petition does not establish unreasonable risk under the conditions of use of using and distributing in commerce hydrogen fluoride for domestic refining, and, “[b]y extension, the petition’s claim that governmental authorities and industry programs cannot eliminate such unreasonable risk is moot.”
RCRA/CERCLA/CWA/CAA/PHMSA/SDWA
PHMSA Publishes Notice Of Temporary Enforcement Discretion For Real-Time Train Consist Information: The U.S. Department of Transportation’s (DOT) Pipeline and Hazardous Materials Safety Administration (PHMSA) published a “Notice of Temporary Enforcement Discretion for Real-Time Train Consist Information” (Notice) on April 3, 2025. According to the Notice, PHMSA and the Federal Railroad Administration (FRA) have been notified that Class I railroads anticipate significant challenges in their efforts to comply with the requirements and timelines of the June 24, 2024, final rule requiring railroads that carry hazardous materials to generate, maintain, and provide, in electronic form, certain information regarding hazardous materials in rail transportation to first responders, emergency response officials, and law enforcement personnel to enhance emergency response and investigative efforts. The final rule requires compliance by June 24, 2025, for Class I railroads. The Notice states that the challenges described by Class I railroads “include employee training, IT system updates, and installation of physical infrastructure along certain areas of their rail network to facilitate electronic real-time train consist information updates.” In consideration of these issues, once a Class I railroad provides PHMSA notice that their individual railroad is using this enforcement discretion in its operations, “PHMSA and FRA will take no enforcement action against those particular Class I railroads related to the requirements adopted in the HM-263 final rule until June 24, 2026.” The Notice was effective April 3, 2025.
EPA Extends Comment Period On Draft Sewage Sludge Risk Assessment For PFOA And PFOS: On April 17, 2025, EPA extended the comment period on a draft risk assessment of the potential human health risks associated with the presence of perfluorooctanoic acid (PFOA) and perfluorooctane sulfonic acid (PFOS) in biosolids, also known as sewage sludge. 90 Fed. Reg. 16128. According to EPA, the draft risk assessment “reflects the agency’s latest scientific understanding of the potential risks to human health and the environment posed by the presence of PFOA and PFOS in sewage sludge that is land applied as a soil conditioner or fertilizer (on agricultural, forested, and other lands), surface disposed, or incinerated.” Once issued in final, the risk assessment “will provide information on risk from use or disposal of sewage sludge and will inform the EPA’s potential future regulatory actions under the Clean Water Act.” EPA is extending the comment period to allow additional time for interested parties “to thoroughly review and analyze this draft science document.” Comments previously submitted need not be resubmitted. Comments are now due August 14, 2025.
EPA Requests Nominations For CASAC: On May 1, 2025, EPA requested nominations of scientific experts to be considered for appointment to the Clean Air Scientific Advisory Committee (CASAC). 90 Fed. Reg. 18658. CASAC is a chartered Federal Advisory Committee, established pursuant to the CAA to review air quality criteria and National Ambient Air Quality Standards (NAAQS) and recommend to the EPA Administrator any new NAAQS and revisions of existing criteria and standards as may be appropriate. CASAC also advises the EPA Administrator of areas in which additional knowledge is required to appraise the adequacy and basis of existing, new, or revised NAAQS; describes the research efforts necessary to provide the required information; advises the EPA Administrator on the relative contribution to air pollution concentrations of natural as well as anthropogenic activity; and advises the EPA Administrator of any adverse public health, welfare, social, economic, or energy effects that may result from various strategies for attainment and maintenance of such NAAQS. Nominations are due June 2, 2025.
EPA Will Keep MCLs For PFOA And PFOS: EPA announced on May 14, 2025, that it will keep the current national primary drinking water regulations (NPDWR) for PFOA and PFOS. EPA intends to extend the compliance deadlines for PFOA and PFOS, establish a federal exemption framework, and initiate enhanced outreach to water systems, especially in rural and small communities, through EPA’s new PFAS OUTreach Initiative (PFAS OUT). EPA states that this action “would help address the most significant compliance challenges EPA has heard from public water systems, members of Congress, and other stakeholders, while supporting actions to protect the American people from certain PFAS in drinking water.” EPA intends to rescind the regulations and reconsider the regulatory determinations for perfluorohexane sulfonic acid (PFHxS), perfluorononanoic acid (PFNA), and hexafluoropropylene oxide dimer acid (HFPO-DA or GenX), and the Hazard Index mixture of these three plus perfluorobutane sulfonic acid (PFBS) “to ensure that the determinations and any resulting drinking water regulation follow the legal process laid out in the Safe Drinking Water Act.” More information on the 2024 final rule is available in our May 9, 2024, memorandum.
FDA
FDA Provides PFAS Test Results In Bottled Water: On April 14, 2025, the U.S. Food and Drug Administration (FDA) posted its results for 2023 – 2024 testing of PFAS in domestic and foreign purified, artesian, spring, and mineral bottled water. FDA notes that it analyzed 197 samples for 18 types of PFAS in parts per trillion (ppt). The results indicate that ten samples contained detectable levels, but none exceeded the maximum contaminant levels in drinking water established by EPA.
FDA To Phase Out Petroleum-Based Synthetic Dyes In Foods: On April 22, 2025, FDA announced new measures for phasing out petroleum-based synthetic dyes from the nation’s food supply. FDA’s actions include:
Establishing a national standard and timeline for the food industry to transition from petrochemical-based dyes to natural alternatives;
Initiating the process to revoke authorization for Citrus Red No. 2 and Orange B within the coming months;
Working with industry to eliminate FD&C Green No. 3, FD&C Red No. 40, FD&C Yellow No. 5, FD&C Yellow No. 6, FD&C Blue No. 1, and FD&C Blue No. 2 from the food supply by the end of next year;
Authorizing four new natural color additives in the coming weeks, while also accelerating the review and approval of others;
Partnering with the National Institutes of Health (NIH) to conduct comprehensive research on how food additives impact children’s health and development; and
Requesting food companies to remove FD&C Red No. 3 sooner than the 2027-2028 deadline previously required.
FDA Commissioner Marty Makary, MD, MPH, stated ”Today, the FDA is asking food companies to substitute petrochemical dyes with natural ingredients for American children as they already do in Europe and Canada.”
FDA Announces Expanded Use Of Unannounced Inspections At Foreign Manufacturing Facilities: On May 6, 2025, FDA announced that it intends to expand use of inspections of foreign manufacturing facilities without giving prior notice. This change builds upon FDA’s Office of Inspection and Investigations Foreign Unannounced Inspection Pilot program in India and China and aims to ensure that foreign companies will receive the same level of regulatory oversight and scrutiny as domestic companies. According to the press release, FDA conducts approximately 12,000 domestic inspections and 3,000 foreign inspections each year in more than 90 countries, and foreign manufacturing sites “have often had weeks to prepare, undermining the integrity of the oversight process.”
FDA Announces Expansion Of Generative Artificial Intelligence Use: On May 8, 2025, FDA Commissioner Makary announced “an aggressive timeline to scale use of artificial intelligence (AI) internally across all FDA centers by June 30, 2025.” The announcement notes that the AI tools will “allow FDA scientists and subject-matter experts to spend less time on tedious, repetitive tasks that often slow down the review process.” FDA further stated that it “plans to expand generative AI capabilities—across all centers using a secure, unified platform. Future enhancements will focus on improving usability, expanding document integration, and tailoring outputs to center-specific needs, while maintaining strict information security and compliance with FDA policy.”
FDA Approves Three Food Colors: On May 9, 2025, FDA announced that it granted three new color additive petitions that will expand the palette of available colors from natural sources for manufacturers to safely use in food. FDA approved the three new color additives for Galdieria extract blue, butterfly pea flower extract (blue), and calcium phosphate (white). FDA indicates that this is part of its ongoing initiatives announced in April to remove petroleum-based food dyes and approve “safe, natural alternatives – to protect families and support healthier choices.”
NANOTECHNOLOGY
Registration Open Until May 16, 2025, For Joint Regulatory Risk Assessors Summit On Advancing Safety And Sustainability Assessment Of Advanced Materials: On June 19 to June 20, 2025, the EU Horizon Europe projects ACCORDs, iCare, MACRAMÉ, and nanoPASS are hosting a joint summit to address the needs of industry and regulators in assessing the safety and sustainability of advanced materials. The summit will feature discussions, latest method developments, and direct engagement with regulators, scientists, and industry professionals. Key sessions will focus on regulatory challenges, scientific developments, and pathways toward advancing test methods for regulatory testing. Registration will close May 16, 2025.
BIOBASED/RENEWABLE PRODUCTS/SUSTAINABILITY
B&C® Biobased And Sustainable Chemicals Blog: For access to a summary of key legislative, regulatory, and business developments in biobased chemicals, biofuels, and industrial biotechnology, go to https://www.lawbc.com/brand/bioblog/.
PUBLIC POLICY AND REGULATION
“Just do it” May Sell Shoes, But Can It Revolutionize Bureaucracy?: So catchy phrases (“You’re fired”), props (chainsaws), Executive Orders (take your pick), and even 900-page blueprints (Project 2025) may not be enough to impose fundamental change on “the system.” More benign is the realization that the workforce of two-plus million federal workers is hard to manage with only the 1,000 or so most senior appointees arriving with the new Administration.
Viable suggestions coming from the incumbent staff are impossible when the staff is afraid and confused by the swirl of e-mails from questionable authority. Surprise cuts to your program or the end of your career coming from press releases and reports of the latest Executive Order is not good for morale. The apparent rationale for the chainsaw metaphor is a “move fast and break things” approach. This is evocative of some strategies used in the Vietnam war, summarized as: “burn down the village to save it.”
Even if big moves and fundamental changes are the order of the day, the private sector and government functions are different in ways that matter. Failed mergers resulting in a drastic drop in stock prices are impactful in different ways than a drastic impairment of important government functions the public depends on — including clean water or safe food and social security checks delivered on time (and that do not bounce).
More respect for the staff and more understanding of the agency mission and how procedures or budgets evolved into today’s program (warts and all) would have served the reform taskmasters more effectively than the progress reported until now. More information is available in our April 23, 2025, blog item.
Recalibrating Regulation: EPA, Energy, And The Unfolding Consequences Of Deregulatory Momentum: EPA has long navigated the complex intersection of science, law, policy, and public trust. Under the Trump Administration, EPA faces renewed scrutiny. The Administration seeks regulatory rollbacks and is pursuing a broader deregulatory strategy that many believe risks sacrificing hard won environmental protections in the name of economic growth. While early promises to reduce bureaucratic red tape struck a chord with a number in industry, implementation has appeared blunt thus far, rather than measured. Deregulatory actions have sometimes resembled sweeping cuts “with a machete instead of a scalpel,” affecting the intended target of outdated or burdensome rules, but taking with it collateral damage, including critical administrative safeguards and scientific functions. Although EPA has avoided some of the steepest cuts levied on other federal agencies, many worry that this trajectory will fundamentally impair the Agency’s mission. For more thoughts on this deregulatory push, please read our April 24, 2025, blog item.
Navigating The Regulatory Crossroads: Chemical Policy In Trump’s First 100 Days: President Donald Trump’s initial 100 days in office during his second term have marked a significant shift in the United States’ approach to chemical regulation, emphasizing deregulation and industry facilitation over more traditional environmental and public health safeguards. President Trump’s actions, inactions, and policy choices during his first 100 days seem to have come at a cost, as polls show his approval rating has decreased to 39 percent, an 80-year low for a President’s first 100 days in office. This blog item expands on the following issues:
Deregulatory Initiatives and Industry Impact;
PFAS Regulation: A Plan for Regulatory Reversal?; and
Environmental Justice and Community Health Concerns.
The first 100 days of President Trump’s tenure have ushered in a new era of chemical regulation, characterized by a strong emphasis on deregulation and a leaner federal infrastructure. While proponents argue this fosters economic growth and innovation, critics highlight the potential risks to environmental integrity, public health, and institutional knowledge. As the Administration continues to redefine regulatory frameworks, stakeholders must navigate this evolving landscape with vigilance and adaptability. For more insight on these issues, please read our May 4, 2025, blog.
Setting The Record Straight: New Chemical Review Needs Scientists: On May 2, 2025, EPA Administrator Lee Zeldin announced the “[n]ext phase of organizational improvements to better integrate science into agency offices.” As part of this reorganization effort, Zeldin introduced the creation of the Office of Applied Science and Environmental Solutions (OASES) within the Office of the Administrator. According to Zeldin, OASES will “align research and put science at the forefront of the agency’s rulemakings and technical assistance to states.” That same day, The New York Times published an article titled, “Out at the E.P.A.: Independent Scientists. In: Approving New Chemicals.” The piece suggests that EPA’s renewed focus on addressing the backlog of new chemical submissions under TSCA amounts to a policy of automatic approval, an oversimplification that mischaracterizes both TSCA statutory requirements and the Agency’s intended actions.
For EPA’s new chemical review program, what is needed is a long-overdue step toward regulatory equity. EPA needs either to reconsider its interpretation of TSCA Section 5 or Congress needs to act to clarify whether it views EPA’s interpretation as what is best. Consumers and manufacturers alike stand to benefit from a process that allows safer, innovative chemicals to compete on a level regulatory playing field with legacy substances that will not rise to a level that would justify EPA designating the substance as high priority for risk evaluation. More information is available in our May 8, 2025, blog.
LEGISLATIVE
Bipartisan Bill Would Reduce Federal Use Of Products Containing PFOA And PFOS: On April 30, 2025, Representatives Mike Lawler (R-NY), Haley Stevens (D-MI), Brian Fitzpatrick (R-PA), Chris Pappas (D-NH), and Pat Ryan (D-NY) introduced the PFAS-Free Procurement Act (H.R. 3110), a bill aimed at reducing harmful chemical exposure by prohibiting the procurement of products containing PFOS or PFOA. According to Lawler’s April 30, 2025, press release, the bill would prohibit federal agencies from renewing or entering into contracts for products containing PFOS or PFOA, including nonstick cookware, cooking utensils, furniture, carpets, and rugs treated with stain-resistant coatings. The legislation would take effect six months after enactment and would apply to all contracts entered into after that date.
Bipartisan Bill Would Remove PFAS From Firefighter Gear: On May 5, 2025, Representative Debbie Dingell (D-MI), co-chair of the PFAS Task Force, along with Representatives Sam Graves (R-MO), Suzanne Bonamici (D-OR), Tom Kean, Jr. (R-NJ), Dina Titus (D-NV), Brian Fitzpatrick (R-PA), Glenn Ivey (D-MD), and Glenn “GT” Thompson (R-PA), reintroduced the bipartisan Protecting Firefighters and Advancing State-of-the-Art Alternatives Act (PFAS Alternatives Act) (H.R. 3184) to support development of next-generation PFAS-free turnout gear for firefighters and better protect firefighters from the dangers of their work. According to Dingell’s May 5, 2025, press release, the bill would:
Accelerate the development of PFAS-free turnout gear through research, development, and testing of PFAS-free turnout gear materials;
Facilitate the development of safer turnout gear materials that reduce the dangers firefighters face, including enhanced protection against primary and secondary exposure to particulates and byproducts of combustion; reduced maintenance that includes contamination resistance and greater ease of cleaning; visible warning indicators to alert firefighters to hazardous exposures or the need for decontamination; and consideration of body composition in turnout gear design;
Support guidance and training for firefighters on best practices for reducing harmful exposures through the proper wearing, cleaning, and caring for next-generation turnout gear; and
Involve the firefighting industry in the development process by requiring grant applicants to use the leadership, experience, and knowledge of firefighters to ensure the next-generation turnout gear will be both effective and practical for the everyday demands of firefighting.
The bill would authorize $25 million annually for each of fiscal years 2025 through 2029 to support the development of new materials, and an additional $2 million annually to support guidance and training.
MISCELLANEOUS
Comments On Minnesota’s Proposed Rule For Reporting Products Containing Intentionally Added PFAS Are Due May 21, 2025: With the January 1, 2026, reporting deadline fast approaching for reporting on products containing intentionally added PFAS, on April 21, 2025, the Minnesota Pollution Control Agency (MPCA) published a proposed rule intended to clarify the reporting requirements, specify how and what to report, and establish fees. Written comments on the proposed rule are due May 21, 2025, at 4:30 p.m. (CDT). On May 22, 2025, at 2:00 p.m. (CDT), MPCA will hold a public hearing during which it will accept oral comments on the proposed rule. The hearing will end at 5:00 p.m. (CDT), but additional days of hearings may be scheduled if necessary. The procedural rulemaking documents available include:
Proposed Permanent Rules Relating to PFAS in Products; Reporting and Fees (c-pfas-rule1-06);
Statement of Need and Reasonableness for PFAS in products reporting and fees rulemaking (c-pfas-rule1-07) (SONAR); and
Notice of intent to adopt rules with a hearing (c-pfas-rule1-05).
In addition to reviewing the proposed rule, stakeholders should read MPCA’s SONAR. There is much to absorb, and B&C highlights only some of the issues in its April 22, 2025, memorandum.
EPA Requests Nominations For SAB Candidates: On May 1, 2025, EPA requested nominations of scientific experts from a wide range of disciplines to be considered for appointment to the EPA Science Advisory Board (SAB). 90 Fed. Reg. 18657. SAB is a chartered Federal Advisory Committee, established in 1978 under the authority of the Environmental Research, Development and Demonstration Authorization Act (ERDDAA) to provide independent scientific and technical peer review, consultation, advice, and recommendations to the EPA Administrator on the scientific bases for EPA’s actions and programs. EPA states that members of the SAB constitute distinguished bodies of non-EPA scientists, engineers, economists, and behavioral scientists who are nationally and internationally recognized experts in their respective fields. Members are appointed by the EPA Administrator for a two or three-year term and serve as Special Government Employees who provide independent expert advice. Nominations are due June 2, 2025.
Maine Updates PFAS In Products Web Page, Includes Instructions For Submitting A CUU Proposal: The Maine Department of Environmental Protection (MDEP) updated its web page on PFAS in products on May 7, 2025. The updated page includes links to the April 2025 final rule on products containing PFAS, instructions for submitting a currently unavoidable use (CUU) proposal, and frequently asked questions (FAQ). The FAQs address several questions related to CUU determinations, including:
Does my product sold in Maine qualify for a CUU determination?
How and when do I submit a CUU proposal?
What are the timelines for MDEP’s decision making on CUU proposals?
How will MDEP communicate the results of a proposal for CUU determination?
Will CUU determinations be public information?
What will the status of the pending CUU proposals be while MDEP is actively reviewing them and has yet to reach a decision?
As reported in our April 11, 2025, blog item, CUU proposals are due June 1, 2025, for products containing intentionally added PFAS that are within a prohibited category beginning January 1, 2026. Those categories are cleaning products; cookware; cosmetics; dental floss; juvenile products; menstruation products; textile articles (with exception); ski wax; upholstered furniture; and products listed that do not contain intentionally added PFAS but that are sold, offered for sale, or distributed for sale in a fluorinated container or in a container that otherwise contains intentionally added PFAS.
Petitions Filed To Add Chemicals To List Of Chemical Substances Subject To Superfund Excise Tax: On May 13, 2025, the Internal Revenue Service (IRS) announced that petitions have been filed to add the following chemicals to the list of taxable substances:
Bromobutyl isobutylene isoprene rubber (BIIR) (90 Fed. Reg. 20346): Petition filed by Exxon Mobil Corporation, an exporter of BIIR;
Chlorobutyl isobutylene isoprene rubber (CIIR) (90 Fed. Reg. 20350): Petition filed by Exxon Mobil Corporation, an exporter of CIIR;
Di-isobutylene (90 Fed. Reg. 20352): Petition filed by TPC Group, Inc., an exporter of di-isobutylene;
Di-isodecyl phthalate (90 Fed. Reg. 20354): Petition filed by Exxon Mobil Corporation, an exporter of di-isodecyl phthalate;
Di-tridecyl phthalate (90 Fed. Reg. 20352): Petition filed by Exxon Mobil Corporation, an exporter of di-tridecyl phthalate;
Linear nonyl phthalate (90 Fed. Reg. 20348): Petition filed by Exxon Mobil Corporation, an exporter of linear nonyl phthalate;
Linear undecyl phthalate (90 Fed. Reg. 20353): Petition filed by Exxon Mobil Corporation, an exporter of linear undecyl phthalate;
Neo pentanoic acid (90 Fed. Reg. 20346): Petition filed by Exxon Mobil Corporation, an exporter of neo pentanoic acid; and
Regular butyl rubber (90 Fed. Reg. 20347): Petition filed by Exxon Mobil Corporation, an exporter of regular butyl rubber.
Comments on the petitions are due July 14, 2025.
On May 14, 2025, IRS announced that petitions have been filed to add the following chemicals to the list of taxable substances:
Di-isononyl phthalate(90 Fed. Reg. 20551): Petition filed by Exxon Mobil Corporation, an exporter of di-isononyl phthalate; and
Linear nonyl undecyl phthalate (90 Fed. Reg. 20553): Petition filed by Exxon Mobil Corporation, an exporter of linear nonyl undecyl phthalate.
Comments on the petitions are due July 14, 2025.
When States Step In: PFAS Policy Innovation or Fragmentation?
Per- and polyfluoroalkyl substances (PFAS) remain a top concern for regulators and the public alike. While federal regulators continue to lay the groundwork for a comprehensive response, including through the PFAS Strategic Roadmap, states are increasingly positioning themselves as policy innovators in this space. The recent announcement that the U.S. Environmental Protection Agency (EPA) will issue additional guidance and extend the compliance deadline for the Toxic Substances Control Act (TSCA) Section 8(a)(7) PFAS reporting rule underscores a broader dynamic: in the absence of fast-moving federal action that states perceive as comprehensive, states are setting the pace, even if their approaches do not always (or ever) mirror the federal approach to regulation and risk mitigation.
Federal Rulemaking Slows, States Surge Ahead
EPA issued in final the TSCA Section 8(a)(7) PFAS reporting rule in October 2023 to obtain historical data on PFAS manufactured or imported since 2011. Following significant stakeholder pushback over the reporting burden and the scope of the information required, EPA announced on May 13, 2025, that it extended by direct interim final rule the reporting deadline to October 2026 (longer for small business). EPA also signaled its receptivity to revisiting the contours of the core reporting rule — music to many corporate ears.
While this federal delay, and retreat in other PFAS areas, is recent, states have not waited for federal action. Over the past few years, several states have increasingly framed PFAS regulation as a space for environmental leadership, and their regulatory approaches diverge significantly from federal approaches to PFAS regulation.
PFAS Trendsetting: State-by-State
States have introduced wide-ranging PFAS policies aimed at consumer products, environmental media, and public health surveillance. Notably, many of these state efforts include categorical bans and reporting obligations that would be difficult to implement under TSCA without extensive TSCA rulemaking.
Maine’s landmark PFAS in Products Program, An Act To Stop Perfluoroalkyl and Polyfluoroalkyl Substances Pollution, enacted in 2021 and most recently amended in 2024, first prohibits intentionally added PFAS in certain consumer products before setting an ambitious timeline to eliminate most uses by 2032, while also allowing industry to submit currently unavoidable use (CUU) proposals. The 2021 statute required manufacturers to report the presence of intentionally added PFAS, but after several postponements, the legislature amended the statute so that only products with CUU determinations will be required to report. While implementation has faced logistical hurdles, the law positions Maine as a national trendsetter.
California continues to expand its PFAS regulatory portfolio through targeted legislation. Recent laws prohibit PFAS in juvenile products, food packaging, textile articles (including apparel, bedding, handbags, and upholstery), and menstrual products, while adding numerous PFAS chemicals to the Proposition 65 list. This piecemeal approach prompted Governor Gavin Newsom (D) to veto three bills in 2023 that separately addressed PFAS.
Colorado’s HB22-1345, passed in 2022, phases out PFAS in products such as carpets, cosmetics, and firefighting foam, and includes a labeling requirement for cookware that contains intentionally added PFAS. The labeling requirement took effect January 1, 2024, yet the same month that the labeling requirement took effect, SB24-081 was introduced. Enacted on May 1, 2024, the bill repeals the labeling requirement for cookware effective January 1, 2026, when cookware containing intentionally added PFAS is banned, as well as certain other consumer products containing intentionally added PFAS. This legislative one-two for cookware reinforces the idea that while consumer product restrictions are a primary policy tool for many states, the states may not have a long-term view in mind.
Minnesota passed Amara’s Law in 2023, and it was modeled after Maine’s 2021 statute — intentionally added PFAS were banned in certain consumer products on January 1, 2025; reporting on intentionally added PFAS will be required on or before January 1, 2026; and effective January 1, 2032, intentionally added PFAS will be banned in all products that are not exempt and do not have a CUU determination.
Connecticut and Vermont both enacted laws in 2024, with Vermont’s law (S25) restricting certain chemicals, including PFAS, in cosmetic and menstrual products and Connecticut’s statute (S.B. No. 292) banning intentionally added PFAS in certain consumer products and mandating disclosure and reporting.
New Mexico’s HB 212, the most recently enacted statute, is similar to Minnesota’s in that it will phase out certain consumer products containing intentionally added PFAS, require reporting, and ultimately ban products containing intentionally added PFAS that are not exempt or that do not have a CUU determination. New Mexico is unique among enacted legislation to date in that it distinguishes fluoropolymers. Products that contain only intentionally added fluoropolymers are exempt from both the reporting requirements and prohibition.
Leadership or Fragmentation?
While many states are eager to demonstrate environmental leadership, the result for industry is a fragmented landscape. State definitions of intentionally added PFAS vary, as do timelines, disclosure requirements, and enforcement approaches. Moreover, some states are advancing policies that would be difficult to replicate under federal law without significant evidentiary support or economic impact analysis — processes TSCA requires but state legislatures often bypass.
For companies operating across jurisdictions, this growing divergence raises compliance challenges and highlights the need to monitor both federal and state developments, along with a growing number of international measures. Safer States maintains a table of PFAS bans in key sectors with implementation dates.
Looking Ahead
EPA’s decision to extend the reporting window under TSCA Section 8(a)(7) may not have triggered state action, but it reinforces a pattern that has been building for years: states are not waiting for federal consensus before moving forward on PFAS. Whether these policies ultimately converge or further diverge remains to be seen, but what is clear is that PFAS compliance is increasingly being shaped by state leadership — and companies will need to navigate that evolving terrain carefully.
Employer Compliance with Illinois E-Verify Law Still Necessary Despite DOJ Lawsuit
Takeaways
The DOJ suit against Illinois to block a new state law argues that Illinois is intruding on federal immigration authority.
Illinois’ law requires E-Verify employers to post state notices and give employees advance notice of any Form I-9 inspections, among other obligations not required under federal law.
A similar California law (AB 450) was upheld, which suggests Illinois’ employee-notice requirements might survive the DOJ’s challenge.
In its complaint in United States v. State of Illinois, No. 1:25-cv-04811, the U.S. Department of Justice (DOJ) alleges that Illinois’ new E-Verify amendment (SB 508) “encroaches on federal immigration authority” by layering state rules on the employment verification process.
SB 508 amended the Illinois Right to Privacy in the Workplace Act effective Jan. 1, 2025, imposing new obligations on any employer enrolled in E-Verify. Illinois now mandates employee notifications that go beyond federal requirements. For example, employers must display both federal and state E-Verify notices at their workplace and provide written notice to all employees within 72 hours whenever the employer receives notice of a government inspection of I-9 employment eligibility forms. Illinois also requires training for staff who use E-Verify and formal attestations of compliance to the state. Failure to meet these state requirements can trigger state civil fines.
DOJ’s Legal Challenge
The DOJ contends that Illinois is stepping into the federal government’s territory of immigration enforcement. In a press release, officials argue that SB 508 “discourages and complicates the use of E-Verify” by imposing confusing rules and threatening hefty penalties on employers. The complaint asserts that the Illinois law violates the Supremacy Clause of the U.S. Constitution and conflicts with the Immigration Reform and Control Act’s federal scheme for employment verification. DOJ officials caution that Illinois’ advance notice requirements (like alerting employees of government I-9 audits) could undermine federal immigration enforcement, for instance, by giving unauthorized workers warning that they may be losing their positions. Illinois’ law even prescribes the time, place, and manner of employee notifications, which DOJ argues goes beyond what federal law permits.
Comparison to California’s AB 450
California enacted a similar law in 2018. It required employers to notify employees in advance of any I-9 inspections and to share inspection results with affected workers, among other things. DOJ sued California, claiming interference with federal authority. The U.S. Court of Appeals for the Ninth Circuit ruled in 2019 that California’s employee-notice provisions were not preempted by federal law and did not improperly hinder federal immigration enforcement. This suggests that courts allow states some leeway to impose notification and poster rules on employers if those rules don’t directly conflict with federal employer obligations. Illinois’ requirements (including posting a state-prescribed E-Verify notice and giving 72-hour audit notices) resemble California’s and could withstand a preemption challenge.
What Employers Should Know
The DOJ’s lawsuit is in the early stages and does not relieve Illinois employers’ obligations to comply with SB 508. Employers must post the required “Right to Privacy in the Workplace Act” E-Verify notice (available from the Illinois Department of Labor) in your workplace, ensure E-Verify users are trained, and be prepared to promptly notify employees of any government I-9 inspections or E-Verify discrepancies as the Illinois law directs. HR departments should keep a close eye on the DOJ lawsuit.
Chairman Atkins Outlines SEC’s New Roadmap for Crypto Reform
In a May 12, 2025 Keynote Address before the U.S. Securities and Exchange Commission (“SEC”) Crypto Task Force’s fourth industry roundtable on digital assets, newly-minted Chair Paul Atkins laid out a sweeping vision for modernizing the U.S. securities framework to accommodate blockchain-based assets. His remarks reflect a sharp departure from his predecessor’s enforcement-heavy stance and outline a more rules-based, innovation-oriented approach.
Atkins likened the move from traditional securities to tokenized instruments to the digitization of music, suggesting that blockchain technology will unlock novel and improved ways to issue, own, and trade assets.
As outlined in the Chair’s address, the SEC’s crypto policy agenda will center around three pillars of issuance, custody, and trading:
Issuance: Atkins criticized the SEC’s failure to adapt Form S-1 and other disclosures to tokenized assets, noting that only four issuers have registered crypto offerings to date. He committed to establishing clear and sensible guidelines for crypto assets that are securities or subject to an investment contract and exploring new exemptions and safe harbors to registration requirements, emphasizing that staff guidance is not a substitute for Commission action.
Custody: Atkins referenced the SEC’s recent rescission of Staff Accounting Bulletin 121—which required custodians to record crypto assets as liabilities and assets on their own balance sheets despite not owning them—calling the guidance an overreach that discouraged lawful custodial services. He pledged clarity on qualified custodian standards and suggested reforms to allow investment advisers and funds to self-custody under certain circumstances. Atkins also raised the possibility of repealing and replacing the “special purpose broker-dealer” framework, which placed strict conditions on custodians of digital asset securities.
Trading: Atkins supported enabling broker-dealers to offer trading in both securities and non-securities, including crypto asset “pairs trading” through which a security is traded against a crypto asset, such as a stablecoin. Atkins directed staff to explore updates to the framework for Alternative Trading Systems—non-exchange trading platforms that facilitate the matching and execution of securities trades—and consider conditional registration exemption relief where appropriate. In addition, Atkins announced that he has directed SEC staff to explore whether further guidance or rulemaking may be helpful to enable the listing and trading of crypto assets on national securities exchanges.
In sum, Chair Atkins’ remarks confirm that the SEC is shifting toward a more transparent, rules-based regime for crypto markets. Firms weighing decisions relating to token issuance, custodial services, or trading platforms should closely monitor coming developments to ensure they are equipped to hit the ground running once new pathways to compliance are formalized.
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An Overview of the Department of State’s New ‘Catch-and-Revoke’ Visa Policy
On April 30, 2025, U.S. Secretary of State Marco Rubio announced a shift in U.S. immigration policy by formally introducing the State Department (DOS)’s “catch-and-revoke” visa policy. This new approach underscores the Trump administration’s increased focus on immigration by allowing the government to revoke visas of non-U.S. citizens. While the policy aims to deter criminal activity, employers should be mindful of its potential impact on foreign national employees. Under this one-strike policy, any foreign national caught breaking U.S. laws risks losing their visa status. The DOS announcement emphasizes that a visa is not a right but a privilege, and the DOS is prepared to cancel such visas in cases of legal infractions by foreign nationals. Although the policy primarily targets individuals convicted of crimes such as assault or domestic violence, its implementation remains ambiguous. As it stands, there is a lack of clarity around which types of violations, including minor traffic infractions, might trigger visa revocation.
From an employer’s perspective, the catch-and-revoke policy signals a need for heightened vigilance in compliance efforts. Organizations that sponsor visas may need to reassess their risk management and legal strategies to safeguard their workforce against disruptions. This may be especially relevant for industries that depend on specialized skills often sourced from international talent pools. Importantly, employers should take note of the fact that a visa revocation does not automatically invalidate a foreign national’s underlying non-immigrant status or work authorization in the United States. Visa revocations do invalidate the underlying visa stamp that employees would need to return to the United States after international travel. As such, employees with visa revocations should proceed with extra caution when traveling internationally, as they may face difficulties in attaining a new visa issued post-revocation and reentering the United States.
The catch-and-revoke policy underscores that U.S. immigration policies are evolving rapidly. For employers, careful planning and adaptation may help enhance compliance while continuing to attract and retain global talent. For foreign nationals, understanding and adhering to U.S. laws is more essential than ever.
DOJ Alert: New White-Collar Priorities and Stronger Incentives to Self-Report
DOJ sets out new enforcement priorities for corporate and white-collar crime and emphasizes “focus, fairness and efficiency.”
This week, Matthew R. Galeotti, Head of the Criminal Division at the US Department of Justice, issued a memorandum outlining the Department’s renewed enforcement priorities and updating policies regarding the prosecution of corporate and white-collar crime. In this memorandum, Galeotti emphasized a commitment to addressing “the most urgent criminal threats to the country,” and promoting equality and efficiency throughout the Department. The DOJ will concentrate its efforts and resources on both longstanding areas of focus and new areas identified in the current administration’s “America First Priorities,” memorandum, including:
Material Support by Corporations to Cartels, Transnational Criminal Organizations (TCOs) and Foreign Terrorist Organizations (FTOs): As Bracewell previously reported, the DOJ is intensifying its scrutiny of companies that provide material support or resources to designated FTOs or facilitating the criminal operations of cartels and TCOs through bribery. On his first day in office, President Trump issued a series of executive orders addressing this issue. Accordingly, businesses operating in high-risk regions such as in parts of Mexico and other areas in Central and South America — as well as the Middle East — are encouraged to adopt robust internal controls and compliance protocols to mitigate investigation and enforcement risk.
Waste, Fraud and Abuse (Health Care Fraud and Federal Program and Procurement Fraud): The DOJ will continue its efforts to hold accountable individuals and corporations that defraud vital government programs such as Medicare, Medicaid and defense-related initiatives, thereby resulting in harm to the public fisc.
Trade and Customs Fraud, Including Tariff and Sanctions Evasion: The DOJ will focus its resources on combatting these forms of fraud, as they threaten the US economy, American competitiveness and national security.
Fraud Perpetuated Through Variable Interest Entities (VIEs): The America First Investment Policy highlights the importance of investor protection against fraudulent practices tied to certain foreign adversary companies listed on US exchanges. The DOJ will focus its efforts on VIEs — which are typically “Chinese-affiliated” companies listed on US exchanges — that facilitate fraud in the US markets via schemes such as “ramp and dumps,” elder fraud, securities fraud and other forms of market manipulation.
Fraud that Victimizes US Investors, Individuals and Markets: This includes, but is not limited to, Ponzi schemes, investment fraud, elder fraud, servicemember fraud and fraud that threatens the health and safety of consumers.
Conduct that Threatens US National Security: This includes, but is not limited to, threats to the US financial system by gatekeepers, such as financial institutions and their insiders that commit sanctions violations or enable transactions by cartels, TCOs, hostile nation-states and/or foreign terrorist organizations.
Complex Money Laundering: The DOJ will focus on Chinese money laundering organizations and other organizations involved in laundering funds used in the manufacturing of illegal drugs.
Violations of the Controlled Substances Act and the Federal Food, Drug, and Cosmetic Act (FDCA): This includes the unlawful manufacture and distribution of chemicals and equipment used to create counterfeit pills laced with fentanyl and the unlawful distribution of opioids by medical professionals and companies.
Bribery and Associated Money Laundering Impacting U.S. National Interests: The DOJ recognizes that bribery and money laundering undermine US national security, harm the competitiveness of US businesses and enrich foreign corrupt officials.
Crimes Involving Digital Assets: As provided by the Digital Assets DAG Memorandum, the DOJ will focus on crimes (1) involving digital assets that victimize investors and consumers; (2) that use digital assets in furtherance of criminal conduct; and (3) willful violations that facilitate significant criminal activity. Notably, cases involving cartels, TCOs, or terrorist groups, or that facilitate drug money laundering or sanctions evasion will receive the highest priority.
Related Policy Updates
To address these areas of focus, Galeotti announced that the Department would undergo various policy updates, as summarized below:
Incentives for Corporate Self-Reporting: Acknowledging that not all corporate misconduct warrants prosecution, the DOJ is encouraging companies to self-report violations. In emphasizing its dedication to equality and fairness, the Department has revised the Corporate Enforcement and Voluntary Self-Disclosure Policy (CEP) to now offer clearer benefits — such as potential declinations and fine reductions — for companies that demonstrate transparency, cooperation and a genuine commitment to remediation. In a recent speech, Galeotti stated that companies will have a “clear path to declination” from criminal charges if they “voluntarily self-disclose to the Criminal Division, fully cooperate, timely and appropriately remediate, and have no aggravating circumstances” and that “[c]ompanies that are ready to take responsibility should not be overburdened by enforcement.” Even where a company does not qualify for declination, resolutions resulting in non-prosecution agreements, deferred prosecution agreements or reduced penalties be available. Prosecutors are encouraged to conduct case-by-case assessments of the facts while prioritizing transparency and fairness in their determinations.
Streamlined Corporate Investigations: To promote efficiency in addressing complex, cross-border white-collar investigations, the Department will collaborate closely with relevant authorities to expedite investigations and make timely charging decisions. In fact, the central theme of Galeotti’s memorandum is the emphasis the Department will now place on “three core tenets: (1) focus; (2) fairness; and (3) efficiency.”
Enhanced Whistleblower Protections: Galeotti also directed updates to the Criminal Division’s Corporate Whistleblower Awards Pilot Program to reflect the DOJ’s current enforcement priorities. In addition to existing categories of eligibility, new eligible “Subject Areas” for whistleblower tips that lead to forfeiture will now include:
Corporate violations related to international cartels or TCOs (e.g., money laundering, narcotics, Controlled Substances Act infractions);
Corporate breaches of federal immigration law;
Material support of terrorism;
Corporate sanctions violations;
Trade, tariff and customs fraud; and
Corporate procurement fraud.
Narrowly Tailored Use of Monitorships: Through this memorandum, the DOJ has emphasized that independent compliance monitorships should only be imposed when a company is unlikely to implement an effective compliance program or otherwise address the root causes of misconduct. When monitorships are deemed necessary, they must be narrowly tailored to meet essential objectives while minimizing cost, burden and disruption to legitimate business operations — further exemplifying how the Department’s three core tenets will be practically applied. In support of this principle, Galeotti announced a new monitor selection memorandum that outlines the key factors prosecutors should consider when evaluating the appropriateness of a monitorship and emphasizes the importance of tailoring the monitor’s scope to the specific risks of future criminal conduct, thereby avoiding unnecessary expenses. The Department has also initiated a case-by-case review of all existing monitorships to assess their continued necessity.
Key Takeaways
To what extent these new focus areas and priorities will truly shift the DOJ’s operations remains to be seen. However, in light of the announcement, companies should consider the following measures:
Conduct an updated risk assessment and create or revise internal controls and policies to address specific risks that align with DOJ’s stated enforcement priorities.
Conduct an audit of the company’s compliance program to test and evaluate its effectiveness in preventing and detecting wrongdoing and make necessary policy and internal control changes to addresses any material weaknesses.
Review and update policies and processes around internal complaints. Ensuring that stakeholders are encouraged to raise complaints internally so that the company can review, investigate and can self-report if needed is more important than ever.
Assess and review internal investigation procedures to ensure efficient and thorough internal investigations to capitalize on self-disclosure benefits.
Galeotti’s full memorandum can be reviewed here.
Focus, Fairness and Efficiency: DOJ Reveals Administration’s Plans for Enforcement of Corporate and White-Collar Crime
Key Takeaways
DOJ Criminal Division will prioritize enforcement in key areas, including health care fraud, trade and customs violations and national security-related financial crimes.
Companies that voluntarily self-disclose, cooperate and remediate may qualify for declinations, reduced penalties and shortened compliance obligations even where aggravating factors are present.
Corporate compliance agreements will generally be capped at three years, with early termination available based on remediation, risk reduction and program maturity.
Independent compliance monitors will be imposed only when necessary and must be narrowly tailored to limit burden and business disruption.
On May 12, 2025, the Head of the Department of Justice’s (DOJ) Criminal Division, Matthew R. Galeotti, issued a memorandum detailing the Division’s enforcement priorities and policies for prosecuting corporate and white-collar crimes under the Trump administration.
The memorandum describes the need for the Division’s policies to “strike an appropriate balance” between investigating and prosecuting criminal wrongdoing “while minimizing unnecessary burdens on American enterprise.” In accordance with this position, the memorandum describes areas that the Division will be particularly focused on investigating and prosecuting, while also emphasizing the Division’s willingness to reduce criminal and civil sanctions when corporations self-disclose and cooperate with the government.
Overall, the memorandum describes enforcement priorities and associated policies that align with the Trump administration’s focus on rooting out government waste and abuse, toughening U.S. policy on foreign trade and combatting national security concerns such as drug trafficking and foreign crime organizations, citing to several executive orders on these topics.
The Criminal Division’s “Areas of Focus” include:
Federal program fraud, waste and abuse—specifically health care fraud and procurement fraud;
Trade and customs fraud, including tariff evasion;
Fraud perpetrated through variable interest entities (VIEs), including schemes targeting elders, “ramp and dumps,” and other forms of market manipulation;
Fraud that victimizes U.S. investors, individuals and markets, such as Ponzi schemes, schemes targeting elders and servicemembers and fraud that threatens consumer health and safety;
Financial institutions that commit sanctions violations or enable transactions by Transnational Criminal Organizations (TCOs), drug cartels, hostile nation-states and/or foreign terrorist organizations;
Corporations that provide “material support” to foreign terrorist organizations, cartels and TCOs;
Complex money laundering schemes—specifically referencing “Chinese Money Laundering Organizations” and other organizations involved in laundering money used in the manufacturing of illegal drugs;
Violations of the Controlled Substances Act and the Federal Food, Drug, and Cosmetic Act, including the unlawful manufacture and distribution of products used to create counterfeit pills containing fentanyl and the unlawful distribution of opioids by medical professionals and companies;
Bribery that impacts U.S. national interests, undermines U.S. national security and harms the competitiveness of the U.S.; and
Crimes involving the use of digital assets—with cases impacting victims, involving cartels, TCOs, or terrorist groups or facilitating drug money laundering or sanctions evasion receiving the highest priority.
After outlining the Criminal Division’s investigation and prosecution priorities, the memorandum indicates that the Department will take a more relaxed approach to misconduct committed by corporations that are willing to report such conduct, cooperate with the government and take actions to remediate the misconduct. In fact, these are factors that Criminal Division prosecutors must now consider when determining whether to bring criminal charges against corporations.
The memorandum further states that the Division’s Corporate Enforcement and Voluntary Self-Disclosure Policy will be revised to clarify additional benefits that are available to companies that self-disclose and cooperate with the government and will provide a “more easily understandable” path for declination and fine reductions. As part of this effort, the Criminal Division’s Fraud Section and Money Laundering and Asset Recovery Section have been instructed to review all existing corporate compliance agreements to determine if they should be terminated early. Facts that these Sections may consider when determining whether early termination is warranted include the duration of the post-resolution period, a substantial reduction in the company’s risk profile, the extent of remediation and maturity of the compliance program and whether the company self-reported the misconduct.
Additionally, Division attorneys must consider several factors when imposing terms for corporate compliance agreements, including the severity of the misconduct, the company’s degree of cooperation and remediation and the effectiveness of the company’s compliance program at the time of resolution. The memorandum provides that the terms of such agreements should not exceed three years “except in exceedingly rare cases,” and Division attorneys should assess these agreements regularly to determine if they should be terminated early.
Lastly, the memorandum provides policy changes with respect to the use of independent compliance monitors. Namely, the Division will only impose such monitoring when necessary, for example, when a company cannot be expected to implement an effective compliance program or prevent recurrence of the underlying misconduct, and the monitoring must be narrowly tailored to minimize expense, burden and interference with business.
Mr. Galeotti discussed these policy changes while speaking at the Securities Industry and Financial Markets Association’s Anti-Money Laundering and Financial Crimes Conference on May 13, 2025, stating that companies will now have a “clear path to declination” through self-disclosure, full cooperation with the government and timely remediation. Galeotti stated that even companies with aggravating circumstances may receive declination if the company’s cooperation and remediation outweigh these circumstances. Furthermore, Galeotti indicated that even companies that self-disclose after the government has become aware of their misconduct can still qualify for shorter-term compliance agreements, fine reduction and lessened monitoring.
Taken together, this memorandum and other guidance issued by DOJ under the direction of U.S. Attorney General Pam Bondi, indicate that the Department intends to treat corporate misconduct outside certain areas of focus with a lighter hand, incentivizing corporations to be transparent with the government and, as stated in the Division’s memorandum, “learn from their mistakes.”
“AI Policy Roadmap” Released by AdvaMed to Guide Regulators
On March 14, 2025, AdvaMed, the MedTech Association, released its AI Policy Roadmap (the Roadmap) outlining policy priorities for Congress and the U.S. Food and Drug Administration (FDA). The impetus for the Roadmap was the recognition of the important role that AI-enabled devices will play in improving the accuracy and efficiency of disease diagnosis, enabling higher quality treatments, and expanding access to health care and to innovative technologies. The Roadmap is broken down into three main policy priority areas: privacy and data access, FDA AI regulatory framework, and reimbursement and coverage.
Privacy and Data Access
The Roadmap contends that one component of AI-enabled devices that sets them apart from traditional technology is the need for large datasets to train and validate the algorithms underlying the devices. The need for large datasets creates two distinct challenges.
First, health care data is highly fragmented and generally stored in non-standardized formats. Health care data is not frequently shared across health systems, and there are very few commercial vendors that provide the services necessary to link and standardize this data.
The second significant challenge is the need to protect patient privacy and ensure that data security is prioritized. To this end, the Health Insurance Portability and Accountability Act of 1996 (HIPAA) requires protection of certain types of personal health information, consent to use and/or disclose data, and strict deidentification requirements when personal health information is used. The need for high quality data measured against the need to protect patient privacy creates an inherent tension in policy priorities.
To mitigate this tension, the Roadmap provides three recommendations:
Congress and regulatory agencies such as the FDA should ensure data protection without stifling innovation.
Congress should evaluate the need to update HIPAA for the AI era and create clear guidelines specifically for data use in AI development.
Congress and regulatory agencies should develop appropriate guidelines around patient notice and authorization for the data used to develop AI.
The Roadmap strives to balance the need for a high volume of high quality standardized data with patient privacy by placing modernized consent and notification requirements at the center of the policy priorities. Recognizing the need for large datasets, the Roadmap emphasizes modernizing traditional privacy policies, such as HIPAA, to accommodate data use and collection for AI models.
FDA AI Regulatory Framework
The FDA regulates certain AI-enabled devices for safety and efficacy. However, AI-enabled devices require a different approach than FDA’s “traditional” medical device review model for those devices that undergo changes in an iterative fashion. For approved medical devices that evolve continuously, e.g., AI-enabled devices, developers must submit for FDA review any modification that could significantly affect the product’s safety or effectiveness, consistent with FDA-drafted guidance on the preapproval process for post-market changes – referred to as predetermined change control plans (PCCP). These post-market changes occur as algorithms continue to learn and validate against the data of the populations using the technology. The algorithms then adjust based on continued learning. While Congress passed legislation authorizing PCCP approval in 2022, comprehensive FDA PCCP guidance was only released in December of 2024. The complete pre- and post-market processes for AI-enabled devices are outlined in the FDA’s “Artificial Intelligence-Enabled Device Software Functions: Lifecycle Management and Marketing Submission Recommendations.”
The Roadmap’s recommendations suggest that FDA modernize regulations to align with the increasing shift from traditional medical devices to AI-enabled devices. Specifically, the Roadmap recommends that:
The FDA should remain the lead regulator responsible for overseeing the safety and effectiveness of AI-enabled medical devices.
The FDA should implement the existing PCCP authority to ensure it achieves its intended purpose of ensuring patients have timely access to positive product updates.
The FDA should issue timely and current AI guidance documents related to AI-enabled devices and to prioritize the development and recognition of voluntary international consensus standards.
The FDA should establish a globally harmonized approach to regulatory oversight of AI-enabled devices.
The Roadmap commends progress made by Congress and the FDA to modernize legislative and regulatory processes applicable to AI-enabled devices but urges continued focus on keeping pace with technological innovation. The focus of the policy recommendations is on streamlined, uniform regulations that are not overly burdensome and will not stifle innovation.
Reimbursement and Coverage
Finally, the third policy area addressed in the Roadmap is reimbursement and coverage as a critical component of increasing access to digital health technologies. Currently, reimbursement for AI-enabled devices has been considered on a device-specific basis, leading to incremental policy changes. The Roadmap suggests that Medicare, as the country’s largest health care payor supporting the medical needs of millions of Americans, could be instrumental in shifting this policy position. Further, Medicare policy initiatives heavily influence the coverage policies of private payors and state Medicaid plans. While the Roadmap acknowledges that there is no one single policy solution to increase accessibility to digital health technology through reimbursement, “accurately capturing the cost and value of [AI-enabled devices] is critical to ensuring appropriate reimbursement.”
Toward this end, the Roadmap provides five policy suggestions:
Congress should consider legislative solutions to address the impact of budget neutrality constraints, or restraining Medicare spending to a certain defined threshold, on the coverage and adoption of AI technologies.
The Centers for Medicare & Medicaid Services (CMS) should develop a formalized payment pathway for algorithm-based health care services to ensure future innovation and to protect access to this subset of AI technologies for Medicare beneficiaries.
To ensure future innovation and to protect access to algorithm-based health care services for Medicare beneficiaries, CMS should develop a formalized payment pathway for algorithm-based health care services.
Congress and the FDA should facilitate the adoption and reimbursement of digital therapeutics through legislation and regulation.
CMS should leverage its authority to test innovative alternative payment models to promote the ability of AI technologies to improve patient care and/or lower costs.
The development and adoption of AI-enabled devices to improve diagnosis, treatment, and patient care will be amplified by the adoption of appropriate reimbursement policies as health care providers and practitioners will be more readily able to learn about and use these health care tools. Sound reimbursement and coverage policies are an integral part of supporting innovation and development of AI-enabled health care devices.
Conclusion
In a recent press release, Scott Whitaker, AdvaMed CEO and President said about the release of the Roadmap, “The future of AI applications in medtech is vast and bright. It’s also mostly to be determined. We’re in an era of discovery… This is the right time to promote the development of AI-enabled medtech to its fullest potential to serve all patients, regardless of zip code or circumstance.” It is from this position of promoting new technology that AdvaMed urges Congress and the Food and Drug Administration to act in support of the development of AI-enabled medical technology.