[Federal Register Volume 83, Number 80 (Wednesday, April 25, 2018)]
[Rules and Regulations]
[Pages 17925-17930]
[FR Doc No: 2018-08695]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 180

[EPA-HQ-OPP-2016-0661; FRL-9974-42]

Chlormequat Chloride; Pesticide Tolerances

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: This regulation establishes tolerances for residues of
chlormequat chloride in or on multiple commodities which are identified
and discussed later in this document. Taminco US LLC, a subsidiary of
Eastman Chemical Company requested these tolerances under the Federal
Food, Drug, and Cosmetic Act (FFDCA).

DATES: This regulation is effective April 25, 2018. Objections and
requests for hearings must be received on or before June 25, 2018, and
must be filed in accordance with the instructions provided in 40 CFR
part 178 (see also Unit I.C. of the SUPPLEMENTARY INFORMATION).

ADDRESSES: The docket for this action, identified by docket
identification (ID) number EPA-HQ-OPP-2016-0661, is available at http://www.regulations.gov or at the Office of Pesticide Programs Regulatory
Public Docket (OPP Docket) in the Environmental Protection Agency
Docket Center (EPA/DC), West William Jefferson Clinton Bldg., Rm. 3334,
1301 Constitution Ave. NW, Washington, DC 20460-0001. The Public
Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through
Friday, excluding legal holidays. The telephone number for the Public
Reading Room is<PHONE_NUMBER>, and the telephone number for the OPP
Docket is<PHONE_NUMBER>. Please review the visitor instructions and
additional information about the docket available at http://www.epa.gov/dockets.

FOR FURTHER INFORMATION CONTACT: Michael Goodis, Registration Division
(7505P), Office of Pesticide Programs, Environmental Protection Agency,
1200 Pennsylvania Ave. NW, Washington, DC 20460-0001; main telephone
number:<PHONE_NUMBER>; email address: [email protected].

SUPPLEMENTARY INFORMATION:

I. General Information

A. Does this action apply to me?

    You may be potentially affected by this action if you are an
agricultural producer, food manufacturer, or pesticide manufacturer.
The following list of North American Industrial Classification System
(NAICS) codes is not intended to be exhaustive, but rather provides a
guide to help readers determine whether this document applies to them.
Potentially affected entities may include:
     Crop production (NAICS code 111).
     Animal production (NAICS code 112).
     Food manufacturing (NAICS code 311).
     Pesticide manufacturing (NAICS code 32532).

B. How can I get electronic access to other related information?

    You may access a frequently updated electronic version of EPA's
tolerance regulations at 40 CFR part 180 through the Government
Printing Office's e-CFR site at http://www.ecfr.gov/cgi-bin/text-idx?&c=ecfr&tpl=/ecfrbrowse/Title40/40tab_02.tpl.

C. How can I file an objection or hearing request?

    Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an
objection to any aspect of this regulation and may also request a
hearing on those objections. You must file your objection or request a
hearing on this regulation in accordance with the instructions provided
in 40 CFR part 178. To ensure proper receipt by EPA, you must identify
docket ID number EPA-HQ-OPP-2016-0661 in the subject line on the first
page of your submission. All objections and requests for a hearing must
be in writing, and must be received by the Hearing Clerk on or before
June 25, 2018. Addresses for mail and hand delivery of objections and
hearing requests are provided in 40 CFR 178.25(b).
    In addition to filing an objection or hearing request with the
Hearing Clerk as described in 40 CFR part 178, please submit a copy of
the filing (excluding any Confidential Business Information (CBI)) for
inclusion in the public docket. Information not marked confidential
pursuant to 40 CFR part 2 may be disclosed publicly by EPA without
prior notice. Submit the non-CBI copy of your objection or hearing
request, identified by docket ID number EPA-HQ-OPP-2016-0661, by one of
the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov.
Follow the online instructions for submitting comments. Do not submit
electronically any information you consider to be CBI or other
information whose disclosure is restricted by statute.
     Mail: OPP Docket, Environmental Protection Agency Docket
Center (EPA/DC), (28221T), 1200 Pennsylvania Ave. NW, Washington, DC
20460-0001.
     Hand Delivery: To make special arrangements for hand
delivery or delivery of boxed information, please follow the
instructions at http://www.epa.gov/dockets/contacts.html.
    Additional instructions on commenting or visiting the docket, along
with more information about dockets generally, is available at http://www.epa.gov/dockets.

II. Summary of Petitioned-For Tolerance

    In the Federal Register of February 7, 2017 (82 FR 9555) (FRL-9956-
86), EPA issued a document pursuant to FFDCA section 408(d)(3), 21
U.S.C. 346a(d)(3), announcing the filing of a pesticide petition (PP
6E8495) by Taminco US LLC, a subsidiary of Eastman Chemical Company,
Two Windsor Plaza, Suite 400, 7540 Windsor Dr., Allentown, PA 18195.
The petition requested that 40 CFR part 180 be amended by establishing
tolerances for residues of the plant regulator chlormequat chloride in
or on barley grain at 3 parts per million (ppm); bovine, sheep, goat-
fat at 0.06 ppm; bovine, sheep, goat-kidney at 0.5 ppm; bovine, sheep,
goat-liver at 0.15 ppm; bovine, sheep, goat-muscle at 0.2 ppm; cattle-
milk at 0.5 ppm; eggs at 0.1 ppm; oat grain at 15 ppm; poultry-fat at
0.03 ppm; poultry-liver at 0.1 ppm; poultry-muscle at 0.04 ppm; swine-
fat at 0.02 ppm; swine-kidney at 0.5 ppm; swine-liver at 0.15 ppm;
swine-muscle at 0.2 ppm; and wheat grain at 4 ppm. That document
referenced a summary of the petition prepared by Taminco US LLC, the
registrant, which is available in the docket, http://www.regulations.gov. Comments were received on the notice of filing.
EPA's response to these comments is discussed in Unit IV.C.
    Based upon review of the data supporting the petition, EPA has
modified the levels at which some of the tolerances are being
established as well as the commodities for which tolerances are being
established. The reasons for

these changes are explained in Unit IV.D.

III. Aggregate Risk Assessment and Determination of Safety

    Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a
tolerance (the legal limit for a pesticide chemical residue in or on a
food) only if EPA determines that the tolerance is ``safe.'' Section
408(b)(2)(A)(ii) of FFDCA defines ``safe'' to mean that ``there is a
reasonable certainty that no harm will result from aggregate exposure
to the pesticide chemical residue, including all anticipated dietary
exposures and all other exposures for which there is reliable
information.'' This includes exposure through drinking water and in
residential settings, but does not include occupational exposure.
Section 408(b)(2)(C) of FFDCA requires EPA to give special
consideration to exposure of infants and children to the pesticide
chemical residue in establishing a tolerance and to ``ensure that there
is a reasonable certainty that no harm will result to infants and
children from aggregate exposure to the pesticide chemical residue. . .
.''
    Consistent with FFDCA section 408(b)(2)(D), and the factors
specified in FFDCA section 408(b)(2)(D), EPA has reviewed the available
scientific data and other relevant information in support of this
action. EPA has sufficient data to assess the hazards of and to make a
determination on aggregate exposure for chlormequat chloride including
exposure resulting from the tolerances established by this action.
EPA's assessment of exposures and risks associated with chlormequat
chloride follows.

A. Toxicological Profile

    EPA has evaluated the available toxicity data and considered its
validity, completeness, and reliability as well as the relationship of
the results of the studies to human risk. EPA has also considered
available information concerning the variability of the sensitivities
of major identifiable subgroups of consumers, including infants and
children.
    Decreases in body weight and signs of neurotoxicity (e.g. ataxia,
salivation, decreased body temperature) were consistently observed in
the available oral repeat dosing studies in rats, mice, and dogs. Dogs
appear to be the most sensitive species with clinical signs of toxicity
(salivation, vomiting, and diarrhea) at 10 mg/kg/day in the chronic dog
study. Decreased body weights and/or decreased food consumption were
the only effects observed in the 90-day dietary rat study (190 mg/kg/
day), and in the chronic toxicity and carcinogenicity studies in rats
(125 mg/kg/day) and mice (363 mg/kg/day). The prenatal developmental
rat study (gavage), however, produced clinical signs such as salivation
and chromorhinorrhea, as well as decreased food consumption at 90 mg/
kg/day. One or more of these clinical signs were observed in the dams
typically within one hour after the single oral dose on gestational day
six (GD6). In the prenatal developmental toxicity study in rabbits,
there were no adverse effects noted up to the highest dose tested (12
mg/kg/day). In the rat two-generation reproduction study, reproductive
and offspring effects occurred at doses higher than those causing
parental toxicity.
    There was no quantitative or qualitative susceptibility observed in
the offspring compared to the adult animals in the rat and rabbit
developmental studies and the rat two-generation reproduction study.
    No systemic toxicity was observed in the 21-day dermal study in
rabbits when tested up to the limit dose. Dermal irritation and
histopathological lesions of the treated skin (acanthosis, subacute
inflammation and edema) was observed at 345 mg/kg/day in female rabbits
only. No immunotoxicity study was available; however, no evidence of
immunotoxicity was observed in the chlormequat chloride database.
    Carcinogenicity studies in mice and rats did not demonstrate
potential signs of carcinogenicity and chlormequat chloride was non-
mutagenic in four genotoxicity studies. Therefore, chlormequat chloride
is classified as ``Not Likely to be a Carcinogen to Human'' based on
the lack of evidence of carcinogenicity.
    Specific information on the studies received and the nature of the
adverse effects caused by chlormequat chloride as well as the no-
observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-
effect-level (LOAEL) from the toxicity studies can be found at http://www.regulations.gov in the document titled ``Chlormequat Chloride.
Human-Health Risk Assessment to Support Establishment of a Tolerance
Without U.S. Registration on Wheat, Barley, and Oats'' on pages 20-22
in docket ID number EPA-HQ-OPP-2016-0661.

B. Toxicological Points of Departure/Levels of Concern

    Once a pesticide's toxicological profile is determined, EPA
identifies toxicological points of departure (POD) and levels of
concern to use in evaluating the risk posed by human exposure to the
pesticide. For hazards that have a threshold below which there is no
appreciable risk, the toxicological POD is used as the basis for
derivation of reference values for risk assessment. PODs are developed
based on a careful analysis of the doses in each toxicological study to
determine the dose at which no adverse effects are observed (the NOAEL)
and the lowest dose at which adverse effects of concern are identified
(the LOAEL). Uncertainty/safety factors are used in conjunction with
the POD to calculate a safe exposure level--generally referred to as a
population-adjusted dose (PAD) or a reference dose (RfD)--and a safe
margin of exposure (MOE). For non-threshold risks, the Agency assumes
that any amount of exposure will lead to some degree of risk. Thus, the
Agency estimates risk in terms of the probability of an occurrence of
the adverse effect expected in a lifetime. For more information on the
general principles EPA uses in risk characterization and a complete
description of the risk assessment process, see http://www2.epa.gov/pesticide-science-and-assessing-pesticide-risks/assessing-human-health-risk-pesticides.
    A summary of the toxicological endpoints for chlormequat chloride
used for human risk assessment is shown in Table 1 of this unit.

   Table 1--Summary of Toxicological Doses and Endpoints for Chlormequat Chloride for Use in Human Health Risk
                                                   Assessment
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                                    Point of departure
        Exposure/scenario            and uncertainty/     RfD, PAD, LOC for     Study and toxicological effects
                                      safety factors       risk assessment
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Acute dietary (all populations)..  NOAEL = 100 mg/kg/    Acute RfD = 1 mg/kg/ Prenatal Developmental-Rat and
                                    day UFA = 10x.        day.                 acute neurotoxicity-rat.
                                   UFH = 10x...........  aPAD = 1 mg/kg/day.  1-Day oral LOAEL 180 mg/kg/day,
                                   FQPA SF = 1x........                        based on overt toxicity signs
                                                                               (tremors, ataxia) within an hour
                                                                               after a single oral dose in dams
                                                                               (GD 6).
Chronic dietary (All populations)  NOAEL= 5 mg/kg/day    Chronic RfD = 0.05   Chronic Toxicity--Dog.
                                    UFA = 10x.            mg/kg/day.          LOAEL (mg/kg/day): 10 mg/kg/day,
                                   UFH = 10x...........  cPAD = 0.05 mg/kg/    based on salivation (1-week post-
                                   FQPA SF = 1x........   day.                 dosing, both sexes), vomiting
                                                                               (females), diarrhea (males), and
                                                                               decreased body weight gain
                                                                               (males).
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Cancer (Oral, dermal, inhalation)  Classification: ``Not Likely to be Carcinogenic to Humans'' based on the lack
                                    of carcinogenic potential in the available studies.
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FQPA SF = Food Quality Protection Act Safety Factor. LOAEL = lowest-observed-adverse-effect-level. NOAEL = no-
  observed-adverse-effect-level. PAD = population adjusted dose (a = acute, c = chronic). RfD = reference dose.
  UF = uncertainty factor. UFA = extrapolation from animal to human (interspecies). UFH = potential variation in
  sensitivity among members of the human population (intraspecies).

C. Exposure Assessment

    1. Dietary exposure from food and feed uses. In evaluating dietary
exposure to chlormequat chloride, EPA considered exposure under the
petitioned-for tolerances. EPA assessed dietary exposures from
chlormequat chloride in food as follows:
    i. Acute exposure. Quantitative acute dietary exposure and risk
assessments are performed for a food-use pesticide, if a toxicological
study has indicated the possibility of an effect of concern occurring
as a result of a 1-day or single exposure.
    Such effects were identified for chlormequat chloride. In
estimating acute dietary exposure, EPA used food consumption
information from the U.S. Department of Agriculture's National Health
and Nutrition Examination Survey, What We Eat in America, (NHANES/
WWEIA). As to residue levels in food, EPA assumed tolerance-level
residues and 100 percent crop treated (PCT).
    ii. Chronic exposure. In conducting the chronic dietary exposure
assessment EPA used the food consumption data from the USDA's NHANES/
WWEIA. As to residue levels in food, EPA assumed tolerance-level
residues and 100 PCT.
    iii. Cancer. Based on the data summarized in Unit III.A., EPA has
concluded that chlormequat chloride does not pose a cancer risk to
humans. Therefore, a dietary exposure assessment for the purpose of
assessing cancer risk is unnecessary.
    iv. Anticipated residue and percent crop treated (PCT) information.
EPA did not use anticipated residue or PCT information in the dietary
assessment for chlormequat chloride. Tolerance-level residues and 100
PCT were assumed for all food commodities.
    2. Dietary exposure from drinking water. The Agency used screening-
level water exposure models in the dietary exposure analysis and risk
assessment for chlormequat chloride in drinking water. These simulation
models take into account data on the physical, chemical, and fate/
transport characteristics of chlormequat chloride. A total toxic
residue approach that assumes all uncharacterized extractable residues
are of equal toxicity to chlormequat chloride was used to estimate
exposure. Further information regarding EPA drinking water models used
in pesticide exposure assessment can be found at http://www2.epa.gov/pesticide-science-and-assessing-pesticide-risks/about-water-exposure-models-used-pesticide.
    Based on the First Index Reservoir Screening Tool (FIRST) and
Screening Concentration in Ground Water (SCI-GROW) models, the
estimated drinking water concentrations (EDWCs) of chlormequat chloride
for acute exposures are estimated to be 2574 parts per billion (ppb)
for surface water and 24 ppb for ground water and for chronic exposures
are estimated to be 91 ppb for surface water and 24 ppb for ground
water.
    Modeled estimates of drinking water concentrations were directly
entered into the dietary exposure model. For the acute dietary risk
assessment, the water concentration value of 2574 ppb was used to
assess the contribution to drinking water. For the chronic dietary risk
assessment, the water concentration of value 91 ppb was used to assess
the contribution to drinking water.
    3. From non-dietary exposure. The term ``residential exposure'' is
used in this document to refer to non-occupational, non-dietary
exposure (e.g., for lawn and garden pest control, indoor pest control,
termiticides, and flea and tick control on pets).
    Chlormequat chloride is not registered for any specific use
patterns that would result in residential exposure.
    4. Cumulative effects from substances with a common mechanism of
toxicity. Section 408(b)(2)(D)(v) of FFDCA requires that, when
considering whether to establish, modify, or revoke a tolerance, the
Agency consider ``available information'' concerning the cumulative
effects of a particular pesticide's residues and ``other substances
that have a common mechanism of toxicity.''
    EPA has not found chlormequat chloride to share a common mechanism
of toxicity with any other substances, and chlormequat chloride does
not appear to produce a toxic metabolite produced by other substances.
For the purposes of this tolerance action, therefore, EPA has assumed
that chlormequat chloride does not have a common mechanism of toxicity
with other substances. For information regarding EPA's efforts to
determine which chemicals have a common mechanism of toxicity and to
evaluate the cumulative effects of such chemicals, see EPA's website at
http://www2.epa.gov/pesticide-science-and-assessing-pesticide-risks/cumulative-assessment-risk-pesticides.

D. Safety Factor for Infants and Children

    1. In general. Section 408(b)(2)(C) of FFDCA provides that EPA
shall apply an additional tenfold (10X) margin of safety for infants
and children in the case of threshold effects to account for prenatal
and postnatal toxicity and the completeness of the database on toxicity
and exposure unless EPA determines based on reliable data that a
different

margin of safety will be safe for infants and children. This additional
margin of safety is commonly referred to as the Food Quality Protection
Act Safety Factor (FQPA SF). In applying this provision, EPA either
retains the default value of 10X, or uses a different additional safety
factor when reliable data available to EPA support the choice of a
different factor.
    2. Prenatal and postnatal sensitivity. There was no quantitative or
qualitative susceptibility observed in the offspring compared to the
adult animals in the rat and rabbit developmental studies and the rat
two-generation reproduction study.
    3. Conclusion. EPA has determined that reliable data show the
safety of infants and children would be adequately protected if the
FQPA SF were reduced to 1x. That decision is based on the following
findings:
    i. The toxicity database for chlormequat chloride is complete.
    ii. Although a subchronic neurotoxicity study is not available,
evidence of neurotoxicity was observed in the acute neurotoxicity,
developmental rat, two-generation reproduction and chronic dog studies.
However, there is a low degree of concern for the potential neurotoxic
effects of chlormequat chloride because clear no observed adverse
effect levels (NOAELs) were identified for the neurotoxic effects, and
the endpoints chosen for risk assessment are protective of any
potential neurotoxicity.
    iii. There is no evidence that chlormequat chloride results in
increased susceptibility in in utero rats or rabbits in the prenatal
developmental studies or in young rats in the 2-generation reproduction
study.
    iv. There are no residual uncertainties identified in the exposure
databases. The dietary food exposure assessments were performed based
on 100 PCT and tolerance-level residues. EPA made conservative
(protective) assumptions in the ground and surface water modeling used
to assess exposure to chlormequat chloride in drinking water. These
assessments will not underestimate the exposure and risks posed by
chlormequat chloride.

E. Aggregate Risks and Determination of Safety

    EPA determines whether acute and chronic dietary pesticide
exposures are safe by comparing aggregate exposure estimates to the
acute PAD (aPAD) and chronic PAD (cPAD). For linear cancer risks, EPA
calculates the lifetime probability of acquiring cancer given the
estimated aggregate exposure. Short-, intermediate-, and chronic-term
risks are evaluated by comparing the estimated aggregate food, water,
and residential exposure to the appropriate PODs to ensure that an
adequate MOE exists.
    1. Acute risk. Using the exposure assumptions discussed in this
unit for acute exposure, the acute dietary exposure from food and water
to chlormequat chloride will occupy 49% of the aPAD for all infants
less than 1-year-old, the population group receiving the greatest
exposure.
    2. Chronic risk. Using the exposure assumptions described in this
unit for chronic exposure, EPA has concluded that chronic exposure to
chlormequat chloride from food and water will utilize 86% of the cPAD
for children 1-2 years old, the population group receiving the greatest
exposure. There are no residential uses for chlormequat chloride.
    3. Short- and intermediate-term risk. Short- and intermediate-term
aggregate exposure takes into account short- and intermediate-term
residential exposure plus chronic exposure to food and water
(considered to be a background exposure level).
    Short- and intermediate-term adverse effects were identified;
however, chlormequat chloride is not registered for any use patterns
that would result in either short- or intermediate-term residential
exposure. Short- and intermediate-term risk is assessed based on short-
and intermediate-term residential exposure plus chronic dietary
exposure. Because there is no short- or intermediate-term residential
exposure and chronic dietary exposure has already been assessed under
the appropriately protective cPAD (which is at least as protective as
the POD used to assess short-term risk), no further assessment of
short- or intermediate-term risk is necessary, and EPA relies on the
chronic dietary risk assessment for evaluating short- and intermediate-
term risk for chlormequat chloride.
    4. Aggregate cancer risk for U.S. population. Based on the lack of
evidence of carcinogenicity in two adequate rodent carcinogenicity
studies, chlormequat chloride is not expected to pose a cancer risk to
humans.
    5. Determination of safety. Based on these risk assessments, EPA
concludes that there is a reasonable certainty that no harm will result
to the general population, or to infants and children from aggregate
exposure to chlormequat chloride residues.

IV. Other Considerations

A. Analytical Enforcement Methodology

    Plant: An adequate high performance liquid chromatography method
with tandem mass spectrometry detection (HPLC/MS/MS), BASF Method No.
530/0, is available for the determination of residues of chlormequat
chloride in/on plant commodities. The HPLC/MS/MS method determines
residues as the chlormequat cation. The limit of quantitation (LOQ) is
0.05 ppm for plant commodities other than straw and 0.1 ppm for straw.
    Animal: An adequate LC/MS/MS method, BASF Method No. 397/0 is
available for the determination of residues of chlormequat chloride in
livestock commodities for enforcement purposes. The LOQ is 0.01 ppm for
meat, kidney, fat, milk, and egg, and 0.05 ppm for liver. A method
description, method validation data, and an independent laboratory
validation have been submitted to support the proposed enforcement
method.
    The method may be requested from: Chief, Analytical Chemistry
Branch, Environmental Science Center, 701 Mapes Rd., Ft. Meade, MD
20755-5350; telephone number:<PHONE_NUMBER>; email address:
[email protected].

B. International Residue Limits

    In making its tolerance decisions, EPA seeks to harmonize U.S.
tolerances with international standards whenever possible, consistent
with U.S. food safety standards and agricultural practices. EPA
considers the international maximum residue limits (MRLs) established
by the Codex Alimentarius Commission (Codex), as required by FFDCA
section 408(b)(4). The Codex Alimentarius is a joint United Nations
Food and Agriculture Organization/World Health Organization food
standards program, and it is recognized as an international food safety
standards-setting organization in trade agreements to which the United
States is a party. EPA may establish a tolerance that is different from
a Codex MRL; however, FFDCA section 408(b)(4) requires that EPA explain
the reasons for departing from the Codex level.
    The Codex has established MRLs for chlormequat chloride in or on
the commodities referenced in this document at the same levels as the
tolerances established for chlormequat chloride in this rule.

C. Response to Comments

    Two comments were received in response to the notice of filing. One
noted that ``these are of a highly technical nature and should be
written in a format that the layperson can understand.'' The other
comment stated that ``there should not be ANY residue of chlormequat
chloride on ANY commodity, ever.''
    The first comment does not materially impact this establishment of
these tolerances. Concerning the second comment, although the Agency
recognizes that some individuals believe that pesticides should be
banned on agricultural crops, the existing legal framework provided by
section 408 of the Federal Food, Drug and Cosmetic Act (FFDCA)
authorizes EPA to establish tolerances when it determines that the
tolerance is safe. Upon consideration of the validity, completeness,
and reliability of the available data as well as other factors the
FFDCA requires EPA to consider, EPA has determined that these
chlormequat chloride tolerances are safe. The commenter has provided no
information supporting a contrary conclusion.

D. Revisions to Petitioned-For Tolerances

    The petitioner requested tolerances for several animal commodities
in addition to the barley, oat, and wheat grain tolerances. The Agency
has determined that tolerances are only needed on meat and meat
byproducts to cover the liver and kidney tissues. In addition, based on
residue data and using the Organisation for Economic Cooperation and
Development calculator, the Agency is establishing tolerances for the
barley, oat, and wheat grain commodities at levels that harmonize with
Codex MRLs. In addition, EPA is revising the commodity terminology used
by the petitioner to be consistent with the commodity vocabulary EPA
uses for establishing tolerances.

V. Conclusion

    Therefore, tolerances are established for residues of chlormequat
chloride, in or on barley, grain at 2.0 ppm; cattle, meat byproduct at
0.50 ppm; cattle, meat at 0.20 ppm; egg at 0.10 ppm; goat, meat
byproduct at 0.50 ppm; goat, meat at 0.20 ppm; hog, meat byproduct at
0.50 ppm; hog, meat at 0.20 ppm; milk at 0.50 ppm; oat, grain at 10
ppm; poultry, meat byproduct at 0.10 ppm; poultry, meat at 0.04 ppm;
sheep, meat byproduct at 0.50 ppm; sheep, meat at 0.20 ppm; and wheat,
grain at 3.0 ppm.

VI. Statutory and Executive Order Reviews

    This action establishes tolerances under FFDCA section 408(d) in
response to a petition submitted to the Agency. The Office of
Management and Budget (OMB) has exempted these types of actions from
review under Executive Order 12866, entitled ``Regulatory Planning and
Review'' (58 FR 51735, October 4, 1993). Because this action has been
exempted from review under Executive Order 12866, this action is not
subject to Executive Order 13211, entitled ``Actions Concerning
Regulations That Significantly Affect Energy Supply, Distribution, or
Use'' (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled
``Protection of Children from Environmental Health Risks and Safety
Risks'' (62 FR 19885, April 23, 1997), nor is it considered a
regulatory action under Executive Order 13771, entitled ``Reducing
Regulations and Controlling Regulatory Costs'' (82 FR 9339, February 3,
2017). This action does not contain any information collections subject
to OMB approval under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501
et seq.), nor does it require any special considerations under
Executive Order 12898, entitled ``Federal Actions to Address
Environmental Justice in Minority Populations and Low-Income
Populations'' (59 FR 7629, February 16, 1994).
    Since tolerances and exemptions that are established on the basis
of a petition under FFDCA section 408(d), such as the tolerance in this
final rule, do not require the issuance of a proposed rule, the
requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et
seq.), do not apply.
    This action directly regulates growers, food processors, food
handlers, and food retailers, not States or tribes, nor does this
action alter the relationships or distribution of power and
responsibilities established by Congress in the preemption provisions
of FFDCA section 408(n)(4). As such, the Agency has determined that
this action will not have a substantial direct effect on States or
tribal governments, on the relationship between the national government
and the States or tribal governments, or on the distribution of power
and responsibilities among the various levels of government or between
the Federal Government and Indian tribes. Thus, the Agency has
determined that Executive Order 13132, entitled ``Federalism'' (64 FR
43255, August 10, 1999) and Executive Order 13175, entitled
``Consultation and Coordination with Indian Tribal Governments'' (65 FR
67249, November 9, 2000) do not apply to this action. In addition, this
action does not impose any enforceable duty or contain any unfunded
mandate as described under Title II of the Unfunded Mandates Reform Act
(UMRA) (2 U.S.C. 1501 et seq.).
    This action does not involve any technical standards that would
require Agency consideration of voluntary consensus standards pursuant
to section 12(d) of the National Technology Transfer and Advancement
Act (NTTAA) (15 U.S.C. 272 note).

VII. Congressional Review Act

    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.),
EPA will submit a report containing this rule and other required
information to the U.S. Senate, the U.S. House of Representatives, and
the Comptroller General of the United States prior to publication of
the rule in the Federal Register. This action is not a ``major rule''
as defined by 5 U.S.C. 804(2).

List of Subjects in 40 CFR Part 180

    Environmental protection, Administrative practice and procedure,
Agricultural commodities, Pesticides and pests, Reporting and
recordkeeping requirements.

    Dated: April 6, 2018,
Michael L. Goodis,
Director, Registration Division, Office of Pesticide Programs.

    Therefore, 40 CFR chapter I is amended as follows:

PART 180--[AMENDED]

0
1. The authority citation for part 180 continues to read as follows:

    Authority: 21 U.S.C. 321(q), 346a and 371.

0
2. Add Sec.  180.698 to subpart C to read as follows:

Sec.  [emsp14]180.698   Chlormequat chloride; tolerances for residues.

    (a) General. Tolerances are established for the residues of the
plant regulator chlormequat chloride, including its metabolites and
degradates in or on food commodities in the table below. Compliance
with the tolerance levels specified below is to be determined by
measuring only chlormequat chloride [(2-chloroethyl) trimethylammonium
chloride in or on the following commodities:

------------------------------------------------------------------------
                                                               Parts per
                          Commodity                             million
------------------------------------------------------------------------
Barley, grain \1\............................................        2.0
Cattle, meat byproduct \1\...................................       0.50
Cattle, meat \1\.............................................       0.20
Egg \1\......................................................       0.10

Goat, meat byproduct \1\.....................................       0.50
Goat, meat \1\...............................................       0.20
Hog, meat byproduct \1\......................................       0.50
Hog, meat \1\................................................       0.20
Milk \1\.....................................................       0.50
Oat, grain \1\...............................................         10
Poultry, meat byproduct \1\..................................       0.10
Poultry, meat \1\............................................       0.04
Sheep, meat byproduct \1\....................................       0.50
Sheep, meat \1\..............................................       0.20
Wheat, grain \1\.............................................        3.0
------------------------------------------------------------------------
\1\ There are no U.S. registrations for this commodity as of April 25,
  2018.

    (b) Section 18 emergency exemptions. [Reserved]
    (c) Tolerances with regional registrations. [Reserved]
    (d) Indirect or inadvertent residues. [Reserved]

[FR Doc. 2018-08695 Filed 4-24-18; 8:45 am]
 BILLING CODE 6560-50-P


[Federal Register Volume 77, Number 173 (Thursday, September 6, 2012)]
[Rules and Regulations]
[Pages 54798-54800]
[FR Doc No: 2012-21289]

-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2011-1065; Directorate Identifier 2011-NM-007-AD;
Amendment 39-17175; AD 2012-17-12]
RIN 2120-AA64

Airworthiness Directives; The Boeing Company Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: We are adopting a new airworthiness directive (AD) for certain
The Boeing Company Model 747-400 series airplanes. This AD was prompted
by reports of water leaking into electrical and electronic equipment in
the main equipment center (MEC). This AD requires modifying the floor
panels; removing drains; installing floor supports, floor drain trough
doublers, drain troughs, and drains; and sealing and taping the floor
panels. We are issuing this AD to prevent water from entering the MEC,
which could result in an electrical short and potential loss of several
functions essential for safe flight.

DATES: This AD is effective October 11, 2012.
    The Director of the Federal Register approved the incorporation by
reference of a certain publication listed in the AD as of October 11,
2012.

ADDRESSES: For service information identified in this AD, contact
Boeing Commercial Airplanes, Attention: Data & Services Management,
P.O. Box 3707, MC 2H-65, Seattle, Washington 98124-2207; phone: 206-
544-5000, extension 1; fax:<PHONE_NUMBER>; Internet: https://www.myboeingfleet.com. You may review copies of the referenced service
information at the FAA, Transport Airplane Directorate, 1601 Lind
Avenue SW., Renton, Washington. For information on the availability of
this material at the FAA, call<PHONE_NUMBER>.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov; or in person at the Docket Management Facility
between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays. The AD docket contains this AD, the regulatory evaluation,
any comments received, and other information. The address for the
Docket Office (phone:<PHONE_NUMBER>) is Document Management Facility,
U.S. Department of Transportation, Docket Operations, M-30, West
Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE.,
Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT: Francis Smith, Aerospace Engineer,
Cabin Safety & Environmental Systems Branch, ANM-150S, Seattle Aircraft
Certification Office (ACO), FAA, 1601 Lind Avenue SW., Renton,
Washington 98057-3356; phone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>; email:
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Discussion

    We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR
part 39 to include an AD that would apply to the specified products.
That NPRM was published in the Federal Register on October 11, 2011 (76
FR 62667). That NPRM proposed to require modifying the floor panels;
removing drains; installing floor supports, floor drain trough
doublers, drain troughs, and drains; and sealing and taping the floor
panels.

Comments

    We gave the public the opportunity to participate in developing
this AD. The following presents the comment received on the proposal
(76 FR 62667, October 11, 2011) and the FAA's response to each comment.

Concurrence With NPRM (76 FR 62667, October 11, 2011)

    Boeing stated that it has reviewed the NPRM (76 FR 62667, October
11, 2011) and concurs with the contents of the proposed rule.

Request To Withdraw NPRM (76 FR 62667, October 11, 2011): Unsafe
Condition Already Addressed

    UPS stated it believes the NPRM (76 FR 62667, October 11, 2011) is
unnecessary and increases the economic burden on operators because the
unsafe condition of water leaking into the MEC is already addressed in
AD 2011-16-06, Amendment 39-16764 (76 FR 47427, August 5, 2011). UPS
noted that an intact MEC drip shield should prevent water from leaking
onto the electronic and electrical equipment, thereby eliminating the
need for additional rulemaking.
    UPS also noted that it finds the NPRM (76 FR 62667, October 11,
2011) problematic because it establishes an AD-mandated configuration
for floor panel sealing in the nose section of Model 747-400BCF and
747-400F airplanes that is different from the floor sealing criteria
for the center and aft sections of the same airplanes.
    We do not agree with the request to withdraw the NPRM (76 FR 62667,
October 11, 2011). While we recognize that most of the airplanes
affected by this AD are also affected by AD 2011-16-06, Amendment 39-
16764 (76 FR 47427, August 5, 2011), water intrusion into the MEC
addressed by the NPRM is in locations and by means different than those
addressed by AD 2011-16-06. AD 2011-16-06 addresses water intrusion
that migrates through cracked drip shields into the exhaust plenum and
the MEC, and affects stations 117 and 118 for certain Model 747-400BCF
and 747-400F airplanes. The NPRM addresses water intrusion through main
deck panels, fasteners and floor fittings, and affects stations 210 and
530 for certain Model 747-400BCF and -400F airplanes.
    We found the safety risk to be sufficient enough to require a
specific floor sealing criteria to the affected areas. While a possible
loss of uniform floor sealing criteria throughout the airplane may
result, this AD action is necessary to adequately address the stated
unsafe condition to the vulnerable areas. Operators seeking to
establish more uniform floor panel sealing criteria may submit a
request for an alternative method of compliance (AMOC) as specified in
paragraph (h) of the AD. We have not changed the final rule in this
regard.

Request To Withdraw NPRM (76 FR 62667, October 11, 2011): Low Risk of
Water Intrusion

    In addition, UPS stated that the probability for water intrusion on
the forward section of Model 747-400BCF airplanes is overstated because
these models do not have a nose cargo door like Model 747-400F
airplanes. Therefore, Model 747-400BCF airplanes are not as susceptible
to moisture entering the forward area of the main deck cargo
compartment during cargo loading in adverse weather conditions.
    We do not agree. Both water intrusion safety concerns were studied
separately based on reports submitted from multiple operators. The data
were reviewed based on the location and causes of the water intrusion.
Based on the frequency of reported failures, severity of outcome, and
airplane usage, both studies showed an unacceptable and unsafe
condition if left uncorrected. Addressing only one source of water
intrusion neither precludes nor diminishes the probability of the
other. We have not changed the final rule in this regard.

Request To Withdraw NPRM (76 FR 62667, October 11, 2011): Revise
Operational Procedures

    UPS also stated that proper ground operational procedures will
significantly reduce water accumulation in the nose area, either
through the main entry door or on pallets or containers.
    We infer that UPS requested withdrawal of the NPRM (76 FR 62667,
October 11, 2011) in favor of revised ground operational procedures. We
do not agree that revising operational procedures to avoid the
identified unsafe condition is a consistent or reliable method in
precluding what is inherently a safety risk through design. In
determining a corrective action, Boeing and the FAA agreed that a
design solution, instead of an operational solution, provides the best
method to address the identified unsafe condition. No change to the
final rule is necessary.

Request To Withdraw NPRM (76 FR 62667, October 11, 2011): Conflict With
Aircraft Maintenance Manual (AMM)

    UPS also stated that Figures 18 and 23 of Boeing Special Attention
Service Bulletin 747-25-3586, dated November 12, 2010, specify that
different materials be used in lieu of those called out in Section 53-
21-02 of the Boeing Model 747-400 AMM. UPS stated that by not allowing
operators to use the AMM, the NPRM (76 FR 62667, October 11, 2011)
would put the UPS mechanics in an untenable situation. Mechanics
following AMM procedures in the nose area of these two airplanes would
unknowingly be altering an AD-mandated configuration.
    We do not agree because an AD-mandated configuration always takes
precedence over AMMs. When there is a conflict between an AD
requirement and service document, the operator must always comply with
the requirements of the AD, as explicitly stated in the requirements of
Federal Aviation Regulations 14 CFR 39.27. We have not changed the
final rule in this regard.

Request To Allow Alternative Floor Sealing Procedures

    UPS noted that it and other operators have developed improved
alternative floor panel sealing procedures based on years of
operational experience with cargo aircraft. UPS stated that the NPRM
(76 FR 62667, October 11, 2011) would mandate a Boeing floor sealing
procedure that appears optimized for passenger aircraft flooring, which
is not as effective as the procedures UPS uses today. UPS noted that
this situation creates more of a regulatory problem with maintaining an
AD-mandated condition than a safety of flight condition, as there are
many ways to adequately seal the floor panels to prevent moisture
intrusion. UPS noted that obtaining an alternative method of compliance
(AMOC) approval for a floor sealing procedure presents another undue
regulatory burden on operators.
    We recognize the different methods operators currently use for
floor panel sealing procedures to mitigate this safety concern.
However, the frequency of failures reported when using these different
methods underscores the importance of providing an acceptable method
for operators to follow in reducing the safety risk. Under the
provisions of paragraph (h) of the final rule, we will consider
requests for approval of an AMOC if sufficient data are submitted to
substantiate that alternative method of sealing floor panels to prevent
moisture intrusion would provide an acceptable level of safety. We have
not changed the final rule in this regard.

Request for Revised Service Information

    UPS submitted the following list of technical errors found in
Boeing Special Attention Service Bulletin 747-25-3586, dated November
12, 2010, and requested that a revision to this service information be
issued to address them.
     The fastener quantities specified in the fastener table in
figure 7 are incorrect.
     Figure 17 specifies installing the modified floor panels
with new fasteners, followed by figure 18, which specifies removing and
reinstalling all floor panels between station 140 and station 640.
Figure 18 should specify excluding those floor panels installed as
shown in figure 17.
     Figure 8, Detail G, and figure 14, Detail K, should show
the doubler and the support, not just the doubler.
    We acknowledge and agree that there are certain technical errors
identified in the figures of Boeing Special Attention Service Bulletin
747-25-3586, dated November 12, 2010. We have contacted Boeing and it
has acknowledged the list of technical issues identified. We consider
Boeing Special Attention Service Bulletin 747-25-3586, dated November
12, 2010, adequate to address the identified unsafe condition; and this
service information was validated by Boeing on an airplane. Different
operators may see different numbers of necessary fasteners and will
have to submit an AMOC if their configuration deviates from Boeing
Special Attention Service Bulletin 747-25-3586, dated November 12,
2010, instructions. Boeing stated it will address the issues in a
Boeing service bulletin revision or other service document to provide
clarity in the work steps. We have not changed the final rule in this
regard.

Conclusion

    We reviewed the relevant data, considered the comments received,
and determined that air safety and the public interest require adopting
the AD as proposed.

Costs of Compliance

    We estimate that this AD affects 12 airplanes of U.S. registry.
    We estimate the following costs to comply with this AD:

                                                 Estimated Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Cost on U.S.
              Action                    Labor cost        Parts cost    Cost per product          operators
----------------------------------------------------------------------------------------------------------------
Floor panel reworking and          Up to 644 work-hours      $64,033  Up to $118,773......  Up to $1,425,276.
 sealing; installing drains,        x $85 per hour =
 drain trough doublers, and drain   $54,740.
 troughs.
----------------------------------------------------------------------------------------------------------------

    According to the manufacturer, some of the costs of this AD may be
covered under warranty, thereby reducing the cost impact on affected
individuals. We do not control warranty coverage for affected
individuals. As a result, we have included all costs in our cost
estimate.

Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, section 106, describes the
authority of the FAA Administrator. Subtitle VII: Aviation Programs,
describes in more detail the scope of the Agency's authority.

    We are issuing this rulemaking under the authority described in
Subtitle VII, Part A, Subpart III, Section 44701: ``General
requirements.'' Under that section, Congress charges the FAA with
promoting safe flight of civil aircraft in air commerce by prescribing
regulations for practices, methods, and procedures the Administrator
finds necessary for safety in air commerce. This regulation is within
the scope of that authority because it addresses an unsafe condition
that is likely to exist or develop on products identified in this
rulemaking action.

Regulatory Findings

    This AD will not have federalism implications under Executive Order
13132. This AD will not have a substantial direct effect on the States,
on the relationship between the national government and the States, or
on the distribution of power and responsibilities among the various
levels of government.
    For the reasons discussed above, I certify that this AD:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866,
    (2) Is not a ``significant rule'' under DOT Regulatory Policies and
Procedures (44 FR 11034, February 26, 1979),
    (3) Will not affect intrastate aviation in Alaska, and
    (4) Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by
reference, Safety.

Adoption of the Amendment

    Accordingly, under the authority delegated to me by the
Administrator, the FAA amends 14 CFR part 39 as follows:

PART 39--AIRWORTHINESS DIRECTIVES

0
1. The authority citation for part 39 continues to read as follows:

    Authority:  49 U.S.C. 106(g), 40113, 44701.

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by adding the following new airworthiness
directive (AD):

2012-17-12 The Boeing Company: Amendment 39-17175; Docket No. FAA-
2011-1065; Directorate Identifier 2011-NM-007-AD.

(a) Effective Date

    This AD is effective October 11, 2012.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to The Boeing Company Model 747-400 series
airplanes, certificated in any category, as identified in Boeing
Special Attention Service Bulletin 747-25-3586, dated November 12,
2010.

(d) Subject

    Joint Aircraft System Component (JASC)/Air Transport Association
(ATA) of America Code 25, Equipment and Furnishings.

(e) Unsafe Condition

    This AD was prompted by reports of water leaking into electrical
and electronic equipment in the main equipment center. We are
issuing this AD to prevent water from entering the main equipment
center, which could result in an electrical short and potential loss
of several functions essential for safe flight.

 (f) Compliance

    Comply with this AD within the compliance times specified,
unless already done.

(g) Floor Panel Sealing

    Within 24 months after the effective date of this AD: Modify the
floor panels; remove drains; install floor supports, floor drain
trough doublers, drain troughs, and drains; and seal and tape the
floor panels; at the applicable locations; in accordance with the
Accomplishment Instructions of Boeing Special Attention Service
Bulletin 747-25-3586, dated November 12, 2010.

(h) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, Seattle Aircraft Certification Office (ACO),
FAA, has the authority to approve AMOCs for this AD, if requested
using the procedures found in 14 CFR 39.19. In accordance with 14
CFR 39.19, send your request to your principal inspector or local
Flight Standards District Office, as appropriate. If sending
information directly to the manager of the ACO, send it to the
attention of the person identified in the Related Information
section of this AD. Information may be emailed to<EMAIL_ADDRESS>    (2) Before using any approved AMOC, notify your appropriate
principal inspector, or lacking a principal inspector, the manager
of the local flight standards district office/certificate holding
district office.

(i) Related Information

    For more information about this AD, contact Francis Smith,
Aerospace Engineer, Cabin Safety & Environmental Systems Branch,
ANM-150S, Seattle Aircraft Certification Office (ACO), FAA, 1601
Lind Avenue SW., Renton, Washington 98057-3356; phone:<PHONE_NUMBER>;
fax:<PHONE_NUMBER>; email<EMAIL_ADDRESS>
(j) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the
incorporation by reference (IBR) of the service information listed
in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
    (2) You must use this service information as applicable to do
the actions required by this AD, unless the AD specifies otherwise.
    (i) Boeing Special Attention Service Bulletin 747-25-3586, dated
November 12, 2010.
    (ii) Reserved.
    (3) For service information identified in this AD, contact
Boeing Commercial Airplanes, Attention: Data & Services Management,
P. O. Box 3707, MC 2H-65, Seattle, Washington 98124-2207; phone:
206-544-5000, extension 1; fax:<PHONE_NUMBER>; Internet: https://www.myboeingfleet.com.
    (4) You may review copies of the referenced service information
at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW.,
Renton, Washington. For information on the availability of this
material at the FAA, call<PHONE_NUMBER>.
    (5) You may also review copies of the service information that
is incorporated by reference at the National Archives and Records
Administration (NARA). For information on the availability of this
material at NARA, call<PHONE_NUMBER>, or go to: http://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued in Renton, Washington, on August 22, 2012.
Ali Bahrami,
Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 2012-21289 Filed 9-5-12; 8:45 am]
BILLING CODE 4910-13-P


      Equivalent Containment Standards for the Remanufacturing Exclusion:

     Background Document in Support of the Definition of Solid Waste Rule

                                                                   Prepared by:

                                           U.S. Environmental Protection Agency
                                      Office of Pollution Prevention and Toxics
                                     Economic, Exposure and Technology Division
                                                  Pollution Prevention Division
                                                    1200 Pennsylvania Avenue NW
                                                          Washington, DC  20460

                                                                  June 16, 2011

Equivalent Containment Standards for DSW Re-Manufacturing Exclusion

For the DSW Re-Manufacturing Exclusion, containment is proposed to be achieved through complying with RCRA Subtitle C hazardous waste containment requirements at 40 CFR Parts 264/265, Subpart I and J, or through complying with equivalent standards.

--------------------------------------------------------------------------------
   DRAFT DSW REGULATORY TEXT
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
   §260.10 Definitions
--------------------------------------------------------------------------------
   * * * *
--------------------------------------------------------------------------------
   Contained means a unit (including a land-based unit as defined in this subpart) that meets the following criteria:  (1) the unit is in good condition, with no leaks or other continuing or intermittent unpermitted releases of the hazardous secondary materials to the environment, and is designed, as appropriate for the hazardous secondary materials, to prevent releases of hazardous secondary materials to the environment. Such releases may include, but are not limited to, releases through surface transport by precipitation runoff, releases to groundwater, wind-blown dust, fugitive air emissions, and catastrophic unit failures; (2) the unit is properly labeled or otherwise has a system (such as a log) to immediately identify the hazardous secondary materials in the unit; and (3) the unit does not hold incompatible materials and addresses any potential risks of fires or explosions. Hazardous secondary materials in units that meet the applicable requirements of 40 CFR parts 264 or 265 are considered to be contained.
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
   DSW PREAMBLE
--------------------------------------------------------------------------------
   Eligibility condition for re-manufacturing exclusion
--------------------------------------------------------------------------------
   5(d)  Prior to re-manufacturing, store the hazardous spent solvents in tanks or containers that meet technical standards that would be the same as those found in 40 CFR Part 264 Subparts I and J, with the tanks and containers being labeled or otherwise having an immediately available record of the material being stored; During re-manufacturing, and during storage of the hazardous secondary materials prior to re-manufacturing, ensure that there is effective control of hazardous air emissions by complying with all applicable NESHAP standards, and with the requirements of 40 CFR Part 264 or 265 Subparts AA, BB, CC;

1.  Equivalency for Tank and Container Storage Requirements

EPA regulates tank and container storage requirements (40 CFR 264 Subparts I and J) under RCRA authority.  EPA also requires containment at 40 CFR 112 under the Oil Pollution Act amendment to the Clean Water Act (40 CFR 112 covers n-hexane, one of the 18 chemicals listed in the proposed Re-Manufacturing Exclusion).  Other entities using their authorities to issue containment requirements include the U.S. Occupational Safety and Health Administration (mirroring fire protection codes), the U.S. Department of Transportation, and various nonprofit and trade organizations.   Collectively, the containment standards number over a hundred.   There are so many industry standards that commentators observe it is difficult to make sure the list is complete.  Although industry standards are subject to change, they will tend to get more protective, not less.  More importantly, for purposes of the proposed Re-Manufacturing Exclusion, 40 CFR 264 Subparts I and J will remain constant reference points.

A critical few industry standards can be used to satisfy the main technical requirements for tank systems and containers under 40 CFR Parts 264 Subparts I and J.  These critical few standards are organized below according to new tank design, operations, maintenance, and closure.

   > New aboveground tank system design and construction standards (API 620, API 2000, UL 142, STI F921, ASME  Boiler and Pressure Vessel Code VIII Division 1; see also OSHA installation and venting requirements at  29 CFR 1910.106).

      Standards and regulations commonly classify tanks by the internal pressure the tank is to operate under.  Sources of internal pressure are the vapor pressure of the liquid itself, which increases with rising temperature, and any inert-gas blanketing system in use to pressurize the vapor space of a tank to perform such functions as keeping oxygen out of reactive liquids. All three tank types below are relevant to the proposed Re-Manufacturing Exclusion, given the range in vapor pressure of the 18 chemicals covered.  Selection of tank type is dependent on many factors to be considered by the responsible engineering designer.

         o Atmospheric tanks operate at internal pressures slightly above atmospheric pressure; fire codes define them as operating from atmospheric up to (1/2) psig (pound-force per square inch gauge) above atmospheric pressure.  Atmospheric storage tank design and construction standards consist of --
               # Underwriters Laboratory (UL) Standard 142 for Steel Aboveground Tanks for Flammable and Combustible Liquids;
               # Steel Tank Institute (STI) Standard F921 for Aboveground Tanks with Integral Secondary Containment.
               # API Standard 2000 Venting Atmospheric and Low-Pressure Storage Tanks.
               # Note: 29 CFR 1910.106 is OSHA's requirement for the design of atmospheric tanks, which requires them to be built in accordance with acceptable good standards of design.

         o Low-pressure tanks operate at internal pressures up to 15 psig.  These are actually higher-pressure tanks. Low-pressure tank design and construction standards consist of  -
               # American Petroleum Institute (API) Standard 620 Design and Construction of Large, Welded, Low-pressure Storage Tanks;
               # API Standard 2000 Venting Atmospheric and Low-Pressure Storage Tanks.
               # Note: 29 CFR 1910.106 is OSHA's requirement for the design of low pressure tanks, which requires them to be built in accordance with acceptable good standards of design.

         o Pressure vessels operate at the highest internal pressures, that is, above 15 psig.  The term high-pressure tank is not used because these are actually vessels, a specialized form of container.  If chloromethane, one of the 18 chemicals, is stored as compressed gas, this would require a pressure vessel. The pressure vessel design and construction standard consists of  -
               # American Society of Mechanical Engineers (ASME) Boiler and Pressure Vessel Code  -  Division 1 Rules for Construction of Pressure Vessels.
               # Note: 29 CFR 1910.106 is OSHA's requirement for the design of pressure vessels, which requires them to be built in accordance with the ASME Boiler and Pressure Vessel Code.
   > Operations and maintenance:
         o Tank and piping integrity  and recordkeeping   -
               # Either  API 653 or Steel Tank Institute (STI) SP001 as appropriate for tank integrity;
               # API 570 for piping system integrity.

         o Container integrity   -
               # OSHA 1910.101 (chloromethane if stored as a compressed gas);
               # OSHA 1910.106 (for 16 of our 18 solvents);
               # OSHA 1910.119 (for chloromethane gas if not compressed); and,
               # Occupational Safety and Health Act, General Duty Clause (for chloroform).

         o Addressing incompatible materials and the potential risks of fires or explosions  -
               # National Fire Protection Association (NFPA) 30  -  Flammable and Combustible Liquids Code.

         o  Systems to prevent and respond to releases  -
               # NFPA 30 and API 2350 are mutually consistent for overfill protection.

   > Closure:
         o NFPA 30-<IP_ADDRESS> Closure of Storage Tanks;
         o API Standard 2015 Safe Entry and Cleaning of Petroleum Storage Tanks and related API recommended practices and publications;
         o OSHA confined space requirements at 29 CFR 1910.146 and OSHA Guidance on Major Work Activities for Tank Cleaning Operations with API cross-references.

Equivalency to 40 CFR Part 264 or 265 Subparts AA, BB, and CC.

EPA amended RCRA Subparts AA, BB, and CC rules more than a decade ago to exempt any hazardous waste management unit that the owner or operator certifies is equipped with and operating air emission controls in accordance with an applicable Clean Air Act regulation codified under 40 CFR Part 60, Part 61, or Part 63. It is important to note that these exemptions only apply to those units, process vents, or equipment using organic air emission controls to comply with an applicable CAA regulation.

Description of Appendices

1.  Table 1 showing the classification of the 18 Re-Manufacturing Exclusion chemicals as flammable or combustible liquids.
      This is included immediately below.

2.  List of Frequently Utilized Tank Storage Standards (separate file).
      This list, edited only slightly from what Pennsylvania makes available on its portal regarding organizations referenced in state law, provides an example of what could be issued as guidance for the DSW Re-Manufacturing Exclusion.

Appendix 1.

Table 1.  18 Re-Manufacturing Exclusion chemicals classified as flammable or combustible liquids.
Chemical
Classification
Toluene
Flammable liquid  -  Class IB
Xylenes (mixed isomers)
Flammable liquid  -  Class IC
Ethylbenzene
Flammable liquid  -  Class IB
1,2,4-trimethylbenzene
Combustible liquid  -  Class II
Chlorobenzene
Flammable liquid  -  Class IC
n-hexane
Flammable liquid  -  Class IB
Cyclohexane
Flammable liquid  -  Class IB
Methyl tert-butyl ether (MTBE)
Flammable liquid  - Class IB
Acetonitrile
Flammable liquid  -  Class IB
Chloroform
Non-combustible liquid
Chloromethane
Flammable gas
Dichloromethane
Combustible liquid
Methyl isobutyl ketone
Flammable liquid  -  Class IB
N,N-dimethylformamide
Combustible liquid  -  Class II
Tetrahydrofuran
Flammable liquid  -  Class IB
Ethanol
Flammable liquid  -  Class IB
n-butyl alcohol
Flammable liquid  -  Class IC
Methanol
Flammable liquid  -  Class IB


[Federal Register Volume 76, Number 242 (Friday, December 16, 2011)]
[Rules and Regulations]
[Pages 78141-78144]
[FR Doc No: 2011-32333]

-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 61

[Docket No. FAA-2006-26661; Amdt. No. 61-129]
RIN 2120-AI86

Pilot, Flight Instructor, and Pilot School Certification;
Technical Amendment

AGENCY: Federal Aviation Administration, DOT.

ACTION: Final rule; technical amendment.

-----------------------------------------------------------------------

SUMMARY: The FAA is correcting a final rule published on August 21,
2009 (74 FR 42500). In that rule, the FAA amended its regulations to
revise the training, qualification, certification, and operating
requirements for pilots, flight instructors, ground instructors, and
pilot schools. This document corrects an error in the codified text of
that document to permit a person serving as an examiner and
administering a practical test for the issuance of a sport pilot
certificate in a light-sport aircraft other than a glider or balloon to
hold either a medical certificate or a U.S. driver's license. The FAA
is also clarifying the regulatory text related to when an instrument
proficiency check is required to act as pilot in command under IFR or
in weather conditions less than the minimums prescribed for VFR.
Finally, this document corrects one section of the final rule to
clarify the FAA's original intent with regard to the use of flight
simulation training devices for training and testing when seeking to
add a type rating to an existing pilot certificate or obtain a type
rating concurrently with a pilot certificate.

DATES: Effective December 16, 2011.

FOR FURTHER INFORMATION CONTACT: For technical questions concerning
this action, contact Jeffrey Smith, Airmen Certification and Training
Branch, AFS-810, General Aviation and Commercial Division, Flight
Standards Service, Federal Aviation Administration, 800 Independence
Avenue SW., Washington, DC 20591; telephone<PHONE_NUMBER>; email to
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Background

    On August 21, 2009, the FAA published a final rule entitled,
``Pilot, Flight Instructor, and Pilot School Certification'' (74 FR
42500). That final rule revised the training, qualification,
certification, and operating requirements for pilots, flight
instructors, ground instructors, and pilot schools. The FAA is now
issuing a technical amendment to correct an error in Sec.  61.23 and to
clarify the original intent of Sec.  61.64.

Discussion of Technical Amendment to Sec.  61.23

    As part of the 2009 final rule, the FAA revised Sec.  61.23 to set
forth the medical certification requirements for persons serving as
examiners and administering practical tests. As modified in the final
rule, the current text of that section requires an examiner
administering a practical test in an aircraft, other than a glider or
balloon, to hold at least a third-class medical certificate.
    During the rulemaking process, the FAA received a comment stating
that examiners administering practical tests to applicants for a sport
pilot certificate should not be required to hold a medical certificate.
These tests--particularly those conducted in powered parachutes and
weight-shift-control aircraft--are frequently conducted by examiners
who hold only a sport pilot certificate. A person exercising the
privileges of a sport pilot certificate may hold either a medical
certificate or a U.S. driver's license to exercise those privileges.
Although the preamble to the final rule acknowledged the comment, the
regulatory text did not address the issue raised by the comment.
    Although an examiner is generally not the pilot in command of an
aircraft during a practical test, an examiner may, on occasion, need to
act as pilot in command of an aircraft during the course of a practical
test. Accordingly, the FAA believes that an examiner must meet the
appropriate medical certification requirements to act as pilot in
command of the aircraft in which the test is being conducted should the
need arise. An examiner conducting a practical test for a sport pilot
certificate in a light-sport aircraft other than a glider or balloon
would therefore only need to hold either a medical certificate or a
U.S. driver's license.
    The technical amendment will revise Sec.  61.23(c) to permit a
person to serve as an examiner and administer a practical test for the
issuance of a sport pilot certificate in a light-sport aircraft other

than a glider or balloon if that person holds and possesses either a
medical certificate issued under part 67 or a U.S. driver's license.

Discussion of Technical Amendment to Sec.  61.57(d)

    Section 61.57(c) sets forth the instrument recent flight experience
requirements for a pilot to act as pilot in command under IFR or in
weather conditions less than the minimums prescribed for VFR. Under
that provision, a pilot must have performed and logged certain tasks
and maneuvers within six calendar months preceding the month of the
flight on which the pilot intends to serve as pilot in command. Section
61.57(d) sets forth the time when a pilot who does not meet the
instrument recent experience requirements of paragraph (c) must
accomplish an instrument proficiency check (IPC) before serving as
pilot in command under IFR or in weather conditions less than the
minimums prescribed for VFR.
    In the 2009 final rule, the FAA modified the language in Sec.
61.57(d) to remove confusing language (``within the prescribed time, or
within 6 calendar months after the prescribed time'') and replaced it
with language that a pilot must perform the instrument recent flight
experience within a period of 12 months to avoid having to accomplish
an IPC. The FAA acknowledges that the language as modified allows for
interpretations inconsistent with the intent of the rule and contrary
to the manner the rule has been historically applied.
    In this technical amendment, the FAA is revising the language in
paragraph (d) to clarify the intent of the rule. The revised language
makes it clear that a pilot who has failed to maintain instrument
currency for more than six calendar months may not serve as pilot in
command under IFR or in weather conditions less than the minimums
prescribed for VFR until completing an instrument proficiency check. A
pilot whose instrument currency has been lapsed for less than six
months may continue to reestablish instrument currency by performing
the tasks and maneuvers required in paragraph (c).

Discussion of Technical Amendment to Sec.  61.64

    Prior to issuance of the 2009 final rule, 14 CFR 61.63(e), (f), and
(g) set forth the requirements for the use of flight simulators and
flight training devices for a pilot seeking to add ratings to an
existing pilot certificate other than the airline transport pilot
certificate. Under former Sec.  61.63(e), (f), and (g), any pilot who
completed ``all training and testing requirements'' in a flight
simulator for an additional rating on an existing pilot certificate
other than an airline transport pilot certificate had to have specific
flight experience (e.g., hold a type rating for a turbojet airplane of
the same class of airplane for which the type rating is sought) to
avoid having to fulfill a supervised operating experience requirement
before acting as pilot in command of the aircraft for which the
additional rating was sought.
    The requirements for the use of flight simulators and flight
training devices for obtaining an airline transport pilot certificate
with a type rating or adding a type rating to an existing airline
transport pilot certificate were covered by 14 CFR 61.157(g), (h), and
(i). Under former Sec.  61.157(h), (i) and (j), any pilot who completed
``all of the training and the required practical test'' in a flight
simulator for a type rating on an airline transport pilot certificate
had to have the same prior flight experience listed in former Sec.
61.63 to avoid having to fulfill a supervised operating experience
requirement before acting as pilot in command in the aircraft for which
the type rating was sought.
    In 2007, the FAA proposed to consolidate the requirements of
Sec. Sec.  61.63(e), (f), and (g) and 61.157(g), (h), and (i) into new
Sec.  61.64 (72 FR 5806; February 7, 2007). In the preamble to the
final rule, the FAA stated that in consolidating these sections ``[n]o
substantive changes had been made'' (74 FR 42500 and 74 FR 42522). One
commenter objected because, as consolidated in Sec.  61.64, a pilot
would be required to meet one of the experience prerequisites if any
portion of the practical test for a type rating was completed in a
flight simulator. The commenter noted that this requirement differed
from the existing rule which required a pilot to meet one of the
experience prerequisites only if he or she completed the entire
practical test in a simulator. Two months after the final rule was
published, the FAA issued a technical correction that made several
changes to Sec.  61.64. 74 FR 53643 (Oct. 20, 2009). The correction did
not affect the language identified by the commenter that could be
construed as requiring a pilot to meet one of the experience
prerequisites if a simulator was used for any portion of the practical
test.
    Although the FAA stated in the 2009 final rule that no substantive
changes were being made in consolidating the requirements in Sec. Sec.
61.63 and 61.157, the language of the consolidation resulted in
apparent changes to the requirements for using flight simulation
training devices (FSTD) to train and test for an additional rating on
an existing pilot certificate. The consolidation of the two provisions
into Sec.  61.64 could be read to expand the number of pilots who would
be subject to the supervised operating limitation because the
regulatory text as written applies to a pilot who completes any
training or testing in flight simulators to meet one of the listed
experience requirements or receive a limitation. This result was not
the FAA's intention in consolidating the provisions. The FAA,
therefore, is modifying Sec.  61.64 to reflect that a supervised
operating limitation must be placed on a pilot certificate if the pilot
applying for the rating uses a flight simulator for the entire
practical test and fails to meet one of the listed flight experience
requirements.
    In making the changes to Sec.  61.64, the FAA emphasizes that
Sec. Sec.  61.63 and 61.157 continue to set forth the training
requirements for additional ratings and type ratings. Section 61.64
merely details the use of FSTD in training and testing for those
ratings. We note that, if Sec.  61.63 requires a pilot to meet the
training requirements of another section, for example Sec.  61.129
(commercial pilot), then the FSTD limitations set forth in Sec.  61.129
will apply to that training and the pilot will not be able to train and
test completely through simulation. In addition, pilots who train under
the aeronautical experience requirements that limit the use of
simulation for training (e.g., Sec.  61.129; part 141 appendices) will
continue to have the option of accomplishing a segmented practical test
(see 14 CFR 61.39(d); 14 CFR 61.45(a); and FAA Order 8900.1, Vol. 5,
Chapter 1, Section 4).
    This technical amendment also makes several clarifying changes to
Sec.  61.64, including (1) reinserting the language ``except preflight
inspection'' to the provisions related to the requirement that the
entire practical test take place in a Level C or higher flight
simulator if an aircraft is not used, (2) modifying the language of the
limitation, (3) rewording the language in paragraph (g) related to the
manner in which the supervised operating experience must be obtained,
and (4) clarifying the language in paragraph (g) related to the means
by which the supervised operating limitation may be removed from a
pilot certificate. The FAA has also made a conforming change to the
applicability provision in Sec.  61.61.

List of Subjects in 14 CFR Part 61

    Aircraft, Airmen, Alcohol abuse, Aviation safety, Drug abuse,
Recreation and recreation areas, Reporting and

recordkeeping requirements, Security measure and Teachers.

The Amendment

    In consideration of the foregoing, the Federal Aviation
Administration amends chapter I of title 14, Code of Federal
Regulations as follows:

PART 61--CERTIFICATION: PILOTS, FLIGHT INSTRUCTORS, AND GROUND
INSTRUCTORS

0
1. The authority citation for part 61 continues to read as follows:

    Authority:  49 U.S.C. 106(g), 40113, 44701-44703, 44707, 44709-
44711, 45102-45103, 45301-45302.

0
2. Amend Sec.  61.23 by revising paragraph (c) to read as follows:

Sec.  61.23  Medical Certificates: Requirements and duration.

* * * * *
    (c) Operations requiring either a medical certificate or U.S.
driver's license. (1) A person must hold and possess either a medical
certificate issued under part 67 of this chapter or a U.S. driver's
license when--
    (i) Exercising the privileges of a student pilot certificate while
seeking sport pilot privileges in a light-sport aircraft other than a
glider or balloon;
    (ii) Exercising the privileges of a sport pilot certificate in a
light-sport aircraft other than a glider or balloon;
    (iii) Exercising the privileges of a flight instructor certificate
with a sport pilot rating while acting as pilot in command or serving
as a required flight crewmember of a light-sport aircraft other than a
glider or balloon; or
    (iv) Serving as an Examiner and administering a practical test for
the issuance of a sport pilot certificate in a light-sport aircraft
other than a glider or balloon.
* * * * *

0
3. Amend Sec.  61.57 by revising paragraph (d) introductory text to
read as follows:

Sec.  61.57  Recent flight experience: Pilot in command.

* * * * *
    (d) Instrument proficiency check. Except as provided in paragraph
(e) of this section, a person who has failed to meet the instrument
experience requirements of paragraph (c) for more than six calendar
months may reestablish instrument currency only by completing an
instrument proficiency check. The instrument proficiency check must
consist of the areas of operation and instrument tasks required in the
instrument rating practical test standards.
* * * * *

0
4. Revise Sec.  61.61 to read as follows:

Sec.  61.61  Applicability.

    This subpart prescribes the requirements for the issuance of
additional aircraft ratings after a pilot certificate is issued,
issuance of a type rating concurrently with a pilot certificate, and
the requirements for and limitations of pilot authorizations issued by
the Administrator.

0
5. Revise Sec.  61.64 to read as follows:

Sec.  61.64  Use of a flight simulator and flight training device.

    (a) Use of a flight simulator or flight training device. If an
applicant for a certificate or rating uses a flight simulator or flight
training device for training or any portion of the practical test, the
flight simulator and flight training device--
    (1) Must represent the category, class, and type (if a type rating
is applicable) for the rating sought; and
    (2) Must be qualified and approved by the Administrator and used in
accordance with an approved course of training under part 141 or part
142 of this chapter; or under part 121 or part 135 of this chapter,
provided the applicant is a pilot employee of that air carrier
operator.
    (b) Except as provided in paragraph (f) of this section, if an
airplane is not used during the practical test for a type rating for a
turbojet airplane (except for preflight inspection), an applicant must
accomplish the entire practical test in a Level C or higher flight
simulator and the applicant must--
    (1) Hold a type rating in a turbojet airplane of the same class of
airplane for which the type rating is sought, and that type rating may
not contain a supervised operating experience limitation;
    (2) Have 1,000 hours of flight time in two different turbojet
airplanes of the same class of airplane for which the type rating is
sought;
    (3) Have been appointed by the U.S. Armed Forces as pilot in
command in a turbojet airplane of the same class of airplane for which
the type rating is sought;
    (4) Have 500 hours of flight time in the same type of airplane for
which the type rating is sought; or
    (5) Have logged at least 2,000 hours of flight time, of which 500
hours were in turbine-powered airplanes of the same class of airplane
for which the type rating is sought.
    (c) Except as provided in paragraph (f) of this section, if an
airplane is not used during the practical test for a type rating for a
turbo-propeller airplane (except for preflight inspection), an
applicant must accomplish the entire practical test in a Level C or
higher flight simulator and the applicant must--
    (1) Hold a type rating in a turbo-propeller airplane of the same
class of airplane for which the type rating is sought, and that type
rating may not contain a supervised operating experience limitation;
    (2) Have 1,000 hours of flight time in two different turbo-
propeller airplanes of the same class of airplane for which the type
rating is sought;
    (3) Have been appointed by the U.S. Armed Forces as pilot in
command in a turbo-propeller airplane of the same class of airplane for
which the type rating is sought;
    (4) Have 500 hours of flight time in the same type of airplane for
which the type rating is sought; or
    (5) Have logged at least 2,000 hours of flight time, of which 500
hours were in turbine-powered airplanes of the same class of airplane
for which the type rating is sought.
    (d) Except as provided in paragraph (f) of this section, if a
helicopter is not used during the practical test for a type rating in a
helicopter (except for preflight inspection), an applicant must
accomplish the entire practical test in a Level C or higher flight
simulator and the applicant must meet one of the following
requirements--
    (1) Hold a type rating in a helicopter and that type rating may not
contain the supervised operating experience limitation;
    (2) Have been appointed by the U.S. Armed Forces as pilot in
command of a helicopter;
    (3) Have 500 hours of flight time in the type of helicopter; or
    (4) Have 1,000 hours of flight time in two different types of
helicopters.
    (e) Except as provided in paragraph (f) of this section, if a
powered-lift is not used during the practical test for a type rating in
a powered-lift (except for preflight inspection), an applicant must
accomplish the entire practical test in a Level C or higher flight
simulator and the applicant must meet one of the following
requirements--
    (1) Hold a type rating in a powered-lift without a supervised
operating experience limitation;
    (2) Have been appointed by the U.S. Armed Forces as pilot in
command of a powered-lift;
    (3) Have 500 hours of flight time in the type of powered-lift for
which the rating is sought; or
    (4) Have 1,000 hours of flight time in two different types of
powered-lifts.

    (f) If the applicant does not meet one of the experience
requirements of paragraphs (b)(1) through (5), (c)(1) through (5),
(d)(1) through (4) or (e)(1) through (4) of this section, as
appropriate to the type rating sought, then--
    (1) The applicant must complete the following tasks on the
practical test in an aircraft appropriate to category, class, and type
for the rating sought: Preflight inspection, normal takeoff, normal
instrument landing system approach, missed approach, and normal
landing; or
    (2) The applicant's pilot certificate will be issued with a
limitation that states: ``The [name of the additional type rating] is
subject to pilot in command limitations,'' and the applicant is
restricted from serving as pilot in command in an aircraft of that
type.
    (g) The limitation described under paragraph (f)(2) of this section
may be removed from the pilot certificate if the applicant complies
with the following--
    (1) Performs 25 hours of flight time in an aircraft of the
category, class, and type for which the limitation applies under the
direct observation of the pilot in command who holds a category, class,
and type rating, without limitations, for the aircraft;
    (2) Logs each flight and the pilot in command who observed the
flight attests in writing to each flight;
    (3) Obtains the flight time while performing the duties of pilot in
command; and
    (4) Presents evidence of the supervised operating experience to any
Examiner or FAA Flight Standards District Office to have the limitation
removed.

    Issued in Washington, DC, on December 6, 2011.
Pamela Hamilton-Powell,
Director, Office of Rulemaking.
[FR Doc. 2011-32333 Filed 12-15-11; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 78, Number 58 (Tuesday, March 26, 2013)]
[Notices]
[Pages 18384-18385]
[FR Doc No: 2013-06876]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69190; File No. SR-BATS-2013-005]

Self-Regulatory Organizations; BATS Exchange, Inc.; Order
Approving Proposed Rule Change To Modify the Competitive Liquidity
Provider Program to, Among Other Things, Modify the Calculation of Size
Event Tests

March 20, 2013.

I. Introduction

    On January 18, 2013, BATS Exchange, Inc. (``Exchange'') filed with
the Securities and Exchange Commission (``Commission''), pursuant to
Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act''), and
Rule 19b-4 thereunder, a proposed rule change to modify the Exchange's
competitive liquidity provider program, to among other things, modify
the calculation of size event tests. The proposed rule change was
published in the Federal

Register on February 6, 2013.\1\ The Commission received no comments on
the proposal. This order approves the proposal.
---------------------------------------------------------------------------

    \1\ See Securities Exchange Act Release No. 68789 (January 31,
2013), 78 FR 8655.
---------------------------------------------------------------------------

II. Description of the Proposal

    The Exchange operates a competitive liquidity provider program that
provides incentives to certain Exchange market makers to provide
additional liquidity in Exchange listed securities.\2\ The Exchange
proposes to modify certain aspects of the competitive liquidity
provider program.
---------------------------------------------------------------------------

    \2\ See Exchange Rule 11.8.02.
---------------------------------------------------------------------------

A. Calculation of Size Event Tests

    Currently, a market maker participating in the competitive
liquidity provider program would be eligible for a financial rebate
based on the size of the liquidity provided by the market maker. The
Exchange calculates the rebate by examining, at least once per second,
the quoted size at the national best bid and national best offer
(``Size Event Test''). The market maker with the greatest aggregative
size would be considered the winner of the Size Event Test.
    The Exchange proposes to bifurcate the calculation of the Size
Event Test by the bid and the offer. Thus, instead of having one
winner, the Exchange proposes to have two separate winners--one winner
at the bid and one winner at the offer. As proposed, the market maker
with the greatest aggregated size at the national best bid (excluding
odd lots) would be considered the winner of the bid test and the market
maker with the greatest aggregative size at the national best offer
(excluding odd lots) would be considered the winner of the offer test.

B. Financial Rebates for the Bid Winner and the Offer Winner

    In connection with the proposal to bifurcate the Size Event Test
winners into the bid test winner and the offer test winner, the
Exchange proposes to provide financial rebates separately. Currently, a
market maker must have at least 10% of the winning Size Event Tests in
order to meet its daily quoting requirements and qualify for the
financial rebate. The Exchange proposes to allocate the rebate to both
the bid test winner and the offer test winner.

C. Allocation of Financial Rebates

    The competitive liquidity provider program assigns only one market
maker for the first six months of a security's initial listing.
Thereafter, multiple market makers may qualify to quote and to receive
the financial rebates. Currently, for Tier I securities and exchange
traded products, 80% of the rewards would go to the market maker with
the highest number of winning tests and 20% of the total rewards would
go to the market maker with the second highest number of winning
tests.\3\ The Exchange proposes to allocate the rewards differently.
Instead of a fixed dollar amount, the Exchange would reward the two
winning market makers based on a pro rata amount, calculated on the
combined sum of their winning tests.
---------------------------------------------------------------------------

    \3\ For Tier II securities, there is only one rebate for the
winner.
---------------------------------------------------------------------------

D. Quoting Requirements

    Currently, the Exchange requires each market maker to quote at
least one round lot. The Exchange proposes to increase the minimum
quoting requirement to five round lots in order for market makers to
qualify for the winning tests.
    The Exchange also proposes to add an additional quoting requirement
for market makers to qualify for the winning tests. In order to qualify
for the winning bid test, the Exchange is proposing for market makers
to quote at least a displayed round lot offer at a price at or within
1.2% of the market maker's bid. Conversely, in order to qualify for the
winning offer test, the market makers must quote at least a displayed
round lot bid at a price at or within 1.2% of the market maker's offer.

E. Time of Operation

    Currently, the competitive liquidity provider program measures
participants in assigned securities during Exchange regular trading
hours, from 9:30 a.m. to 4:00 p.m. The Exchange proposes to extend the
time by 10 total minutes, from 9:25 a.m. to 4:05 p.m.\4\
---------------------------------------------------------------------------

    \4\ See proposed Exchange Rule 11.8.02(g)(1).
---------------------------------------------------------------------------

III. Discussion and Commission Findings

    After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of the Act and the rules and
regulations thereunder applicable to national securities exchanges.\5\
In particular, the Commission finds that the proposed rule change is
consistent with Section 6(b)(5) of the Act,\6\ which requires that the
rules of an exchange be designed, among other things, to promote just
and equitable principles of trade, to remove impediments to and to
perfect the mechanism for a free and open market and a national market
system, and, in general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \5\ In approving the proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition and
capital formation. See 15 U.S.C. 78c(f).
    \6\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Commission believes that the proposal is consistent with the
requirements of the Act and should benefit investors by providing
additional liquidity in the securities that participate in the
competitive liquidity provider program. The Commission believes that
bifurcating the Size Event Tests could incentivize market makers to
provide two-sided quotes that could enhance the liquidity of the
security. Moreover, the Exchange's proposal to provide the rebate to
the winner of the bid test and the winner of the offer test could
provide a stimulus to market makers to increase quoting size on both
sides of the market. The Commission believes that the allocation, on a
pro rata basis, of the financial rebate should provide a more equitable
distribution of the rebate to the winning market makers. The Commission
believes that the proposed quoting requirements should enhance the
market size and could lead to tighter spreads. Finally, the Commission
believes the extended time period could entice market makers to provide
more quotes in the opening auctions and closing auctions.
    For the reasons stated above, the Commission believes that the
proposal is consistent with the requirements of the Act and is designed
to promote just and equitable principles of trade, to remove
impediments to and to perfect the mechanism for a free and open market
and a national market system, and, in general, to protect investors and
the public interest.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\7\ that the proposed rule change (SR-BATS-2013-005), be, and it
hereby is, approved.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
---------------------------------------------------------------------------

    \8\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-06876 Filed 3-25-13; 8:45 am]
BILLING CODE 8011-01-P