[Federal Register: December 3, 2008 (Volume 73, Number 233)]
[Rules and Regulations]
[Page 73586-73592]
[DOCID:fr03de08-9]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 180

[EPA-HQ-OPP-2007-0147; FRL-8385-7]

Glyphosate; Pesticide Tolerances

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: This regulation establishes new tolerances for certain plant
commodities and all animal commodities, and revises other tolerances
for glyphosate and its metabolite N-acetyl-glyphosate (expressed as
glyphosate). These changes are detailed in Unit II of this document.
E.I. DuPont de Nemours and Company requested these tolerances under the
Federal Food, Drug, and Cosmetic Act (FFDCA).

DATES: This regulation is effective December 3, 2008. Objections and
requests for hearings must be received on or before February 2, 2009,
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: EPA has established a docket for this action under docket
identification (ID) number EPA-HQ-OPP-2007-0147. All documents in the
docket are listed in the docket index available at http://
www.regulations.gov. Although listed in the index, some information is
not publicly available, e.g., Confidential Business Information (CBI)
or other information whose disclosure is restricted by statute. Certain
other material, such as copyrighted material, is not placed on the
Internet and will be publicly available only in hard copy form.
Publicly available docket materials are available in the electronic
docket at http:/ /www.regulations.gov, or, if only available in hard
copy, at the OPP Regulatory Public Docket in Rm. S-4400, One Potomac
Yard (South Bldg.), 2777 S. Crystal Dr., Arlington, VA. The Docket
Facility is open from 8:30 a.m. to 4 p.m., Monday through Friday,
excluding legal holidays. The Docket Facility telephone number is (703)
305-5805.

FOR FURTHER INFORMATION CONTACT: Vickie Walters, Registration Division
(7505P), Office of Pesticide Programs, Environmental Protection Agency,
1200 Pennsylvania Ave., NW., Washington, DC 20460-0001; telephone
number:<PHONE_NUMBER>; e-mail address<EMAIL_ADDRESS>
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.
Potentially affected entities may include, but are not limited to those
engaged in the following activities:
     Crop production (NAICS code 111).
     Animal production (NAICS code 112).
     Food manufacturing (NAICS code 311).
     Pesticide manufacturing (NAICS code 32532).
    This listing is not intended to be exhaustive, but rather to
provide a guide for readers regarding entities likely to be affected by
this action. Other types of entities not listed in this unit could also
be affected. The North American Industrial Classification System
(NAICS) codes have been provided to assist you and others in
determining whether this action might apply to certain entities. If you
have any questions regarding the applicability of this action to a
particular entity, consult the person listed under FOR FURTHER
INFORMATION CONTACT.

B. How Can I Access Electronic Copies of this Document?

    In addition to accessing electronically available documents at
http:/ /www.regulations.gov, you may access this Federal Register
document electronically through the EPA Internet under the ``Federal
Register'' listings at http://www.epa.gov/fedrgstr. You may also access
a frequently updated electronic version of EPA's tolerance regulations
at 40 CFR part 180 through the Government Printing Office's pilot e-CFR
site at http://www.gpoaccess.gov/ecfr.

C. Can I File an Objection or Hearing Request?

    Under section 408(g) of FFDCA, 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-2007-0147 in the subject line on the first
page of your submission. All requests must be in writing, and must be
mailed or delivered to the Hearing Clerk as required by 40 CFR part 178
on or before February 2, 2009.
    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 that does not contain any CBI for inclusion in the public
docket that is described in ADDRESSES. Information not marked
confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA
without prior notice. Submit this copy, identified by docket ID number
EPA-HQ-OPP-2007-0147, by one of the following methods:
    Federal eRulemaking Portal: http://www.regulations.gov. Follow the
oN-line instructions for submitting comments.
    Mail: Office of Pesticide Programs (OPP) Regulatory Public Docket
(7502P), Environmental Protection Agency, 1200 Pennsylvania Ave., NW.,
Washington, DC 20460-0001.
    Delivery: OPP Regulatory Public Docket (7502P), Environmental
Protection Agency, Rm. S-4400, One Potomac Yard (South Bldg.), 2777
Crystal Dr., Arlington, VA. Deliveries are only accepted during the
Docket Facility's normal hours of operation (8:30 a.m. to 4 p.m.,
Monday through Friday, excluding legal holidays). Special arrangements
should be made for deliveries of boxed information. The Docket Facility
telephone number is<PHONE_NUMBER>.

II. Petition for Tolerance

     In the Federal Register of May 9, 2007 (72 FR 26372) (FRL-8121-
5), EPA issued a notice pursuant to section 408(d)(3) of FFDCA, 21
U.S.C. 346a(d)(3), announcing the filing of a pesticide petition (PP
6F7146) by E.I. DuPont de Nemours and Company, DuPont Crop Protection,
Laurel Run Plaza, P.O. Box 80, Newark, DE 19714-0030. The petition
requested that 40 CFR 180.364 be amended by establishing tolerances for
combined residues of the herbicide glyphosate, N-
(phosphonomethyl)glycine and its metabolite N-acetyl-glyphosate, N-
acetyl-N-(phosphonomethyl)glycine resulting from the application of
glyphosate, the isopropylamine salt of glyphosate, the ethanolamine
salt of glyphosate, the ammonium salt of glyphosate, and the potassium
salt of glyphosate to OptimumTMGATTM soybeans in
or on the food commodities: Cattle, kidney; cattle, liver; egg, goat,
kidney; goat, liver; hog, kidney; hog, liver; horse, kidney; horse,
liver; poultry, meat; poultry, meat byproducts; sheep, kidney; sheep,
liver; soybean, forage; soybean, hay; soybean, hulls; and soybean,
aspirated grain fractions at levels already established for glyphosate
alone. That notice referenced a summary of the petition prepared by
E.I. DuPont de Nemours and Company, the registrant, which is available
to the public 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.
    DuPont has requested a Section 3 registration under the Federal
Insecticide, Fungicide, and Rodenticide Act (``FIFRA'') for the
preplant application of the herbicides glyphosate and pyrithiobac
sodium to glyphosate-tolerant soybean. The petitioner is also working
to commercialize a genetically modified soybean designated as
OptimumTMGATTM soybeans. N-acetyl-glyphosate is
produced when glyphosate is applied to
OptimumTMGATTM soybeans. As a result the
petitioner is requesting that the glyphosate tolerance expression be
modified from glyphosate per se to the combined residues of glyphosate
and N-acetyl-glyphosate. This petition was filed in conjunction with
Dupont's this requested change to its FIFRA registration.
    Based upon review of the data submitted in support of the petition,
EPA has determined that the residues of concern in these commodities
are glyphosate and N-acetyl-glyphosate. The current tolerance
expression specifies residues of glyphosate
(N(phosphonomethyl)glycine). To address that N-acetyl-glyphosate was
the major residue in mature OptimumTMGATTM
soybean forage, hay, and seed, the Agency concluded that it is
necessary to include this compound in the tolerance expression. EPA is
splitting current Sec.  180.364(a) into paragraphs (a)(1) and (a)(2).
Paragraph (a)(1) will include all of the commodities currently in
paragraph (a), except for the animal commodities and the commodities
grain, aspirated fractions; soybean, forage; soybean, hay; soybean,
hulls; and soybean, seed, which EPA is transferring to new paragraph
(a)(2). The tolerances in paragraph (a)(2) will cover application of
glyphosate to non-genetically modified soybeans, genetically-modified
soybeans currently in use, and OptimumTMGATTM
soybeans. Note that based on the submitted residue data on application
of glyphosate to OptimumTMGATTM soybeans, the
numerical value of the current soybean and livestock tolerances do not
need to be changed (only the tolerance expression is changing).
Combined residues of glyphosate and N-acetyl-glyphosate in soybean
commodities derived from glyphosate-treated
OptimumTMGATTM soybeans and livestock commodities
from animals which consume only glyphosate-treated
OptimumTMGATTM soybeans will not exceed the
existing tolerance level. Additionally, the change in tolerance
expression will not affect the application of the tolerance to soybean
commodities derived from glyphosate-treated non-genetically modified
soybean and livestock commodities from animals which consumed only
glyphosate-treated non-genetically modified soybean because these
commodities will have only glyphosate per se residues, and not N-
acetyl-glyphosate residues.
    In the Federal Register of May 2, 2007 (72 FR 24188)(FRL-8122-8),
the Agency published a final rule revising the tolerance expression for
glyphosate to include the dimethylamine salt of glyphosate. Because
there is a potential for soybeans to be treated with product containing
the dimethylamine salt of glyphosate the Agency has determined that the
dimethylamine salt of glyphosate should be added to the tolerance
expression for paragraph (a)(2).
    Based upon review of the soybean processing studies submitted
supporting the petition, EPA has determined that the currently
established tolerances for the commodities grain, aspirated fractions
and soybean, hulls need to be increased to 310 ppm and 120 ppm,
respectively. Currently established tolerance levels for all other
commodities in this rule are supported by available data.

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 section 408(b)(2)(D) of FFDCA, and the factors
specified in section 408(b)(2)(D) of FFDCA, 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 the petitioned-for
tolerances for the combined residues of glyphosate, N-
(phosphonomethyl)glycine and its metabolite N-acetyl-glyphosate
(expressed as glyphosate) resulting from the application of glyphosate,
the isopropylamine salt of glyphosate, the ethanolamine salt of
glyphosate, the dimethylamine salt of glyphosate, the ammonium salt of
glyphosate, and the potassium salt of glyphosate on the food
commodities cattle, meat byproducts at 5.0 ppm; egg at 0.05 ppm; goat,
meat byproducts at 5.0 ppm; grain, aspirated fractions at 310 ppm; hog,
meat byproducts at 5.0 ppm; horse, meat byproducts at 5.0 ppm; poultry,
meat, at 4.0 ppm; poultry, meat byproducts at 1.0 ppm; sheep, meat
byproducts at 5.0 ppm; soybean, seed at 20.0 ppm; soybean, forage at
100.0 ppm; soybean, hay at 200.0 ppm, and soybean, hulls at 120 ppm and
soybean, seed at 20.0 ppm. EPA's assessment of exposures and risk
associated with establishing tolerances 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. Specific information on the studies received and the nature
of the adverse effects caused by glyphosate and its metabolite N-
acetyl-glyphosate 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 entitled Petition: 6F7146. Glyphosate-Isopropylammonium and
Pyrithiobac Sodium. Human Health Risk Assessment for Application to
Glyphosate Tolerant Soybean; pages 7-10 in docket ID number EPA- HQ-
OPP-2007-0147 and identified as document EPA-HQ-OPP-2007- 0147-0007.
    The toxicological profile of glyphosate is discussed in the risk
assessment referenced earlier in this section and in the risk
assessment referenced in the final rule published in the Federal
Register of December 20, 2006 (71 FR 76180) (FRL-8105-9) which
establishes tolerances for residues of glyphosate in or on noni at 0.20
ppm; pea, dry at 8.0 ppm; safflower at 85 ppm; sunflower at 85 ppm; and
vegetable, legume group 6 except soybean and pea, dry at 5.0 ppm.
    Toxicological endpoints and current risk assessments for glyphosate
are discussed in the risk assessment referred to in the final rule
published in the Federal Register of December 20, 2006 (71 FR 76180)
(FRL-8105-9) which establishes tolerances for residues of glyphosate in
or on noni at 0.20 ppm; pea, dry at 8.0 ppm; safflower at 85 ppm;
sunflower at 85 ppm; and vegetable, legume group 6 except soybean and
pea, dry at 5.0 ppm.
    1. A summary of the data submitted in support of the metabolite N-
acetyl-glyphosate is listed below. Refer to the risk assessment
available in the public docket for this rule and identified above as
document EPA-HQ-OPP-2007-0147-0007 for more information.
    i. An acute oral toxicity study in rats with an Acute Oral
LD50 greater than 5,000 milligrams/kilogram (mg/kg).
    ii. A 90-day subchronic oral (feeding) study, in which no systemic
toxicity was observed in male and female rats at doses up to 18,000 ppm
(equal to 1157/1461 mg/kg/day in males/females, respectively).
    iii. N-acetyl-glyphosate was negative for mutagenicity in a
bacterial reverse mutation assay (Ames test), an in vitro chromosomal
aberration assay in Chinese Hamster Ovary (CHO) cells, an in vitro
Mammalian Cell Gene Mutation Assay in CHO cells and an in vivo
cytogenetics (bone marrow) in mice, and a metabolism and
pharmacokinetics study.
    2. N-acetyl aminomethylphosphonic acid (N-acetyl-AMPA) was detected
as one of the metabolites formed following oral administration of N-
acetyl-glyphosate. It is not expected to be absorbed quickly from the
gastrointestinal tract since it is a charged molecule at the
physiological pH. N-acetyl-AMPA is expected to be less toxic than N-
acetyl-glyphosate. Data submitted in support of this metabolite
included the following:
    i. An acute oral toxicity study with an LD50 of greater
than 8,300 mg/kg.
    ii. A bacterial reverse mutation assay (Ames test), in which N-
acetyl-AMPA was not mutagenic when tested up to 5,000 microgram
([micro]g)/plate in presence and absence of activation in S.
typhimurium strains of TA98, TA 100, TA1535, TA1537, and in Escheria
coli strain WP2uvrA.
    iii. An in vitro Mammalian Chromosome Aberration Test in Human
Perpherral Blood Lymphocytes, in which N-acetyl-AMPA was negative for
the induction of structural and numerical chromosome aberrations in
both the non-activated and the S9-activated test systems when tested up
to 15.30 milligrams/milliliter (mg/ml).
    iv. An in vitro Mammalian Cell Gene Mutation Test (CHO/HPRT) Test,
in which N-acetyl-AMPA was not mutagenic at the HGPRT locus in Chinese
hamster ovary cells tested up to 1,531 [micro]g/ml in the presence and
absence of metabolic activation.
    v. An in vivo Mouse Bone Marrow Micronucleus Test, in which N-
acetyl-AMPA resulted in no detections of chromosomal aberrations were
detected in male and female mice at doses up to 2,000 mg/kg.
    3. For the purpose of assessing the aggregate risk from glyphosate
tolerances, EPA has assumed that N-acetyl-glyphosate is equally toxic
to glyphosate. This conservative assumption is based on the structural
similarity of N-acetyl-glyphosate with glyphosate; a structure activity
relationships (SAR) analysis of N-acetyl-glyphosate with a lack or
structural alerts for carcinogenicity, mutagenicity and endocrine
effects; and toxicity data for N-acetyl-glyphosate showing low acute
toxicity, low subchronic toxicity and lack of mutagenicity, In all
probability, N-acetyl-glyphosate is of lower toxicity than glyphosate.
For example, subchronic toxicity testing with glyphosate showed no
systemic toxicity in male and female rats at doses up to 400 mg/kg/day
in males and females. Subchronic testing with N-acetyl-glyphosate
showed no systemic toxicity in male and female rats at doses up to
1157/1446 mg/kg/day in males/females, respectively.
    The toxicity of N-acetyl-AMPA is considered low and of limited
concern based on the available data described above, and lack of any
structural alerts.
    Amendment of the glyphosate soybean and meat and milk tolerances to
include N-acetyl-glyphosate in the tolerance expression does not result
in changes in the exposure or risk estimates reported in the previous
risk assessments for the reasons listed below and fully discussed in
the risk assessment referenced earlier in this section.
    i. The Agency has determined that N-acetyl-glyphosate has no
greater toxicity than glyphosate and probably is of lower toxicity.
    ii. The numerical value of all but two food tolerances will remain
the same.
    iii. The most recent dietary analysis assumed tolerance level
residues and, 100% crop treated.
    iv. The estimate of glyphosate levels in drinking water is based on
a glyphosate use involving direct application to water at 3.75 pounds
active ingredient per acre. Use of glyphosate on glyphosate-resistant
soybeans will not result in higher levels in drinking water.
    v. Previously calculated dietary burdens to poultry were based on
alfalfa meal (400 ppm tolerance) and soybeans hulls (100 ppm tolerance)
as significant contributors to the diet. Based on the latest guidance,
although soybean seed, meal, and hulls are feed to poultry, soybean
hulls are is no longer considered a significant contributor to poultry
diets. The previously calculated dietary burdens to hog were based on
alfalfa meal and barley grain (20 ppm tolerance) being significant
contributors to the diet. Soybean seed and meal are fed to hogs;
however, the current action does not require an increase in tolerance
for soybean seed or meal. Based on these complications, the Agency
concludes that the application of glyphosate to
OptimumTMGATTM soybean will not result in
combined residues of glyphosate and N-acetyl-glyphosate (expressed as
glyphosate) in poultry or hog commodities greater than the residues of
glyphosate that result under the currently established glyphosate per
se tolerances.

    vi. Previously calculated dietary burdens to dairy or beef cattle
were based on alfalfa hay (400 ppm tolerance) being the significant
contributor to the diet. The Agency concludes that the consumption of
glyphosate OptimumTMGATTM soybean will not result
in combined residues of glyphosate and N-acetyl-glyphosate (expressed
as glyphosate) in or on beef/dairy cattle commodities greater than the
currently established glyphosate per se tolerances for the reasons
below.
    a. The high tolerance value for alfalfa hay (400 ppm) and alfalfa
hay occupies 40% of the total beef/dairy cattle diet.
    b. The soybean hull tolerance is only increasing from 100 to 120
ppm and soybean hulls will occupy at most 20% of the beef/dairy cattle
dietary burdens.
    c. Aspirated grain fractions occupy at most 5% of the beef cattle
dietary burden and are not feed to dairy cattle.
    Accordingly, based on the risk assessments discussed in the notice
referenced above, EPA concludes that no harm will result to the general
population and to infants and children from aggregate exposure to the
combined residues of glyphosate and its metabolite N-acetyl-glyphosate
(expressed as glyphosate).

IV. Other Considerations

A. Analytical Enforcement Methodology

    Adequate enforcement methodology (high performance liquid
chromatography (HPLC) with tandem mass spectrometry (MS/MS)) is
available to enforce the tolerance expression. 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>; e-mail address<EMAIL_ADDRESS>
B. International Residue Limits

     There are Codex Maximum Residue Levels (MRL) established for
glyphosate (sum of glyphosate and AMPA, expressed as glyphosate) on
soybean, dry at 20 ppm; edible offal (mammalian) at 5 ppm; eggs at 0.05
ppm; poultry meat at 0.05 ppm and poultry, edible offal of at 0.5 ppm.
Canadian MRLs are established for glyphosate including the metabolite
aminomethylphosphonic acid (AMPA) on soybean seed at 20 ppm, kidney of
cattle, goats, hogs, poultry and sheep at 2.0 ppm; and liver of cattle,
goats, hogs, poultry, and sheep at 0.2 ppm. A Mexican MRL of 6 ppm is
established for glyphosate. The glyphosate tolerances EPA is
establishing in this action differ from the tolerance expression for
the CODEX, Canadian or Mexican MRLs, due to the inclusion of N-acetyl-
glyphosate in the expression. Additionally, the EPA tolerances differ
from the CODEX and Canadian MRLs in that the EPA tolerances do not
include AMPA in tolerance expression. At this time, harmonization
between the U.S. tolerances and the CODEX, Canadian or Mexican MRLs can
not be achieved because of the inclusion of N-acetyl-glyphosate in the
EPA tolerances is necessary to support use patterns in the United
States and EPA has concluded that AMPA should not be included in the
tolerance expression because it is not toxicologically significant. The
petitioner is seeking registration and amendment of the tolerance
expressionin other countries. This may lead to harmonization between
the U.S. tolerances and the CODEX, Canadian or Mexican MRLs.

C. Response to Comments

    Three commenters submitted comments in response to the notice of
filing. A summary of the comments and EPA's response follows.
    1. Comment. One commenter does not believe that DuPont has
submitted sufficient toxicological data to demonstrate that N-acetyl-
glyphosate is not of toxicological concern and that submitted data did
not support the claim of equivalent toxicity between glyphosate and N-
acetyl-glyphosate. The commenter argued that the single acute toxicity
EPA relied on actually suggests that N-acetyl-glyphosate is more toxic
than glyphosate. This commenter also believes that reproductive,
developmental, and chronic and carcinogenicity data on N-acetyl-
glyphosate should be generated and analyzed.
    Another commenter expressed concern that sufficient data may not
have been submitted on the metabolite N-acetyl-glyphosate to satisfy
the requirements for EPA to establish tolerances or to support the
establishment of MRLs by other countries. The first commenter expressed
a similar concern that submitted data failed to meet requirements of
international authorities such as Joint FAO/WHO Meeting in Pesticide
Residues (JMPR), particularly when compared to the extensive data bases
required for other metabolites such as AMPA and N-acetyl-glufosinate.
    Response. EPA does not agree with the contention that N-acetyl-
glyphosate is more toxic than glyphosate. The Agency concluded that N-
acetyl-glyphosate is not likely to be more toxic than glyphosate based
on the available toxicity studies and Structure Activity Relationship
(SAR). The available acute toxicity study with N-acetyl-glyphosate and
glyphosate indicate low toxicity (Acute Oral LD50 was
greater than 5,000 mg/kg bw). Both N-acetyl-glyphosate and glyphosate
are placed in acute Tox Category IV. There was evidence of some
mortality in an acute oral study with N-acetyl-glyphosate but not with
glyphosate. However, the evidence from very high doses in this acute
oral LD50 test suggesting that N-acetyl-glyphosate might be
more toxic than glyphosate is outweighed by the results of subchronic
tests with the two compounds. There was no evidence of systemic
toxicity in 90-day dietary toxicity studying rats with N-acetyl-
glyphosate conducted at well above the limit dose (18,000 PPM equal to
1,157/1,461 mg/kg/day in males and females, respectively). In a 90-day
dietary toxicity study in rats with glyphosate at 0, 1,000, 5,000 or
20,000 ppm (equivalent to 0, 63, 317, or 1,267 mg/kg/day in males and
0, 84, 404, or 1,623 mg/kg/day in females), glyphosate caused increased
serum phosphorus and potassium at all doses treated in both sexes and
occurrence of high dose pancreatic lesions in males (effect was not
evaluated at lower doses). Based on these findings systemic toxicity
NOAEL for glyphosate can be considered as less than 1,000 ppm
(equivalent to <63 mg/kg/day). Thus the subchronic study with N-acetyl
glyphosate clearly indicates that it is less toxic than glyphosate. The
available adequate battery of mutagenicity studies with N-acetyl
glyphosate and glyphosate indicate that they are not mutagenic. The
metabolism of N-acetyl glyphosate and glyphosate is well studied in
rats. These studies indicate that both compounds are rapidly absorbed
and excreted from the body and are not biosequestered. In fact, nearly
all of the orally administered N-acetyl-glyphosate was excreted
unchanged in the urine and feces. There is extensive database available
on glyphosate, which indicate that glyphosate is not mutagenic, not a
carcinogen, and not a developmental or reproductive toxicant. Based on
its structural similarities with glyphosate and available data, it is
reasonable to conclude that the N-acetyl-glyphosate is not likely to be
more toxic than the parent. The Agency evaluated available information
and data and concluded that additional data on N-acetyl-glyphosate was
not needed based on the weight of evidence described above. In
addition, Agency has accepted bridging data where evidence is clear in
order to reduce the animal usage.
    EPA also disagrees with the claim that EPA has insufficient data on
N-acetyl-

glyphosate. EPA did review larger data sets on the metabolites AMPA and
N-acetyl-glufosinate but these larger data sets were submitted
voluntarily by pesticide registrants; EPA did not require these data to
be submitted. EPA's decision to review all data that was submitted
whether required or not (which is something the Agency does routinely)
can not be converted into an EPA determination that such data would be
required to make a safety finding for a similar pesticide metabolite.
For the reasons expressed above, EPA concludes it has sufficient data
on N-acetyl-glyphosate. For similar reasons, EPA also disagrees with
the commenter's suggestion that because the Joint FAO/WHO Meeting in
Pesticide Residues (JMPR) reviewed larger data sets on AMPA and N-
acetyl-glufosinate, EPA's data set on N-acetyl-glyphosate must be
deficient. The JMPR does not have any regulatory authority to require
data and the commenters do not claim that JMPR defined the
toxicological data needed to make the toxicity determinations with
regard to AMPA and N-acetyl-glufosinate. The JMPR reviewed the data
voluntarily submitted; it did not make a recommendation on the data
necessary to make the needed toxicity evaluation.
    2. Comment. One commenter argues that the higher residues of N-
acetyl-glyphosate may be absorbed at a higher rate than glyphosate.
Taking into consideration the increased absorption for N-acetyl-
glyphosate compared to glyphosate are likely in meat, milk, poultry,
and eggs due to the high values of N-acetyl-glyphosate that are likely
in plants and the higher absorption in animals of N-acetyl-glyphosate
(when compared to glyphosate). The commenter notes that
OptimumTMGATTM soybeans were specifically
engineered to convert N-acetyl-glyphosate and thus is likely to result
in significant amounts of N-acetyl-glyphosate in soybeans. As to the
higher absorption in animals, the commenter references a rat metabolism
study and argues that indicates that higher absorption would occur in
poultry and livestock that ingest residues of N-acetyl-glyphosate in
feed and that the higher absorption would likely result in higher
residues in meat, milk, and eggs when compared with glyphosate.
     Response. As the commenter stated, the rat metabolism studies
indicate that N-acetyl-glyphosate may be absorbed at a higher rate than
glyphosate. Taking into consideration the increased absorption for N-
acetyl-glyphosate, the previously calculated livestock diets (driven by
400 ppm alfalfa hay/meal tolerances), and the previously revised
guidance concerning the construction of livestock diets (changes to the
percent each food feedstuff contributes to a livestock diet, livestock
diets are now constructed taking in to consideration nutritional
requirements), it was concluded that higher livestock tolerances are
not necessary. Note that the dietary analysis assumed tolerance level
residue for the livestock commodities (i.e. assumes all of the
commodities feed to livestock have tolerance level residues and all
livestock commodities consumed by humans have tolerance level
residues).
    3. Comment. One commenter expressed concern that the petitioner had
stated its intent to increase glyphosate spray rates or change spray
timing and that residue data had not be submitted to reflect levels of
N-acetyl-glyphosate under actual use conditions.
    Response. The petitioner submitted several
OptimumTMGATTM soybean magnitude-of-the-residue
studies which monitored for residues of glyphosate and N-acetyl-
glyphosate in forage and hay and soybean seed. (See document cited
earlier in this unit for detailed discussion of these data). The Agency
concluded that this data was acceptable and supported the proposed use
pattern. The Agency also concluded that additional field trial data
were not necessary and that the proposed tolerance levels discussed in
Unit II of this document were acceptable. The Agency has not received
an application requesting increased application rates or changes in
application timing at this time. The Agency will reevaluate the need
for additional magnitude-of-the-residue data if and when an application
of this type is received.
    4. Comment. A concern expressed by two of the three commenters was
the possible amendment of FIFRA registration to allow higher
application rates on soybeans of ALS inhibitor herbicides such as
sulfonylureas already registered on soybeans or new uses of ALS
inhibitor herbicides on soybeans. Such amended uses or new uses, the
commenter urged, should be conditioned on the submission of additional
residue data or consideration of possible effects to non-target plants
and endangered species.
    Response. The Agency has not received requests for increased use or
new uses of ALS inhibitor pesticides on
OptimumTMGATTM soybean seed to additional
herbicides at this time. The pre-plant use of pyrithiobac sodium in
soybeans remained unchanged for this action. However, as discussed on
page 3 of the risk assessment referenced in Section III of this
document, since ALS tolerance is conferred via modification of the
endogenous ALS gene such that the plant is no longer sensitive (i.e.
the tolerance is not conveyed via metabolism of the herbicide), the
Agency's current view is that the nature/magnitude of residues
submitted in support of registration of ALS-inhibiting herbicides to
nontransgenic soybean are applicable for application of these compounds
to OptimumTMGATTM soybean.
    5. Comment. One commenter expressed a concern that the analytical
method submitted may not enable simultaneous quantification of the
combination of glyphosate, N-acetyl-glyphosate and
aminomethylphosphonic acid (AMPA), all of which could be present in
exported soybeans.
     Response. Available information including Agency method trial
confirms that proposed analytical method (high performance liquid
chromatography (HPLC) with tandem mass spectrometry (MS/MS)) quantifies
residues of glyphosate, N-acetyl-glyphosate, and AMPA in crops and
animal commodities.
    6. Comment. One commenter opposed the way the tolerance expression
was written in the notice of filing and the fact that a new paragraph
was being added to the tolerance expression allowing for duplicate
listings of the same commodities dependent on genetic makeup.
    Response. Based on the submitted comments and the available
information the Agency has decided that 40 CFR 180.364(a) will be
redesignated as paragraph (a)(1) and that the current listings from
newly redesignated paragraph (a)(1) for soybean and animal commodities
will be transferred to new paragraph (a)(2). The revised tolerance
expression deletes any reference to genetic make up. See Unit II of
this document for discussion.
    7. Comment. One commenter expressed a concern that current EPA
label policy allowing the use of general terminology such as
``glyphosate tolerant soybeans'' would permit use of any soybean seed
that satisfies the general ``glyphosate tolerant'' criteria if crop
seed such as OptimumTMGATTM soybean seed were
commercially available, even if appropriate data have not been reviewed
and tolerances granted.
    Response. The EPA label policy is intended to allow the use of
glyphosate on any approved glyphosate tolerant seed. The Agency does
not regulate or approve the glyphosate tolerant seed, only the use of
glyphosate on the crops grown from the glyphosate tolerant

seed. The approval of the seed itself is handled by the United States
Department of Agriculture (USDA) Animal and Plant Health Inspection
Service (APHIS). Information on approval of the
OptimumTMGATTM soybean seed is available in a
notice published in the Federal Register of July 24, 2008 (73 FR 43203)
which advised the public of their determination that a soybean line
developed by Pioneer HI-Bred International, Inc., designated as
transformation event 356043, which has been genetically engineered for
tolerance to glyphosate and acetolactate synthase-inhibiting
herbicides, is no longer considered a regulated article under their
regulations governing the introduction of certain genetically
engineered organisms, and the public docket established for that action
by USDA/APHIS, which is available at http://www.regulations.gov and is
identified as docket identification number APHIS-2007-019.
    8. Comment. One commenter expressed a concern that
OptimumTMGATTM soybeans are plants that have high
levels of a new abnormal enzyme that creates new untested metabolites.
The commenter referenced an article (Science, 21 May 2004, vol. 34 pp
1151-1154) which shows that the new ``shuffled enzyme'' (N-acetylate)
can react with common amino acids L-aspartate, L-serine, phosphor-L-
serine, L-threonine, L-glutamate, L-aspargine, and L-cysteine to form
new N-acetylated versions of these common amino acids. The commenter
stated that toxicology data may be necessary to address the safety of
these N-acetylated metabolites.
    Response. This issue concerns componets of the
OptimumTMGATTM soybean and not residues of the
pesticide glyphosate and is not relevant to EPA's determination of
safety under section 408 of the FFDCA. However, similar comments were
received and addressed by APHIS during the course of their review of
the OptimumTMGATTM soybean seed which is fully
discussed in the Federal Register notice of July 24, 2008 and the APHIS
public docket referenced earlier in this unit. In summary APHIS
reviewed available information toxicity data available for both the
356043 soybean seed and N-acetyl-L-aspartic acid (NAA) and determine
that additional toxicological assessment was unwarranted. APHIS
determined that quantification of other acetylated amino acids did not
need to be measured based on the fact that the GAT4601 enzyme has
different kinetic and specificity properties than the native enzymes
from Bacillus licheniformis which have the ability to use additional
amino acids as substrates under specific in vitro conditions. The study
conducted with GAT4601 demonstrated the kinetic parameters could only
be established for aspartate and glutamate. Additional information
concerning this conclusion can be found in the APHIS public docket
referenced earlier in this unit.
    9. Comment. One commenter expressed concern that sufficient data
may not have been submitted on the metabolite N-acetyl-glyphosate to
satisfy the requirements for EPA to establish tolerances or to support
the establishment of MRLs by other countries and Agencies. A second
commenter expressed a similar concern that submitted data failed to
meet requirements of international authorities such as Joint FAO/WHO
Meeting in Pesticide Residues (JMPR), particularity when compared to
the extensive databases required for other metabolites such as AMPA and
N-acetyl-glufosinate.
    Response. The Agency has determined that the submitted data
discussed above and in the referenced risk assessments provided
sufficient information for the Agency to make the required human safety
determination required in the FFDCA and satisfy data requirements for
establishment of tolerances and registration in the United States.
    10. Comment. One commenter expressed concern that the proposed
unilateral change to the glyphosate residue definition to include the
new metabolite N-acetyl-glyphosate has significant potential to disrupt
the international trade of soybeans for U.S. growers until the
glyphosate residue definition is implemented globally. The commenter
further noted that the data submitted to EPA may not be sufficient for
other countries to modify their tolerance expressions.
    Response. The petitioner submitted a summary of a metabolism study
conducted with OptimumTMGATTM soybean. This study
indicated that both glyphosate and N-acetyl-glyphosate were significant
residues in/on OptimumTMGATTM soybean forage and
straw. For mature OptimumTMGATTM soybean seed,
only N-acetyl-glyphosate was a significant residue (glyphosate
represented a minor component of the total residue). Since N-acetyl-
glyphosate was the major residue in mature
OptimumTMGATTM soybean forage, hay, and seed, EPA
concluded that it is necessary to include this compound in the
tolerance expression.
    EPA believes that the new metabolite N-acetyl glyphosate is not
likely to disrupt international trade of soybean for U.S. growers.
DuPont is seeking registration in various countries. The Agency expects
that the various countries will come to similar conclusion as the
United States for OptimumTMGATTM soybean and
amend their tolerance expressions which will alleviate the potential
trade issue. The current analytical method would detect glyphosate,
AMPA and N-acetyl glyphosate allowing enforcement of the tolerances in
other countries. Growers in the United States have the option of
growing conventional soybeans or other varieties of glyphosate tolerant
seed until any trade issues in other countries with
OptimumTMGATTM soybeans are resolved.
    11. Comment. Several comments were received from a private citizen
objecting to establishment of tolerances.
    Response. The Agency has received similar comments from this
commenter on numerous previous occasions. Refer to the Federal Register
of March 14, 2007 (72 FR 11784; FRL-8117-2) for the Agency's response
to these objections. In addition the commenter noted that bees and
turkey vultures are dying. These comments are not relevant to human
safety determination which is the sole focus of tolerance actions under
section 408 of the FFDCA. For informational purposes, EPA would note
that pesticide effects on wildlife are addressed in the FIFRA
registration process. In a honey bee contact test with glyphosate,
mortality was low in all treatment levels. The results indicate that
glyphosate is classified as practically nontoxic to honeybees. Although
the Agency does not require testing on turkey buzzards specifically,
the potential for avian mortality to glyphosate has been assessed using
bobwhite quail acute oral LD50 study and bobwhite quail and
mallard duck 8-day dietary LC50 studies. These data indicate
that glyphosate is practically nontoxic to avian species on an acute
oral basis and no more than slightly toxic on a subacute dietary basis.
The potential effects to avian growth and reproduction from glyphosate
have been assessed using avian reproduction studies with mallard duck
and bobwhite quail. These data indicate that glyphosate is not expected
to cause reproductive impairment. The commenter did not submit any
information to support a revision of Agency conclusions.

V. Conclusion

    Therefore, tolerances are established for combined residues of
glyphosate, N-(phosphonomethyl)glycine and its metabolite N-acetyl-
glyphosate (expressed as glyphosate) resulting from the application of
glyphosate, the

isopropylamine salt of glyphosate, the ethanolamine salt of glyphosate,
the dimethylamine salt of glyphosate, the ammonium salt of glyphosate,
and the potassium salt of glyphosate on the food commodities cattle,
meat byproducts at 5.0 ppm; egg at 0.05 ppm; goat, meat byproducts at
5.0 ppm; grain, aspirated fractions at 310 ppm; hog, meat byproducts at
5.0 ppm; horse, meat byproducts at 5.0 ppm; poultry, meat, at 4.0 ppm;
poultry, meat byproducts at 1.0 ppm; sheep, meat byproducts at 5.0 ppm;
soybean, seed at 20.0 ppm; soybean, forage at 100.0 ppm; soybean, hay
at 200.0 ppm, and soybean, hulls at 120 ppm as discussed in Unit II of
this document.

VI. Statutory and Executive Order Reviews

    This final rule establishes tolerances under section 408(d) of
FFDCA 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 final rule has been
exempted from review under Executive Order 12866, this final rule 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). This final rule 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 section 408(d) of FFDCA, 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 final rule 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 section 408(n)(4) of FFDCA. 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 final rule. In addition,
this final rule does not impose any enforceable duty or contain any
unfunded mandate as described under Title II of the Unfunded Mandates
Reform Act of 1995 (UMRA) (Public Law 104-4).
    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 of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272
note).

VII. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. 801 et seq., generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report to each House of the Congress and to
the Comptroller General of the United States. 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 this final rule in the Federal
Register. This final rule 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: November 19, 2008.
Donald R. Stubbs,
Director, Registration Division, Office of Pesticide Programs.

0
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. Section 180.364 is amended as follows:
0
a. By removing the entries cattle, meat byproducts; egg; goat, meat
byproducts; grain, aspirated fractions; hog, meat byproducts; horse,
meat byproducts; poultry, meat; poultry, meat byproducts; sheep, meat
byproducts; soybean, forage; soybean, hay; soybean, hulls; and soybean,
seed from the table in paragraph (a).
0
b. By redesignating paragraph (a) introductory text and the remainder
of the table as paragraph (a)(1) and by adding paragraph (a)(2) to read
as follows:

Sec.  180.364  Glyphosate, Tolerance for residue.

    (a) * * * (1) * * *
    (2) Tolerances are established for combined residues of glyphosate,
N-(phosphonomethyl)glycine and its metabolite N-acetyl-glyphosate
(expressed as glyphosate) resulting from the application of glyphosate,
the isopropylamine salt of glyphosate, the ethanolamine salt of
glyphosate, the dimethylamine salt of glyphosate, the ammonium salt of
glyphosate, and the potassium salt of glyphosate on the food
commodities:

------------------------------------------------------------------------
                                                            Parts per
                       Commodity                             Million
------------------------------------------------------------------------
Cattle, meat byproducts...............................               5.0
Egg...................................................              0.05
Goat, meat byproducts.................................               5.0
Grain aspirated fractions.............................             310.0
Hog, meat byproducts..................................               5.0
Horse, meat byproducts................................               5.0
Poultry, meat.........................................               4.0
Poultry, meat byproducts..............................               1.0
Sheep, meat byproducts................................               5.0
Soybean, forage.......................................             100.0
Soybean, hay..........................................             200.0
Soybean, hulls........................................             120.0
Soybean, seed.........................................              20.0
------------------------------------------------------------------------

* * * * *
[FR Doc. E8-28571 Filed 12-2-08; 8:45 am]

BILLING CODE 6560-50-S


[Federal Register Volume 85, Number 136 (Wednesday, July 15, 2020)]
[Notices]
[Pages 42876-42877]
[FR Doc No: 2020-15203]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-1997-D-0444]

Special Considerations, Incentives, and Programs To Support the
Approval of New Animal Drugs for Minor Uses and for Minor Species;
Draft Guidance for Industry; Availability

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice of availability.

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

SUMMARY: The Food and Drug Administration (FDA or Agency) is announcing
the availability of draft guidance for industry (GFI) #61 entitled
``Special Considerations, Incentives, and Programs to Support the
Approval of New Animal Drugs for Minor Uses and for Minor Species.''
This draft guidance is intended to assist those interested in pursuing
FDA approval of new animal drugs intended for minor uses in major
species or for use in minor species (MUMS drugs). It outlines the basic
statutory and regulatory requirements and special considerations for
these approvals, and describes the incentives available to encourage
the development of MUMS drugs.

DATES: Submit either electronic or written comments on the draft
guidance by November 12, 2020 to ensure that the Agency considers your
comment on this draft guidance before it begins work on the final
version of the guidance.

ADDRESSES: You may submit comments on any guidance at any time as
follows:

Electronic Submissions

    Submit electronic comments in the following way:
     Federal eRulemaking Portal: https://www.regulations.gov.
Follow the instructions for submitting comments. Comments submitted
electronically, including attachments, to https://www.regulations.gov
will be posted to the docket unchanged. Because your comment will be
made public, you are solely responsible for ensuring that your comment
does not include any confidential information that you or a third party
may not wish to be posted, such as medical information, your or anyone
else's Social Security number, or confidential business information,
such as a manufacturing process. Please note that if you include your
name, contact information, or other information that identifies you in
the body of your comments, that information will be posted on https://www.regulations.gov.
     If you want to submit a comment with confidential
information that you do not wish to be made available to the public,
submit the comment as a written/paper submission and in the manner
detailed (see ``Written/Paper Submissions'' and ``Instructions'').

Written/Paper Submissions

    Submit written/paper submissions as follows:
     Mail/Hand Delivery/Courier (for written/paper
submissions): Dockets Management Staff (HFA-305), Food and Drug
Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.
     For written/paper comments submitted to the Dockets
Management Staff, FDA will post your comment, as well as any
attachments, except for information submitted, marked, and identified
as confidential, if submitted as detailed in ``Instructions.''
    Instructions: All submissions received must include the Docket No.
FDA-1997-D-0444 for ``Special Considerations, Incentives, and Programs
to Support the Approval of New Animal Drugs for Minor Uses and for
Minor Species.'' Received comments will be placed in the docket and,
except for those submitted as ``Confidential Submissions,'' publicly
viewable at https://www.regulations.gov or at the Dockets Management
Staff between 9 a.m. and 4 p.m., Monday through Friday,<PHONE_NUMBER>.
     Confidential Submissions--To submit a comment with
confidential information that you do not wish to be made publicly
available, submit your comments only as a written/paper submission. You
should submit two copies total. One copy will include the information
you claim to be confidential with a heading or cover note that states
``THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.'' The Agency will
review this copy, including the claimed confidential information, in
its consideration of comments. The second copy, which will have the
claimed confidential information redacted/blacked out, will be
available for public viewing and posted on https://www.regulations.gov.
Submit both copies to the Dockets Management Staff. If you do not wish
your name and contact information to be made publicly

available, you can provide this information on the cover sheet and not
in the body of your comments and you must identify this information as
``confidential.'' Any information marked as ``confidential'' will not
be disclosed except in accordance with 21 CFR 10.20 and other
applicable disclosure law. For more information about FDA's posting of
comments to public dockets, see 80 FR 56469, September 18, 2015, or
access the information at: https://www.govinfo.gov/content/pkg/FR-2015-09-18/pdf/2015-23389.pdf.
    Docket: For access to the docket to read background documents or
the electronic and written/paper comments received, go to https://www.regulations.gov and insert the docket number, found in brackets in
the heading of this document, into the ``Search'' box and follow the
prompts and/or go to the Dockets Management Staff, 5630 Fishers Lane,
Rm. 1061, Rockville, MD 20852,<PHONE_NUMBER>.
    You may submit comments on any guidance at any time (see 21 CFR
10.115(g)(5)).
    Submit written requests for single copies of the guidance to the
Policy and Regulations Staff (HFV-6), Center for Veterinary Medicine,
Food and Drug Administration, 7500 Standish Pl., Rockville, MD 20855.
Send one self-addressed adhesive label to assist that office in
processing your requests. See the SUPPLEMENTARY INFORMATION section for
electronic access to the draft guidance document.

FOR FURTHER INFORMATION CONTACT: Margaret Oeller, Center for Veterinary
Medicine (HFV-50), Food and Drug Administration, 7500 Standish Pl.,
Rockville, MD 20855,<PHONE_NUMBER><EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. Background

    FDA is announcing the availability of draft GFI #61 entitled
``Special Considerations, Incentives, and Programs to Support the
Approval of New Animal Drugs for Minor Uses and for Minor Species.''
This draft guidance replaces final GFI #61, issued in April 1999 (with
a minor update in May 2008) entitled ``FDA Approval of New Animal Drugs
for Minor Uses and for Minor Species.'' This draft guidance, when
finalized, should assist those interested in pursuing FDA approval of
MUMS drugs. It outlines the basic statutory and regulatory requirements
and special considerations for these approvals, and describes the
incentives available to encourage the development of MUMS drugs.
    This level 1 draft guidance is being issued consistent with FDA's
good guidance practices regulation (21 CFR 10.115). The draft guidance,
when finalized, will represent the current thinking of FDA on approval
MUMS drugs. It does not establish any rights for any person and is not
binding on FDA or the public. You can use an alternative approach if it
satisfies the requirements of the applicable statutes and regulations.

II. Paperwork Reduction Act of 1995

    FDA tentatively concludes that this draft guidance contains no
collection of information. Therefore, clearance by the Office of
Management and Budget (OMB) under the Paperwork Reduction Act of 1995
(PRA) (44 U.S.C. 3501-3521) is not required.
    However, this draft guidance refers to previously approved FDA
collections of information. These collections of information are
subject to review by OMB under the PRA. The collections of information
in 21 CFR part 511 have been approved under OMB control number 0910-
0117; in 21 CFR part 514 have been approved under OMB control numbers
0910-0032 and 0910-0284; and in 21 CFR part 516 have been approved
under OMB control numbers 0910-0605 and 0910-0620.

III. Electronic Access

    Persons with access to the internet may obtain the guidance at
either https://www.fda.gov/AnimalVeterinary/GuidanceComplianceEnforcement/GuidanceforIndustry/default.htm or
https://www.regulations.gov.

    Dated: July 7, 2020.
Lowell J. Schiller,
Principal Associate Commissioner for Policy.
[FR Doc. 2020-15203 Filed 7-14-20; 8:45 am]
BILLING CODE 4164-01-P


[Federal Register Volume 76, Number 17 (Wednesday, January 26, 2011)]
[Proposed Rules]
[Pages 4569-4574]
[FR Doc No: 2011-1488]

=======================================================================
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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 35

[Docket No. RM10-20-000]

Market-Based Rate Affiliate Restrictions

AGENCY: Federal Energy Regulatory Commission.

ACTION: Withdrawal of notice of proposed rulemaking and termination of
rulemaking proceeding.

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

SUMMARY: The Federal Energy Regulatory Commission (Commission)
withdraws a notice of proposed rulemaking, which proposed to amend its
regulations governing market-based rates for public utilities pursuant
to section 205 of the Federal Power Act (FPA) to include in the
regulatory text the clarification that employees that determine the
timing of scheduled outages or that engage in economic dispatch, fuel
procurement or resource planning may not be shared under the market-
based rate affiliate restrictions codified in Order No. 697.

DATES: Effective Date: This withdrawal will become effective February
25, 2011.

FOR FURTHER INFORMATION CONTACT:

Michelle Barnaby (Technical Information), Office of Energy Market
Regulation, Federal Energy Regulatory Commission, 888 First Street,
NE., Washington, DC 20426,<PHONE_NUMBER>.
Stephen J. Hug (Legal Information), Office of the General Counsel,
Federal Energy Regulatory Commission, 888 First Street, NE.,
Washington, DC 20426,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:
    Issued January 20, 2011.
    1. On April 15, 2010, the Commission issued a Notice of Proposed
Rulemaking (NOPR) in this proceeding.\1\ For the reasons set forth
below, we are exercising our discretion to withdraw the NOPR and
terminate this rulemaking proceeding.
---------------------------------------------------------------------------

    \1\ Market-Based Rate Affiliate Restrictions, 75 FR 20796 (Apr.
21, 2010), Notice of Proposed Rulemaking, FERC Stats. & Regs. ]
32,567 (2010).
---------------------------------------------------------------------------

I. Background

    2. In Order No. 697,\2\ the Commission adopted affiliate
restrictions that govern the relationship between franchised public
utilities with captive customers and their ``market-regulated'' power
sales affiliates, i.e., affiliates whose power sales are regulated in
whole or in part on a market-based rate basis. These market-based rate
affiliate restrictions govern the separation of functions, the sharing
of market information, sales of non-power goods or services, and power
brokering. The Commission requires that, as a condition of receiving
and retaining market-based rate authority, sellers comply with these
affiliate restrictions unless explicitly permitted by Commission rule
or order. Failure to satisfy the conditions set forth in the affiliate
restrictions constitutes a violation of a seller's market-based rate
tariff.\3\
---------------------------------------------------------------------------

    \2\ Market-Based Rates for Wholesale Sales of Electric Energy,
Capacity and Ancillary Services by Public Utilities, Order No. 697,
FERC Stats. & Regs. ] 31,252, clarified, 121 FERC ] 61,260 (2007),
order on reh'g, Order No. 697-A, FERC Stats. & Regs. ] 31,268,
clarified, 124 FERC ] 61,055, order on reh'g, Order No. 697-B, FERC
Stats. & Regs. ] 31,285 (2008), order on reh'g, Order No. 697-C,
FERC Stats. & Regs. ] 31,291 (2009), order on reh'g, Order No. 697-
D, FERC Stats. & Regs. ] 31,305 (2010).
    \3\ Order No. 697, FERC Stats. & Regs. ] 31,252 at P 549-550.
---------------------------------------------------------------------------

    3. On March 9, 2009, the Compliance Working Group \4\ submitted a
request for clarification in the Commission's market-based rate
rulemaking proceeding regarding which employees can be shared for
purposes of compliance with the Commission's market-based rate
affiliate restrictions. On October 28, 2009, the Compliance Working
Group submitted an amended request for clarification. In response to
the Compliance Working Group's request, the Commission provided
clarification regarding which employees may not be shared under the
affiliate

restrictions.\5\ Concurrently with the April 15 Clarification Order,
the Commission issued the NOPR, in which it proposed to revise the text
of the separation of functions and information sharing provisions of
the affiliate restrictions contained in Sec.  35.39 of the Commission's
regulations in order to reflect the clarification provided in response
to the Compliance Working Group's request.
---------------------------------------------------------------------------

    \4\ The Compliance Working Group stated that it consists of 27
energy companies, which include integrated electric businesses,
merchant generators, marketing and trading businesses, and natural
gas distributors, and explains that the group was formed in mid-2008
``to develop a model [Commission] compliance program guide.''
Compliance Working Group Request for Clarification, Docket No. RM04-
7-007, at 2 (filed Mar. 9, 2009); Compliance Working Group Amended
Request for Clarification, Docket No. RM04-7-007, at 3 (filed Oct.
28, 2009). The members of the Compliance Working Group taking part
in its request for clarification are: Allegheny Energy, Inc.,
American Electric Power Company, Inc., Cleco Corporation, Consumers
Energy Company, Dominion Resources, Inc., Duke Energy Corporation,
Edison International, El Paso Electric Company, Energy East Corp.,
Entergy Corporation, Exelon Corporation, FirstEnergy Corp., FPL
Group, Inc., Pacific Gas and Electric Co., Progress Energy, Inc.,
Public Service Enterprise Group Incorporated, and Westar Energy,
Inc.
    \5\ Market-Based Rates for Wholesale Sales of Electric Energy,
Capacity and Ancillary Services By Public Utilities, 131 FERC ]
61,021 (2010) (April 15 Clarification Order).
---------------------------------------------------------------------------

    4. In the April 15 Clarification Order, the Commission denied the
Compliance Working Group's request that the Commission interpret the
market-based rate affiliate restrictions to permit the sharing of
employees who are neither transmission function employees nor marketing
function employees under the Standards of Conduct. However, in order to
address the Compliance Working Group's concerns regarding compliance
with the market-based rate affiliate restrictions, the April 15
Clarification Order provided guidance regarding which employees may not
be shared under the affiliate restrictions.\6\ Specifically, the
Commission rejected the Compliance Working Group's interpretation of
the market-based rate affiliate restrictions because the Compliance
Working Group's interpretation would permit the sharing of employees
who are prohibited from being shared under the market-based rate
affiliate restrictions (for instance, employees that make economic
dispatch decisions or that determine the timing of scheduled outages).
Thus, the Commission explained that granting the Compliance Working
Group's requested interpretation would permit market-based rate sellers
to share employees that may not currently be shared under the affiliate
restrictions.
---------------------------------------------------------------------------

    \6\ April 15 Clarification Order, 131 FERC ] 61,021 at P 39-42.
---------------------------------------------------------------------------

    5. The April 15 Clarification Order explained that ``marketing
function employee'' is not a defined term in the market-based rate
regulations adopted in Order No. 697, and explained that the
restrictions on which employees may be shared under the market-based
rate affiliate restrictions are not limited to those employees who are
engaged in sales.\7\ It stated that, as clarified in Order No. 697-A,
under the market-based rate affiliate restrictions, ``shared employees
may not be involved in decisions regarding the marketing or sale of
electricity from the facilities, may not make economic dispatch
decisions, and may not determine the timing of scheduled outages for
facilities.'' \8\ In this regard, the April 15 Clarification Order
explained that responsibility for economic dispatch or the timing of
scheduled outages, for example, is not a ``marketing function'' under
the Standards of Conduct and, therefore, employees engaging in economic
dispatch or that determine the timing of scheduled outages would not be
marketing function employees under the Standards of Conduct. Therefore,
those employees could be shared under the Standards of Conduct, despite
the fact that sharing of such employees is prohibited under the
affiliate restrictions. Thus, consistent with the Commission's
determinations in Order No. 697-A, the April 15 Clarification Order
clarified that, for purposes of compliance with the market-based rate
affiliate restrictions, a franchised public utility with captive
customers and its market-regulated power sales affiliates may not share
employees that make economic dispatch decisions or that determine the
timing of scheduled outages.\9\
---------------------------------------------------------------------------

    \7\ Under the Standards of Conduct regulations, ``marketing
function employee'' is defined as ``an employee, contractor,
consultant or agent of a transmission provider or of an affiliate of
a transmission provider who actively and personally engages on a
day-to-day basis in marketing functions.'' 18 CFR 358.3(d) (2010).
``Marketing functions'' means ``in the case of public utilities and
their affiliates, the sale for resale in interstate commerce, or the
submission of offers to sell in interstate commerce, of electric
energy or capacity, demand response, virtual transactions, or
financial or physical transmission rights, all as subject to an
exclusion for bundled retail sales, including sales of electric
energy made by providers of last resort. * * *'' 18 CFR 358.3(c)
(2010). As the Commission stated in the April 15 Clarification
Order, the Standards of Conduct definition of ``marketing function
employee'' may be read to be limited to those employees engaged in
sales.
    \8\ April 15 Clarification Order, 131 FERC ] 61,021 at P 37
(citing Order No. 697-A, FERC Stats. & Regs. ] 31,268 at P 253).
    \9\ Order No. 697-A, FERC Stats. & Regs. ] 31,268 at P 253.
---------------------------------------------------------------------------

    6. The April 15 Clarification Order also explained that franchised
public utilities with captive customers should be prohibited from
sharing employees that engage in resource planning or fuel procurement
with their market-regulated power sales affiliates. The Commission
explained that if the franchised public utility and its market-
regulated power sales affiliate are permitted to share employees that
make strategic decisions about future generation supply, such as
deciding when and/or where to build or acquire generating capacity,
such strategic decision making by a shared employee could result in
generation being built or acquired for the benefit of the market-
regulated power sales affiliate, and at the expense of the captive
customers of the franchised public utility. The April 15 Clarification
Order also explained that a shared employee that procures fuel for both
the franchised public utility and the market-regulated power sales
affiliate may have the incentive to allocate purchases of lower priced
fuel supplies to the market regulated power sales affiliate while
allocating purchases of higher priced fuel supplies to the franchised
public utility. Therefore, given that the definition of marketing
function employee under the Standards of Conduct does not specifically
address employees that determine the timing of scheduled outages or
that engage in economic dispatch, fuel procurement, or resource
planning,\10\ the April 15 Clarification Order clarified that employees
engaging in these activities are prohibited from being shared under the
market-based rate affiliate restrictions, absent an explicit waiver
from the Commission.
---------------------------------------------------------------------------

    \10\ The prohibition on sharing employees that engage in
resource planning applies only to the sharing of employees between a
franchised public utility and its market-regulated power sales
affiliate, and is not intended to alter resource planning activities
by transmission providers that are permitted under the Standards of
Conduct. See Standards of Conduct for Transmission Providers, Order
No. 717, FERC Stats. & Regs. ] 31,280, at P 144 (2008) (Standards of
Conduct Final Rule), order on reh'g, Order No. 717-A, FERC Stats. &
Regs. ] 31,297, order on reh'g, Order No. 717-B, 129 FERC ] 61,123
(2009).
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    7. In order to reflect these clarifications, the Commission
proposed in the NOPR to revise Sec.  35.39 of its regulations in order
to clarify that employees that determine the timing of scheduled
outages or that engage in economic dispatch, fuel procurement, or
resource planning may not be shared under the market-based rate
affiliate restrictions. Accordingly, the Commission proposed to revise
the separation of functions provision contained in Sec.
35.39(c)(2)(ii) of the regulations to include the provision that
franchised public utilities with captive customers are prohibited from
sharing employees that determine the timing of scheduled outages or
that engage in economic dispatch, fuel procurement, or resource
planning with their market-regulated power sales affiliates.
    8. The Commission also proposed to revise the information sharing
provision contained in Sec.  35.39(d)(2) of the regulations to include
the provision that employees that determine the timing of scheduled
outages or that engage in economic dispatch, fuel procurement, or
resource planning may not have access to information covered by the
prohibition of Sec.  35.39(d)(1).

II. Comments

    9. The Edison Electric Institute (EEI), Ameren Services Company
(Ameren), Dominion Resources Services, Inc. (Dominion), Duke Energy
Corporation (Duke), Entergy Services, Inc. (Entergy), and the Nuclear
Energy Institute (NEI) \11\ filed comments opposing the codification of
the clarifications provided in the April 15 Clarification Order. The
Transmission Access Policy Study Group (TAPS) submitted comments in
support of the NOPR's proposed codification of the clarifications
provided.
    10. EEI contends that the April 15 Clarification Order bypassed the
notice-and-comment proceeding established in the NOPR, depriving the
public of an effective opportunity to provide input on the Commission's
proposed changes. According to EEI, the NOPR is evidence that the April
15 Clarification Order does more than merely clarify existing
restrictions. NEI also states that the April 15 Clarification Order is
effectively amending the Commission's affiliate restrictions
regulations without notice and comment. NEI contends that the NOPR is
not a logical outgrowth of the Compliance Working Group's request for
clarification or the notice associated with the request and that, as a
result, the notice and comment on the Compliance Working Group's
request for clarification does not satisfy the Administrative Procedure
Act.\12\
---------------------------------------------------------------------------

    \11\ NEI represents the commercial nuclear energy industry in
regulatory communications, public policy and other matters. NEI
states that its members generate electricity for sale in both
regulated and deregulated markets. NEI Comments at 2-3.
    \12\ NEI Comments at 10 (citing Shell Oil Co. v. E.P.A., 950
F.2d 741, 747 (D.C. Cir. 1991).
---------------------------------------------------------------------------

    11. EEI opposes adoption of the proposed changes to the market-
based rate affiliate restrictions because it believes that the
Commission's current regulations provide a solid and a sufficient
framework to protect captive customers.\13\ EEI contends that the April
15 Clarification Order could impose new obligations on a number of
utilities and require reorganization and operational changes by
affected entities.\14\ EEI argues that the Commission should not adopt
any such changes absent evidence that captive retail customers are at
risk of subsidizing the activities of market-regulated power sales
affiliate operations. EEI requests that the Commission find that
franchised public utilities with captive customers and their market-
regulated power sales affiliates may share employees who: (1) Perform
economic dispatch and outage scheduling functions, but are abiding by
guidance provided by the Commission or its staff permitting the sharing
of these employees; (2) provide inputs and other support to the
resource planning process but do not exercise decisional authority with
respect to such matters; \15\ or (3) provide shared fuel procurement
services within the corporate family when the Commission or a state
commission has approved such sharing of employees, or sharing is
consistent with no-action letters or other such guidance. EEI also
states that the Commission should find that franchised public utilities
with captive customers and their market regulated power sales
affiliates may continue to rely on waivers, no-action letters, audit
reports, informal guidance, or other documents that the Commission or
its staff has issued, even if those documents precede or depart from
the April 15 Clarification Order or the Final Rule issued pursuant to
the NOPR.
---------------------------------------------------------------------------

    \13\ EEI Comments at 5.
    \14\ Id. at 16-17.
    \15\ While it is unclear what EEI means by its use of the term
``inputs,'' EEI appears to use the term ``inputs'' to describe
support services.
---------------------------------------------------------------------------

    12. With respect to fuel procurement employees, EEI requests that,
at a minimum, the Commission clarify that: (1) Those franchised public
utilities with captive customers and their market-regulated power sales
affiliates that currently rely on a shared fuel procurement unit may
continue to do so; and (2) companies may seek waivers in the future to
establish new shared fuel procurement units. EEI asserts that joint
fuel procurement would be governed by the requirements of the
regulations adopted in Order Nos. 667 and 707, and by applicable state
orders and regulations, and argues that the Commission has not
previously proscribed the use of joint fuel procurement units.\16\
---------------------------------------------------------------------------

    \16\ EEI Comments at 13-14 (citing Repeal of the Public Utility
Holding Company Act of 1935 and Enactment of the Public Utility
Holding Company Act of 2005, Order No. 667, FERC Stats. & Regs. ]
31,197 (2005), order on reh'g, Order No. 667-A, FERC Stats. & Regs.
] 31,213 (2006), order on reh'g, Order No. 667-B, FERC Stats. &
Regs. ] 31,224 (2006), order on reh'g, Order No. 667-C, 118 FERC ]
61,133 (2007); Cross-Subsidization Restrictions on Affiliate
Transactions, Order No. 707, FERC Stats. & Regs. ] 31,264 (2008),
order on reh'g, Order No. 707-A, 124 FERC ] 61,047 (2008)).
---------------------------------------------------------------------------

    13. Dominion, Ameren, Duke, Entergy, and NEI make arguments similar
to those of EEI. Dominion, Duke, Entergy, and NEI argue that sharing of
nuclear fuel procurement employees should be permitted. NEI argues that
a categorical prohibition on the sharing of employees that engage in
fuel procurement is unnecessary given that there is no record of abuse
and that such a prohibition would negatively affect the ability of
utilities to procure nuclear fuel. NEI argues that the Commission has
allowed the sharing of fuel procurement employees in the past, and
suggests that the Commission's concerns regarding the sharing of fuel
procurement employees could be better addressed through procedural
approaches, such as requiring separate contracts for each entity and
auditable records to justify specific procurement actions.\17\
According to Entergy, market-based rate affiliate personnel with
information on regulated utility nuclear fuel prices could not use that
information in electricity trading or dispatch decisions in any manner
to the detriment of ratepayers, even if the no-conduit rule were
ineffective in ensuring that marketing personnel do not have access to
that information.\18\
---------------------------------------------------------------------------

    \17\ NEI Comments at 4-7 (citing Entergy Corp., No-Action
Letter, Docket No. NL07-4-000 (Feb. 8, 2007)).
    \18\ Entergy Comments at 15, 17.
---------------------------------------------------------------------------

    14. Dominion claims that state regulation of fuel procurement
protects captive ratepayers, and states that it currently uses shared
fuel procurement personnel in accordance with state commission-approved
affiliate agreements. Dominion proposes that the Commission create safe
harbors, which Dominion describes as pre-defined categories for fast-
track waiver requests that permit the sharing of resource planning and/
or fuel procurement employees. Dominion argues that creating safe
harbors would minimize utilities having to make a fact-specific showing
that part or all of the affiliate restrictions should not apply and
minimize problems with showings becoming outdated.\19\
---------------------------------------------------------------------------

    \19\ Dominion Comments at 8, 19-22.
---------------------------------------------------------------------------

    15. Entergy argues that, particularly in the nuclear context, the
prohibition on the sharing of outage schedulers should be read
narrowly, so that employees that support the outage scheduling process
may continue to be shared. Entergy seeks confirmation that its
interpretation of the words ``determine the timing of'' as being
limited to a small group of personnel, such as site outage managers and
senior vice presidents, who are the outage decision-makers, is correct
\20\ and requests that the Commission clarify that after-the-fact
sharing of certain information does not constitute the sharing of
market information.\21\
---------------------------------------------------------------------------

    \20\ Entergy Comments at 20-21.
    \21\ Specifically, Entergy argues that the sharing of
information concerning the causes of forced outages, system weakness
or equipment failures, other potential concerns, and best practices
should be permitted. Id. at 21-22.

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

    16. Ameren argues that the use of shared employees allows the
utilities to avoid having to hire duplicate sets of employees, and
asserts that the Commission has found the sharing of resource planning
and fuel procurement personnel appropriate in other circumstances.\22\
Ameren also argues that the proposed prohibitions against the sharing
of resource planning or fuel procurement employees would contradict the
findings in National Fuel Gas Supply Corp. v. FERC,\23\ where the court
found that the record did not support the Commission's attempt to
extend the Standards of Conduct to relationships between pipelines and
an additional class of their affiliates. Similarly, Duke argues that
the Commission has not previously prohibited sharing of employees who
engage in fuel procurement, and has not provided evidence that would
support imposing new restrictions.\24\
---------------------------------------------------------------------------

    \22\ Ameren Comments at 14-15 (citing Standards of Conduct Final
Rule, FERC Stats. & Regs. ] 31,280 at P 146; Entergy Services, Inc.,
No-Action Letter, Docket No. NL07-4-000 (Feb. 8, 2007); Cinergy
Services, Inc., No-Action Letter, Docket No. NL06-1-000 (Jan. 31,
2006)).
    \23\ 468 F.3d 831 (D.C. Cir. 2006).
    \24\ Duke Comments at 3-4 (citing Order No. 697, FERC Stats. &
Regs. ] 31,252 at P 564-565; Order No. 697-B, 125 FERC ] 61,326 at P
59).
---------------------------------------------------------------------------

    17. EEI contends that the proposed ``blanket proscriptions'' would
run afoul of individual orders, notices, waivers, and no-action letters
issued to companies that allow the sharing of employees that schedule
outages or that engage in economic dispatch, resource planning or fuel
procurement. Entergy argues that the Commission has previously
recognized that co-owned units and plants should be excepted from
certain prohibitions in the affiliate restrictions, as long as such
sharing is kept to the minimum practicable level. Entergy seeks
clarification as to whether the guidance provided by no-action letters
and cases granting waivers to entities that co-own generation remains
valid, and argues that if the Commission prefers that entities that
have relied on this guidance but never submitted a waiver request,
submit a waiver, it should so clarify.\25\
---------------------------------------------------------------------------

    \25\ Entergy Comments at 22-23.
---------------------------------------------------------------------------

    18. Entergy argues that in the situation where a franchised public
utility with captive customers and its market-regulated power sales
affiliate co-own generation, there is a significant likelihood that
market information about the level of dispatch of the total plant may
become known to market-based rate affiliate personnel, despite co-
owners taking steps to ensure that disclosures are kept to a minimum.
Entergy argues that the Commission should clarify that the unintended,
incidental sharing of market information regarding economic dispatch as
well as after-the-fact operational information does not violate the
affiliate restrictions in the situation of co-owned generation, as long
as economic dispatch decisions are made separately, and not by shared
employees, and as long as the no-conduit rule is strictly followed.\26\
Entergy also argues that the Commission should continue to permit
sharing (for co-owned units) or coordination (for co-owned plants) of
outage scheduling, to the extent necessary given the joint ownership
arrangement, as well as the information sharing that inevitably
results.\27\ Entergy argues that the Commission should clarify that it
recognizes the need for fuel procurement sharing in the situation of
co-owned generation.\28\
---------------------------------------------------------------------------

    \26\ Id. at 23-24.
    \27\ Id. at 25 (citing Allegheny Energy, Inc., 119 FERC ] 61,025
(2007)).
    \28\ Id. at 26-28.
---------------------------------------------------------------------------

    19. With respect to employees that engage in resource planning, EEI
states that it has understood that ``traditional'' resource planning
employees who make direct resource planning decisions could not be
shared under the affiliate restrictions. However, it states that the
Commission's proposed proscription is written so broadly that it could
inadvertently prevent the sharing of support staff, which is explicitly
permitted by the Commission's regulations.\29\ EEI also states that it
assumes that by the term ``employee,'' the Commission does not mean to
include senior executives responsible for overseeing corporate
activities from a family-wide perspective and who have fiduciary
responsibilities, including responsibilities regarding the acquisition
of significant assets and corporate finance.\30\
---------------------------------------------------------------------------

    \29\ EEI Comments at 7-8.
    \30\ Id. at 8, n.10.
---------------------------------------------------------------------------

    20. TAPS argues that the Commission should revise its regulations
as proposed in the NOPR and should emphasize that its proposed
clarifications concerning the sharing of employees are not an
exhaustive listing of prohibited shared employees. TAPS states that the
Commission correctly identified situations where the sharing of
employees between affiliated market-based rate power sellers and
franchised public utilities with captive customers could harm the
captive customers of the franchised public utility.
    21. EEI argues that the Commission should provide affected
companies with 60 days of transition time to comply with the changes
adopted in the Final Rule or to file a request for waiver.\31\ Ameren
argues that if the Commission adopts the changes proposed in the NOPR,
the Commission should only apply the prohibition against the sharing of
fuel procurement and resource planning employees prospectively,
beginning no earlier than 180 days after the Final Rule becomes
effective, and that the Commission should grandfather existing sharing
agreements.\32\ Dominion requests that the Commission provide ``a
significant amount of time'' to undertake the structural
reorganizations that will be required if the proposed changes are
adopted. Dominion requests that the Commission require companies to be
in compliance within one year of the later of: (1) The date of issuance
of the Final Rule; (2) the date of Commission action on any waiver
request filed within 30 days of the issuance of the Final Rule; or (3)
the date of state commission action on any approval required in
connection with a proposed restructuring to comply with the Final
Rule.\33\
---------------------------------------------------------------------------

    \31\ Id. at 17.
    \32\ Ameren Comments at 23-25.
    \33\ Dominion Comments at 23-24.
---------------------------------------------------------------------------

III. Discussion

    22. Upon further consideration, we will withdraw the NOPR because
the current regulations are sufficient insofar as they already require
that employees of a market-regulated power sales affiliate operate
separately from the employees of any affiliated franchised public
utility with captive customers, to the maximum extent practical. While
the NOPR was intended to provide additional clarity to the industry by
identifying in the regulatory text certain employees who cannot be
shared, we find that codifying these clarifications in the regulatory
text is unnecessary because the separation of functions requirement in
the existing regulations already requires that, ``[t]o the maximum
extent practical, the employees of a market-regulated power sales
affiliate must operate separately from the employees of any affiliated
franchised public utility.'' \34\ The existing regulations also provide
that ``[a] franchised public utility with captive customers may not
share market information with a market-regulated power sales affiliate
if the sharing could be used to the detriment of captive customers,
unless simultaneously disclosed to the public.'' \35\ Because we find
that codifying these clarifications

provided in the April 15 Clarification Order in the regulatory text is
unnecessary, we conclude that it is no longer necessary to adopt the
amendments to the regulations proposed in the NOPR. Sellers will be
required to comply with the guidance provided in the April 15
Clarification Order within 90 days of the date of issuance of the order
addressing EEI's request for rehearing of the April 15 Clarification
Order in Docket No. RM04-7-009, which is being issued concurrently with
this order.\36\
---------------------------------------------------------------------------

    \34\ 18 CFR 35.39(c)(2)(i) (2010).
    \35\ 18 CFR 35.39(d)(1) (2010).
    \36\ Market-Based Rates for Wholesale Sales of Electric Energy,
Capacity and Ancillary Services by Public Utilities, 134 FERC ]
61,046, at P 27 (2011).
---------------------------------------------------------------------------

    23. We find that commenters' arguments objecting to the amendments
to the regulatory text proposed in the NOPR and their arguments that
adequate notice and opportunity for comment were not provided on the
amendments to the regulatory text are rendered moot by our withdrawal
of this NOPR. We address below commenters' remaining arguments.
    24. A number of commenters request that we clarify that franchised
public utilities with captive customers may share employees with their
market-regulated power sales affiliates where they are abiding by
guidance provided by the Commission or by a state commission or in
certain circumstances, such as in the case of co-owned generation
facilities. We decline to grant such clarification on a generic basis.
    25. While the Commission has granted waiver of its market-based
rate affiliate restrictions to permit the sharing of certain employees
in certain circumstances, such as employees that schedule outages at
co-owned generation facilities, these waivers were based on case-
specific circumstances and representations made by the specific
applicants in those cases. For example, in Cleco Power LLC, the waiver
of certain affiliate restrictions was limited to three employees, was
limited to the ``specific facts and circumstances'' presented by the
applicants, and was conditioned on the requirement that the applicants
maintain sufficient records to allow the Commission to audit their
compliance with the conditions of the waiver.\37\ We believe that the
Commission, for purposes of the affiliate restrictions, should retain
its authority to review on a case-by-case basis circumstances where
affiliates seek to share employees or market information. Accordingly,
we clarify that prior orders granting waiver are case specific and
apply only to the entities that were specifically granted waiver in
those cases. Therefore, entities that have relied on this previous
guidance but who have not submitted a waiver request themselves should
submit such a request. Entities that have previously obtained waiver of
certain of the affiliate restrictions may continue to rely on those
waivers as long as the facts and circumstances relied upon by the
Commission in granting the waiver remain true and accurate, and as long
as any conditions set forth in the order granting waiver continue to be
satisfied.
---------------------------------------------------------------------------

    \37\ 130 FERC ] 61,102, at P 22-25 (2010) (granting limited
waiver to permit sharing of employees that determine the timing of
scheduled outages based on the conjoined nature of the facilities
and the applicants'' representations that the waiver was necessary
to allow for the practical and efficient operation of the conjoined
facilities); see also Allegheny Energy Inc., 119 FERC ] 61,025 at P
20, 22 (granting waiver of the market-based rate code of conduct
information sharing provision (the market-based rate code of conduct
was the predecessor to the affiliate restrictions codified in Order
No. 697) based on the applicants' representations that the waiver
was necessary to allow for the practical and efficient operation of
the conjoined facilities); American Electric Power Service Corp.,
119 FERC ] 61,064, at P 20 (2007) (granting waiver of the market-
based rate code of conduct (the market-based rate code of conduct
was the predecessor to the affiliate restrictions codified in Order
No. 697) to allow sharing of a senior executive officer based on the
applicants' representations that the senior executive officer was
not involved in the daily functions of directing, organizing and
executing business decisions).
    Further, the Commission has granted waiver of the affiliate
restrictions where a seller demonstrates and the Commission agrees
that the seller has no captive customers. See Order No. 697, FERC
Stats. & Regs. ] 31,252 at P 552, 589. Likewise, sellers have the
option of seeking waiver of the separation of functions requirement
to allow the sharing of employees that engage in fuel procurement or
resource planning.
---------------------------------------------------------------------------

    26. Similarly, we clarify that an entity may rely on the guidance
provided by Commission staff in a no-action letter if the letter was
issued in response to that entity's request, and if the specific facts
and representations relied on by Commission staff in responding to the
no-action letter request remain true and accurate.\38\
---------------------------------------------------------------------------

    \38\ See Interpretative Order Modifying No-Action Letter Process
and Reviewing Other Mechanisms for Obtaining Guidance, 123 FERC ]
61,157, at P 10-12 (2008) (explaining that no-action letters ``can
offer useful guidance to the industry,'' however, are non-binding on
the Commission, and must relate to a specific, actual transaction,
practice or situation in which the applicant is or may be involved,
and that the applicant must explain the specific details of the
transaction, practice or situation).
---------------------------------------------------------------------------

    27. While we reject the notion that the Commission should rely on
determinations made by state commissions with respect to the sharing of
employees, we clarify that to the extent that an affected entity
believes that a state commission's determination supports waiver of our
market-based rate affiliate restrictions, the Commission will consider
this argument on a case-by-case basis if this argument is presented in
a request for a no-action letter regarding specific proposed
transactions, practices or situations, or in a case-specific request
for waiver of the affiliate restrictions.
    28. Similarly, in response to commenters' arguments that sharing of
nuclear fuel procurement and other fuel procurement employees should be
permitted, an entity can seek waiver of the affiliate restrictions to
permit the sharing of certain employees based on case-specific
circumstances.
    29. We deny Entergy's request that the Commission confirm which of
Entergy's personnel determine the timing of scheduled outages, and its
request as to whether after-the-fact sharing of certain information
constitutes the sharing of market information, and whether unintended
sharing of market information regarding economic dispatch and
operational information violates the affiliate restrictions when such
sharing occurs in the context of co-owned generation.\39\ As we explain
above, prior orders granting waiver of the affiliate restrictions are
case specific, and apply only to the entities that were specifically
granted waiver in those cases. Further, Entergy does not provide
sufficient detail regarding the activities of its personnel that
determine the timing of scheduled outages, or sufficient detail
regarding the facts and circumstances of the information sharing that
it believes is permitted for the Commission to confirm whether
Entergy's sharing of employees and market information is permitted.\40\
To

the extent that Entergy seeks clarification concerning whether it is
complying with the market-based rate affiliate restrictions, or seeks
waiver of certain affiliate restrictions, it may submit a request for a
no-action letter regarding specific proposed transactions, practices or
situations, or a case-specific request for waiver of the affiliate
restrictions.
---------------------------------------------------------------------------

    \39\ The Commission has adopted an exception to the independent
functioning requirement and the information sharing restrictions for
emergency circumstances affecting system reliability, provided that
the subsequent reporting provisions are followed. Order No. 697,
FERC Stats. & Regs. ] 31,252 at P 568; 18 CFR 35.39(c)(2)(iii)
(2010). The Commission has also explained that, while shared field
and maintenance employees may not make economic dispatch decisions
or determine when scheduled maintenance outages will occur, they may
do so during emergency forced outages. See Order No. 697-A, FERC
Stats. & Regs. ] 31,268 at P 253; Order No. 697, FERC Stats. & Regs.
] 31,252 at P 568. In addition, the Commission has explained that it
permits the sharing of information to enable nuclear power plants to
comply with the requirements of the Nuclear Regulatory Commission
(NRC) as described in the NRC's February 1, 2006 Generic Letter
2006-002, Grid Reliability and the Impact on Plant Risk and the
Operability of Offsite Power. Order No. 697-A, FERC Stats. & Regs. ]
31,268 at n.339 (citing Order No. 697, FERC Stats. & Regs. ] 31,252
at P 581).
    \40\ With respect to Entergy's request that the Commission
confirm that Entergy's interpretation of employees that determine
the timing of scheduled outages is limited to a small group of
personnel, such as site outage managers and senior vice presidents,
who are the outage decision-makers, we note that the Commission has
previously clarified ``that companies may share employees and
supervisors who have the authority to curtail or stop the operation
of generation facilities solely for operational reasons'' and that
``shared employees may not be involved in decisions regarding the
marketing or sale of electricity from the facilities, may not make
economic dispatch decisions, and may not determine the timing of
scheduled outages for facilities.'' Order No. 697-A, FERC Stats. &
Regs. ] 31,268 at P 253.
---------------------------------------------------------------------------

    30. For the reasons discussed above, the Commission withdraws the
NOPR and terminates this rulemaking proceeding.

    By the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
 [FR Doc. 2011-1488 Filed 1-25-11; 8:45 am]
BILLING CODE 6717-01-P