            Supporting Statement for a Request for OMB Review under
                          The Paperwork Reduction Act
IDENTIFICATION OF THE INFORMATION COLLECTION
       1(a)	Title and Number of the Information Collection

      Title: TSCA Section 8(a) Preliminary Assessment Information Rule (PAIR)

      EPA ICR No.: 0586.13 	OMB Control No.: 2070-0054
       1(b)	Short Characterization

      On June 22, 1982, EPA promulgated the generic section 8(a) Preliminary Assessment Information Rule (PAIR) (40 CFR part 712; see Attachment B) under the Toxic Substances Control Act (TSCA) (15 U.S.C. 2607; see Attachment A). EPA uses PAIR to collect information to identify, assess, and manage human health and environmental risks from chemical substances, mixtures and categories. PAIR requires chemical manufacturers and importers to complete a standardized reporting form to help evaluate the potential for adverse human health and environmental effects caused by the manufacture or importation of identified chemical substances, mixtures or categories.

      Chemicals identified by the existing chemical review program or any other EPA office or federal agency, for which a justifiable information need for production, use, or exposure-related data can be satisfied by the use of the PAIR, is a proper subject for a chemical-specific TSCA section 8(a) PAIR rulemaking. Many of the chemical substances, mixtures and categories listed in 40 CFR part 712 have been recommended by the Interagency Testing Committee (ITC) to EPA for test rule consideration. In most instances, such as in a preliminary risk determination, or in reaching a decision on whether testing of a chemical is necessary to satisfy an identified data need, the information that EPA receives from a PAIR report is sufficient to satisfy its information needs.

      This information collection activity also covers certain specific chemical testing and reporting requirements under Subpart B of 40 CFR part 766 (see Attachment D) that are very similar to the PAIR requirements. The Agency rarely receives submissions of the information required by 40 CFR 766. EPA received no more than five submissions over the course of the last OMB approval for this particular aspect of the information collection. However, collection of this information is covered under the PAIR ICR because the requirements are similar and because the Paperwork Reduction Act requires that recordkeeping and reporting activities contained in any regulation be approved by OMB even if they involve less than ten respondents or would otherwise not require approval (see 5 CFR 1320.3(c)(4)(i)).

      The dibenzo-para-dioxin/dibenzofuran regulations at part 766 require that any person who manufactures, imports, or processes a chemical substance listed at 766.25 test that chemical substance and submit appropriate information to EPA according to the schedules described in at 766.35. These chemical substances are subject to testing immediately upon manufacture, import or processing. Persons who manufacture or import a chemical substance listed under 766.25 must report results, using the Dioxin/Furan Report Form 7710-51 (see Attachment E), of all existing test data that show that chemical substance has been tested for the presence of halogenated dibenzodioxins/halogenated dibenzofurans (HDDs/HDFs), as defined in the regulation, no later than 90 days after the person first manufactures or imports the chemical substance. Copies of EPA Form 7710-51 are available from the Office of Pollution Prevention and Toxics' (OPPT) National Program Chemicals Division. Additionally, any manufacturer or importer of a chemical substance listed in 766.25 in possession of unpublished health and safety studies on HDDs/HDFs is required to submit copies of such studies to EPA, in accordance with various provisions of 40 CFR 716, no later than 90 days after the person first manufactures or imports the chemical substance.
NEED FOR AND USE OF THE COLLECTION
      2(a)	Need/Authority for the Collection

     Under TSCA, which covers the production, distribution, and disposal of commercial and industrial chemicals in the United States, EPA's Office of Pollution Prevention and Toxics (OPPT) is charged with the responsibility for assuring that chemicals made available for sale and use in the United States do not pose any unreasonable adverse risks to human health or to the environment. To carry out this mandate, EPA has broad authority to issue regulations designed to gather health/safety and exposure information on, require testing of, and control exposure to chemical substances and mixtures. Drugs, cosmetics, foods, food additives, pesticides, and nuclear materials are exempt from TSCA and are subject to control under other U.S. Government statutes (e.g., foods, food additives, drugs and cosmetics are under the purview of the Federal Food, Drug, and Cosmetic Act (FFDCA)).

     TSCA section 8(a) gives EPA the authority to promulgate rules under which manufacturers (which by statute includes importers) and processors of chemical substances must maintain records and/or report such data as EPA may reasonably require to carry out the TSCA mandates. Examples of information that can be required to be reported under TSCA section 8(a) include:

   *          chemical or mixture identity;
   *          categories of use;
   *          quantity manufactured or processed;
   *          by-product description;
   *          health and environmental effects information;
   *          number of individuals exposed; and
   *          method(s) of disposal

      Section 8(a) regulations can be tailored to meet unique information needs (e.g., via chemical-specific rules, which are covered under EPA ICR #1198, OMB Control #2070-0067) or information can be obtained via the use of "model" or standardized reporting rules. One example of a model TSCA section 8(a) reporting rule is the "Preliminary Assessment Information Rule" or PAIR. Under PAIR, producers and importers of a listed chemical are required to report the following site-specific information on EPA Form 7710-35 (described in more detail in section 4 of this Supporting Statement; also see Attachment C):

      * Quantity of chemical produced and/or imported;
      * Amount of chemical lost to the environment during production or importation;
      * Quantity of enclosed, controlled and open releases of the chemical; and
      * Per release, the number of workers exposed and the number of hours exposed.

      Exemptions for such reporting are as follows:

      * Production or importation for the sole purpose of research and development (R&D);
      * Production or importation of less than 500 kilograms during the reporting period at single plant site;
      * Companies whose total annual sales from all sites owned by the domestic or foreign parent company are below $30 million for the reporting period and who produced or imported less than 45,400 kilograms of the chemical; and
      * Production or importation of the listed chemical solely as an impurity, a non-isolated intermediate, and under certain circumstances as a by-product.

      This Supporting Statement addresses the information collection activities associated with PAIR, which establishes procedures for chemical manufacturers and processors to report production, use, and exposure-related information on listed chemical substances. Subpart A establishes requirements that apply to all reporting under PAIR, and Subpart B covers manufacturers' and processors' reporting. Processors are not required to report PAIR information under this information collection.

      In addition, as described in the previous section, this Supporting Statement addresses information collection activities associated with the reporting and recordkeeping requirements contained in 40 CFR 766.
       2(b)	Use/Users of the Data

      EPA uses PAIR data to (1) monitor domestic manufacture and/or importation of chemical substances, mixtures and categories, (2) identify possible routes of human or environmental exposure, (3) support regulations designed to prevent possible adverse health effects and (4) support EPA programs. The information provided by PAIR is needed to complete assessments of chemicals of interest and to assist in the development of regulations to control hazardous chemicals.

      All EPA program offices are potential users of the PAIR. The information helps EPA evaluate the potential for adverse human health or environmental effects caused by the manufacture and importation of the identified chemical substance, mixture or category. If EPA does not monitor these parameters, adverse human health or environmental effects may occur without EPA's knowledge. Without this information, EPA would not be able to evaluate the need for additional testing or further regulatory action.

      Other federal agencies, which require data on the human health and environmental effects of a chemical, use PAIR information. States also have access to public portions of PAIR information. Public interest groups use information reported under the public portions of PAIR.
NON-DUPLICATION, CONSULTATION AND OTHER COLLECTION CRITERIA
      3(a)	Non-Duplication

     PAIR reporting data assist EPA in identifying, evaluating and managing the human health and environmental effects of chemical substances, mixtures and categories.

     EPA has developed procedures that must be met to ensure that the chemicals added to the rule and the information requested on these chemicals does not duplicate other activities or impose a burden on industry that outweighs the need for the data. These procedures are for rule promulgation and implementation:

     (1) A continuing evaluation of the information collection and management activities;
     (2) The management of the collected information;
     (3) A chemical nomination, screening and selection process; and
     (4) Technical assistance for persons subject to the rule.

     It is unlikely that the information to be reported is duplicative because (1) EPA estimates that each rule will generate only a few reports, (2) the information required by the PAIR is unique to the manufacturer or importer, and (3) efforts are made to ensure that the information requested is not currently in the possession of EPA or easily obtained by EPA from other public sources. The following databases and sources of information are checked:

      * The Chemical Screening Branch's Existing Chemical Assessment Tracking System (CECATS), a database containing information on TSCA section 8(e) and For Your Information (FYI) submissions and Chemical Hazard Information Profiles (CHIPs);
      * The Toxic Substances Control Act Test Submissions (TSCATS) database, an online index to the compiled, unpublished health and safety studies submitted to EPA;
      * The Registry of Toxic Effects of Chemical Substances (RTECS), a file containing chemical toxicity data;
      * LEXIS/NEXUS, a data network with a wide range of fields including information published in the Code of Federal Regulations (CFR) and BNA's Environmental Reporter and Chemical Regulation Reporter;
      * The Toxicology Data Network (TOXNET), run by the National Library of Medicine; and
      * The Toxic Substances Control Act section 8(b) inventory data (CICIS) and inventory update data (CUS).

      Similar searches are conducted for each list of chemical substances, mixtures or categories added to the PAIR.

      Some chemicals in PAIR are referred to EPA by other federal agencies. These agencies conduct searches of their own databases for existing chemical information before they refer any chemical to EPA. Referrals are made to EPA only after a decision has been made that an agency's existing chemical information is inadequate to meet its needs.

      3(b)	Public Notice Required Prior to ICR Submission to OMB

      Prior to submission to OMB, this ICR will be made available to the public for comment through a Federal Register notice. The public will have 60 days to provide comments. Any comments received will be given consideration when completing the supporting statement that is submitted to OMB.
       3(c)	Consultations
      Under 5 CFR 1320.8(d)(1) OMB requires agencies to consult with potential ICR respondents and data users about specific aspects of ICRs before submitting an original or renewal ICR to OMB for review and approval. In accordance with this regulation, EPA will pursue additional consultations with interested parties during the development of the renewal of this collection.
       3(d)	Effects of Less Frequent Collection

      Under PAIR, persons are required to report only once for a chemical listed in the PAIR. However, if information received from the initial report indicates human health and environmental risks, then the Agency may require that additional information be submitted at some future date to monitor any changes pertaining to that chemical. As such, the reporting frequency for PAIR cannot be reduced without effectively suspending the information collection requirement.

      3(e)	General Guidelines

      This collection does not exceed any of the Paperwork Reduction Act guidelines at 5 CFR 1320.6. Note that when this information collection was approved by OMB in October 2001, OMB established the following terms of clearance:

      "The Agency shall ensure that the approximate annual burden estimates for each PAIR rule are provided in the preamble to each rule. Upon renewal of this ICR, the Agency shall provide a list of the chemicals covered by the final PAIR rules issued by EPA over the next three years."

      Accordingly, in the preamble to each PAIR rule, EPA provides an annual burden estimate for the rule. The list of chemicals in those final PAIR rules, along with the burden estimate provided for those rules, is generally found in this supporting statement. However, this supporting statement contains no such information because no PAIR rules were issued over the last three years.

       3(f)	Confidentiality

      Submitters may designate information reported under PAIR and subpart B of 40 CFR 766 as confidential business information (CBI). EPA has implemented procedures to protect any confidential, trade secret or proprietary information from disclosure. These procedures comply with EPA's confidentiality regulations at 40 CFR part 2, subpart B, and TSCA section 10.
       3(g)	Sensitive Questions

      This information collection does not include questions of a sensitive nature.

4	THE RESPONDENTS AND THE INFORMATION REQUESTED
      4(a)	Respondent NAICS Codes

      PAIR's respondents are manufacturers and importers of chemical substances, mixtures or categories. Respondents affected by this collection are included primarily in the following NAICS codes:

      3251 Basic Chemical Manufacturing
      3252 Resin, Synthetic Rubber, and Artificial Synthetic Fibers and Filaments Manufacturing
      3255 Paint, Coating, and Adhesive Manufacturing
      3253 Pesticide, Fertilizer, and Other Agricultural Chemical Manufacturing
      3259 Other Chemical Product and Preparation Manufacturing
      32411 Petroleum Refineries
      4(b)	Information Requested
            (i) Data Items

      PAIR requires manufacturers or importers of the listed chemical substances, mixtures or categories to report to EPA information such as the substances' chemical identification, quantity produced or imported, chemical processes, employee exposure, environmental releases, uses and products. Respondents are only required to report information that is known or reasonably ascertainable by them. As described in the previous section, extensive files searches are not required. The PAIR reporting requirements are included in the PAIR form (EPA Form 7710-35) and instructions.
            (ii) Respondent Activities

      A representative respondent would engage in the following activities:

         *          Conduct an initial review of the rule to determine if their company must report;
         *          Familiarize themselves with the PAIR reporting form;
         *          Complete the PAIR reporting form;
         *          Provide trade name notification;
         *          Indicate CBI status if so desired; and
         *          Keep a copy for recordkeeping requirements.

      The PAIR generally requires one-time reporting and establishes the reporting period for the listed chemical substances, mixtures or categories. Typically, the reporting period is 30 days from the effective date of the PAIR rule. Effective dates of PAIR rules are typically 30 days after publication of the rule in the Federal Register. In other words, the reporting period is typically 60 days from the publication of a final PAIR rule in the Federal Register. Therefore, a reporting schedule is not required.

5	THE INFORMATION COLLECTED - AGENCY ACTIVITIES, COLLECTION
      METHODOLOGY AND INFORMATION MANAGEMENT
   5(a)	Agency Activities

      The activities routinely conducted by EPA related to the rule development, processing, analysis and storage of the information collected under a PAIR rule are as follows:

      * Chemical nomination, review and selection;
      * Rule development;
      * Evaluation of the rule (including impact assessments);
      * Industry/public assistance;
      * Compliance monitoring; and
      * Processing of data received for listed chemicals (includes receipt, dissemination, evaluation, etc.).
       5(b)	Collection Methodology and Management

      The PAIR requires respondents to submit TSCA section 8(a) notices to the Information Management Division, Office of Pollution Prevention and Toxics (OPPT), using EPA Form 7710-35. Information collected under PAIR is logged in and assigned a document control number (DCN), distributed to appropriate EPA personnel for further processing, review, analysis, etc. The information is maintained by EPA's Information Management Division.

      At the time OMB last approved this information collection, OMB included the following Terms of Clearance for EPA to address in the current renewal:

      "In accordance with 5 CFR 1320, this information collection has been approved
      for 3 years. The agency is reminded to review older forms and update where
      applicable."

      EPA has reviewed EPA Form 7710-35 and has updated the form as necessary.
       5(c)	Small Entity Flexibility

      In accordance with TSCA section 8(a)(1)(B), PAIR contains a small business exemption. A manufacturer or importer is considered a small business if (1) the firm's total annual sales when combined with those of its parent company (if any) are less than $30 million for the reporting period and (2) its total production and/or importation of the chemical substances, mixture or category, for the reporting period, does not exceed 100,000 pounds (45,000 kilograms) at an individual site owned and controlled by the firm.

      The small manufacturer/importer exemptions apply to PAIR, regardless of which office or agency nominates a chemical. In some instances, the EPA Administrator can remove these exemptions on a chemical-specific basis, provided notice and comment rulemaking is utilized. EPA expects that those offices that have a critical need for reporting from small businesses usually exempt from PAIR reporting will use other mechanisms to gather the data. EPA does not expect to issue a PAIR rule during the next 3 years that would impact such small businesses.
       5(d)	Collection Schedule

      Information collection under PAIR occurs after publication of a Federal Register notice establishing the reporting period for the listed chemical substances, mixtures or categories. Respondents are asked to respond once, within 30 days of the effective date of the final PAIR rule (which is usually 30 days after publication of the rule in the Federal Register). The Agency has no plans to publish the data collected by PAIR, although non-CBI information may be made available to the public upon request.

6	ESTIMATING THE BURDEN AND COST OF THE COLLECTION
      6(a)	Estimating Respondent Burden

      This section presents the Agency's estimates of the burden associated with the reporting and recordkeeping requirements under the TSCA section 8(a) PAIR. The total annual industry burden for both reporting and recordkeeping is estimated to be 31.5 hours. These estimates are based on the level of PAIR reporting activity expected during the ICR period of FY 2015 through 2017. In conducting any study that will be submitted to EPA under TSCA, the respondent must comply with the Good Laboratory Practice Standards (GLPS) at 40 CFR part 792 (see Attachment F). Since the GLPS represent basic standard practices used by laboratories, any burden and costs related to the GLPS are fully captured in the cost and burden estimates provided below.

      The PAIR report is submitted on EPA Form 7710-35, which is two pages long (available on the Internet at http://www.epa.gov/opptintr/chemtest/pubs/pairform.pdf). The first page asks the respondent to provide basic identifying information, such as the identity of the chemical (CAS number), the physical location of the plant and mailing address of the responding entity. The second page requires the respondent to provide general information on the quantities of the chemical used and number of workers exposed and some additional information on the categories of products (e.g., industrial and consumer) associated with manufacture or processing of the reported substance.

      Much of the information requested under this ICR is routinely collected by manufacturers and processors for the maintenance and upkeep of health and safety information but has not previously been made available to the Agency. This information should be readily available to the firm as it is generated and maintained as part of their normal business practices. In fact, the regulations specifically state that the respondent is not required to conduct an exhaustive search of their files (see 40 CFR 712.7). The EPA has reviewed the average per-report burden estimate in light of the Agency's experience and feedback received from actual submitters. Our average estimate of 31.5 hours per response is consistent with that information.

      The methodology used to develop these cost estimates follows principles that have been used in previous ICRs. The methodology and calculations used in this analysis assume the employee responsible for filling out the form has a reasonable level of familiarity with the company and knowledge of the operation at the site. The analysis deals with the marginal costs of complying with this specific request and not the total costs to the company of initial employee training and costs associated with collecting and storing records or of file maintenance that enable a company to comply with a range of other federal and state environmental, health and safety regulations or accounting requirements that rely on this type of information. The 8(a) PAIR requests are issued infrequently and based on conversations with respondents, this effort is similar to other efforts they perform which require familiarity with EPA, state and other federal agency requests for chemical information and does not involve additional familiarization or training to comply with information requested under this ICR.

      The Agency is not asserting an exact measurement of the burden and costs that all potential respondents will incur while complying with this information collection activity. The Agency's burden and cost estimates are based on averages. Some respondents may require more time to respond the information collection than the Agency's estimated average of 31.5 hours per report; however, the Agency believes some respondents will be able to complete their response activities in less time. The Agency also intends to continue to provide rule-specific estimates of burden and costs, presenting them in the preamble to the PAIR rule. Should the Agency determine in that context that this average estimate is insufficient, it will adjust the ICR accordingly. Upon renewal, EPA will reassess its burden estimate based on the next three-year approval period and make adjustments as appropriate.

      Based on information provided by EPA's Information Management Division (IMD), an average of 14.8 sites submitted a total of 33 reports per year (an average of 2.23 reports per site per year) during the period of FY 2006 through FY 2010. The rate at which new PAIR rule chemicals are added is sporadic and not entirely predictable; between FY 2011 and FY 2014, EPA received no PAIR submissions. In general, the analysis uses data and methodological assumptions from previous economic analyses of PAIR rules, other government data sources, and assumptions as described. A detailed description of the methodology used to derive the estimates follows.

      Number of Sites and Reports per Site

      The burden hour estimates in this analysis are based on an estimate of the level of PAIR reporting activity during the next three-year ICR approval period (FY 2015 to FY 2017). This, in turn, is related to the number of expected PAIR chemical reports and reporting sites. During fiscal years 2011 to 2014, EPA received no PAIR submissions. Furthermore, EPA has no new PAIR rulemakings planned for the next three years. Some PAIR reports submitted during a given fiscal year may be for chemicals added to the PAIR during previous years. For the purposes of this analysis, EPA assumes an annual average of 1 site (respondent) submitting 1 report (form), for an average of 1 report per respondent.

      Chemicals are added to the PAIR (via Federal Register notices) based on Interagency Testing Committee reports as published in the Federal Register. The number of chemicals added to the PAIR recently is not used in estimating burden but are provided as background (Source: 40 CFR 712.30).

      Error! Reference source not found. presents the historic submission statistics for section 8(a) PAIR reporting.

Table 1: Historic Numbers of Sites Reporting and PAIR Reports Submitted
                                  Fiscal Year
                                Sites Reporting
                                     2006
                                       3
                                     2007
                                      68
                                     2008
                                       1
                                     2009
                                       0
                                     2010
                                       2
                                     2011
                                       0
                                     2012
                                       0
                                     2013
                                       0
                                     2014
                                       0
                                    Totals
                                      74

      Unit Burden Estimates

      To estimate the burden and costs to industry respondents, several reporting activities (or burden factors) are analyzed. These burden items include: form familiarization; report preparation; trade name notification; CBI substantiation; recordkeeping; CDX registration; and report submission. Each of these activities requires the skills of various labor categories. The section below details each separate activity and presents the estimated labor hours required by each task, by labor category (clerical, technical and managerial).

      All burden estimates are taken from the Economic Impact and Small Business Definition Analysis for the Final TSCA Section 8(a) Preliminary Assessment Information Rule, Final Report (EPA, 1981), previous TSCA Section 8(a) PAIR ICRs updates, and the Economic Analysis for the Electronic Reporting under the Toxic Substances Control Act (TSCA) Final Rule (EPA, 2012), unless otherwise noted. The 2012 EA estimates the burden associated with electronic PAIR submissions, including the burden associated with CDX registration, the reduction in recordkeeping burden, and the reduction of the clerical burden associated with report submission. However, for this ICR, in addition to the changes made in the 2012 EA, EPA removed the clerical burden associated with all other PAIR submission activities. This change was made to be consistent with the burden estimates provided for the electronic reporting of TSCA Section 5 Notices in The Economic Analysis of the Premanufacture Notification Electronic Reporting Rule (EPA, 2009) and the electronic submission of TSCA 8(b) Chemical Data Reporting (CDR) submissions in the Economic Analysis for the Final Inventory Update Reporting (IUR) Modifications Rule (EPA, 2011).
       Form Familiarization

      In the 1981 PAIR economic analysis, it was estimated that form familiarization would require 3 hours of effort from managerial personnel and 4 hours from technical personnel for a total of 7 hours per site. The estimate includes efforts for rule familiarization and to determine if reporting is required. Because EPA only expects one report from one site in the next ICR cycle, the per-report burden is estimated to be 7 hours.

Table 2: Per-Report Burden Hours for Form Familiarization
                                   Activity
                                   Clerical
                                   Technical
                                  Managerial
                                     Total
Form Familiarization
                                     0.00
                                     4.00
                                     3.00
                                     7.00
       Report Preparation

      The 1981 PAIR economic analysis estimated that direct reporting activities would require a total of 16 hours of effort per report. This consists of the burden related to the completion of the PAIR form. As indicated previously, the respondents are not expected to conduct an exhaustive search of their files. Respondents are only required to report what is known or reasonably ascertainable to them (see 40 CFR 712.7). The relative distribution of reporting burden between managerial, technical and clerical personnel was developed for the 1992 PAIR ICR update. For this ICR update EPA removed the 1.25 hours of clerical time to adjust for electronic reporting submissions, for a total burden estimate of 14.75 hours.

Table 3: Per-Report Burden Hours for Report Preparation
                                   Activity
                                   Clerical
                                   Technical
                                  Managerial
                                     Total
Reporting
                                       0
                                     9.25
                                      5.5
                                     14.75

      Given that each site produces an average of 1 report, the per-site burden for report preparation is 1 x 14.75 hours, or 14.75 hours.
       Trade Name Notification

      Some companies may report their customers' uses as "unknown" for more than twenty percent of their volume. These companies must list under Item 10 of the PAIR reporting form the market (trade) name(s) under which they distribute the chemical. This reporting is referred to as trade name notification.

      All commercial manufacturing, importing and processing sites that distribute any of the chemicals subjected to a PAIR reporting rule under a trade name must take steps to ensure that information about the downstream processors is submitted to EPA. Firms may choose among several options to meet trade name notification requirements, including:

      1) Submit trade name data to EPA for listing in the Federal Register;
      2) Notify all customers of the need to report; or
      3) Complete the reporting requirements for each customer.

      This ICR assumes that companies will adopt the least-costly reporting alternative of providing a trade name list to EPA for inclusion in the Federal Register. However, trade name notification is not relevant if processor reporting is not required.

      Furthermore, this ICR also assumes that all manufacturers and importers will incur trade name notification costs, but does not address processors due to the lack of data on processor reporting. In the 1994 EPA PAIR ICR, the unit burden of trade name notification was given as 3.2 hours (i.e., 2.2 hours managerial and 1.0 hours clerical), for this analysis the 1.0 hours of clerical burden is removed to adjust for electronic submissions, for a total burden of 2.2 hours per report.

Table 4: Per-Report Burden Hours for Trade Name Notification
                                   Activity
                                   Clerical
                                   Technical
                                  Managerial
                                     Total
Trade Name Notification
                                     0.00
                                     0.00
                                     2.20
                                     2.20

      Given that each site produces an average of 1 report, the trade name notification per-site burden for trade name notification is 1 x 2.2 hours, or 2.2 hours.

      CBI Substantiation

      A company may make claims of confidentiality for any data element contained in its submission. For each CBI (confidential business information) claim, generic information must be supplied for a non-CBI copy of the submission (i.e., a sanitized version must also be submitted). It is assumed that most of the time required for CBI substantiation involves managerial staff discussion of whether or not to make a CBI claim. Furthermore, it is assumed that all firms will review their submissions for CBI content. As used in the previous PAIR ICR, the 1986 alternative CAIR CBI substantiation burden estimates have been used in this analysis with substantial downward adjustments to account for the less rigorous substantiation requirements in PAIR reporting rules. CBI claims for a PAIR report can be made by simply checking the appropriate boxes on the PAIR reporting form. It is assumed that most of the time required for PAIR CBI substantiation involves staff discussion of whether or not to make a CBI claim. As a result, burden estimates used in CAIR have been reduced by one-half in both labor categories to 0.5 hours of clerical time and 4 hours of managerial time per report. For this ICR, the clerical burden is removed as a result of electronic submissions, for a total burden of 4 hours per substation.

Table 5: Per-Substantiation Burden for CBI Substantiation
                                   Activity
                                   Clerical
                                   Technical
                                  Managerial
                                     Total
CBI Substantiation
                                     0.00
                                     0.00
                                     4.00
                                     4.00

      Based on an analysis of CBI claims for reporting to the TSCA Inventory (discussed in the 1986 CAIR economic analysis), only 75 percent of reports are expected to make CBI claims. The burden distributed across all reports is 4.0 hours x 0.75, or 3.00 hours. Multiplying the adjusted report burden and cost by 1, in turn, provides the per-site burden for CBI substantiations of 3.00 hours.

      Recordkeeping

      Pursuant to TSCA section 8(a), the manufacturer/importer or processors of the chemical substances identified under PAIR must also maintain records of the information submitted to EPA. In addition, since manufacturer/importer or processors that submit data to EPA must comply with the GLPS in 40 CFR 792, this ICR also generally covers the burden associated with maintaining records as required under the GLPS. These records are used for compliance monitoring and enforcement purposes.
	EPA estimates that the recordkeeping burden associated with this ICR involves about half an hour of time for both the clerical and the technical labor category, based on the Economic Analysis for the Electronic Reporting under the Toxic Substances Control Act (TSCA) Final Rule (EPA, 2012). This burden estimate represents the time necessary for the individuals to identify the information, determine the appropriate location for the record to be kept, and placing the record in such a location. The per-report recordkeeping burden is therefore estimated to be 1.00 hour.

Table 6: Per-Report Burden Estimates for Recordkeeping
                                   Activity
                                   Clerical
                                   Technical
                                  Managerial
                                     Total
Recordkeeping
                                      0.5
                                      0.5
                                       0
                                     1.00

      The per-site burden for recordkeeping is 1 report x 1.0 hours, or 1 hours.
       CDX Registration

      As part of EPA's electronic reporting requirements, submitters of PAIR reports are required to register and submit information electronically with EPA's Central Data Exchange (CDX) system. EPA estimates that companies registering with CDX for the first time would incur a one-time burden to complete CDX registration activities, obtain a CDX electronic signature, and familiarize themselves with electronic reporting requirements. The total burden associated with CDX registration is taken from the Economic Analysis for the Electronic Reporting under the Toxic Substances Control Act (TSCA) Final Rule (EPA, 2012) and is estimated to be 3.48 hours per company, including 0.91 hours for CDX Registration, 1.75 hours for completing electronic signature agreements, and 0.82 hours for rule familiarization.

Table 7: Per-Site Burden Estimates for One Time CDX Registration
                                   Activity
                                   Clerical
                                   Technical
                                  Managerial
                                     Total
CDX Registration
                                     0.00
                                     0.73
                                     0.18
                                     0.91
CDX Electronic Signature
                                     0.00
                                     1.00
                                     0.75
                                     1.75
Rule Familiarization
                                     0.00
                                     0.27
                                     0.55
                                     0.82
Total
                                     0.00
                                     2.00
                                     1.48
                                     3.48

      For the purposes of this analysis EPA assumes that the one site submitting PAIR data will register with CDX, for a total per-site burden of 3.48 hours.
       Report Submission

      Report submission consists of the preparation, review and electronic submission of a report (EPA Form No. 7710-35) in accordance with 40 CFR Part 712, Subpart B, as amended by 78 FR 72818 (December 4, 2013), which required electronic submission.

      EPA estimates that the per-report submission will require 0.05 hours of clerical time and 0.5 hours of managerial time for a total of 0.55 hours. The clerical burden is taken from the Economic Analysis for the Electronic Reporting under the Toxic Substances Control Act (TSCA) Final Rule (EPA, 2012) and includes time to prepare and submit a report electronically. The managerial time assumes an involvement in the preparation of the transmittal letter and review of the report package before it is submitted to EPA.

          Table 8: Per-Report Burden Estimates for Report Submission
                                   Activity
                                   Clerical
                                   Technical
                                  Managerial
                                     Total
Report Submission
                                     0.05
                                     0.00
                                      0.5
                                     0.55

      Given that each site produces an average of one (1) report, the per-site burden for report submission is 1 x 0.55 hours, or 0.55 hours.

      Total Industry Burden Estimates

      Table 9 presents the compilation of the annual burden hour estimates for respondents.

Table 9: Estimated Annual Burden Hours (assuming 1 report per site and a total of 1  report per year)
                                  Burden Item
                               Hours Per Report
                       Total Number of Reports per Site
                                Hours Per Site
                             Total Number of Sites
                              Total Annual Hours
Form Familiarization
                                     7.00
                                       1
                                     7.00
                                     1.00
                                     7.00
Reporting
                                     14.75
                                       1
                                     14.75
                                     1.00
                                     14.75
Trade Name Notification
                                     2.20
                                       1
                                     2.20
                                     1.00
                                     2.20
CBI Substantiation
                                     3.00
                                       1
                                     3.00
                                     1.00
                                     3.00
Recordkeeping
                                     0.50
                                       1
                                     0.50
                                     1.00
                                     0.50
CDX Registration
                                       -
                                       -
                                     3.48
                                     1.00
                                     3.48
Report Submission
                                     0.55
                                       1
                                     0.55
                                     1.00
                                     0.55
Totals
                                     28.00

                                     31.48

                                     31.48

      In summary, an average of one (1) respondent per year would be required to spend an estimated total of 31.48 hours each year to respond to PAIR rules during the period of FY 2015 through FY 2017, resulting in an average burden of 31.48 hours per response.
   6(b)	Estimating Respondent Costs

      This section presents estimates of the cost expected to be incurred as a result of reporting under the TSCA section 8(a) PAIR. The total annual industry cost for both reporting and recordkeeping is estimated to be $2,078. This estimate is based on the cost of the burden estimate provided above, and includes other costs associated with this ICR.

      Labor costs in this report have been updated using the most recently available, revised wage rates and information on benefits costs. These wage rates are taken from the Bureau of Labor Statistics (BLS) Employer Costs for Employee Compensation Supplemental Tables, December 2014 (released on March 11, 2015), with the information extracted from Table 2, Private industry workers in manufacturing industries, by occupational group. This table is available on-line at http://www.bls.gov/news.release/pdf/ecec.pdf in PDF format. The clerical wages are taken from the BLS data for "office and administrative support." The technical wages are taken from the BLS data for "professional and related." The managerial wages are taken from the BLS data for "management, business and financial." Labor wage rates and hourly benefit costs taken from those sources have been used to calculate the labor cost to respondents, as shown below. The hourly overhead is calculated as 17 percent of the base wage. This approach is used for consistency with Office of Pollution Prevention and Toxics economics practices, and is based on the analysis in Wage Rates for Economic Analyses of the Toxics Release Inventory Program, Cody Rice, U.S. EPA, Office of Pollution Prevention and Toxics, Economic and Policy Analysis Branch, June 10, 2002. This approach, which is now standard practice in this office, produces wage and cost estimates that are somewhat lower than the data and methods used in the most recent previous 8(a) PAIR ICR renewal analysis. Table 10 presents 2014$ hourly industry wages.

Table 10: Industry Hourly Labor Costs (2014$)
Wage Component
                                   Clerical
                                   Technical
                                  Managerial
Hourly Wage Rate
                                    $18.68
                                    $42.19
                                    $47.90
Benefit Costs
                                     $9.40
                                    $22.86
                                    $24.18
Fringe and Overhead Factor
                                     1.67
                                     1.71
                                     1.67
Total Hourly Cost
                                    $31.26
                                    $72.22
                                    $80.22

      These labor costs are multiplied by the estimated burden hours per activity and added to any non-labor costs to develop total unit costs per report (See Table 11). It is estimated that only the CDX registration task will require expenditures other than labor.

      Total non-burden costs per report are estimated to be $2.30 associated with mailing CDX electronic signature forms to EPA. With an annual estimate of 1 report expected, the total annual non-burden cost for this ICR is $2.30. These non-burden hour costs are identified separately on the OMB Form 83-I pursuant to OMB guidance, but are included in the total costs here. Finally, unit costs per report are multiplied by the number of reports per site per year to arrive at unit costs per site (respondent costs), and are summarized in Table 11.

      Table 11: Reporting Costs by Labor Category and Reporting Activity
                                 Cost Element
                                   Clerical
                                   Technical
                                  Managerial
                               Total Labor Costs
                              Other Direct Costs
                             Total Cost Per Report
                            Total Number of Reports
                              Total Cost Per Site
                             Total Number of Sites
                          Total Annual Industry Cost
                             Form Familiarization
                                    $31.26
                                     0.00
                                    $72.22
                                     4.00
                                    $80.22
                                     3.00
                                     $530
                                     $0.00
                                   $529.56
                                      1
                                   $529.56
                                       1
                                     $530
                                   Reporting
                                    $31.26
                                     0.00
                                    $72.22
                                     9.25
                                    $80.22
                                     5.50
                                    $1,109
                                     $0.00
                                    $1,109
                                      1
                                    $1,109
                                       1
                                    $1,109
                            Trade Name Notification
                                    $31.26
                                     0.00
                                    $72.22
                                     0.00
                                    $80.22
                                     2.20
                                     $176
                                     $0.00
                                     $176
                                      1
                                     $176
                                       1
                                     $176
                              CBI Substantiation
                                    $31.26
                                     0.00
                                    $72.22
                                     0.00
                                    $80.22
                                     4.00
                                     $321
                                     $0.00
                                     $321
                                      1
                                     $321
                                       1
                                     $321
                                 Recordkeeping
                                    $31.26
                                     0.00
                                    $72.22
                                     0.50
                                    $80.22
                                     0.00
                                    $36.11
                                    $0.00
                                    $36.11
                                      1
                                    $36.11
                                       1
                                    $36.11
                               CDX Registration
                                    $31.26
                                     0.00
                                    $72.22
                                     0.73
                                    $80.22
                                     1.48
                                     $171
                                     $2.30
                                     $174
                                      1
                                     $174
                                       1
                                     $174
                               Report Submission
                                    $31.26
                                     0.05
                                    $72.22
                                     0.00
                                    $80.22
                                     0.50
                                    $41.67
                                     $0.00
                                    $41.67
                                      1
                                    $41.67
                                       1
                                    $41.67
                                                                          TOTAL
                                    $2,385
                                     $2.30
                                    $2,388
                                      1
                                    $2,388
                                      1
                                    $2,388

      The average respondent is assumed to spend $2,388 per report, or $ 2,388 in total per respondent per year. As noted earlier, the Agency is estimating an average of 1 reporting sites and 1 reports per year. As a result, total industry cost for complying with PAIR rules is estimated to be $ 2,388 per year during the period of FY 2015 through FY 2017.
       6(c)	Estimating Agency Burden and Cost

     The FY 2014 cost to EPA of a full-time equivalent employee (FTE), Grade 12, Step 1 in the Baltimore-Washington pay area is $75,621 (U.S. Office of Personnel Management Internet site at http://www.opm.gov). One FTE is equivalent to 2,080 hours per year. The fully loaded FTE cost is $120,994. The annual costs per FTE are derived by multiplying the annual pay rate by 1.6 (the benefits multiplication factor). The multiplication factor used is recommended in EPA's Office of Policy, Planning, and Evaluation's Instructions for Preparing Information Collection Requests (ICRs), (June 1, 1992).

      Data processing costs have been updated from 2010 to average 2014 dollars using the GDP implicit price deflator from the Bureau of Economic Analysis (BEA). The BEA GDP price index series with a base of 2009 = 100 has the 2010 index at 101.949  and the 2014 index at 108.647 so the adjustment factor from 2006 to 2010 is 1.0657 (108.647 /101.949  = 1.0657). Data processing costs for the 2010 PAIR ICR update were estimated to be approximately $265.61 per report. Adjusting this number to 2014 with the GDP implicit price deflator yields an adjusted data processing cost of $283.06 per report (i.e., $265.61 x 1.066 = $283.06).

      This analysis assumes that an annual average of 1 report will be submitted over the three-year period of the ICR. Personnel burden and costs associated with industry/public assistance and data processing activities have been adjusted based on that estimate. From the 1989 PAIR ICR update it has been derived that industry/public assistance required approximately 1.5 hours per report or 0.0007 FTE. Similarly, the 1989 PAIR ICR update estimated that about 3.75 hours, or 0.002 FTE, of data processing/system support personnel time would be required per report.

      Table 12 summarizes the government's activities in developing and administrating the PAIR. The required FTEs per activity are retained from the 1996 PAIR ICR update and from the previous 8(a) PAIR ICR renewal analyses, for all activities except for the recalculation of the burden associated with industry/public assistance and data processing/system support personnel time.

Table 12: Government Burden Summary
                                   Activity
                                 Annual Burden
Chemical nomination, review, and selection
                                     0.25
Rule development
                                     0.90
Evaluation of rule
                                     0.05
Industry/public assistance
                                    0.0007
Compliance monitoring
                                     0.10
Data processing and system support personnel
                                     0.002
Total FTE
                                      1.3

      It is estimated that the annual cost to the federal government will be $283 in data processing costs plus 1.3 FTEs. At an estimated loaded annual salary of $120,994 per FTE, the total of 1.3 FTEs will cost EPA $157,597 in fully loaded labor cost (salaries, benefits, and overhead). This brings the total costs to the federal government to $157,880 annually (i.e., $283 + $157,597).

      Table 13 presents a summary of the costs to the federal government for this information collection.

Table 13: Government Estimated Annual Burden and Cost Summary (2014$)
Total FTEs
                                      1.3
Loaded Cost per FTE
                                   $120,994
Government Labor Cost
                                   $157,597
Government Data Processing Cost
                                       $283
Total Annual Government Cost
                                   $157,880
   6(d)	Bottom Line Burden Hours and Costs

Respondent Burden and Costs

Total respondent annual burden hours = 31.48 hours
Total respondent annual costs = $2,388

Agency Burden and Costs
Agency burden hours: 1.3 FTEs = 2,709.3 hours
Agency annual costs = $157,880
      6(e)	Reason for Change in Burden

      This request reflects a decrease in the estimated annual burden of 916 hours (from 948 hours to 31 hours) from that currently in the OMB inventory. This change reflects both adjustment changes from a decrease in the assumed number of PAIR reports filed annually and program changes resulting from mandatory electronic submissions of PAIR reports. In recent years (FY 2011  -  2014), EPA has received no PAIR submissions, and, for the purposes of this analysis, EPA assumes an annual rate of one submission per year. In the last ICR, EPA estimated an average of 33 reports from 14.8 submitters based on fiscal 2006-2010 data.

      Table 14: Annual Burden Hour Change
Starting Burden
                                     947.9
Adjustment Changes

                                             Change due to Submission Decreases
                                    -914.23
Program Changes

      Changes due to Electronic Submission Requirements
                                     -2.22
                                                                   Total Change
                                    -916.45
                                                           Total Annual Burden
                                     31.48

       6(f)	Burden Statement

      The annual public burden for this collection of information, which is approved under OMB Control No. 2070-0054, is estimated to average 31.5 hours per response. Burden is defined in 5 CFR 1320.3(b). 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 title 40 of the CFR, after appearing in the Federal Register, are listed in 40 CFR part 9 and included on the related collection instrument or form, if applicable.

	The Agency has established a public docket for this ICR under Docket ID No. EPA-HQ-OPPT-2015-0236, which is available for online viewing at www.regulations.gov, or in person viewing at the EPA Docket Center (EPA/DC), EPA West, Room 3334, 1301 Constitution Ave., NW, Washington, DC. The EPA Docket Center 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 Reading Room is<PHONE_NUMBER>, and the telephone number for the Pollution Prevention and Toxics Docket is<PHONE_NUMBER>. You may submit comments regarding the Agency's need for this information, the accuracy of the provided burden estimates and any suggested methods for minimizing respondent burden, including the use of automated collection techniques.

      Submit your comments, referencing Docket ID No. EPA-HQ-OPPT-2015-0236 and OMB Control No. 2070-0054, to (1) EPA online using www.regulations.gov (our preferred method), or by mail to: Document Control Office (DCO), Office of Pollution Prevention and Toxics (OPPT), Environmental Protection Agency, Mail Code: 7407T, 1200 Pennsylvania Ave., NW, Washington, D.C. 20460, and (2) OMB by mail to: Office of Information and Regulatory Affairs, Office of Management and Budget (OMB), Attention: Desk Officer for EPA, 725 17th Street, NW, Washington, DC 20503.

Attachments to the Supporting Statement

Attachment A	Section 8(a) of the Toxic Substances Control Act (15 U.S.C.
			2607a)

Attachment B		Chemical Information Rules  -  40 CFR 712

Attachment C	PAIR Reporting Form (EPA Form 7710-35) and instructions.
			Available electronically at
			http://www.epa.gov/opptintr/chemtest/pubs/pairform.pdf

Attachment D	Dibenzo-para-dioxins/dibenzofurans  -  40 CFR 766

Attachment E		Dioxin/Furan Report Form (EPA Form 7710-51) and instructions
			Available electronically at
			http://www.epa.gov/opptintr/chemtest/pubs/7710-51.pdf

Attachment F		Good Laboratory Practice Standards  -  40 CFR 792

Attachment G	List of Chemicals Covered by Final PAIR Rules


[Federal Register Volume 82, Number 6 (Tuesday, January 10, 2017)]
[Notices]
[Pages 3004-3005]
[FR Doc No: 2017-00233]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2016-D-4646]

Annual Reporting by Prescription Drug Wholesale Distributors and
Third-Party Logistics Providers: Questions and Answers; Draft Guidance
for Industry; Availability

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice of availability.

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

SUMMARY: The Food and Drug Administration (FDA or Agency) is announcing
the availability of a draft guidance for industry entitled ``Annual
Reporting by Prescription Drug Wholesale Distributors and Third-Party
Logistics Providers: Questions and Answers.'' This draft addresses
questions about and clarifies FDA's expectations for annual reporting
to FDA by prescription drug wholesale distributors (wholesale
distributors) and third-party logistics providers (3PLs) as required
under the Federal Food, Drug, and Cosmetic Act (the FD&C Act) as
amended by the Drug Supply Chain Security Act (DSCSA).

DATES: Although you can comment on any guidance at any time (see 21 CFR
10.115(g)(5)), to ensure that the Agency considers your comment on this
draft guidance before it begins work on the final version of the
guidance, submit either electronic or written comments on the draft
guidance by March 13, 2017.

ADDRESSES: You may submit comments as follows:

Electronic Submissions

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

Written/Paper Submissions

    Submit written/paper submissions as follows:
     Mail/Hand delivery/Courier (for written/paper
submissions): Division of Dockets Management (HFA-305), Food and Drug
Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.
     For written/paper comments submitted to the Division of
Dockets Management, FDA will post your comment, as well as any
attachments, except for information submitted, marked and identified,
as confidential, if submitted as detailed in ``Instructions.''
    Instructions: All submissions received must include the Docket No.
FDA-2016-D-4646 for ``Annual Reporting by Prescription Drug Wholesale
Distributors and Third-Party Logistics Providers: Questions and
Answers; Draft Guidance for Industry; Availability.'' Received comments
will be placed in the docket and, except for those submitted as
``Confidential Submissions,'' publicly viewable at https://www.regulations.gov or at the Division of Dockets Management between 9
a.m. and 4 p.m., Monday through Friday.
     Confidential Submissions--To submit a comment with
confidential information that you do not wish to be made publicly
available, submit your comments only as a written/paper submission. You
should submit two copies total. One copy will include the information
you claim to be confidential with a heading or cover note that states
``THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.'' The Agency will
review this copy, including the claimed confidential information, in
its consideration of comments. The second copy, which will have the
claimed confidential information redacted/blacked out, will be
available for public viewing and posted on https://www.regulations.gov.
Submit both copies to the Division of Dockets Management. If you do not
wish your name and contact information to be made publicly available,
you can provide this information on the cover sheet and not in the body
of your comments and you must identify this information as
``confidential.'' Any information marked as ``confidential'' will not
be disclosed except in accordance with 21 CFR 10.20 and other
applicable disclosure law. For more information about FDA's posting of
comments to public dockets, see 80 FR 56469, September 18, 2015, or
access the information at: http://www.fda.gov/regulatoryinformation/dockets/default.htm.
    Docket: For access to the docket to read background documents or
the electronic and written/paper comments received, go to https://www.regulations.gov and insert the docket number, found in brackets in
the heading of this document, into the ``Search'' box and follow the
prompts and/or go to the Division of Dockets Management, 5630 Fishers
Lane, Rm. 1061, Rockville, MD 20852.
    Submit written requests for single copies of the draft guidance to
the Division of Drug Information, Center for Drug Evaluation and
Research, Food and Drug Administration, 10001 New Hampshire Ave.,
Hillandale Building, 4th Floor, Silver Spring, MD 20993-0002; or to the
Office of Communication, Outreach and Development, Center for Biologics
Evaluation and Research (CBER), Food and Drug Administration, 10903 New
Hampshire Ave., Bldg. 71, Rm. 3128, Silver Spring, MD 20993-0002. Send
one self-addressed adhesive label to assist that office in processing
your requests. See the SUPPLEMENTARY INFORMATION section for electronic
access to the draft guidance document.

FOR FURTHER INFORMATION CONTACT: Office of Compliance, Center for Drug
Evaluation and Research, Food and Drug Administration, 10903 New
Hampshire Ave., Silver Spring, MD 20993-0002,<PHONE_NUMBER>,
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. Background

    Section 204 of the DSCSA (Title II of Pub. L. 113-54) amended
section 503(e)

of the FD&C Act (21 U.S.C. 353(e)) to require, under section
503(e)(2)(A) of the FD&C Act (as amended), annual reporting by
wholesale distributors, beginning on January 1, 2015. Section
503(e)(2)(B) of the FD&C Act (as amended) requires FDA to make certain
information about wholesale distributors' licensure available to the
public on FDA's Web site. Section 205 of the DSCSA added section 584 to
the FD&C Act (21 U.S.C. 360eee-3); under section 584 of the FD&C Act
(as amended), 3PL facilities are required to report annually, beginning
on November 27, 2014.
    FDA previously published the draft guidance ``DSCSA Implementation:
Annual Reporting by Prescription Drug Wholesale Distributors and Third-
Party Logistics Providers'' (Annual Reporting draft guidance), which
described who must report, what should be reported, when to report, and
how to report (December 9, 2014, 79 FR 73083). The Annual Reporting
draft guidance is available on the Wholesale Distributor and Third-
Party logistics Providers Reporting Web page at http://www.fda.gov/Drugs/DrugSafety/DrugIntegrityandSupplyChainSecurity/DrugSupplyChainSecurityAct/ucm423749.htm. This draft guidance
supplements the information in the Annual Reporting draft guidance by
addressing questions and comments that FDA received about annual
reporting since publication of the Annual Reporting draft guidance.
Topics covered in this guidance include clarifications about who must
report, what should be reported, when to report, and how to report.
This guidance also addresses questions related to the public
availability of reported information.
    This draft guidance is being issued consistent with FDA's good
guidance practices regulation (21 CFR 10.115). FDA intends to finalize
this draft guidance and the Annual Reporting draft guidance in one
unified final guidance on annual reporting requirements under the
DSCSA. Once issued that unified final guidance will represent the
current thinking of FDA regarding annual reporting by prescription drug
wholesale distributors and third-party logistics providers. It will not
establish any rights for any person and will not be binding on FDA or
the public. You will be able to use an alternative approach to that
described in the final guidance if it satisfies the requirements of the
applicable statutes and regulations.

II. Electronic Access

    Persons with access to the Internet may obtain the draft guidance
at either http://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/default.htm, http://www.fda.gov/BiologicsBloodVaccines/GuidanceComplianceRegulatoryInformation/Guidances/default.htm, or
https://www.regulations.gov.

III. Paperwork Reduction Act of 1995

    Under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520)
(PRA), Federal Agencies must obtain approval from the Office of
Management and Budget (OMB) for each collection of information they
conduct or sponsor. ``Collection of information'' is defined in 44
U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes Agency requests or
requirements that members of the public submit reports, keep records,
or provide information to a third party.
    This draft guidance addresses proposed information collections that
are subject to review by OMB under the PRA. These information
collections were also addressed in the draft guidance entitled ``Drug
Supply Chain Security Act Implementation: Annual Reporting by
Prescription Drug Wholesale Distributors and Third-Party Logistics
Providers,'' the availability of which was announced in a notice
published in the Federal Register of December 9, 2014. In that Federal
Register notice, FDA published a 60-day notice requesting public
comment on the proposed collections of information (79 FR 73083). This
draft guidance provides further clarification regarding those
information collections.
    In compliance with the PRA, FDA intends to submit these proposed
collections of information to OMB for review and approval, including
providing notice of that submission and opportunity for the public to
comment to OMB on the proposed information collections. In accordance
with the PRA, the agency will inform the public of OMB approval,
including the associated currently valid OMB control number, before
conducting or sponsoring a collection of information.

    Dated: January 4, 2017.
Leslie Kux,
Associate Commissioner for Policy.
[FR Doc. 2017-00233 Filed 1-9-17; 8:45 am]
 BILLING CODE 4164-01-P


[Federal Register Volume 77, Number 125 (Thursday, June 28, 2012)]
[Notices]
[Pages 38690-38692]
[FR Doc No: 2012-15806]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67242; File No. SR-FINRA-2012-023]

Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Order Granting Approval of a Proposed Rule Change
Relating to FINRA's Trading Activity Fee Rate for Transactions in
Covered Equity Securities

June 22, 2012.

I. Introduction

    On May 2, 2012, the Financial Industry Regulatory Authority, Inc.
(``FINRA'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change relating to FINRA's Trading Activity Fee (``TAF'')
rate for transactions in covered equity securities. The proposed rule
change was published for comment in the Federal Register on May 10,
2012.\3\ The Commission received four comments on the proposal.\4\ On
June 19, FINRA responded to the comments.\5\ This order approves the
proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 66924 (May 4, 2012),
77 FR 27527.
    \4\ See Letters to the Commission from Leonard J. Amoruso,
General Counsel, Knight Capital Group, Inc., dated June 4, 2012
(``Knight Letter''); Kimberly Unger, Executive Director, The
Security Traders Association of New York, Inc., dated June 11, 2012
(``STANY Letter''); Daniel Keegan, Managing Director, Citigroup
Global Markets Inc., dated June 13, 2012 (``Citi Letter''); and John
C. Nagel, Managing Director and General Counsel, Citadel Securities,
dated June 13, 2012 (``Citadel Letter'').
    \5\ See Letter to the Commission from Brant K. Brown, Associate
General Counsel, The Financial Industry Regulatory Authority, Inc.,
dated June 19, 2012 (``FINRA Response Letter'').
---------------------------------------------------------------------------

II. Description of the Proposal

    FINRA's proposal would amend Section 1 of Schedule A to the FINRA
By-Laws to adjust the rate of FINRA's TAF for transactions in Covered
Securities that are equity securities.\6\ The TAF, along with the
Personnel Assessment and the Gross Income Assessment fees, is used to
fund FINRA's regulatory activities.\7\
---------------------------------------------------------------------------

    \6\ Covered Securities are defined in Section 1 of Schedule A to
the FINRA By-Laws as: exchange-registered securities wherever
executed (except debt securities that are not TRACE-Eligible
Securities); OTC Equity Securities; security futures; TRACE-Eligible
Securities (provided that the transaction is a Reportable TRACE
Transaction); and all municipal securities subject to Municipal
Securities Rulemaking Board reporting requirements. The rules
governing the TAF also include a list of exempt transactions. See
FINRA By-Laws, Schedule A, Sec.  1(b)(2).
    \7\ See FINRA By-Laws, Schedule A, Sec.  1(a).
---------------------------------------------------------------------------

    The current TAF rate is $0.000095 per share for each sale of a
Covered Security that is an equity security, with a maximum charge of
$4.75 per trade. This rate, which was implemented by FINRA on March 1,
2012, represented a $0.000005 per share increase over the previously
effective rate of $0.000090 per share, while the per-transaction cap
for Covered Securities that are equity securities increased by $0.25,
from $4.50 to $4.75.\8\
---------------------------------------------------------------------------

    \8\ See Securities Exchange Act Release No. 66287 (February 1,
2012), 77 FR 6161 (February 7, 2012); Securities Exchange Act
Release No. 66276 (January 30, 2012), 77 FR 5613 (February 3, 2012).
---------------------------------------------------------------------------

    Under the current proposal, FINRA would increase the TAF rate by an
additional $0.000024 per share, from $0.000095 per share to $0.000119
per share, while the per-transaction cap for transactions in Covered
Securities that are equity securities would increase by $1.20, from
$4.75 to $5.95. FINRA intends to make the proposal effective on July 1,
2012.
    Additionally, FINRA seeks approval to submit future filings related
to the TAF rate under Section 19(b)(3)(A) of the Act \9\ and Rule 19b-
4(f)(2) thereunder,\10\ rather than under Section 19(b)(2) of the
Act.\11\ When the TAF was first proposed in 2002 to replace the former
NASD Regulatory Fee, several commenters at the time expressed concern
that the TAF rate could be raised at any time without notice and
comment and Commission approval.\12\ The Commission approved the TAF in
part based on representations by NASD that all future changes to the
TAF would

be filed under Section 19(b)(2) of the Act and thus subject to approval
by the Commission.\13\
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(2).
    \11\ 15 U.S.C. 78s(b)(2).
    \12\ See Securities Exchange Act Release No. 47946 (May 30,
2003), 68 FR 34021 (June 6, 2003).
    \13\ See id. at 34024.
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III. Summary of Comments and FINRA's Response to Comments

a. Summary of Comments

    The Commission received four comments on the proposal, all of which
objected to both the proposed increase in the TAF and FINRA's intention
to file future TAF adjustments under Section 19(b)(3)(A) of the Act.
    The commenters shared concern that the proposed increase to the TAF
would disproportionately harm FINRA members that provide liquidity in
covered equity securities.\14\ One of these commenters observed that
the proposed new TAF rate would represent a 138% increase over the rate
that was first implemented in 2002.\15\ This commenter argued that,
because the fee is based on share transaction volume, liquidity
providers are assessed the greatest amount of fees.\16\ Furthermore,
this commenter expressed concern that the proposal would result in an
inequitable allocation of fees among FINRA members and therefore run
afoul of Section 15A(b)(5) of the Act.\17\ Specifically, the commenter
contended that, because 95% of the TAF is generated by transactions in
equity securities, the net result of the TAF is that liquidity
providers that deal in covered equity securities end up funding aspects
of FINRA's regulatory that do not apply to them.\18\
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    \14\ See Knight Letter at 2-3; STANY Letter at 2 (expressing
particular concern about FINRA members that make markets in OTC
equities securities); Citi and Citadel Letters (joining the Knight
and STANY Letters).
    \15\ See Knight Letter at 2.
    \16\ See id.
    \17\ 15 U.S.C. 78o-3(b)(5).
    \18\ See Knight Letter at 2-3. See also STANY Letter at 2
(expressing a similar concern); Citi and Citadel Letters (joining
the Knight and STANY Letters).
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    The commenters also questioned the structure of FINRA's funding.
One commenter noted that the revenues FINRA derives from the TAF are
subject to the volatility of trading in the equity markets; as a
result, according to this commenter, adequate funding for FINRA's
regulatory program is dependent on FINRA's transaction volume
projections.\19\ Additionally, this commenter believed increasing the
TAF at a time when transaction volume decreases places an especially
difficult burden on trading firms, which operate on thin margins and
are themselves dependent on volume.\20\ Thus, the commenter suggested
that FINRA consider alternatives to the TAF that would be more stable
and equitably apportioned among FINRA members.\21\ Another commenter
also suggested that FINRA consider a funding scheme for its regulatory
programs that more fairly allocates the financial burden of regulation
across asset classes and regulated members.\22\
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    \19\ See Knight Letter at 2.
    \20\ See id. See also STANY Letter at 2 (stating that ``[a]t a
time when trading desks are seeing a marked decline in revenue due
to the decline in volume, we are concerned that an increase in there
[sic] per share fees may cause some firms to go out of business and
will serve as a further disincentive to other firms to continue
making markets or providing liquidity in the markets for OTC equity
securities'').
    \21\ See Knight Letter at 3.
    \22\ See STANY Letter at 2.
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    Finally, the commenters objected to FINRA's proposal to file future
adjustments to the TAF under Section 19(b)(3)(A) of the Act, as opposed
to Section 19(b)(2). According to the commenters, allowing FINRA to do
so would limit or eliminate the opportunity for public comment on such
future adjustments.\23\ One commenter stated that those most affected
by adjustments to the TAF rely on the opportunity for public comment as
an appropriate check on FINRA's rate-setting.\24\ Another commenter
contended that transparency is necessary in this context because FINRA
has no competitors and the TAF is not subject to competitive
forces.\25\ Thus, both commenters expressed their belief that a
reasonable period for notice and comment is important to allow FINRA
members the chance for meaningful input.\26\
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    \23\ See Knight Letter at 3-4; STANY Letter at 2.
    \24\ See Knight Letter at 3-4.
    \25\ See STANY Letter at 2.
    \26\ See also Citi and Citadel Letters (joining the Knight and
STANY Letters).
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b. FINRA's Response to Comments

    FINRA responded that the proposed adjustment to the TAF is
necessary, reasonable, and equitably allocated among its members, and
by explaining its rationale for the TAF structure.
    With respect to the commenters' concerns about the TAF's
disproportionate impact on covered equity security liquidity providers,
FINRA noted that there are three critical factors that it uses to
measure regulatory costs for a member firm: the overall size of the
firm, the level of a firm's trading activity, and the firm's number of
registered representatives. FINRA stated that it has sought to measure
these factors and assess fees accordingly by implementing regulatory
fees that line up with each factor: the Gross Income Assessment Fee,
the TAF, and Personnel Assessment Fee, respectively. According to
FINRA, trading in the equity markets drives a significant portion of
its regulatory costs, and therefore it is equitable to recover some of
those costs from fees generated from equity trading activity.\27\ FINRA
also noted that the TAF rate for other types of securities, like TRACE-
reportable debt securities, is similarly calibrated to be equitably
allocated in a way that corresponds to the costs of FINRA's regulatory
efforts.\28\
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    \27\ See FINRA Response Letter at 4. FINRA also stated that it
is cognizant of the fact that its member firms may be experiencing
lower revenues themselves as a result of the decrease in volume, but
its statutory obligations continue to exist in difficult financial
and market environments and it needs adequate resources to
effectively carry out its responsibilities. See id. at 3.
    \28\ FINRA noted that when the TAF was expanded to TRACE-
reportable debt securities, it set the rate so that the portion of
TAF revenue received on debt transactions reflected FINRA's
regulatory efforts in the fixed income market. See id. at 4-5.
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    Second, with respect to the structure of FINRA's funding, FINRA
noted that the TAF is one of three types of assessments--the other two
are the Gross Income Assessment and the Personnel Assessment. According
to FINRA, the Gross Income Assessment, which is not dependent on market
activity, is the most important component of FINRA's regulatory
funding, and in 2011 the TAF represented only 33% of FINRA's total
member regulatory fees and assessments.\29\
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    \29\ See id. at 2-3.
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    FINRA stated that it strives to operate on a cash-flow-neutral
basis \30\ and routinely reexamines its fee structure to consider
alternative means to reasonably and equitably allocate fees in a method
that is efficient, sustainable, and predictable.\31\ FINRA stated that
in 2009, for example, it increased the Personnel Assessment fee and
revised its calculation of the Gross Income Assessment to achieve a
more consistent and predictable funding scheme, while also engaging in
cost-control measures.\32\ According to FINRA, the currently proposed
adjustment--an increase to the TAF--is necessary in light of current
market conditions so that FINRA can properly fund its regulatory
mission.\33\ FINRA represents, however, that if market volume were to
increase, it would decrease the TAF rate accordingly.\34\
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    \30\ See id. at 3.
    \31\ See id. at 6.
    \32\ See id.
    \33\ See id. at 3.
    \34\ See id. at 3, 7-8.

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    Finally, with respect to filing future amendments to the TAF under
Section 19(b)(3)(A), FINRA stated that Section 19(b)(3)(A) and Rule
19b-4(f)(2) thereunder specifically contemplate such types of fee
filings. Furthermore, FINRA noted that filing adjustments to the TAF
under Section 19(b)(3)(A) would allow it to adjust rates in response to
market volatility--both up and down--more efficiently, and would not
run afoul of the rulemaking system's set of checks and balances
established in the Act and the SEC's rules thereunder.

IV. Discussion and Commission's Findings

    After carefully considering the proposed rule change, the comments
submitted, and FINRA's response to the comments, the Commission finds
that the proposed rule change is consistent with the requirements of
the Act and the rules and regulations thereunder applicable to a
national securities association.\35\ In particular, the Commission
finds that the proposal is consistent with Section 15A(b)(5) of the
Act,\36\ which requires, among other things, that FINRA rules provide
for the equitable allocation of reasonable dues, fees, and other
charges among members and issuers and other persons using any facility
or system that FINRA operates or controls. The Commission believes that
the proposal is reasonably designed to secure adequate funding to
support FINRA's regulatory duties.
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    \35\ In approving the proposal, the Commission has considered
the proposed rule's impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
    \36\ 15 U.S.C. 78o-3(b)(5).
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    FINRA has represented that its proposed increases to the TAF rate
and per-transaction cap are necessary to adequately fund FINRA's member
regulatory obligations, and that the proposed increase to the TAF, like
prior adjustments, seeks to remain revenue neutral to FINRA. Although
commenters argue that the proposal would disproportionately harm firms
that provide liquidity in covered equity securities and that the TAF is
subject to volatility in the equity markets, the Commission agrees with
FINRA that adjusting the TAF rate and the per-transaction cap as
proposed is warranted. FINRA represented that trading in equity markets
drives a significant portion of its regulatory costs, and therefore it
is equitable to recover some of those costs from fees generated from
equity trading activity. Moreover, as the Commission stated in 2009,

    Adequate regulatory funding is critical to FINRA's ability to
meet [its] statutory requirements. While some member firms
understandably question whether it is reasonable for FINRA to
increase regulatory fees at a time when the securities industry has
faced declining revenues as a result of the economic downturn, it is
incumbent on FINRA to continue to support a robust regulatory
program irrespective of market events.\37\
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    \37\ Securities Exchange Act Release No. 61042 (November 20,
2009), 74 FR 62616, 62818 (November 30, 2009).

Furthermore, the Commission notes that the TAF constitutes only a
portion of the fees that FINRA charges members to support its
regulatory function. FINRA also charges a Gross Income Assessment Fee
and a Personnel Assessment Fee, which are not directly correlated to
equity trading volumes.
    Finally, the Commission finds that FINRA may, consistent with the
Act, submit future filings to adjust the TAF rate and the per-
transaction fee cap for immediate effectiveness under Section
19(b)(3)(A) of the Act. Section 19(b)(3)(A)(ii) allows an SRO to file
an immediately effective proposed rule change if such filing is
designated as ``establishing or changing a due, fee, or other charge
imposed by the self-regulatory organization.'' \38\ Proposed
adjustments to the TAF rate and per-transaction fee cap clearly fall
within the scope of this provision.
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    \38\ 15 U.S.C. 78s(b)(3)(A)(ii).
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    The Commission notes that commenter concerns regarding the
opportunity to comment on proposed TAF adjustments are mitigated by the
fact that such filings would still be subject to comment and Commission
review even when filed under Section 19(b)(3)(A). The Commission
summarily may temporarily suspend such a proposed rule change within 60
days of filing ``if it appears to the Commission that such action is
necessary or appropriate in the public interest, for the protection of
investors, or otherwise in furtherance of the purposes of [the Act].''
\39\
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    \39\ 15 U.S.C. 78s(b)(3)(C).
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    For the reasons stated above, the Commission finds that the
proposed rule change is consistent with the Act and the rules and
regulations thereunder.

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\40\ that the proposed rule change (SR-FINRA-2012-023) be, and
hereby is, approved.
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    \40\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\41\
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    \41\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-15806 Filed 6-27-12; 8:45 am]
BILLING CODE 8011-01-P