[Federal Register Volume 86, Number 3 (Wednesday, January 6, 2021)]
[Rules and Regulations]
[Pages 911-922]
[FR Doc No: 2020-28689]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 751

[EPA-HQ-OPPT-2019-0080; FRL-10018-89]
RIN 2070-AK60

Pentachlorothiophenol (PCTP); Regulation of Persistent,
Bioaccumulative, and Toxic Chemicals Under TSCA Section 6(h)

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The Environmental Protection Agency is finalizing a rule under
the Toxic Substances Control Act (TSCA) to address its obligations
under TSCA for pentachlorothiophenol (PCTP) (CASRN 133-49-3), which EPA
has determined meets the requirements for expedited action under TSCA.
This final rule prohibits all manufacturing (including import),
processing, and distribution in commerce of PCTP and PCTP-containing
products or articles for any use, unless PCTP concentrations are at or
below 1% by weight. This rule will result in lower amounts of PCTP
being manufactured, processed, and distributed, which will impact the
amount that will be available for use or disposal, thus reducing the
exposures to humans and the environment.

DATES: This final rule is effective February 5, 2021. For purposes of
judicial review and 40 CFR 23.5, this rule shall be promulgated at 1
p.m. eastern standard time on January 21, 2021.

ADDRESSES: The docket for this action, identified by docket
identification (ID) number EPA-HQ-OPPT-2019-0080, is available at
http://www.regulations.gov or at the Office of Pollution Prevention and
Toxics Docket (OPPT Docket), Environmental Protection Agency Docket
Center (EPA/DC), West William Jefferson Clinton Bldg., Rm. 3334, 1301
Constitution Ave. NW, Washington, DC. The Public Reading Room is open
from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal
holidays. The telephone number for the Public Reading Room is (202)
566-1744, and the telephone number for the OPPT Docket is (202) 566-
0280. Please review the visitor instructions and additional information
about the docket available at http://www.epa.gov/dockets.
    Please note that due to the public health emergency, the EPA Docket
Center (EPA/DC) and Reading Room was closed to public visitors on March
31, 2020. Our EPA/DC staff will continue to provide customer service
via email, phone, and webform. For further information on EPA/DC
services, docket contact information and the current status of the EPA/
DC and Reading Room, please visit https://www.epa.gov/dockets.

FOR FURTHER INFORMATION CONTACT: For technical information contact:
Brooke Porter, Existing Chemical Management Division, Office of
Pollution Prevention and Toxics, (7404T), Environmental Protection
Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460-0001; telephone
number:<PHONE_NUMBER>; email address<EMAIL_ADDRESS>    For general information contact: The TSCA-Hotline, ABVI-Goodwill,
422 South Clinton Ave., Rochester, NY 14620; telephone number: (202)
554-1404; email address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. Executive Summary

A. Does this action apply to me?

    You may be potentially affected by this action if you manufacture
(including import), process, distribute in commerce, or use
pentachlorothiophenol (PCTP) or products or articles that contain PCTP,
especially rubber products. The following list of North American
Industrial Classification System (NAICS) codes is not intended to be
exhaustive, but rather provides a guide to help readers determine
whether this document applies to them. Potentially affected entities
may include:
     Sporting and Athletic Goods Manufacturing (NAICS Code
339920);
     Sporting and Recreational Goods and Supplies Merchant
Wholesale (NAICS Code 423910);
     Sporting Goods Stores (NAICS Code 451110);
     All Other Rubber Product Manufacturing (NAICS Code
326299).
    If you have any questions regarding the applicability of this
action to a particular entity, consult the technical information
contact listed under FOR FURTHER INFORMATION CONTACT.

B. What is the Agency's authority for taking this action?

    Section 6(h) of TSCA, 15 U.S.C. 2601 et seq., directs EPA to issue
a final rule under TSCA section 6(a) on certain persistent,
bioaccumulative, and toxic (PBT) chemical substances. PCTP (CASRN 87-
86-5), primarily found as an impurity in the zinc salt of PCTP, is one
such chemical substance. EPA must take action on those chemical
substances identified in the 2014 Update to the TSCA Work Plan for
Chemical Assessments (Ref. 1) that, among other factors, EPA has a
reasonable basis to conclude are toxic and that with respect to
persistence and bioaccumulation score high for one and either high or
moderate for the other, pursuant to the TSCA Work Plan Chemicals:
Methods Document (Ref. 2). TSCA section 6(h) directs EPA to take
expedited action on these chemical substances, regardless of whether
that substance is primarily found as an impurity or byproduct, to
reduce exposure to the substance, including to exposure to the
substance as an impurity or byproduct, to the extent practicable. This
final rule is final agency action for purposes of judicial review under
TSCA section 19(a).

C. What action is the Agency taking?

    EPA published a proposed rule on July 29, 2019 to address the five
PBT chemicals EPA identified pursuant to TSCA section 6(h) (84 FR
36728; FRL-9995-76). After publication of the proposed rule, EPA
determined to address each of the five PBT chemicals in separate final
actions. This final rule prohibits the manufacture (including import),
processing, and distribution in commerce of PCTP and products and
articles containing PCTP, unless PCTP concentrations are at or below 1%
by weight. Specifically, all persons are prohibited from all
manufacturing and processing of PCTP or PCTP-containing products or
articles, unless PCTP concentrations are at or below 1% by weight after
March 8, 2021, and all persons are prohibited from all distribution in
commerce of PCTP or PCTP-containing products or articles, unless PCTP
concentrations are at or below 1% by weight after January 6, 2022. In
addition, after March 8, 2021, persons manufacturing, processing, and
distributing in commerce PCTP and articles and products containing PTCP
must maintain, for three years from the date the record is generated,
ordinary business records related to compliance with the prohibitions
and restrictions that include the name of the purchaser and list the
products or articles. This

provision is not intended to require subject companies to retain
records in addition to those specified herein, expect as needed
pursuant to normal business operations.

D. Why is the Agency taking this action?

    EPA is issuing this final rule to fulfill EPA's obligations under
TSCA section 6(h) to take timely regulatory action on PBT chemicals,
including PCTP, ``to address the risks of injury to health or the
environment that the Administrator determines are presented by the
chemical substance and to reduce exposure to the substance to the
extent practicable.'' As required by the statute, the Agency is
finalizing this rule to reduce exposures to PCTP to the extent
practicable.

E. What are the estimated incremental impacts of this action?

    EPA has evaluated the potential costs of these restrictions and
prohibitions and the associated reporting and recordkeeping
requirements. The ``Economic Analysis for Regulation of
Pentachlorothiophenol (PCTP) Under TSCA Section 6(h)'' (Economic
Analysis) (Ref. 3), is available in the docket and is briefly
summarized here.
     Benefits. EPA was not able to quantify the benefits of
reducing the potential for human and environmental exposures to PCTP.
As discussed in more detail in Unit II.A., EPA did not perform a risk
evaluation for PCTP, nor did EPA develop quantitative risk estimates.
Therefore, the Economic Analysis (Ref. 3) qualitatively discusses the
benefits of reducing the exposure under the final rule for PCTP, as
summarized in Unit III.B.2.
     Costs. Total quantified annualized social costs for this
final rule are approximately $108,000 (at both 3% and 7% discount
rates). Potential unquantified costs and are those associated with
testing, reformulation, importation of articles, foregone profits, and
indirect costs. The limited data available for those costs prevents EPA
from constructing a quantitative assessment.
     Small entity impacts. This final rule will impact
approximately one small business of which the one small entity is not
expected to incur impacts of 1% of their revenue or greater.
     Environmental Justice. This final rule will increase the
level of protection for all affected populations without having any
disproportionately high and adverse human health or environmental
effects on any population, including any minority or low-income
population or children.
     Effects on State, local, and Tribal governments. This
final rule will not have any significant or unique effects on small
governments, or federalism or tribal implications.

F. Children's Environmental Health

    Executive Order 13045 applies if the regulatory action is
economically significant and concerns an environmental health risk or
safety risk that may disproportionately affect children. While the
action is not subject to Executive Order 13045, the Agency's Policy on
Evaluating Health Risks to Children (https://www.epa.gov/children/epas-policy-evaluating-risk-children) is to consider the risks to infants
and children consistently and explicitly during its decision making
process. This final rule will reduce the exposure to PCTP that could
occur from activities now prohibited under this final rule for the
general population and for potentially exposed or susceptible
subpopulations such as children. More information can be found in the
Exposure and Use Assessment (Ref. 5).

II. Background

A. History of This Rulemaking

    TSCA section 6(h) requires EPA to take expedited regulatory action
under TSCA section 6(a) for certain PBT chemicals identified in the
2014 Update to the TSCA Work Plan for Chemical Assessments (Ref. 1). As
required by the statute, EPA issued a proposed rule to address five PBT
chemicals identified pursuant to TSCA section 6(h) (84 FR 36728, July
29, 2019). The statute required that this be followed by promulgation
of a final rule no later than 18 months after the proposal. Although
EPA proposed regulatory actions on each chemical substance in one
proposal, in response to public comments (EPA-HQ-OPPT-2019-0080-0544),
(EPA-HQ-OPPT-2019-0080-0553), (EPA-HQ-OPPT-2019-0080-0556), (EPA-HQ-
OPPT-2019-0080-0562) requesting these five actions be separated, EPA is
finalizing five separate actions to individually address each of the
PBT chemicals. EPA intends for the five separate final rules to publish
in the same issue of the Federal Register. More discussion on these
comments is in the Response to Comments document which is available in
the docket (Ref. 4). The details of the proposal for PCTP are described
in more detail in Unit II.D.
    Under TSCA section 6(h)(1)(A), the chemical substances subject to
expedited action are those that:
     EPA has a reasonable basis to conclude are toxic and that
with respect to persistence and bioaccumulation score high for one and
either high or moderate for the other, pursuant to the 2012 TSCA Work
Plan Chemicals: Methods Document or a successor scoring system;
     Are not a metal or a metal compound; and
     Are chemical substances for which EPA has not completed a
TSCA Work Plan Problem Formulation, initiated a review under TSCA
section 5, or entered into a consent agreement under TSCA section 4,
prior to June 22, 2016, the date that TSCA was amended by the Frank R.
Lautenberg Chemical Safety for the 21st Century Act (Pub. L. 114-182,
130 Stat. 448).
    In addition, in order for a chemical substance to be subject to
expedited action, TSCA section 6(h)(1)(B) states that EPA must find
that exposure to the chemical substance under the conditions of use is
likely to the general population or to a potentially exposed or
susceptible subpopulation identified by the Administrator (e.g.,
infants, children, pregnant women, workers, or the elderly) or to the
environment, on the basis of an exposure and use assessment conducted
by the Administrator. TSCA section 6(h)(2) further provides that the
Administrator shall not be required to conduct risk evaluations on
chemical substances that are subject to TSCA section 6(h)(1).
    Based on the criteria set forth in TSCA section 6(h), EPA proposed
to determine that five chemical substances meet the TSCA section
6(h)(1)(A) criteria for expedited action, and PCTP is one of these five
chemical substances. In addition, and in accordance with the statutory
requirements to demonstrate that exposure to the chemical substance is
likely under the conditions of use, EPA conducted an Exposure and Use
Assessment for PCTP. As described in the proposed rule, EPA conducted a
review of available literature with respect to PCTP to identify,
screen, extract, and evaluate reasonably available information on use
and exposures. This information is in the document entitled ``Exposure
and Use Assessment of Five Persistent, Bioaccumulative and Toxic
Chemicals'' (Ref. 5). Based on this review, which was subject to peer
review and public comment, EPA proposed to find that exposure to PCTP
is likely based on information detailed in the Exposure and Use
Assessment.

B. Other Provisions of TSCA Section 6

    1. EPA's approach for implementing TSCA section 6(h)(4).
    TSCA section 6(h)(4) requires EPA to issue a final TSCA section
6(a) rule to

``address the risks of injury to health or the environment that the
Administrator determines are presented by the chemical substance and
reduce exposure to the substance to the extent practicable.'' EPA reads
this text to require action on the chemical, not specific conditions of
use.
    The approach EPA takes is consistent with the language of TSCA
section 6(h)(4) and its distinct differences from other provisions of
TSCA section 6 for chemicals that are the subject of required risk
evaluations. First, the term ``condition of use'' is only used in TSCA
section 6(h) in the context of the TSCA section 6(h)(1)(B) finding
relating to likely exposures under ``conditions of use'' to ``the
general population or to a potentially exposed or susceptible
subpopulation . . . or the environment.'' In contrast to the risk
evaluation process under TSCA section 6(b), this TSCA section
6(h)(1)(B) threshold criterion is triggered only through an Exposure
and Use Assessment regarding the likelihood of exposure and does not
require identification of every condition of use. As a result, EPA
collected all the information it could on the use of each chemical
substance, without regard to whether any chemical activity would be
characterized as ``known, intended or reasonably foreseen to be
manufactured, processed, distributed in commerce, used, or disposed
of,'' and from that information created use profiles and then an
Exposure and Use Assessment (Ref. 4) to make the TSCA section
6(h)(1)(B) finding for at least one or more ``condition of use''
activities where some exposure is likely. EPA did not attempt to
precisely classify all activities for each chemical substance as a
``condition of use'' and thus did not attempt to make a TSCA section
6(h)(1)(B) finding for all chemical activities summarized in the
Exposure and Use Assessment (Ref. 4). Second, TSCA section 6 generally
requires a risk evaluation under TSCA section 6(b) for chemicals based
on the identified conditions of use. However, pursuant to TSCA section
6(h)(2), for chemical substances that meet the criteria of TSCA section
6(h)(1), a risk evaluation is neither required nor contemplated to be
conducted for EPA to meet its obligations under TSCA section 6(h)(4).
Rather, as noted in Unit II.B.3., if a previously prepared TSCA risk
assessment exists, EPA would have authority to use that risk assessment
to ``address risks'' under TSCA section 6(h)(4), but even that risk
assessment would not necessarily be focused on whether an activity is
``known, intended or reasonably foreseen,'' as those terms were not
used in TSCA prior to the 2016 amendments and a preexisting assessment
of risks would have had no reason to use such terminology or make such
judgments. It is for this reason EPA believes that the TSCA section
6(h)(4) ``address risk'' standard refers to the risks the Administrator
determines ``are presented by the chemical substance'' and makes no
reference to ``conditions of use.'' Congress did not contemplate or
require a risk evaluation identifying the conditions of use as defined
under TSCA section 3(4). The kind of analysis required to identify and
evaluate the conditions of use for a chemical substance is only
contemplated in the context of a TSCA section 6(b) risk evaluation, not
in the context of an expedited rulemaking to address PBT chemicals.
    Similarly, the TSCA amendments require EPA to ``reduce exposure to
the substance to the extent practicable,'' without reference to whether
the exposure is found ``likely'' pursuant to TSCA section 6(h)(1)(B).
    Taking all of this into account, EPA reads its TSCA section 6(h)(4)
obligation to apply to the chemical substance generally, thus requiring
EPA to address risks and reduce exposures to the chemical substance
without focusing on whether the measure taken is specific to an
activity that might be characterized as a ``condition of use'' as that
term is defined in TSCA section 3(4) and interpreted by EPA in the Risk
Evaluation Rule, 82 FR 33726 (July 20, 2017). This approach ensures
that any activity involving a TSCA section 6(h) PBT chemical, past,
present or future, is addressed by the regulatory approach taken. Thus,
under this final rule, manufacturing, processing, and distribution in
commerce activities that are not specifically excluded are prohibited.
The specified excluded activities are those which EPA determined were
not appropriate to regulate under TSCA section 6(h)(4) standard.
Consistently, based on the Exposure and Use Assessment, activities
associated with PCTP are that are no longer occurring are addressed by
this rule and thus the prohibitions adopted in this rule reduce the
exposures that will result with resumption of past activities or the
initiation of similar or other activities in the future. Therefore, EPA
has determined that prohibiting these activities will reduce exposures
to the extent practicable. The approach taken for this final rule is
limited to implementation of TSCA section 6(h) and is not relevant to
any other action under TSCA section 6 or other TSCA statutory actions.
    2. EPA's interpretation of ``practicable.''
    The term ``practicable'' is not defined in TSCA. EPA interprets
this requirement as generally directing the Agency to consider such
factors as achievability, feasibility, workability, and reasonableness.
In addition, EPA's approach to determining whether particular
prohibitions or restrictions are practicable is informed in part by
certain other provisions in TSCA section 6, such as TSCA section
6(c)(2)(A), which requires the Administrator to consider health
effects, exposure, and environmental effects of the chemical substance;
benefits of the chemical substance; and the reasonably ascertainable
economic consequences of the rule. In addition, pursuant to TSCA
section 6(c)(2)(B), in selecting the appropriate TSCA section 6(a)
regulatory approach, the Administrator is directed to ``factor in, to
the extent practicable'' those same considerations.
    EPA received comments on the proposed rule regarding this
interpretation of ``practicable.'' EPA has reviewed these comments and
believes the interpretation described previously within this Unit is
consistent with the intent of TSCA and has not changed that
interpretation. EPA's interpretation of an ambiguous statutory term
receives deference. More discussion on these comments can be found in
the Response to Comments document for this rulemaking (Ref. 4).
    3. EPA did not conduct a risk evaluation or risk assessment.
    As EPA explained in the proposed rule, EPA does not interpret the
``address risk'' language to require EPA to determine, through a risk
assessment or risk evaluation, whether risks are presented. EPA
believes this reading gives the Administrator the flexibility Congress
intended for issuance of expedited rules for PBTs and is consistent
with TSCA section 6(h)(2) which makes clear risk evaluation is not
required to support this rulemaking.
    EPA received comments on the proposed rule regarding its
interpretation of TSCA section 6(h)(4) and regarding EPA's lack of risk
assessment or risk evaluation of PCTP. A number of commenters asserted
that while EPA was not compelled to conduct a risk evaluation, EPA
should have conducted a risk evaluation under TSCA section 6(b)
regardless. The rationales provided by the commenters for such a risk
assessment or risk evaluation included that one was needed for EPA to
fully quantify the benefits to support this rulemaking, and that
without a risk evaluation, EPA would not be able to determine the

benefits, risks, and cost effectiveness of the rule in a meaningful
way. As described by the commenters, EPA would therefore not be able to
meet the TSCA section 6(c)(2) requirement for a statement of these
considerations. Regarding the contradiction between the mandate in TSCA
section 6(h) to expeditiously issue a rulemaking and the time needed to
conduct a risk evaluation, some commenters stated that EPA would have
had enough time to conduct a risk evaluation and issue a proposed rule
by the statutory deadline.
    EPA disagrees with the commenters' interpretation of EPA's
obligations with respect to chemicals subject to TSCA section 6(h)(4).
TSCA section 6(h)(4) provides that EPA shall: (1) ``Address the risks
of injury to health or the environment that the Administrator
determines are presented by the chemical substance'' and (2) ``reduce
exposure to the substance to the extent practicable.'' With respect to
the first requirement, that standard is distinct from the
``unreasonable risk'' standard for all other chemicals for which a
section 6(a) rule might be issued. EPA does not believe that TSCA
section 6(h) contemplates a new evaluation of any kind, given
evaluations to determine risks are now addressed through the TSCA
section 6(b) risk evaluation process and TSCA section 6(h)(2)
explicitly provides that no risk evaluation is required. Moreover, it
would have been impossible to prepare a meaningful evaluation under
TSCA and subsequently develop a proposed rule in the time contemplated
for issuance of a proposed rule under TSCA section 6(h)(1). Although
EPA does not believe the statute contemplates a new evaluation of any
kind for these reasons, EPA reviewed the hazard and exposure
information on the five PBT chemicals EPA had compiled. However, while
this information appropriately addresses the criteria of TSCA section
6(h)(1)(A) and (B), it did not provide a basis for EPA to develop
sufficient and scientifically robust and representative risk estimates
to evaluate whether or not any of the chemicals present an identifiable
risk of injury to health or the environment.
    Rather than suggesting a new assessment is required, EPA reads the
``address risk'' language in TSCA section 6(h)(4) to contemplate
reliance on an existing EPA assessment under TSCA, similar to a risk
assessment that may be permissibly used under TSCA section 26(l)(4) to
regulate the chemical under TSCA section 6(a). This interpretation
gives meaning to the ``address risk'' phrase, without compelling an
evaluation contrary to TSCA section 6(h)(2) and would allow use of an
existing determination, or development of a new determination based on
such an existing risk assessment, in the timeframe contemplated for
issuance of a proposed rule under TSCA section 6(h). However, there
were no existing EPA assessments of risk for any of the PBT chemicals.
Thus, because EPA had no existing EPA risk assessments or
determinations of risk, the regulatory measures addressed in this final
rule focus on reducing exposures ``to the extent practicable.''
    In sum, because neither the statute nor the legislative history
suggests that a new evaluation is compelled to identify and thereby
provide a basis for the Agency to ``address risks'' and one could not
be done prior to preparation and timely issuance of a proposed rule,
and no existing TSCA risk assessment exists for any of the chemicals,
EPA has made no risk determination finding for any of the PBT
chemicals. Instead, EPA implements the requirement of TSCA section
6(h)(4) by reducing exposures of each PBT chemical ``to the extent
practicable.'' For similar reasons, EPA does not believe that TSCA
section 6(c)(2) requires a quantification of benefits, much less a
specific kind of quantification. Under TSCA section 6(c)(2)(A)(iv), EPA
must consider and publish a statement, based on reasonably available
information, on the reasonably ascertainable economic consequences of
the rule, but that provision does not require quantification,
particularly if quantification is not possible. EPA has reasonably
complied with this requirement by including a quantification of direct
costs and a qualitative discussion of benefits in each of the preambles
to the final rules. EPA was unable to quantify the indirect costs
associated with the rule. More discussion on the issue raised is in the
Response to Comments document (Ref. 4).
    4. Replacement parts and articles.
    In the preamble to the proposed rule, EPA explained that it did not
read provisions of TSCA that conflict with TSCA section 6(h) to apply
to TSCA section 6(h) rules. Specifically, TSCA sections 6(c)(2)(D) and
(E) require a risk finding pursuant to a TSCA section 6(b) risk
evaluation to regulate replacement parts and articles. Yet, TSCA
section 6(h) neither compels nor contemplates a risk evaluation to
precede or support the compelled regulatory action to ``address the
risks. . .'' and ``reduce exposures to the substance to the extent
practicable''. TSCA section 6(h)(2) makes clear no risk evaluation is
required, and the timing required for conducting a risk evaluation is
not consistent with the timing compelled for issuance of a proposed
rule under TSCA section 6(h). Moreover, even assuming a prior risk
assessment might allow a risk determination under the TSCA section
6(h)(4) ``address risk'' standard, such assessment would still not
satisfy the requirement in TSCA section 6(c)(2)(D) and (E) for a risk
finding pursuant to a TSCA section 6(b) risk evaluation. Because of the
clear conflict between these provisions, EPA determined that those
provisions of TSCA section 6(c) that assume the existence of a TSCA
section 6(b) risk evaluation do not apply in the context of this TSCA
section 6(h) rulemaking. Instead, EPA resolves this conflict in these
provisions by taking into account the TSCA section 6(c) considerations
in its determinations as to what measures ``reduce exposure to the
substance to the extent practicable''.
    Commenters contended that TSCA section 6(c)(2)(D) and (E) bar a
TSCA section 6(h) rule in the absence of a risk evaluation,
representing Congress's recognition of the special burdens associated
with regulating replacement parts and articles and the difficulty
importers face in knowing what chemicals are present in the articles
they import. As noted earlier in this Unit and further discussed in the
Response to Comment document, while EPA determined that provisions of
TSCA section 6(c)(2)(D) and (E) do not apply because they conflict with
the requirements of TSCA section 6(h), EPA interpreted the
``practicability'' standard in TSCA section 6(h)(4) to reasonably
contemplate the considerations embodied by TSCA section 6(c)(2)(D) and
(E). As a result, EPA disagrees with any suggestions that the clear
conflict between Congress' mandates in TSCA section 6(h) and TSCA
section 6(c)(2)(D) and (E) must be read to bar regulation of
replacement parts and articles made with chemicals that Congress
believed were worthy of expedited action under TSCA section 6(h) and in
the absence of a risk evaluation. The statute does not clearly
communicate that outcome. Instead, Congress left ambiguous how best to
address the conflict in these provisions, and EPA's approach for taking
into consideration the TSCA section 6(c)(2)(D) and (E) concepts in its
TSCA section 6(h)(4) ``practicability'' determinations is a reasonable
approach. In addition, with respect to comments that TSCA section
6(c)(2)(D) and (E) were intended to address Congress's concerns
regarding burdens associated with regulation of replacement parts and
articles, EPA agrees that these concerns are relevant

and takes them into account in its implementation of the TSCA section
6(h)(4) mandate, with respect to the circumstances for each chemical.
Finally, EPA does not believe that Congress intended, through the
article provisions incorporated into the TSCA amendments, to absolve
importers of the duty to know what they are importing. Importers can
and should take steps to determine whether the articles they are
importing contain chemicals that are prohibited or restricted.
Therefore, as discussed earlier in this Unit and in the Response to
Comment document, EPA is continuing to interpret TSCA sections
6(c)(2)(D) and 6(c)(2)(E) to be inapplicable to this rulemaking. While
this interpretation has not changed, EPA has reviewed the
practicability of regulating replacement parts and articles in
accordance with the statutory directive in TSCA section 6(h)(4) to
reduce exposures to the PBT chemicals to the extent practicable. This
is discussed further in Unit III.A.

C. PCTP Overview, Health Effects, and Exposure

    Historically, PCTP was used in rubber manufacturing as a peptizer,
or a chemical that makes rubber more amenable to processing. As
described in the proposed rule, there are few data on end-use products
and articles that contain PCTP. For years, PCTP was produced in the
United States, but domestic manufacture appears to have ceased (Ref.
6). Although it is likely that PCTP is no longer used as a peptizer, it
can be found as an impurity in the zinc salt of PCTP (zinc PCTP) (CASRN
117-97-5) after zinc PCTP manufacturing (Ref. 7). As shown by a number
of patents, zinc PCTP can be used as a peptizer in rubber manufacturing
and as an ingredient in the rubber core of golf balls to enhance
certain performance characteristics of the ball, such as spin, rebound,
and distance (Ref. 8, 9, and 10). EPA considers the presence of PCTP in
rubber during manufacturing, whether as a peptizer or an impurity, to
be processing under TSCA. Zinc PCTP is imported into the United States,
with approximately 65,000 lbs. imported in 2017 (Ref. 3). EPA believes
that some or all of the zinc PCTP could contain PCTP. The importation
of PCTP, including as an impurity with zinc PCTP, is considered
manufacturing under TSCA.
    There is likely exposure to the general population, workers, and
the environment, including water releases from process water and from
cleaning the processing area and equipment, and worker exposure during
unloading and transfer of the chemical. Women of childbearing age
exposed in the workplace may transfer PCTP to infants via breastmilk.
Exposure information for PCTP is detailed in EPA's Exposure and Use
Assessment (Ref. 5) and the proposed rule.
    PCTP is toxic to protozoa, fish, terrestrial plants, and birds.
Data for analogous chemicals (pentachloronitrobenzene and
hexachlorobenzene) indicate the potential for liver effects in mammals
and systemic (body weight) effects for PCTP in mammals (no repeated-
dose animal or human epidemiological data were identified for PCTP)
(Ref. 11). The studies presented in the document entitled
``Environmental and Human Health Hazards of Five Persistent,
Bioaccumulative and Toxic Chemicals (Hazard Summary) (Ref. 11)
demonstrate these hazardous endpoints. EPA did not perform a systematic
review or a weight of the scientific evidence assessment for the hazard
characterization of these chemicals. As a result, this hazard
characterization is not definitive or comprehensive. Other hazard
information on these chemicals may exist in addition to the studies
summarized in the Hazard Summary that could alter the hazard
characterization.
    In the 2014 Update to the TSCA Work Plan for Chemical Assessments
(Ref. 1), PCTP scored high (3) for hazard (based on toxicity for acute
and chronic exposures); low (1) for exposure (based on 2012 CDR data);
and high (3) for persistence and bioaccumulation (based on high
environmental persistence and high bioaccumulation potential). The
overall screening score for PCTP was high (7).
    In consideration of the production and use of PCTP, the
environmental and human health hazards of PCTP, and the public comments
on the proposed rule that are further discussed in Unit III.A., EPA
determines that PCTP meets the TSCA section 6(h)(1)(A) criteria. In
addition, EPA determines, in accordance with TSCA section 6(h)(1)(B),
that, based on the Exposure and Use Assessment and other reasonably
available information, exposure to PCTP under the conditions of use is
likely to the general population, to a potentially exposed or
susceptible subpopulation, or to the environment. EPA's determination
is based on the opportunities for exposure throughout the lifecycle of
PCTP, including the potential for consumer exposures. EPA did not
receive any significant comments or information to call the exposure
finding into question.

D. EPA's Proposed Rule Under TSCA Section 6(h) for PCTP

    In the proposed rule, EPA proposed to prohibit all manufacturing,
processing, and distribution of PCTP and PCTP-containing products and
articles for any use, unless PCTP concentrations are at or below 1% by
weight.
    In addition, EPA proposed to require, that all persons who
manufacture, process, or distribute in commerce PCTP and articles and
products containing PCTP maintain ordinary business records, such as
invoices and bills-of-lading, that demonstrate compliance with the
prohibitions and restrictions. EPA proposed that these records will
have to be maintained for a period of three years from the date the
record is generated.

E. Public Comments and Other Public Input

    The proposed rule provided a 60-day public comment period, with a
30-day extension provided (Ref. 4). The comment period closed on
October 28, 2019. EPA received a total of 48 comments, with three
commenters sending multiple submissions with attached files, for a
total of 58 submissions. This includes the previous request for a
comment period extension (EPA-HQ-OPPT-2019-0080-0526). Two commenters
submitted confidential business information (CBI) or copyrighted
documents with information regarding economic analysis and market
trends. Copies of all the non-CBI documents, or redacted versions
without CBI, are available in the docket for this action.
    In this preamble, EPA has responded to the major comments relevant
to the PCTP final rule. Of the comment submissions, 10 directly
addressed EPA's proposed regulation of PCTP. Additional discussion
related to this final action can be found in the Response to Comments
document (Ref. 4).

F. Activities Not Directly Regulated by This Rule

    EPA is not regulating all activities or exposures to PCTP, even
though the Exposure and Use Assessment (Ref. 5) identified potential
for exposures under many conditions of use. One such activity is
disposal. EPA generally presumes compliance with federal and state laws
and regulations, including, for example, the Resource Conservation and
Recovery Act (RCRA) and its implementing regulations and state laws, as
well as the Clean Air Act, the Clean Water Act, and the Safe Drinking
Water Act (SDWA). As described in the

proposed rule, regulations promulgated under the authority of RCRA,
govern the disposal of hazardous and non-hazardous wastes. Although
PCTP is not a listed hazardous waste under RCRA, it is subject to the
requirements applicable to solid waste under Subtitle D of RCRA. This
means there is a general prohibition on open dumping, which includes a
prohibition on open burning. Wastes containing this chemical that do
not otherwise meet the criteria for hazardous waste would be disposed
of in municipal solid waste landfills (MSWLFs), industrial
nonhazardous, or, in a few instances, construction/demolition
landfills. Non-hazardous solid waste is regulated under Subtitle D of
RCRA, and states play a lead role in ensuring that the federal
requirements are met. The requirements for MSWLFs include location
restrictions, composite liners, leachate collection and removal
systems, operating practices, groundwater monitoring, closure and post-
closure care, corrective action provisions, and financial assurance.
Industrial waste (non-hazardous) landfills and construction/demolition
waste landfills are primarily regulated under state regulatory
programs, and in addition they must meet the criteria set forth in
federal regulations which may include requirements such as siting,
groundwater monitoring and corrective action depending upon what type
of wastes are accepted. Disposal by underground injection is regulated
under both RCRA and SDWA. In view of these comprehensive, stringent
programs for addressing disposal, EPA determined that it is not
practicable to impose additional requirements under TSCA on the
disposal of the PBT chemicals, including PCTP.
    EPA received a number of comments on this aspect of its proposal.
Some commenters agreed with EPA's proposed determination that it is not
practicable to regulate disposal, while others disagreed. However, in
EPA's view, establishing an entirely new disposal program for PCTP-
containing wastes would be expensive and difficult to establish and
administer. A requirement to treat these wastes as if they were listed
as hazardous wastes would have impacts on hazardous waste disposal
capacity and be very expensive for states and local governments, as
well as for affected industries. Therefore, EPA has determined that it
is not practicable to further regulate PCTP-containing wastes. More
information on the comments received and EPA's responses can be found
in the Response to Comments document (Ref. 4).
    EPA proposed not to use its TSCA section 6(a) authorities to
directly regulate occupational exposures. As explained in the proposed
rule, as a matter of policy, EPA assumes compliance with federal and
state requirements, such as worker protection standards, unless case-
specific facts indicate otherwise. The Occupational Safety and Health
Administration (OSHA) has not established a permissible exposure limit
(PEL) for PCTP. However, under section 5(a)(1) of the Occupational
Safety and Health Act of 1970, 29 U.S.C. 654(a)(1), each employer has a
legal obligation to furnish to each of its employees employment and a
place of employment that are free from recognized hazards that are
causing or are likely to cause death or serious physical harm. The OSHA
Hazard Communication Standard at 29 CFR 1910.1200 requires chemical
manufacturers and importers to classify the hazards of chemicals they
produce or import, and all employers to provide information to
employees about hazardous chemicals to which they may be exposed under
normal conditions of use or in foreseeable emergencies. The OSHA
standard at 29 CFR 1910.134(a)(1) requires the use of feasible
engineering controls to prevent atmospheric contamination by harmful
substances and requires the use of respirators where effective
engineering controls are not feasible. The OSHA standard at 29 CFR
1910.143(c) details the required respiratory protection program. The
OSHA standard at 29 CFR 1910.132(a) requires the use of personal
protective equipment (PPE) by workers when necessary due to a chemical
hazard; 29 CFR 1910.133 requires the use of eye and face protection
when employees are exposed to hazards including liquid chemicals; and
29 CFR 1910.138 requires the use of PPE to protect employees' hands
including from skin absorption of harmful substances. The provisions of
29 CFR 1910.132(d) and (f) address hazard assessment, PPE selection,
and training with respect to PPE required under 29 CFR 1910.133,
1910.135, 1910.136, 1910.138, and 1910.140. EPA assumes that employers
will require, and workers will use, appropriate PPE consistent with
OSHA standards, taking into account employer-based assessments, in a
manner sufficient to prevent occupational exposures that are capable of
causing injury.
    EPA assumes compliance with other federal requirements, including
OSHA standards and regulations. EPA does not read TSCA section 6(h)(4)
to direct EPA to adopt potentially redundant or conflicting
requirements. Not only would it be difficult to support broadly
applicable and safe additional measures for each specific activity
without a risk evaluation and in the limited time for issuance of this
regulation under TSCA section 6(h), but imposing such measures without
sufficient analysis could inadvertently result in conflicting or
confusing requirements and make it difficult for employers to
understand their obligations. Furthermore, EPA cannot conclude that
broadly imposing specific measures is practicable for all of the varied
workplaces. Rather, where EPA has identified worker exposures and
available substitutes, EPA is finalizing measures to reduce those
exposures. As discussed in the proposed rule, EPA assumes that the
worker protection methods used by employers, including in response to
existing OSHA standards, in addition to the regulatory measures taken
for each chemical, meaningfully reduce the potential for occupational
exposures. Although some commenters agreed with this approach, others
thought EPA should establish worker protection requirements for those
uses that would be allowed to continue under the final rule.
Information provided to EPA before and during the public comment period
on the proposed rule indicates that employers are using engineering and
process controls and providing appropriate personal protective
equipment (PPE) to their employees consistent with these requirements
and EPA received no information on PCTP to suggest this is not the
case. Further, EPA has not conducted a risk evaluation on PCTP or any
of the other PBT chemicals. Without a risk evaluation and given the
time allotted for this rulemaking, EPA cannot identify additional
engineering or process controls or PPE requirements that would be
appropriate to each chemical-specific circumstance. For these reasons,
EPA has determined that it is not practicable to regulate worker
exposures in this rule through additional engineering or process
controls or PPE requirements.
    EPA received comments regarding the use of PBT chemicals in
research and development and lab use. Lab use is addressed under newly
established 40 CFR 751.401(b) as the manufacturing, processing,
distribution-in-commerce and use of any chemical substance, or products
and articles that contain the chemical substance, for research and
development, as defined in new 40 CFR 751.403. ``Research and
Development'' is defined in new 40 CFR 751.403 to mean laboratory and
research use only for purposes of scientific

experimentation or analysis, or chemical research on, or analysis of,
the chemical substance, including methods for disposal, but not for
research or analysis for the development of a new product, or
refinement of an existing product that contains the chemical substance.
This will allow, for example, for samples of environmental media
containing PBTs, such as contaminated soil and water, to be collected,
packaged and shipped to a laboratory for analysis. Laboratories also
must obtain reference standards containing PBTs to calibrate their
equipment, otherwise they may not be able to accurately quantify these
chemical substances in samples being analyzed. However, research to
develop new products that use PBTs subject to 40 CFR part 751, subpart
E, or the refinement of existing uses of those chemicals, is not
included in this definition, and those activities remain potentially
subject to the chemical specific provisions in 40 CFR part, 751 subpart
E. EPA believes it is not practicable to limit research and development
activity as defined, given the critical importance of this activity to
the detection, quantification, and control of these chemical
substances.
    Finally, EPA received comments regarding requirements for recycling
and resale of PCTP-containing products and articles, as well as other
PBT chemicals undergoing Section 6(h) rulemaking. One commenter stated
that because the proposed definition of ``person'' includes ``any
natural person,'' the proposed prohibitions would seem to apply to
anyone selling golf balls containing PCTP above the 1% concentration by
weight threshold at a garage or yard sale (EPA-HQ-OPPT-2019-0080-0559).
EPA did not intend to impose these final PCTP regulations on yard sales
or used golf ball sales and has added a provision in 40 CFR 751.401 to
clarify this issue. Distribution in commerce of PCTP, or products and
articles that contain PCTP, that have previously been sold or supplied
to an end user are excluded. The prohibition and recordkeeping
requirements in this final rule exclude PCTP-containing products and
articles that have previously been sold or supplied to an end user for
purposes other than resale. An individual or entity that purchased or
acquired the finished good in good faith for purposes other than resale
are excluded; for example, a consumer who resells a product they no
longer intend to use or donates a product or article to charity, such
as a golf course that resells used PCTP-containing golf balls it no
longer intends to use, or donates used PCTP-containing golf balls to
charity.

III. Provisions of This Final Rule

A. Scope and Applicability

    EPA carefully considered all public comments related to the
proposal. This rule finalizes EPA's proposal to prohibit the
manufacturing, processing, and distribution in commerce of PCTP or
PCTP-containing products and articles, unless PCTP concentrations are
at or below 1% by weight, with changes being made from the proposal to
the compliance date of distribution in commerce of PCTP and PCTP-
containing products and articles.
    1. Banning PCTP.
    EPA received numerous comments regarding the practicability of
regulating PCTP. Specifically, commenters expressed concern with EPA's
statement that it would be ``unreasonable, because of the low
concentrations of PCTP in golf balls, for example, and thus,
impracticable to prohibit or otherwise restrict the continued
commercial use of the products'' (84 FR 145). Some commenters stated
that a ban would be practicable given that EPA had already identified
the sole golf ball manufacturer using PCTP. Commenters also discussed
practicability in the context of availability of PCTP alternatives.
Other commenters supported EPA's proposed rule and stated that EPA's
regulation will allow manufacturers to continue the safe use of zinc
PCTP while restricting potentially more dangerous uses of PCTP in
greater concentrations or in its pure form.
    EPA received comments from one processor of PCTP (i.e., a golf ball
manufacturer) stating that its processes are currently within the
proposed 1% concentration by weight threshold. This commenter provided
data regarding potential exposures, showing little to no exposure to
humans or the environment. This commenter stated that even if the PCTP
product (e.g., within the rubber of the golf ball's core) is ``exposed
to the environment through some mechanism, the [zinc-PCTP] compound is
bound-up in the solid rubber that makes up the core material'' (EPA-HQ-
OPPT-2019-0080-0566). This commenter also provided EPA with information
from tests assessing leachability of the core material using U.S. EPA
Method 1311 (i.e., the toxicity characteristic leaching procedure
(TCLP)). The TCLP test resulted in non-detectable levels of PCTP
leaching from the rubber cores of golf balls when they were cut in half
or quartered. These study results were provided in EPA Docket EPA-HQ-
OPPT-2016-0738.
    EPA believes restricting the allowable concentration will result in
limited use options for PCTP and will encourage the use of available
PCTP alternatives, if other PCTP-related production occurs. EPA does
not expect any domestic production of PCTP or domestic use of PCTP to
prepare zinc PCTP, which is the only known intermediate use of PCTP.
Import of zinc PCTP may occur but only if meeting the concentration
threshold of 1% by weight or less of PCTP. As a result, EPA believes
these stringent measures will result in limited use of PCTP and
encourage the use of alternatives, if that has not already occurred.
    To the extent there are continued manufacturing and processing of
products and articles, within the permitted 1% threshold, the potential
for consumer exposures is not expected from these known activities or
products, e.g., as a component of golf ball cores. Therefore, EPA does
not believe it is practicable to impose a ban on all manufacture and
processing of PCTP at this time.
    2. 1% Concentration limit.
    EPA requested comment on the proposed concentration limit,
including whether the option is practicable, and whether further
exposure reductions would be practicable. EPA specifically requested
comment on the practicability of a lower limit on the PCTP content in
zinc PCTP, and whether it is possible to completely eliminate unreacted
PCTP in the manufacture of zinc PCTP. EPA did not receive comments on
an alternative or lower concentration limit. However, some commenters
did express concern that EPA has not demonstrated that levels below 1%
by weight do not present risks. Comments regarding eliminating the
concentration limit altogether and issuing a total ban are discussed in
Unit III.A.1. Other commenters supported the proposed concentration
limit and one commenter provided information on studies to support
their opinion that ``the 1% concentration threshold provides a more-
than-adequate level of safety for workers and the public, and the
available science does not support any further restrictions'' (EPA-HQ-
OPPT-2019-0080-0566).
    As noted earlier, zinc PCTP is manufactured using PCTP, by reacting
PCTP with zinc oxide, and depending on the yield of the reaction, zinc
PCTP may contain PCTP as an impurity. Zinc PCTP is sold with varying
concentrations of zinc salt, including at a purity of 99% (Ref. 12).
According to several patents, golf balls can be made

using zinc PCTP at this purity (Ref. 9). Since manufacturing or
processing zinc PCTP at 99% purity will comply with the proposed
concentration limit, as will zinc PCTP at lower purities that contains
PCTP at or below 1% concentration by weight, EPA believes that the
proposed concentration limit is practicable and is finalizing a limit
prohibiting manufacturing, processing, and distribution in commerce of
PCTP or PCTP-containing products and articles, unless PCTP
concentrations are at or below 1% by weight. Any manufacturing,
including import, or processing of zinc PCTP containing PCTP above the
1% concentration by weight threshold would not be permitted, including
for use in the manufacture of golf balls. In addition, any
manufacturing, including import, or processing of PCTP above the 1%
concentration by weight threshold to create zinc PCTP would not be
permitted. Thus, the manufacture and processing of PCTP and the
presence of PCTP in any products and articles is significantly impacted
by the prohibitions codified in the final rule. EPA believes
restricting the allowable concentration will result in limited use
options for PCTP and will encourage the use of available PCTP
alternatives, if other PCTP-related production occurs. EPA is
finalizing a limit for PCTP concentrations above 1% by weight rather
than prohibiting any manufacture or processing of PCTP for this reason.
    3. Compliance date for the prohibitions.
    The proposed rule did not delay the compliance date beyond the
rule's effective date; the manufacturing and processing bans would come
into effect 60 days after publication of the final rule notice. EPA
stated in the proposed rule that at that time it had no information
indicating that a compliance date of 60 days after publication of the
final rule is not practicable for the activities that would be
prohibited, or that additional time is needed for products to clear the
channels of trade. The phrases ``as soon as practicable'' and
``reasonable transition period'' as used in TSCA section 6(d)(1) are
undefined, and the legislative history on TSCA section 6(d) is limited.
Given the ambiguity in the statute, for purposes of this expedited
rulemaking, EPA presumed a 60-day compliance date was ``as soon as
practicable,'' unless there was support for a lengthier period of time
on the basis of reasonable available information, such as information
submitted in comments on the Exposure and Use Assessment or in
stakeholder dialogues. Such a presumption ensures the compliance
schedule is ``as soon as practicable,'' particularly in the context of
the TSCA section 6(h) rules for chemicals identified as persistent,
bioaccumulative and toxic, and given the expedited timeframe for
issuing a TSCA section 6(h) proposed rule did not allow time for
collection and assessment of new information separate from the comment
opportunities during the development of and in response to the proposed
rule. Such presumption also allows for submission of information from
the sources most likely to have the information that will impact an EPA
determination on whether or how best to adjust the compliance deadline
to ensure that the final compliance deadline chosen is both ``as soon
as practicable'' and provides a ``reasonable transition period.''
    EPA received public comments regarding the 60-day compliance date
for the prohibition in the proposed rule. Commenters stated that this
date would be unrealistic and requested that EPA phase in the
compliance deadlines for the bans on importation or distribution of
products and articles containing PCTP over a longer period following
promulgation of the final rule (EPA-HQ-OPPT-2019-0080-0549, EPA-HQ-
OPPT-2019-0080-0557). In addition, one commenter requested EPA allow
products or articles containing PCTP that are manufactured and imported
prior to the compliance deadlines to be distributed thereafter without
restriction (EPA-HQ-OPPT-2019-0080-0549). Commenters stated this would
be needed to prevent an untold number of lawfully manufactured and
imported articles from suddenly becoming unsaleable, which would result
in significant costs for retailers and importers. Other commenters
supported the compliance date (EPA-HQ-OPPT-2019-0080-0566).
    However, in response to commenters requesting additional time for
products and articles to clear the channels of trade, e.g., given
complex supply chains, including the request for a sell-through
provision to clear products and articles containing PCTP prior to the
compliance deadlines, EPA is extending the compliance date for the
prohibition on distribution in commerce to one year. Extending the
compliance date to one year will, as commenters note, allow additional
time for products and articles containing PCTP that were produced prior
to the compliance date for the prohibition on manufacture and
processing to clear channels of trade.
    EPA is not extending the compliance date for the prohibition on
manufacture and therefore is not extending the compliance deadline for
the prohibition on import which under TSCA section 3 is a subset of
manufacture activities. Unless reasonably available information
otherwise supports that it is not practicable to impose a 60-day
compliance deadline for manufacture, which includes import, or for
processing of PCTP and PCTP-containing products and articles, for
purposes of meeting EPA's obligations under TSCA section 6(h), EPA
presumes a compliance date of 60 days is ``as soon as practicable.''
EPA received only general comments taking the position, without
support, that the 60-day compliance period for the prohibition on
manufacture or processing is not practicable, while also receiving more
specific support from a manufacturer of PCTP-containing products for
the proposed 60-day timeframe (EPA-HQ-OPPT-2019-0080-0566).
    Therefore, this final rule includes a compliance date of 60 days
after publication of the final rule for the restrictions on
manufacturing and processing and, to address commenters' concerns, a
compliance date of one year after the publication of this final rule
for the restrictions on distribution in commerce of PCTP and PCTP-
containing products and articles, unless PCTP concentrations are at or
below 1% by weight.
    4. Recordkeeping.
    In addition, EPA is requiring that all persons who manufacture,
process, or distribute in commerce PCTP and articles and products
containing PCTP maintain ordinary business records related to
compliance with the prohibitions and restrictions, such as invoices and
bills-of-lading. EPA revised this language slightly from the proposal
to improve clarity. These records will have to be maintained for a
period of three years from the date the record is generated, beginning
on March 8, 2021.

B. TSCA Section 6(c)(2) Considerations

    1. Health effects, exposure, and environmental effects.
    PCTP is toxic to protozoa, fish, terrestrial plants, and birds,
with data for analogous chemicals indicating the potential for liver
effects in mammals and systemic effects for PCTP in mammals. These
hazard statements are not based on a systematic review of the available
literature and information may exist that could refine the hazard
characterization. Additional information about PTCP's health effects,
use, and exposure is in Unit II.C. and is further detailed in EPA's
Hazard Summary (Ref. 11) and Exposure and Use Assessment (Ref. 5).

    2. The benefits of the chemical substance or mixture for various
uses.
    During the manufacture of rubber, PCTP has been used as a peptizer
to reduce the viscosity of rubber during processing. PCTP has been used
as a mastication agent in the rubber industry and, more specifically, a
peptizing agent for natural rubber viscosity reduction in the early
stages of rubber manufacturing (Ref. 13). Mastication and peptization
are processing stages during which the viscosity of rubber is reduced
to a level facilitating further processing (Ref. 14). It is possible to
reduce the viscosity of natural and synthetic rubbers through solely
mechanical efforts, but peptizers allow this process to be less
sensitive to varying time and temperature, which improves the
uniformity between batches (Ref. 13).
    3. The reasonably ascertainable economic consequences of the rule.
    a. Overview of cost methodology. EPA has evaluated the potential
costs of the final action for PCTP. Costs of the final rule were
estimated based on the assumption that under regulatory limitations on
PCTP, processors that use PCTP in their products would switch to
available alternative chemicals to manufacture the product, or to
products and articles that do not contain PCTP. Costs were assessed
based on the assumption that manufacturers will use an alternative
chemical, rather than an evaluation of the pricing of pre-existing
PCTP-free products. For PCTP, the costs were assessed based on chemical
substitutes only. Substitution costs were estimated on the industry
level using the price differential between the cost of the chemical (or
chemical product) and identified substitutes. Costs for rule
familiarization and recordkeeping were estimated based on burdens
estimated for other similar rulemakings. Costs were annualized over a
25-year period. Other potential costs include, but are not limited to,
those associated with testing, reformulation, release prevention,
imported articles, and some portion of potential revenue loss. However,
these costs are discussed only qualitatively, due to lack of data
availability to estimate quantified costs. More details of this
analysis are presented in the Economic Analysis (Ref. 3).
    b. Estimated costs of this final rule. Total quantified annualized
industry costs for the final rule are approximately $30,000 (at both 3%
and 7% discount rates annualized over 25 years). Total annualized
Agency costs associated with implementation of the final rule were
based on EPA's best judgment and experience with other similar rules.
For the final regulatory action, EPA estimates it will require 0.5 FTE
at $77,600 per year (Ref. 3).
    Total quantified annualized social costs for the final rule are
approximately $108,000 (at both 3% and 7% discount rates). As described
earlier in Unit III.B.3, potential costs such as testing,
reformulation, release prevention, and imported articles, could not be
quantified due to lack of data availability to estimate quantified
costs. These costs are discussed qualitatively in the Economic Analysis
(Ref. 3).
    c. Benefits. As discussed in Unit II.A., while EPA reviewed hazard
and exposure information for the PBT chemicals, this information did
not provide a basis for EPA to develop scientifically robust and
representative risk estimates to evaluate whether or not any of the
chemicals present a risk of injury to health or the environment.
Benefits were not quantified due to the lack of risk estimates. A
qualitative discussion of the potential benefits associated with the
final action for PCTP is provided. PCTP is persistent, bioaccumulative,
and an aquatic toxicant. There are limited data on the potential
effects of PCTP in mammals and no data were identified on the potential
effects of PCTP in humans. Under the final regulatory action,
manufacture and processing of PCTP and PCTP-containing products and
articles will be limited to PCTP concentrations of 1% by weight or
lower. With the final rule, there will be lower concentrations of PCTP
in products and articles. These impacts will decrease the potential for
dermal and inhalation PCTP exposures in workers involved in the
manufacturing and processing of PCTP-containing products and articles,
e.g., rubber products and golf balls, and decrease the potential for
releases of PCTP to the environment, including through disposal
activities. With decreased potential for releases to the environment
and reduced presence of PCTP in products and articles, there will also
be a decrease of the potential for exposures in the general population
and potentially exposed or susceptible subpopulations, including
through consumption of food from the persistence and bioaccumulation of
food in animals or through persistence and uptake in agricultural food
products. Thus, by reducing the concentration threshold for
manufacturing and processing of PCTP for use in products and articles
overall, the final regulatory action will have benefits for the
environment, general population, and potentially exposed or susceptible
subpopulations, such as workers.
    d. Cost effectiveness, and effect on national economy, small
business, and technological innovation. With respect to the cost
effectiveness of the final regulatory action and the primary
alternative regulatory action, EPA is unable to perform a traditional
cost-effectiveness analysis of the actions and alternatives for the PBT
chemicals. As discussed in the proposed rule, the cost effectiveness of
a policy option would properly be calculated by dividing the annualized
costs of the option by a final outcome, such as cancer cases avoided,
or to intermediate outputs such as tons of emissions of a pollutant
curtailed. Without the supporting analyses for a risk determination,
EPA is unable to calculate either a health-based or environment-based
denominator. Thus, EPA is unable to perform a quantitative cost-
effectiveness analysis of the final and alternative regulatory actions.
However, by evaluating the practicability of the final and alternative
regulatory actions, EPA believes that it has considered elements
related to the cost effectiveness of the actions, including the cost
and the effect on exposure to the PBT chemicals of the final and
alternative regulatory actions.
    EPA considered the anticipated effect of this rule on the national
economy and concluded that this rule is highly unlikely to have any
measurable effect on the national economy (Ref. 3). EPA analyzed the
expected impacts on small business and found that no small entities are
expected to experience impacts of more than 1% of revenues (Ref. 3).
Finally, EPA has determined that this rule is unlikely to have
significant impacts on technological innovation, although the rule may
create some incentives for chemical manufacturers to develop new
chemical alternatives to PCTP.
    4. Consideration of alternatives.
    As the result of a screening level analysis of likely alternatives
based on the TSCA Work Plan Chemicals: Methods Document (Ref. 2), EPA
believes that there are viable substitutes for PCTP in rubber
manufacturing. Although this final rule is not prohibiting the
manufacture or processing of PCTP and PCTP-containing products and
articles for any use when PCTP concentrations are at or below 1% by
weight, it is possible that some manufacturers and processors may
choose to use alternatives instead of using PCTP at the concentration
limit. At this time, EPA does not know whether products, including golf
balls, are currently being made with halogenated organosulfur compound
substitutes instead of PCTP. Based on information from patents, EPA
believes

that use of these substitutes may be occurring in golf ball
manufacturing (Ref. 8, 9, and 15). Further, only one golf ball
manufacturer has confirmed that it incorporates PCTP into its golf
balls. EPA believes this limited use of PCTP is sufficient evidence of
the availability of substitutes.
    The potential alternatives were evaluated and scored on three
characteristics: Hazard, exposure and the potential for persistence
and/or bioaccumulation. Two chemicals, diphenyldisulfide and 2,2'-
dibenzamidodiphenyl disulfide, scored lower for at least one
characteristic (Ref. 3). With respect to pentafluorothiophenol, there
was not enough information available to score each characteristic (Ref.
16).

C. TSCA Section 26(h) Considerations

    In accordance with TSCA section 26(h) and taking into account the
requirements of TSCA section 6(h), EPA has used scientific information,
technical procedures, measures, and methodologies that are fit for
purpose and consistent with the best available science. For example,
EPA based its determination that human and environmental exposures to
PCTP are likely in the Exposure and Use Assessment (Ref. 5) discussed
in Unit II.A.2, which underwent a peer review and public comment
process, as well as using best available science and methods sufficient
to make that determination. The extent to which the various
information, procedures, measures, and methodologies, as applicable,
used in EPA's decision making have been subject to independent
verification or peer review is adequate to justify their use,
collectively, in the record for this rule. Additional information on
the peer review and public comment process, such as the peer review
plan, the peer review report, and the Agency's response to comments,
are in the public docket for this action (EPA-HQ-OPPT-2018-0314). In
addition, in accordance with TSCA section 26(i) and taking into account
the requirements of TSCA section 6(h), EPA has made scientific
decisions based on the weight of the scientific evidence.

IV. References

    The following is a list of the documents that are specifically
referenced in this document. The docket includes these documents and
other information considered by EPA, including documents that are
referenced within the documents that are included in the docket, even
if the referenced document is not physically located in the docket. All
records in docket EPA-HQ-OPPT-2019-0080 are part of the record for this
rulemaking. For assistance in locating these other documents, please
consult the technical person listed under FOR FURTHER INFORMATION
CONTACT.

1. EPA. TSCA Work Plan for Chemical Assessments: 2014 Update. October
2014. https://www.epa.gov/assessingand-managing-chemicals-under-tsca/tsca-work-plan-chemical-ssessments-2014-update. Accessed March 1, 2019.
2. EPA. TSCA Work Plan Chemicals: Methods Document. February 2012.
https://www.epa.gov/sites/production/files/2014-03/documents/work_plan_methods_document_web_final.pdf. Accessed March 1, 2019.
3. EPA. Economic Analysis for Regulation of Pentachlorothiophenol
(PCTP) Under TSCA Section 6(h). December 2020.
4. EPA. Regulation of Persistent, Bioaccumulative, and Toxic Chemicals
Under TSCA Section 6(h); Response to Public Comments. December 2020.
(Docket EPA-HQ-OPPT-2019-0080).
5. EPA. Exposure and Use Assessment of Five Persistent,
Bioaccumulative, and Toxic Chemicals. December 2020. (EPA-HQ-OPPT-2019-
0080-0518).
6. EPA. Public Database 2016 Chemical Data Reporting. Washington, DC:
US Environmental Protection Agency, Office of Pollution Prevention and
Toxics.
7. Lucas, CR; Peach, ME. (1970). Reactions of Pentachlorothiophenol.
Canadian Journal of Chemistry. 48:1869.
8. Watanabe, Hideo; Kasashima, Atuski, Multi-piece solid golf ball. US
Patent Number US7367901B2, filed January 11, 2007, and published May 6,
2008.
9. Kennedy III, Thomas J., Binette, Mark L., Golf ball, US Patent
Number<PHONE_NUMBER>1, filed July 20, 2004, and published January 26,
2006.
10. EPA. Preliminary Information on Manufacturing, Processing,
Distribution, Use, and Disposal: Pentachlorothiophenol. August 2017.
(EPA-HQ-OPPT-2016-0739-0003).
11. EPA. Environmental and Human Health Hazards of Five Persistent,
Bioaccumulative and Toxic Chemicals. December 2020.
12. American Elements. Los Angeles, CA. Zinc Chlorothiophenolate.
https://www.americanelements.com/zincchlorothiophenolate-117-97-5.
Accessed March 3, 2019.
13. National Library of Medicine. ToxNet, Hazardous Substance Data
Bank. Pentachlorothiophenol: CASRN: 133-49-3. https://
toxnet.nlm.nih.gov/cgi-bin/sis/search2/f?./temp/~ebPHHj:1 Accessed
March 4, 2019.
14. Struktol Company of America, LLC. Stow, OH. Rubber Handbook. 2004.
http://www.struktol.com/pdfs/RubberHB.pdf. Accessed March 4, 2019.
15. Voorheis PR, Rajagopalan M. Golf ball core compositions comprising
unsaturated long chain organic acids and their salts. US Patent Number:
US6762247B2, filed September 9, 2002, published July 13, 2004.
16. EPA. Persistence, Bioaccumulation, Environmental Hazard and Human
Health Hazard Ratings for Alternatives to PBT Chemicals Proposed for
Regulation. April 2019.
17. Keweenaw Bay Indian Community. Re: Notification of Consultation and
Coordination on a Rulemaking Under the Toxic Substances Control Act:
Regulation of Persistent, Bioaccumulative, and Toxic Chemicals Under
TSCA Section 6(h). September 25, 2018.
18. Harper, Barbara and Ranco, Darren, in collaboration with the Maine
Tribes. Wabanaki Traditional Cultural Lifeways Exposure Scenario. July
9, 2009.

V. Statutory and Executive Order Reviews

    Additional information about these statutes and Executive Orders
can be found at https://www.epa.gov/laws-regulations-and-executive-orders.

A. Executive Order 12866: Regulatory Planning and Review and Executive
Order 13563: Improving Regulations and Regulatory Review

    This action is a significant regulatory action that was submitted
to the Office of Management and Budget (OMB) for review under Executive
Order 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821,
January 21, 2011). Any changes made in response to OMB recommendations
have been documented in the docket for this action as required by
section 6(a)(3)(E) of Executive Order 12866.
    EPA prepared an economic analysis of the potential costs and
benefits associated with this action. A copy of this economic analysis,
Economic Analysis for Pentachlorothiophenol

(PCTP) Regulation of Under TSCA Section 6(h) (Ref. 3), is in the docket
and is briefly summarized in Unit III. B.3.

B. Executive Order 13771: Reducing Regulation and Controlling
Regulatory Costs

    This action is considered a regulatory action under Executive Order
13771 (82 FR 9339, February 3, 2017). Details on the estimated costs of
this final rule can be found in the Economic Analysis (Ref. 3), which
is briefly summarized in Unit III.B.3.

C. Paperwork Reduction Act (PRA)

    The information collection activities in this rule have been
submitted for approval to OMB under the PRA, 44 U.S.C. 3501 et seq. The
Information Collection Request (ICR) document that the EPA prepared has
been assigned EPA ICR number 2599.02 and OMB Control No. 2070-0213. A
copy of the ICR is available in the docket for this rule, and it is
briefly summarized here. The information collection requirements are
not enforceable until OMB approves them.
    Respondents/affected entities: Entities potentially affected by
paperwork requirements of this final rule include 4 processors and 1
distributor.
    Respondent's obligation to respond: Mandatory (40 CFR 751.411).
    Estimated number of respondents: 5.
    Frequency of response: On occasion.
    Total estimated burden: 2.5 hours (per year). Burden is defined at
5 CFR 1320.3(b).
    Total estimated cost: $196.50 (per year), includes $0 annualized
capital or operation & maintenance costs.
    An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a
currently valid OMB control number. The OMB control numbers for EPA's
regulations in 40 CFR are listed in 40 CFR part 9. When OMB approves
this ICR, the Agency will announce that approval in the Federal
Register and publish a technical amendment to 40 CFR part 9 to display
the OMB control number for the approved information collection
activities contained in this final rule.

D. Regulatory Flexibility Act (RFA)

    I certify that this action will not have a significant economic
impact on a substantial number of small entities under the RFA, 5
U.S.C. 601 et seq. The small entities subject to the requirements of
this action are small businesses that manufacture/import, process, or
distribute PCTP. In total, only one small business is expected to be
affected by the final action. This small business is not expected to
experience negative impacts of more than 1% of revenue. Because there
is only one small business directly impacted and negative impacts are
less than 1%, EPA presumes no significant economic impact on a
substantial number of small entities (no SISNOSE). No small entities
are expected to experience impacts of more than 1% of revenues. Details
of this analysis are presented in the Economic Analysis (Ref. 3).

E. Unfunded Mandates Reform Act (UMRA)

    This action does not contain an unfunded mandate of $100 million or
more as described in UMRA, 2 U.S.C. 1531-1538, and will not
significantly or uniquely affect small governments. The final rule is
not expected to result in expenditures by State, local, and Tribal
governments, in the aggregate, or by the private sector, of $100
million or more (when adjusted annually for inflation) in any one year.
Accordingly, this final rule is not subject to the requirements of
sections 202, 203, or 205 of UMRA. The requirements of this action will
primarily affect processors, and a distributor of PCTP. The total
quantified annualized social costs for this final rule under are
approximately $108,000 (at both 3% and 7% discount rate), which does
not exceed the inflation-adjusted unfunded mandate threshold of $160
million.

F. Executive Order 13132: Federalism

    This action does not have federalism implications because it is not
expected to have substantial direct effects on the states, on the
relationship between the national government and the states, or on the
distribution of power and responsibilities among the various levels of
government as specified in Executive Order 13132 (64 FR 43255, August
10, 1999). Thus, Executive Order 13132 does not apply to this action.

G. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments

    This action does not have tribal implications because it is not
expected to have substantial direct effects on tribal governments, on
the relationship between the Federal Government and the Indian tribes,
or on the distribution of power and responsibilities between the
Federal Government and Indian tribes as specified in Executive Order
13175 (65 FR 67249, November 9, 2000). Thus, Executive Order 13175 does
not apply to this final rule.
    Consistent with the EPA Policy on Consultation and Coordination
with Indian Tribes, EPA consulted with tribal officials during the
development of this action. EPA consulted with representatives of
Tribes via teleconference on August 31, 2018, and September 6, 2018,
concerning the prospective regulation of the five PBT chemicals under
TSCA section 6(h).
    Tribal members were encouraged to provide additional comments after
the teleconferences. EPA received two comments from the Keweenaw Bay
Indian Community and Maine Tribes (Ref. 17 and 18).

H. Executive Order 13045: Protection of Children From Environmental
Health and Safety Risks

    This action is not subject to Executive Order 13045 (62 FR 19885,
April 23, 1997) because it is not an economically significant
regulatory action as defined by Executive Order 12866. Although the
action is not subject to Executive Order 13045, the Agency considered
the risks to infants and children under EPA's Policy on Evaluating
Health Risks to Children. EPA did not perform a risk assessment or risk
evaluation of PTCP. More information can be found in the Exposure and
Use Assessment (Ref. 5). This regulation will reduce the exposure to
PCTP for the general population and for potentially exposed or
susceptible subpopulations such as workers and children.

I. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use

    This action is not a ``significant energy action'' as defined in
Executive Order 13211 (66 FR 28355, May 22, 2001) because it is not
likely to have a significant adverse effect on the supply,
distribution, or use of energy and has not otherwise been designated as
a significant energy action by the Administrator of the Office of
Information and Regulatory Affairs (OIRA).

J. National Technology Transfer and Advancement Act (NTTAA)

    This rulemaking does not involve any technical standards.
Therefore, NTTAA section 12(d), 15 U.S.C. 272 note, does not apply to
this action.

K. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations

    EPA believes that this action does not have disproportionately high
and adverse health or environmental effects on minority populations,
low-income populations and/or indigenous peoples,

as specified in Executive Order 12898 (59 FR 7629, February 16, 1994).
The documentation for this decision is contained in the Economic
Analysis (Ref. 3), which is in the public docket for this action. EPA
believes that the restrictions on PCTP in this final rule will reduce
exposure in the United States, thus benefitting all communities,
including environmental justice communities.

L. Congressional Review Act (CRA)

    This action is subject to the CRA, 5 U.S.C. 801 et seq., and EPA
will submit a rule report to each House of the Congress and to the
Comptroller General of the United States. This action is not a ``major
rule'' as defined by 5 U.S.C. 804(2).

List of Subjects 40 CFR Part 751

    Environmental protection, Chemicals, Export Notification, Hazardous
substances, Import certification, Reporting and recordkeeping.

Andrew Wheeler,
Administrator.

    Therefore, for the reasons stated in the preamble, 40 CFR part 751
is amended as follows:

PART 751--REGULATION OF CERTAIN CHEMICAL SUBSTANCES AND MIXTURES
UNDER SECTION 6 OF THE TOXIC SUBSTANCES CONTROL ACT

0
1. The authority citation for part 751 continues to read as follows:

    Authority: 15 U.S.C. 2605, 15 U.S.C. 2625(l)(4).

0
2. Amend Sec.  751.403 by adding in alphabetical order the term
``PCTP'' to read as follows:

Subpart E--Persistent, Bioaccumulative, and Toxic Chemicals

Sec.  751.403   Definitions.

* * * * *
    PCTP means the chemical substance pentachlorothiophenol (CASRN 133-
49-3).
* * * * *

0
3. Add Sec.  751.411 to read as follows:

Sec.  751.411   PCTP.

    (a) Prohibition. After March 8, 2021, all persons are prohibited
from all manufacturing and processing of PCTP or PCTP-containing
products or articles, unless PCTP concentrations are at or below 1% by
weight. After January 6, 2022, all persons are prohibited from all
distribution in commerce of PCTP or PCTP-containing products or
articles, unless PCTP concentrations are at or below 1% by weight.
    (b) Recordkeeping. After March 8, 2021, manufacturers, processors
and distributors of PCTP or PCTP-containing products or articles must
maintain ordinary business records related to compliance with the
prohibitions, restrictions and other provisions of this section, such
as invoices and bills-of-lading. These records must be maintained for a
period of three years from the date the record is generated.

[FR Doc. 2020-28689 Filed 1-5-21; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register: December 14, 2005 (Volume 70, Number 239)]
[Notices]
[Page 74082-74083]
[DOCID:fr14de05-118]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52903; File No. SR-Phlx-2005-67]

Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.;
Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto
Relating to the Maintenance, Retention and Furnishing of Books, Records
and Other Information Regarding Payment For Order Flow

December 7, 2005.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on November 3, 2005, the Philadelphia Stock Exchange, Inc. (``Phlx'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. On
November 22, 2005, the Phlx submitted Amendment No. 1 to the proposed
rule change.\3\ The Commission is publishing this notice to solicit
comments on the proposed rule change, as amended, from interested
persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Amendment No. 1 provided clarifying language to Phlx Rule
760 and the purpose section of the filing.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Phlx proposes to amend Phlx Rule 760, Maintenance, Retention
and Furnishing of Books, Records and Other Information, to incorporate
recent changes to the Exchange's payment for order flow program.
    The Exchange recently amended its payment for order flow program
for trades settling on or after October 1, 2005 (``October
program'').\4\ Registered Options Traders who receive electronically-
delivered orders directed to them (``Directed ROTs'') may, pursuant to
the October program, direct the Exchange to make payments to order flow
providers on their behalf.\5\ Thus, the Exchange proposes to amend Phlx
Rule 760 to clarify that these Directed ROTs would now be required to
retain records relating to payment for order flow arrangements.\6\
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    \4\ The October program is in effect as a pilot program that is
scheduled to expire on May 27, 2006. See Securities Exchange Act
Release No. 52568 (October 6, 2005), 70 FR 60120 (October 14, 2005)
(SR-Phlx-2005-58).
    \5\ The Exchange represents that under previous payment for
order flow programs, specialist units requested reimbursement from
the Exchange for monies they paid to order flow providers. Pursuant
to the October program, the available payment for order flow funds
would be disbursed by the Exchange according to the instructions of
the specialist units and Directed ROTs.
    \6\ The Exchange represents that specialists/specialist units
are already specifically required to maintain these books and
records.
---------------------------------------------------------------------------

    The text of Rule Phlx 760, as proposed to be amended, is set forth
below with new language in italics and deletions in [brackets].

Rule 760

Maintenance, Retention and Furnishing of Books, Records and Other
Information
    Every member and member organization shall make, keep current and
preserve such books and records as the Exchange may prescribe and as
may be prescribed by the Securities Exchange Act of 1934 and the rules
and regulations thereunder. No member or member organization shall
refuse to make available to the Exchange such books, records or other
information as may be called for under the rules or as may be requested
in connection with an investigation by the Exchange.
    Supplementary Material: * * *
    .01 Without limiting the general provisions of Rule 760, such Rule
requires Registered Options Traders who receive electronically-
delivered orders directed to them, Specialists [or] and Specialist
Units who request that payments be made [funds, or who make payments]
to order flow providers as part of the Exchange's payment for order
flow program, to make, keep current and preserve all books and records
relating to payment for order flow arrangements, including but not
limited to all records pertaining to the identity of the order flow
providers, [and] the [origin, use, transfer, distribution and] rates,
and the basis for the amounts they have directed the Exchange to pay to
order flow providers [of all payments] (whether on a per contract or
flat fee basis). [Such records should be maintained in such a fashion
as to permit the Exchange to track payments to order flow providers on
an option by option basis.] Such books and records shall be made
available as may be requested by the Exchange.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange states that the purpose of this proposal is to update
Phlx Rule 760 to reflect recent changes to the Exchange's payment for
order flow program, specifically including that Directed ROTs must now
retain records relating to payment for order flow arrangements. The
Exchange proposes to amend the Supplementary Material to Phlx Rule 760
because the Exchange's current payment for order flow program no longer
tracks payments to order flow providers on an option by option basis.
In addition, the Exchange notes that specialists and specialist units
no longer need to maintain records relating to the use, transfer, and
distribution of payment for order flow funds because

they will now direct the Exchange to make on their behalf those payment
for order flow payments to the order flow providers. The Exchange also
proposes to specifically request that books and records regarding the
rate (for example, $0.25 per contract or a flat monthly rate) that is
paid to order flow providers and the basis for the amount that Directed
ROTs, specialists, and specialist units direct the Exchange to pay to
order flow providers be maintained.
2. Statutory Basis
    The Exchange believes the proposal is consistent with section 6(b)
of the Act \7\, in general, and furthers the objectives of section
6(b)(1) of the Act,\8\ in particular, in that it assist the Exchange in
determining and enforcing compliance with its rules assist the Exchange
in determining an enforcing compliance with its rules (i.e., the
specific terms of the Exchange's payment for order flow program). By
enabling the Exchange to verify that the payment for order flow program
is being administered in accordance with the terms thereof as approved
by the Exchange and set forth in its filing with the Commission, this
proposal also promotes just and equitable principles of trade
consistent with section 6(b)(1) of the Act.\9\
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(1).
    \9\ 15 U.S.C. 78f(b)(1).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others

    No written comments were solicited or received by the Exchange on
this proposal.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding, or (ii) as to
which the Exchange consents, the Commission will:
    A. By order approve the proposed rule change, or
    B. Institute proceedings to determine whether the proposed rule
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change, as amended, is consistent with the Act. Comments may be
submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml.
); or     Send an e-mail to<EMAIL_ADDRESS>Please include

File Number SR-Phlx-2005-67 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-9303.
    All submissions should refer to File Number SR-Phlx-2005-67. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml
). Copies of the submission, all subsequent amendments,

all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for inspection
and copying in the Commission's Public Reference Room. Copies of the
filing also will be available for inspection and copying at the
principal office of the Exchange. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-Phlx-2005-67 and should be submitted on or before
January 4, 2006.

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\10\
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
 [FR Doc. E5-7299 Filed 12-13-05; 8:45 am]

BILLING CODE 8010-01-P