[Federal Register Volume 85, Number 140 (Tuesday, July 21, 2020)]
[Rules and Regulations]
[Pages 43990-44002]
[FR Doc No: 2020-13462]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 141 and 142

[EPA-HQ-OW-2018-0780, EPA-HQ-OW-2008-0692, EPA-HQ-OW-2009-0297; FRL-
10011-21-OW]
RIN 2040-AF28

Drinking Water: Final Action on Perchlorate

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final action.

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SUMMARY: The Environmental Protection Agency (EPA) is announcing its
withdrawal of the 2011 determination to regulate perchlorate in
accordance with the Safe Drinking Water Act, (SDWA). On February 11,
2011, the EPA published a Federal Register document in which the Agency
determined that perchlorate met the SDWA's criteria for regulating a
contaminant. On June 26, 2019, the EPA published a proposed national
primary drinking water regulation (NPDWR) for perchlorate and requested
public comments on multiple alternative actions, including the
alternative of withdrawing the 2011 regulatory determination for
perchlorate. The EPA received approximately 1,500 comments on the
proposed rulemaking. The EPA has considered these public comments and
based on the best available information the Agency is withdrawing the
2011 regulatory determination and is making a final determination not
to regulate perchlorate. The EPA has determined that perchlorate does
not occur ``with a frequency and at levels of public health concern''
within the meaning of the SDWA. In addition, in the judgment of the EPA
Administrator, regulation of perchlorate does not present a
``meaningful opportunity for health risk reduction for persons served
by public water systems.'' Accordingly, the EPA is

withdrawing its 2011 determination and is making a final determination
not to regulate perchlorate, and therefore will not issue a NPDWR for
perchlorate at this time.

DATES: For purposes of judicial review, the regulatory determination in
this document is issued as of July 21, 2020.

FOR FURTHER INFORMATION CONTACT: Samuel Hernandez, Office of Ground
Water and Drinking Water, Standards and Risk Management Division (Mail
Code 4607M), Environmental Protection Agency, 1200 Pennsylvania Avenue
NW, Washington, DC 20460; telephone number:<PHONE_NUMBER>; email
address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: This document is organized as follows:

I. General Information
    A. Does this action apply to me?
    B. How can I get copies of this document and other related
information?
II. Background
    A. What is perchlorate?
    B. What is the purpose of this action?
    C. What is the EPA's statutory authority for this action?
    D. Statutory Framework and Perchlorate Regulatory History
III. Withdrawal of the 2011 Regulatory Determination and Final
Determination Not To Regulate Perchlorate
    A. May perchlorate have an adverse effect on the health of
persons?
    B. Is perchlorate known to occur or is there a substantial
likelihood that perchlorate will occur in public water systems with
a frequency and at levels of public health concern?
    C. Is there a meaningful opportunity for the reduction of health
risks from perchlorate for persons served by public water systems?
    D. What is the EPA's final regulatory determination on
perchlorate?
IV. Summary of Key Public Comments on Perchlorate
    A. SDWA Statutory Requirements and the EPA's Authority
    B. Health Effects Assessment
    C. Occurrence Analysis
V. Conclusion
VI. References

I. General Information

A. Does this action apply to me?

    This action will not impose any requirements on anyone. Instead,
this action notifies interested parties of the EPA's withdrawal of the
2011 regulatory determination for perchlorate and the final regulatory
determination not to regulate perchlorate. Section IV of this document
provides a summary of the key comments received on the June 26, 2019
(84 FR 30524) proposed NPDWR for perchlorate (referred to hereinafter
as ``the 2019 proposal'').

B. How can I get copies of this document and other related information?

    The EPA has established a docket for this action under Docket ID
No. EPA-HQ-OW-2018-0780. Publicly available docket materials are
available electronically at https://www.regulations.gov/docket?D=EPA-HQ-OW-2018-0780.

II. Background

A. What is perchlorate?

    Perchlorate is a negatively charged inorganic ion that is composed
of one chlorine atom bound to four oxygen atoms (ClO4-),
which is highly stable and mobile in the aqueous environment.
Perchlorate comes from both natural and manmade sources. It is formed
naturally via atmospheric processes and can be found within mineral
deposits in certain geographical areas. It is also produced in the
United States by industrial processes, and the most commonly produced
compounds include ammonium perchlorate and potassium perchlorate used
primarily as oxidizers in solid fuels to power rockets, missiles, and
fireworks. Perchlorate can also result from the degradation of
hypochlorite solutions used for water disinfection. The degradation
into perchlorate occurs when hypochlorite solutions are improperly
stored and handled. For the general population, most perchlorate
exposure is through the ingestion of contaminated food or drinking
water. Above certain levels, perchlorate can prevent the thyroid gland
from getting enough iodine, which can affect thyroid hormone
production. The consequences of insufficient thyroid hormone levels
during human growth and development are well known. For pregnant women
with low iodine levels, sufficient changes in thyroid hormone levels
may cause changes in the child's brain development. In a 2005 report
entitled ``Health Implications of Perchlorate Ingestion'', the National
Research Council stated that: ``fetuses and preterm newborns constitute
the most sensitive populations although infants and developing children
are also considered sensitive populations'' (NRC, 2005). The existence
of a quantifiable relationship between thyroid hormone changes and
neurodevelopmental outcomes has strong support from the literature on
the subject; however, not every study identifies an association between
maternal thyroid hormone levels and the neurodevelopmental outcomes,
and the state of the science on this relationship is constantly
evolving.

B. What is the purpose of this action?

    The purpose of this action is to publish the EPA's notice to
withdraw the 2011 regulatory determination, one of the alternative
options in the 2019 proposal, and to issue a final determination not to
regulate perchlorate in drinking water. This document presents the
EPA's basis for this withdrawal and final regulatory determination, and
the EPA's response to key issues raised by commenters in response to
the 2019 proposal.

C. What is the EPA's statutory authority for this action?

    The SDWA sets forth three criteria that must be met for the EPA to
issue a maximum contaminant level goal (MCLG) and promulgate a national
primary drinking water regulation (NPDWR). Specifically, the
Administrator must determine that (1) ``the contaminant may have an
adverse effect on the health of persons''; (2) ``the contaminant is
known to occur or there is a substantial likelihood that the
contaminant will occur in public water systems with a frequency and at
levels of public health concern''; and (3) ``in the sole judgment of
the Administrator, regulation of such contaminant presents a meaningful
opportunity for health risk reduction for persons served by public
water systems'' (SDWA 1412(b)(1)(A)).
    SDWA 1412(b)(1)(B) sets out the process for the EPA to establish
drinking water standards for an unregulated contaminant. As explained
in more detail below, in 2011, the EPA issued a determination that
perchlorate met the three statutory criteria outlined above and
therefore should be regulated. Under the statute, a determination to
regulate triggers a duty for the EPA to issue a proposed drinking water
standard within two years and a final rule 18 months later (with the
possibility of a 3 month extension). SDWA 1412(b)(1)(E). The EPA
subsequently published a proposed drinking water standard for
perchlorate, and alternatives including the withdrawal of the 2011
regulatory determination, in 2019. The promulgation of a final drinking
water standard would, when effective, require monitoring of public
water supplies for the contaminant and treatment as necessary to meet
the regulatory standard.
    The EPA has determined, based on reviewing data and analysis
obtained since the issuance of the 2011 regulatory determination, that
perchlorate does not meet the statutorily-prescribed criteria for
regulation. As described in Sections III & VI of the 2019 proposal, the
data

and analysis in the record indicate that perchlorate does not occur in
public water systems with a frequency and at levels of public health
concern. Specifically, the peer-reviewed health effects analysis
indicates that the estimated concentrations of perchlorate that may
represent levels of public health concern (i.e., the proposed MCLG
levels, 18-90 [micro]g/L) is higher than the concentration considered
in issuance of the 2011 regulatory determination (1-47 [micro]g/L)
(USEPA, 2019a). In addition, based on a re-evaluation of the nationally
representative First Unregulated Contaminant Monitoring Rule (UCMR 1)
data, the updated occurrence analysis shows that the frequency of
occurrence of perchlorate in public water systems at levels exceeding
any of the alternative proposed MCLGs (18 [micro]g/L-90 [micro]g/L) is
significantly lower (0.03%-0.002%) than the frequency considered in the
analysis for the 2011 regulatory determination (4%-0.39%) (USEPA,
2019b). The EPA estimates that, even at the most stringent regulatory
level considered in the 2019 proposal (18 [micro]g/L), not more than 15
systems (0.03% of all water systems in the U.S. serving approximately
620,000 people) would need to take action to reduce levels of
perchlorate. Based on this information, the EPA determines that
perchlorate does not occur in public water systems ``with a frequency
and at levels of public health concern'' and thus does not meet the
second criterion of the three required for regulation under the SDWA.
In addition, while the third criterion is ``in the sole judgment of the
Administrator,'' the small number of water systems with perchlorate
levels greater than identified thresholds, and the correspondingly
small population served, provides ample support for the EPA's
conclusion that the regulation of perchlorate does not present a
``meaningful opportunity for health risk reduction for persons served
by public water systems,'' within the meaning of 1412(b)(1)(A)(iii).
Accordingly, because perchlorate no longer meets the statutory criteria
for regulation, the EPA does not have the authority to issue a MCLG or
promulgate a NPDWR for perchlorate.
    While the EPA has not previously withdrawn a regulatory
determination, the decision is supported by the legislative history
underlying the 1996 amendments to the SDWA, which repealed the
statutory requirement for the EPA to regulate an additional 25
contaminants every 3 years and replaced it with the current requirement
for the EPA to determine whether regulation is warranted for five
contaminants every five years. In describing the need for such
amendment, the legislative history points to the view expressed at the
Committee Hearing that ``the current law is a one-size-fits-all
program. It forces our water quality experts to spend scarce resources
searching for dangers that often do not exist rather than identifying
and removing real health risks from our drinking water'' (S. Rep. 104-
169 (1995) at 12). This amendment reflected Congress' clear intent that
the EPA prioritize actual health risks in determining whether to
regulate any particular contaminant. See id at 12 (noting that the
amendment ``repeals the requirement that the EPA regulate an additional
25 contaminants every 3 years replacing it with a new selection process
that gives the EPA the discretion to identify contaminants that warrant
regulation in the future'').
    The EPA's decision to withdraw the regulatory determination is also
consistent with Congress' direction to prioritize SDWA decisions based
on the best available public health information. See
1412(b)(1)(B)(ii)(II) (findings supporting a determination to regulate
``shall be based on the best available public health information'');
1412(b)(2)(A) (requiring that the EPA use ``the best available, peer-
reviewed science and supporting studies . . .'' in carrying out any
actions under this section). Although the EPA determined in 2011 that
perchlorate met the criteria for regulation, new data and analysis
developed by the Agency as part of the 2019 proposal demonstrate that
the occurrence and health effects information used as the basis for the
2011 determination no longer constitute ``best available information,''
are no longer accurate, and no longer support the Agency's
prioritization of perchlorate for regulation. Accordingly, not only is
the EPA not authorized to issue a MCLG or promulgate a NPDWR for
perchlorate, but it would not be in the public interest for the EPA to
do so.
    The EPA recognizes that the SDWA does not include a provision
explicitly authorizing withdrawal of a regulatory determination.
However, such authority is inherent in the authority to issue a
regulatory determination under 1412(b)(1)(B)(ii)(II), particularly
given the requirement that such determination be based on the ``best
available public health information,'' as discussed above. Accordingly,
the EPA must have the inherent authority to withdraw a regulatory
determination if the underlying information changes between regulatory
determination and promulgation. In light of Congress's concern that the
EPA focus new contaminant regulations on priority health concerns,
Congress could not have intended that the EPA's regulatory decision-
making be hamstrung by older data when newer, more accurate scientific
and public health data are available, especially when those data
demonstrate that regulation of a new contaminant would not present a
meaningful opportunity for health risk reduction.
    Moreover, the EPA notes that the statute specifically provides that
a decision not to regulate a contaminant is a final Agency action
subject to judicial review. SDWA 1412(b)(1)(B)(ii)(IV). Congress could
have--but did not--specify the same with respect to determinations to
regulate. Congress also did not explicitly prohibit the EPA from
withdrawing or modifying a regulatory determination. Congress' silence
with respect to determinations to regulate suggests that Congress
intended that such a determination is not itself a final agency action,
but rather a preliminary step in a decision-making process culminating
in a NPDWR and thus subject to reconsideration based on new data and
analysis considered during the 36 month promulgation process specified
in the statute. Accordingly, reconsideration of this preliminary
finding--and withdrawal of the determination based on subsequent
analysis mandated for NPDWR development--is fully consistent with the
statutory decision-making framework.

D. Statutory Framework and Perchlorate Regulatory History

    Section 1412(b)(1)(B)(i) of the SDWA requires the EPA to publish
every five years a Contaminant Candidate List (CCL). The CCL is a list
of drinking water contaminants that are known or anticipated to occur
in public water systems and are not currently subject to federal
drinking water regulations. The EPA uses the CCL to identify priority
contaminants for regulatory decision-making and information collection.
The placement of a substance on the CCL does not require that it be
regulated under the SDWA. Contaminants listed on the CCL may require
future regulation under the SDWA. The EPA included perchlorate on the
first, second, and third CCLs published in 1998 (63 FR 10274, March 2,
1998), 2005 (70 FR 9071, February 24, 2005), and 2009 (74 FR 51850,
October 8, 2009).
    The EPA collects data on the CCL contaminants to better understand
their potential health effects and to determine

the levels at which they occur in public water systems. SDWA
1412(b)(1)(B)(ii) requires that, every five years, the EPA, after
consideration of public comment, issue a determination of whether or
not to regulate at least five contaminants on each CCL. For any
contaminant that the EPA determines meets the criteria for regulation
under SDWA 1412(b)(1)(E), the EPA must propose a NPDWR within two years
and promulgate a final regulation within 18 months of the proposal
(which may be extended by 9 additional months).
    As part of its responsibilities under the SDWA, the EPA implements
section 1445(a)(2) (``Monitoring Program for Unregulated
Contaminants''). This section requires that once every five years, the
EPA issue a list of no more than 30 unregulated contaminants to be
monitored by public water systems. This monitoring is implemented
through the Unregulated Contaminant Monitoring Rule (UCMR), which
collects data from community water systems and non-transient, non-
community water systems. The first four UCMRs collected data from a
census of large water systems (serving more than 10,000 people) and
from a statistically representative sample of small water systems. On
September 17, 1999, the EPA published its first UCMR (64 FR 50556),
which required all large systems and a representative sample of small
systems to monitor for perchlorate and 25 other contaminants (USEPA,
1999). Water system monitoring data for perchlorate were collected from
2001 to 2005.
    The EPA and other federal agencies asked the National Research
Council (NRC) to evaluate the health implications of perchlorate
ingestion. In its 2005 report, the NRC concluded that perchlorate
exposure inhibits the transport of iodide \1\ into the thyroid by a
protein molecule known as the sodium/iodide symporter (NIS), which may
lead to decreases in the production of two thyroid hormones, thyroxine
(T3) and triiodothyronine (T4), and increases in the production of
thyroid-stimulating hormone (TSH) (National Research Council (NRC),
2005). Additionally, the NRC concluded that the most sensitive
population to perchlorate exposure are ``the fetuses of pregnant women
who might have hypothyroidism or iodide deficiency'' (p. 178). The EPA
established a reference dose (RfD) consistent with the NRC's
recommended RfD of 0.7 [micro]g/kg/day for perchlorate. The reference
dose is an estimate of a human's daily exposure to perchlorate that is
likely to be without an appreciable risk of adverse effects. This RfD
was based on a study (Greer, Goodman, Pleus, & Greer, 2002) of
perchlorate's inhibition of radioactive iodine uptake in healthy adults
and the application of an uncertainty factor of 10 for intraspecies
variability (USEPA, 2005a).
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    \1\ For the purposes of this document, ``iodine'' will be used
to refer to dietary intake before entering the body. Once in the
body, ``iodide'' will be used to refer to the ionic form.
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    In October 2008, the EPA published a preliminary regulatory
determination not to regulate perchlorate in drinking water and
requested public comment (73 FR 60262, October 10, 2008). In that
preliminary determination, the EPA found that perchlorate did not occur
with a frequency and at levels of public health concern within the
meaning of the SDWA, and that development of a regulation did not
present a meaningful opportunity for health risk reduction for persons
served by public water systems. In reaching this conclusion, the EPA
derived and used a Health Reference Level (HRL) of 15 [mu]g/L based on
the RfD of 0.7 [micro]g/kg/day and body weight and exposure information
for pregnant women (USEPA, 2008a). Using the UCMR 1 occurrence data,
the EPA estimated that less than 1% of drinking water systems (serving
approximately 1 million people) had perchlorate levels above the HRL of
15 [micro]g/L. Based on this information, the EPA found that
perchlorate did not occur at a frequency and at levels of public health
concern. The EPA also determined there was not a meaningful opportunity
for a NPDWR for perchlorate to reduce health risks.
    In August 2009, the EPA published a supplemental request for
comment with new analysis that derived potential alternative Health
Reference Levels (HRLs) for 14 life stages, including infants and
children. The analysis used the RfD of 0.7 [mu]g/kg/day and life stage-
specific bodyweight and exposure information, resulting in comparable
perchlorate concentrations in drinking water, based on life stage, of
between 1 [mu]g/l to 47 [mu]g/l (74 FR 41883; USEPA, 2009a).
    In February 11, 2011, the EPA published its determination to
regulate perchlorate (76 FR 7762; USEPA, 2011) after careful
consideration of public comments on the October 2008 and August 2009
notices. The EPA found at that time that perchlorate may have an
adverse effect on the health of persons; that it is known to occur, or
that there is a substantial likelihood that it will occur, in public
drinking water systems with a frequency and at levels that present a
public health concern; and that regulation of perchlorate presented a
meaningful opportunity for health risk reduction for persons served by
public water systems. The EPA found that as many as 16 million people
could potentially be exposed to perchlorate at levels of concern, up
from 1 million people originally estimated in the 2008 notice.
    As a result of the determination, and as required by SDWA
1412(b)(1)(E), the EPA initiated the process to develop a MCLG and a
NPDWR for perchlorate.
    In September 2012, the U.S. Chamber of Commerce (the Chamber)
submitted to the EPA a Request for Correction under the Information
Quality Act regarding the EPA's regulatory determination.\2\ In the
request, the Chamber claimed that the UCMR 1 data used in the EPA's
occurrence analysis did not comply with data quality guidelines and
were not representative of current conditions. In response to this
request, the EPA reassessed the data and removed certain source water
samples that could be paired with appropriate follow-up samples located
at the entry point to the distribution system. The EPA also updated the
UCMR 1 data in the analysis for systems in California and
Massachusetts, using state compliance data to reflect current
occurrence conditions after state regulatory limits for perchlorate
were implemented. For more information on the Chamber's request and the
EPA's response, see the Perchlorate Occurrence and Monitoring Report
(USEPA, 2019b).
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    \2\ The U.S. Chamber of Commerce letter to the EPA and other
corresponding records are available at https://www.epa.gov/quality/epa-information-quality-guidelines-requests-correction-and-requests-reconsideration#12004.
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    As required by section 1412(d) of the SDWA, as part of the NPDWR
development process, the EPA requested comments from the Science
Advisory Board (SAB) in 2012, seeking guidance on how best to consider
and interpret the life stage information, the epidemiologic and
biomonitoring data since the NRC report, physiologically-based
pharmacokinetic (PBPK) analyses, and the totality of perchlorate health
information to derive an MCLG for perchlorate. In May 2013, the SAB
recommended that the EPA:
     Derive a perchlorate MCLG that addresses sensitive life
stages through physiologically-based pharmacokinetic/pharmacodynamic
modeling based upon its mode of action, rather than the default MCLG
approach using the RfD and specific chemical exposure parameters;
     expand the modeling approach to account for thyroid
hormone perturbations and potential adverse

neurodevelopmental outcomes from perchlorate exposure;
     utilize a mode-of-action framework for developing the MCLG
that links the steps in the proposed mechanism leading from perchlorate
exposure through iodide uptake inhibition--to thyroid hormone changes--
and finally to neurodevelopmental impacts; and
     ``[e]xtend the [BBDR] model expeditiously to . . . provide
a key tool for linking early events with subsequent events as reported
in the scientific and clinical literature on iodide deficiency, changes
in thyroid hormone levels, and their relationship to neurodevelopmental
outcomes during sensitive early life stages''(SAB for the U.S. EPA,
2013, p. 19).
    To address the SAB recommendations, the EPA revised an existing
PBPK/PD model that describes the dynamics of perchlorate, iodide, and
thyroid hormones in a woman during the third trimester of pregnancy
(Lumen, Mattie, & Fisher, 2013; USEPA, 2009b). The EPA also created its
own Biologically Based Dose Response (BBDR) models that included the
additional sensitive life stages identified by the SAB, i.e., breast-
and bottle-fed neonates and infants (SAB for the U.S. EPA, 2013, p.
19).
    To determine whether the Agency had implemented the SAB
recommendations for modeling thyroid hormone changes, the EPA convened
an independent peer review panel to evaluate the BBDR models in January
2017 (External Peer Reviewers for USEPA, 2017). The EPA considered the
recommendations from the 2017 peer review and made necessary model
revisions to increase the scientific rigor of the model and the
modeling results, including extending the BBDR model to the first
trimester and incorporating the TSH feedback mechanism.
    The EPA convened a second independent peer review panel in January
2018 to evaluate the revisions to the BBDR model, including the
transition from the third to the first trimester as the life stage of
interest. The EPA also presented several approaches to link the thyroid
hormone changes in a pregnant mother predicted by the BBDR model to
neurodevelopmental effects using evidence from the epidemiological
literature (External Peer Review for U.S. EPA, 2018).
    In response to a lawsuit brought to enforce the deadlines in SDWA
1412(b)(1)(E) triggered by the 2011 regulatory determination for
perchlorate, on October 18, 2016, the U.S. District Court for the
Southern District of New York entered a consent decree, requiring the
EPA to sign for publication a proposal for a MCLG and NPDWR for
perchlorate in drinking water no later than October 31, 2018, and to
sign for publication a final MCLG and NPDWR for perchlorate in drinking
water no later than December 19, 2019. The deadline for the EPA to
propose a MCLG and NPDWR for perchlorate in drinking water was later
extended to May 28, 2019, and the date for signature of a final MCLG
and NPDWR was extended to no later than June 19, 2020. The consent
decree is available in the docket for this action.
    In compliance with the deadline established in the consent decree,
on May 23, 2019, the EPA Administrator signed a proposed rulemaking
document seeking public comment on a range of options regarding the
regulation of perchlorate in public drinking water systems. The
proposed rulemaking document was published in the Federal Register on
June 26, 2019. 84 FR 30524. The EPA proposed a NPDWR for perchlorate
with an MCL and MCLG of 56 [micro]g/L. The proposed MCLG of 56
[micro]g/L was based on avoiding an estimated 2 point IQ decrement
associated with exposure to perchlorate in drinking water during the
most sensitive life stage (the fetus) within a specific segment of the
population (iodine deficient pregnant women).
    The EPA also requested comment on two alternative MCL/MCLG values
of 18 [micro]g/L and 90 [micro]g/L. These alternatives were based upon
avoiding an estimated 1 point and 3 point IQ decrement respectively,
associated with perchlorate exposure. Additionally, the EPA requested
comment on whether the 2011 regulatory determination should be
withdrawn, based on new information including updated occurrence data
on perchlorate in drinking water and new analysis of the concentration
of perchlorate in drinking water that represents a level of health
concern.

III. Withdrawal of the 2011 Regulatory Determination and Final
Determination Not To Regulate Perchlorate

    In determining whether to regulate a particular contaminant, the
EPA must follow the criteria mandated by the 1996 SDWA Amendments.
Specifically, in order to issue a MCLG and NPDWR for perchlorate, the
EPA must determine that perchlorate ``may have an adverse effect on the
health of persons,'' that perchlorate occurs at ``a frequency and at
levels of public health concern'' in public water systems, and that
regulation of perchlorate in drinking water systems ``presents a
meaningful opportunity for health risk reduction for persons served by
public water systems.'' SDWA 1412(b)(1)(A). In preparing the 2019
proposal for perchlorate, the EPA updated and improved information on
the levels of public health concern and the frequency and levels of
perchlorate in public water systems. The following is the EPA's
reassessment of the regulatory determination criteria applied to the
best available health science and occurrence data for perchlorate.

A. May perchlorate have an adverse effect on the health of persons?

    Yes, perchlorate may have adverse health effects above certain
exposure levels. The perchlorate anion is biologically significant
specifically with respect to the functioning of the thyroid gland.
Above certain exposure levels, perchlorate can interfere with the
normal functioning of the thyroid gland by inhibiting the transport of
iodide into the thyroid, resulting in a deficiency of iodide in the
thyroid. Perchlorate inhibits (or blocks) iodide transport into the
thyroid by chemically competing with iodide, which has a similar shape
and electric charge. The transfer of iodide from the blood into the
thyroid is an essential step in the synthesis of thyroid hormones.
Thyroid hormones play an important role in the regulation of metabolic
processes throughout the body and are also critical to developing
fetuses and infants, especially for brain development. Because the
developing fetus depends on an adequate supply of maternal thyroid
hormones for its central nervous system development during the first
and second trimester of pregnancy, iodide uptake inhibition from
perchlorate exposure has been identified as a concern in connection
with increasing risk of neurodevelopmental impairment in fetuses of
pregnant women with low dietary iodine. Poor iodide uptake and
subsequent impairment of the thyroid function in pregnant and lactating
women have been linked to delayed development and decreased learning
capability in their infants and children (NRC, 2005). There is
scientific evidence to support that perchlorate can reduce iodide
uptake and therefore alter the level of thyroid hormones. There is also
scientific evidence that changes in thyroid hormone levels in a
pregnant woman may be linked to changes in the neurodevelopment of her
offspring. The existence of a quantifiable relationship between thyroid
hormone changes and neurodevelopmental outcomes has strong support from
the literature on the subject; however, not every study identifies an
association between maternal thyroid hormone levels and the
neurodevelopmental outcomes and

the state of the science on this relationship is constantly evolving.
    Therefore, the EPA continues to find that perchlorate may have an
adverse effect on the health of persons above certain exposure levels
based on its ability to interfere with thyroid hormone production.

B. Is perchlorate known to occur or is there a substantial likelihood
that perchlorate will occur in public water systems with a frequency
and at levels of public health concern?

    The EPA has determined that perchlorate does not occur with a
frequency and at levels of public health concern in public water
systems. The EPA has made this determination by comparing the best
available data on the occurrence of perchlorate in public water systems
with potential MCLGs for perchlorate.
    In past regulatory determinations, the EPA has identified HRLs as
benchmarks against which the EPA compares the concentration of a
contaminant found in public water systems to determine whether it
occurs at levels of public health concern. For the 2011 regulatory
determination, the EPA identified potential alternative HRL values
ranging from 1 to 47 [micro]g/L for 14 different life stages. These
HRLs were not final decisions about the level of perchlorate in
drinking water that is without adverse effects. For the 2019 proposal,
the EPA derived three potential MCLGs for perchlorate of 18, 56, and 90
[mu]g/L for the most sensitive life stage using the best available peer
reviewed science in accordance with the SDWA. After considering public
comment, the EPA used these potential MCLGs as the levels of public
health concern in assessing the frequency of occurrence of perchlorate
in this regulatory determination. These MCLGs were set at levels to
avoid estimated IQ decrements of 1, 2, and 3 points respectively in the
most sensitive life stage, the children of hypothyroxinemic women with
low iodine intake. The EPA proposed an MCLG of 56 [mu]g/L and
alternative MCLG values of 18 and 90 [mu]g/L.
    The rationale used in deriving the numerical values is presented in
greater detail in the EPA technical support document entitled
``Deriving a Maximum Contaminant Level Goal for Perchlorate in Drinking
Water'' (USEPA, 2019a).
    The EPA compared these potential MCLG values with the updated
perchlorate UCMR 1 occurrence data set. A comprehensive description of
the perchlorate occurrence data is presented in Section VI of the 2019
proposal. It is also available in the ``Perchlorate Occurrence and
Monitoring Report'' (USEPA, 2019a).
    The occurrence data for perchlorate were collected from 3,865 PWSs
between 2001 and 2005 under the UCMR 1. In the 2019 proposal, the EPA
modified the UCMR 1 data set in response to concerns raised by
stakeholders regarding the data quality and to represent current
conditions in California and Massachusetts, which have enacted
perchlorate regulations since the UCMR 1 data were collected.
Massachusetts promulgated a drinking water standard for perchlorate of
2 [mu]g/L in 2006 (MassDEP, 2006), and California promulgated a
drinking water standard of 6 [mu]g/L in 2007 (California Department of
Public Health, 2007). Systems in these states are now required to keep
perchlorate levels in drinking water below their state limits. As
discussed below, the EPA finds that perchlorate levels in drinking
water and sources of drinking water have decreased since the UCMR 1
data collection. The main factors contributing to the decrease in
perchlorate levels are the promulgation of drinking water regulations
for perchlorate in California and Massachusetts and the ongoing
remediation efforts in the state of Nevada to address perchlorate
contamination in groundwater adjacent to the lower Colorado River
upstream of Lake Mead.
    To update the occurrence data for systems sampled during UCMR 1
from California and Massachusetts, the EPA identified all systems and
corresponding entry points which had reported perchlorate detections in
UCMR 1. Once the systems and entry points with detections were
appropriately identified, the EPA then used publicly available
California and Massachusetts monitoring data for perchlorate, to
replace the original UCMR1 data with more recent data where available
(Perchlorate Occurrence and Monitoring Report, USEPA, 2019b).
    The EPA has determined that the UCMR 1 data with these updates are
the best available data collected in accordance with accepted methods
regarding the frequency and level of perchlorate nationally. The UCMR 1
data are from a census of the large water systems (serving more than
10,000 people) and a statistically representative sample of small water
systems that provides the best available, national assessment of
perchlorate occurrence in drinking water.
    The EPA used entry point maximum measurements to estimate potential
baseline occurrence and exposure at levels that exceed the potential
MCLG thresholds. The maximum measurements indicate highest perchlorate
levels reported in at least one quarterly sample from surface water
systems and at least one semi-annual sample from ground water systems.

                     Table 1--Perchlorate Occurrence and Exposure (Updated UCMR 1 Data Set)
----------------------------------------------------------------------------------------------------------------
                                                                             Percent of U.S.
                                      Entry points with    Water systems      water systems
Threshold concentration ([micro]g/L)   detections above   with detections    with detections   Population served
                                          threshold       above threshold    above threshold
                                                                                (percent)
----------------------------------------------------------------------------------------------------------------
18 [micro]g/L.......................                 17                 15               0.03            620,560
56 [micro]g/L.......................                  2                  2              0.004             32,432
90 [micro]g/L.......................                  1                  1              0.002             25,972
----------------------------------------------------------------------------------------------------------------

    Table 1 presents the number and percentage of water systems that
reported perchlorate at levels exceeding the three proposed MCLG
threshold concentrations. In summary, the updated perchlorate
occurrence information suggests that at an MCLG of 18 [micro]g/L, there
would be 15 systems (0.03% of all water systems in the U.S.) that would
exceed the threshold, at an MCLG of 56 [micro]g/L, two systems (0.004%
of all water systems in the U.S.) would exceed the threshold, and
finally one system would exceed the MCLG threshold of 90 [micro]g/L.
Based on the analysis of drinking water occurrence presented in the
2019 proposal and the data summarized in Table 1 and the range of
potential MCLGs, the EPA concludes that perchlorate does not occur with
a frequency and at levels of

public health concern in public water systems.
    The EPA notes that in 2008, the EPA stated in its preliminary
regulatory determination that perchlorate did not occur with a
frequency and at levels of public health concern in public water
systems based upon the health effects and occurrence information
available at that time, which indicated that 0.8% of public water
system had perchlorate at levels exceeding the HRL of 15 mg/L. The EPA
also stated that there was not a meaningful opportunity for a NPDWR to
reduce health risks based upon the estimates at that time that 0.9
million people had perchlorate levels above the HRL. The EPA further
notes that the Agency has previously determined CCL1 and CCL2
contaminants did not occur with frequency at levels of public health
concern when the percentage of water systems exceeding the HRL were
greater than the frequency of perchlorate occurrence level at the
proposed MCL (0.004% of all water systems in the U.S.). For example, in
2003 the EPA determined that aldrin did not occur with a frequency and
at levels of public health concern based upon data that showed 0.2% of
water systems had aldrin at levels greater than the HRL. The EPA also
concluded that there was not a meaningful opportunity for health risk
reduction for persons served through a drinking water regulation based
on this occurrence data and the estimate that these systems above the
HRL served approximately 1 million people (USEPA, 2003). In 2008 the
EPA determined that DCPA Mono- and Di-Acid degradates did not occur
with a frequency and at levels of public health concern based on data
that showed 0.03% of water systems exceeded the HRL. The EPA also
concluded that there was not a meaningful opportunity for health risk
reduction through a drinking water regulation based on this occurrence
data and the estimate that these systems above the HRL served
approximately 100,000 people (USEPA, 2008b).
    While the EPA has made its conclusion that perchlorate does not
occur at a frequency and at levels of public health concern in public
water systems based on the updated UCMR 1 data in Table 1 above, the
EPA also sought to find additional information about the perchlorate
levels at the 15 water systems that had at least one reported result
greater than 18 [micro]g/L in the updated UCMR 1 data. The EPA found
that perchlorate levels have been reduced at many of these water
systems. Although these water systems were not required to take actions
to reduce perchlorate in drinking water, many had conducted additional
monitoring for perchlorate and found decreased levels or had taken
mitigation efforts to address perchlorate, confirming the EPA's
conclusion described above. The status of each of these systems is
described in Table 2 below and confirms the Agency's conclusion that is
based upon the information in Table 1.

              Table 2--Update on Systems With Perchlorate Levels Above 18 [micro]g/L in the UCMR 1
----------------------------------------------------------------------------------------------------------------
                                                                 Range of UCMR 1
               State                       System name        results ([micro]g/L)     Update on mitigation and
                                                                       **             levels of perchlorate \++\
----------------------------------------------------------------------------------------------------------------
Florida............................  Sebring Water.........  ND-70.................  The EPA contacted the
                                                                                Sebring system in January
                                                                                2020. Operations personnel
                                                                                indicated that no follow-
                                                                                up/updated monitoring data
                                                                                for perchlorate are
                                                                                available.
Florida............................  Manatee County          ND-30.................  Researchers contacted the
                                      Utilities Dept.                                 system to identify the
                                                                                source of perchlorate.
                                                                                System personnel
                                                                                attributed the sole
                                                                                perchlorate detection
                                                                                under UCMR 1 to analytical
                                                                                error. System personnel
                                                                                indicated that three other
                                                                                quarterly samples
                                                                                collected under UCMR 1 as
                                                                                well as other subsequent
                                                                                perchlorate sampling
                                                                                efforts were non-detect.
                                                                                Source: AWWA (2008).
Georgia............................  Oconee Co.--            38 (single sample)....  Researchers contacted the
                                      Watkinsville.                                   system and found that a
                                                                                perchlorate contaminated
                                                                                well was removed from
                                                                                service in 2003. The
                                                                                system indicates that
                                                                                perchlorate is no longer
                                                                                detected. Source: Luis et
                                                                                al. (2019).
Louisiana..........................  St. Charles Water       ND-24.................  The EPA was not able to
                                      District 1 East Bank.                           identify updated data on
                                                                                perchlorate levels for
                                                                                this system.
Maryland...........................  City of Aberdeen......  ND-19.................  The system's 2018 Consumer
                                                                                Confidence Report (CCR)
                                                                                indicates that perchlorate
                                                                                was not detected.
                                                                                According to the Maryland
                                                                                Department of Environment,
                                                                                perchlorate was not
                                                                                detected in this system in
                                                                                2019. In addition,
                                                                                researchers contacted the
                                                                                system and found that
                                                                                there has been no
                                                                                detection of perchlorate
                                                                                since treatment was
                                                                                installed in 2009. Source:
                                                                                Luis et al. (2019).
Maryland...........................  Chapel Hill--Aberdeen   ND-20.................  The EPA contacted the
                                      Proving Grounds.                                Chapel Hill System in
                                                                                January 2020. Water system
                                                                                personnel indicate that
                                                                                the Chapel Hill WTP was
                                                                                taken off-line and was
                                                                                replaced with a new
                                                                                treatment plant and five
                                                                                new production wells. The
                                                                                new treatment plant
                                                                                started operations on
                                                                                January 27, 2020. System
                                                                                personnel also indicate
                                                                                that monitoring was
                                                                                conducted in November 2019
                                                                                and perchlorate was not
                                                                                detected in either the
                                                                                source well water or the
                                                                                finished water. In
                                                                                addition, according to the
                                                                                Maryland Department of
                                                                                Environment, perchlorate
                                                                                was not detected in this
                                                                                system in 2019.

Mississippi........................  Hilldale Water          ND-20.................  The EPA contacted the
                                      District.                                       Hilldale System in January
                                                                                2020. Water system
                                                                                personnel indicated that
                                                                                no follow-up/updated
                                                                                monitoring data for
                                                                                perchlorate are available.
New Mexico.........................  Deming Municipal Water  15-20.................  Data from the EPA's SDWIS/
                                      System.                                         FED database indicates
                                                                                that the entry point that
                                                                                reported detections in
                                                                                UCMR 1 (Well #3) is now
                                                                                inactive (i.e., the
                                                                                contaminated source is no
                                                                                longer in use).
Nevada.............................  City of Henderson.....  6-23..................  Researchers report that the
                                                                                perchlorate levels
                                                                                described in the system's
                                                                                CCR ranged from non-detect
                                                                                to 9.7 [micro]g/L. Source:
                                                                                AWWA (2008).
Ohio...............................  Fairfield City PWS....  6-27..................  The EPA contacted the
                                                                                Fairfield City System in
                                                                                January 2020. Water system
                                                                                personnel indicated that
                                                                                follow-up monitoring was
                                                                                conducted after UCMR 1,
                                                                                between 2002 and 2004. The
                                                                                Ohio EPA provided copies
                                                                                of the follow-up
                                                                                monitoring results which
                                                                                indicate that results at
                                                                                the entry point ranged
                                                                                from non-detect to 13
                                                                                [micro]g/L.
Ohio...............................  Hecla Water             ND-32.................  The EPA contacted the Hecla
                                      Association--Plant                              Water Association System
                                      PWS.                                            in January 2020. Water
                                                                                system personnel indicated
                                                                                that that no follow-up/
                                                                                updated monitoring data
                                                                                for perchlorate are
                                                                                available.
Oklahoma...........................  Enid..................  ND-30.................  The EPA reviewed Oklahoma's
                                                                                monitoring data and did
                                                                                not find any monitoring
                                                                                results reported for
                                                                                perchlorate.
Pennsylvania.......................  Meadville Area Water    ND-33.................  The EPA contacted the
                                      Authority.                                      Meadville System in
                                                                                January 2020. Water system
                                                                                personnel indicated that
                                                                                no follow-up/updated
                                                                                monitoring data for
                                                                                perchlorate are available.
Puerto Rico........................  Utuado Urbano.........  ND-420................  The EPA contacted the
                                                                                Puerto Rico Aqueduct and
                                                                                Sewer Authority (PRASA) in
                                                                                January 2019. PRASA
                                                                                personnel indicated that
                                                                                no updated monitoring data
                                                                                for perchlorate are
                                                                                available. NOTE: The PRASA
                                                                                personnel stated that the
                                                                                Utuado water system was
                                                                                significantly impacted by
                                                                                Hurricane Maria and that
                                                                                monitoring records from
                                                                                years prior to 2017 were
                                                                                lost.
Texas..............................  City of Levelland.....  ND-32.................  Researchers found that a
                                                                                water storage tank was the
                                                                                source of perchlorate
                                                                                contamination. The wells
                                                                                feeding the tank were
                                                                                tested by the state and
                                                                                perchlorate was not
                                                                                detected. The water tank
                                                                                was shut off from service.
                                                                                Source: Luis et al.
                                                                                (2019).
----------------------------------------------------------------------------------------------------------------
**Values have been rounded. ND describes a sampling event where perchlorate was not detected at or above the
  UCMR 1 minimum reporting level of 4 [micro]g/L. UCMR 1 results collected between 2001 and 2005.
++To obtain updated data and/or information regarding perchlorate levels, the EPA reviewed Consumer Confidence
  Reports and other publicly available data, as well as published studies. In addition, the EPA contacted some
  water systems for information about current perchlorate levels. (USEPA, 2020a)

C. Is there a meaningful opportunity for the reduction of health risks
from perchlorate for persons served by public water systems?

    The EPA's analysis presented in the 2019 proposal demonstrates that
a NPDWR for perchlorate does not present a meaningful opportunity for
health risk reduction for persons served by public water systems. As
discussed above, the EPA found that perchlorate occurs with very low
frequency at levels of public health concern. Based on updated UCMR 1
occurrence information, there were 15 water systems (0.03% of all water
systems in the U.S.) that detected perchlorate in drinking water above
the lowest proposed alternative MCLG of 18 [micro]g/L, and only 1
system had a detection above the proposed alternative MCLG of 90
[micro]g/L. Specifically, Table 1 presents the population served by
PWSs that were monitored under UCMR 1 for which the highest reported
perchlorate concentration was greater than the identified thresholds.
The EPA estimates \3\ that the number of people who may be potentially
consuming water containing perchlorate at levels that could exceed the
levels of concern for perchlorate could range between 26,000 and
620,000.
---------------------------------------------------------------------------

    \3\ The values shown in Table 1 are based on the revised UCMR 1
data. The EPA also applied statistical sampling weights to the small
systems results to extrapolate to national results. There was one
small system included in the statistical sample stratum which had a
perchlorate measurement exceeding 18 [micro]g/L. Accordingly, the
EPA estimates that approximately 41,000 small system customers may
be exposed to perchlorate greater than 18 [micro]g/L.
---------------------------------------------------------------------------

    The small number of water systems with perchlorate levels greater
than identified thresholds, and the correspondingly small population
served, provides ample support for the EPA's conclusion that the
regulation of perchlorate does not present a ``meaningful opportunity
for health risk reduction for persons served by public water systems,''
within the meaning of SDWA 1412(b)(1)(A)(iii).
    While the EPA does not believe that a national primary drinking
water regulation presents a meaningful opportunity for health risk
reduction, the Agency remains committed to

working with States and communities in addressing perchlorate
contamination of drinking water. For example, the EPA has issued a
document entitled ``Perchlorate Recommendations for Public Water
Systems'' which provides recommendations for actions that systems may
take if there are concerns about perchlorate (USEPA, 2020b). The
document outlines steps public systems can take to address perchlorate
in drinking water, including testing, installing treatment equipment,
and communication with customers.
    Although a cost benefit analysis is not one of the three SDWA
criteria for making a regulatory determination, the EPA also considered
the findings of the Health Risk Reduction and Cost Analysis (HRRCA,
USEPA 2019c) as additional information confirming the appropriateness
of the withdrawal of the regulatory determination. The HRRCA for
perchlorate (which was presented in the 2019 proposal) provides a
unique set of economic data indicators that are not available for
regulatory determinations because the HRRCA is required for a proposed
NPDWR under SDWA 1412(b)(3)(C), but is not required to support a
regulatory determination. Accordingly, because the EPA initially
determined that perchlorate met the criteria for regulation and began
the regulatory analysis process, the HRRCA was available with respect
to perchlorate at this stage in the SDWA process, and the Agency
considered this comprehensive economic analysis in informing its
decision to withdraw the regulatory determination.
    Specifically, the HRRCA provides a description of the potential
benefits and costs of a drinking water regulation for perchlorate. For
all potential regulatory levels considered for perchlorate (18, 56, and
90 [micro]g/L), the total costs associated with establishing a
regulation (ranging from $9.5 to $18.0 million across discount rates
and levels) were substantially higher than the potential range of
benefits (ranging from $0.3 to $3.7 million) (USEPA, 2019c). The
infrequent occurrence of perchlorate at levels of health concern
imposes high monitoring and administrative cost burdens on public water
systems and the states, while having little impact on health risk
reductions and the associated low estimates of benefits. The EPA is not
finalizing the HRRCA for this final action nor is the EPA conducting an
analysis in accordance with the Regulatory Flexibility Act because the
Agency is not promulgating a final regulation.
    Based on a comparison of costs and benefits estimated at the three
potential regulatory levels, the EPA determined in the 2019 proposal
that the benefits of establishing a drinking water regulation for
perchlorate do not justify the potential costs.
    A drinking water regulation for perchlorate would impose
significant burdens on states and water systems, mainly associated with
requirements for monitoring, including initial monitoring and long-term
monitoring for over 60,000 systems (see Section VIII of the 2019
proposal for more information), but would result in very few systems
having to take action to reduce perchlorate levels. It is of paramount
importance that water systems (particularly medium, small, and
economically distressed systems) focus their limited resources on
actions that ensure compliance with existing NPDWRs and maintain their
technical, managerial, and financial capacity to improve system
operations and the quality of water being provided to their customers,
rather than spending resources monitoring for contaminants that are
unlikely to occur.

D. What is the EPA's final regulatory determination on perchlorate?

    Based on the EPA's analysis of the best available public health
information, and after careful review and consideration of public
comments on the June 2019 proposal, the Agency is withdrawing its 2011
determination and is making a final determination not to regulate
perchlorate. Accordingly, the EPA will not issue a NPDWR for
perchlorate at this time. While the EPA has found that perchlorate may
have an adverse effect on human health above certain exposure levels,
based on the analysis presented in this document and supporting record,
the EPA has determined that perchlorate does not occur in public water
systems with a frequency and at levels of public health concern and
that regulation of perchlorate does not present a meaningful
opportunity to reduce health risks for persons served by public water
systems. This conclusion is based on the best available peer reviewed
science and data collected in accordance with accepted methods on
perchlorate health effects and occurrence.

IV. Summary of Key Public Comments on Perchlorate

    The EPA received approximately 1,500 comments from individuals or
organizations on the June 2019 proposal. This section briefly discusses
the key technical issues raised by commenters and the EPA's response.
Comments are also addressed in the ``Comment Response Document for the
Final Regulatory Action for Perchlorate'' (USEPA, 2020c) available at
http://www.regulations.gov (Docket ID No. EPA-HQ-OW-2018-0780).

A. SDWA Statutory Requirements and the EPA's Authority

    The EPA received comments stating that the Agency should promulgate
an MCLG and MCL for perchlorate and comments stating that the Agency
should not promulgate a regulation. After considering these comments,
the EPA has re-evaluated perchlorate in accordance with SDWA
1412(b)(1)(A), which requires that the Agency promulgate a NPDWR if (i)
the contaminant may have an adverse effect on the health of persons;
(ii) the contaminant is known to occur or there is a substantial
likelihood that the contaminant will occur in public water systems with
a frequency and at levels of public health concern; and (iii) in the
sole judgment of the Administrator, regulation of such contaminant
presents a meaningful opportunity for health risk reduction for persons
served by public water systems.
    The EPA has determined, based upon the best available peer reviewed
science and data collected in accordance with accepted methods, that
perchlorate does not occur at a frequency and at levels of public
health concern, and that regulation of perchlorate does not present a
meaningful opportunity for health risk reduction. Because perchlorate
does not meet the statutory criteria for regulation, the EPA lacks the
authority to issue a MCLG or NPDWR for perchlorate, and, is therefore
withdrawing its 2011 regulatory determination and issuing this final
determination not to regulate perchlorate. For more information
regarding the EPA's statutory authority to withdraw its regulatory
determination, see Section II.C above.

B. Health Effects Assessment

Health Effects/MCLG Derivation
    The EPA received comments indicating that the Agency should utilize
different approaches to derive the MCLG for perchlorate including
approaches that some states used to develop their perchlorate advisory
levels or drinking water standards. The EPA considered a number of
alternative approaches to develop the MCLG for perchlorate and in
accordance with SDWA 1412(e), the Agency sought recommendations from
the Science Advisory Board. The EPA derived the proposed MCLG for
perchlorate based on the approach recommended by the Science Advisory
Board (SAB) (SAB for

the U.S. EPA, 2013). The SAB recommended that ``the EPA derive a
perchlorate MCLG that addresses sensitive life stages through
physiologically-based pharmacokinetic/pharmacodynamic modeling based
upon its mode of action rather than the default MCLG approach using the
RfD and specific chemical exposure parameters.'' The EPA has
implemented these recommendations and has obtained two independent peer
reviews of the analysis. These peer reviewers stated that: ``[o]verall,
the panel agreed that the EPA and its collaborators have prepared a
highly innovative state-of-the-science set of quantitative tools to
evaluate neurodevelopmental effects that could arise from drinking
water exposure to perchlorate. While there is always room for
improvement of the models, with limited additional work to address the
committee's comments below, the current models are fit-for-purpose to
determine an MCLG'' (External Peer Reviewers for USEPA, 2018, p. 2).
    The EPA received comments indicating that the most sensitive life
stages were not selected and/or considered in the Agency's approach.
The EPA disagrees. Gestational exposure to perchlorate during
neurodevelopment is the most sensitive time period. The NRC concluded
that the population most sensitive to perchlorate exposure are ``the
fetuses of pregnant women who might have hypothyroidism or iodide
deficiency'' (p. 178, NRC 2005). In addition, there is clear evidence
that disrupted maternal thyroid hormone levels during gestation can
impact neurodevelopment later in life (Alexander et al., 2017; Costeira
et al., 2011; Endendijk et al., 2017; Ghassabian, Bongers-Schokking,
Henrichs, Jaddoe, & Visser, 2011; Glinoer & Delange, 2000; Glinoer &
Rovet, 2009; Gyllenberg et al., 2016; Henrichs et al., 2010; Korevaar
et al., 2016; Morreale de Escobar, Obreg[oacute]n, & Escobar del Rey,
2004; Noten et al., 2015; Pop et al., 2003, 1999; SAB for the U.S. EPA,
2013; Thompson et al., 2018; van Mil et al., 2012; Wang et al., 2016;
Zoeller & Rovet, 2004; Zoeller et al., 2007). The available data
demonstrate that the fetus of the first trimester pregnant mother, when
compared to other life-stages, experiences the greatest impact from the
same dose of perchlorate, which is described in detail in Section 6 of
the document ``Deriving a Maximum Contaminant Level Goal for
Perchlorate in Drinking Water'' (USEPA, 2019a). Some commenters
suggested that the bottle-fed infant is a more sensitive life-stage.
The EPA disagrees. As described in the January 2017 Peer Review Report
on the original Biologically Based Dose Response (BBDR) model, the
bottle-fed infant's thyroid hormone levels were not impacted by doses
of perchlorate up to 20 [micro]g/day (External Peer Reviewers for
USEPA, 2017). This lack of any impact is due primarily to the iodine in
the formula, which offsets the impact of perchlorate on the thyroid.
    The EPA received comments advocating for the use of the population-
based approach evaluating the shift in the proportion of a population
that would fall below a hypothyroxinemic cut point under a perchlorate
exposure scenario. The EPA chose to develop the MCLG using dose-
response functions from the epidemiological literature to estimate
neurodevelopmental impacts in the offspring of pregnant women exposed
to perchlorate. The EPA selected this proposed approach because it is
consistent with the SDWA's definition of a MCLG to avoid adverse health
effects and because it is most consistent with the SAB recommendations.
In addition, given that thyroid hormone levels vary by reference
population and that there is not a defined threshold for the
concentration of fT4 representing hypothyroxinemia makes the
population-based approach less desirable than the approach selected
(USEPA, 2018).
End Point Selection/Basis
    The EPA received comments regarding the magnitude of an IQ change
which should be used in deriving the MCLG. The EPA's proposed MCLG was
based upon avoiding a 2% change in IQ in the most sensitive life stage,
and the EPA also requested comment on alternative options for the MCLG
that would respectively avoid 1% or 3% change in IQ in the most
sensitive life stage. Many comments stated that the EPA should at most
consider a 1% IQ change. However, several commenters stated that a 3%
change is too small to have a meaningful impact and suggested that the
EPA consider a higher IQ percent change.
    The EPA uses a variety of science policy approaches to select
points of departure for developing regulatory values. For instance, in
noncancer risk assessment, the EPA often uses a percentage change in
value. When assessing toxicological data, a 10% extra risk (for
discrete data), or a 1 standard deviation (i.e., 15 IQ points) change
from the mean (for continuous data) is often used (USEPA, 2012). A
smaller response to inform a POD has been applied when using
epidemiological literature, because there is an inherently more direct
relationship between the study results and the exposure context and
health endpoint.
    Given the difficulty in identifying a response below which no
adverse impact occurs when considering a continuous outcome in the
human population, the EPA looked to its Benchmark Dose Guidance (2012)
for insight regarding a starting point. Specifically, ``[a] BMR of 1%
has typically been used for quantal human data from epidemiology
studies'' (p. 21, USEPA, 2012). For the specific context of setting an
MCLG for perchlorate, the EPA evaluated the level of perchlorate in
water associated with a 1% decrease, a 2% decrease, and a 3 percent
decrease in the mean population IQ (i.e., 1, 2 and 3 IQ points).
    In evaluating the frequency and level of occurrence of perchlorate
in drinking water, the EPA has found that perchlorate does not occur
with frequency even at the lowest alternative MCLG of 18 [micro]g/L,
which is based upon avoiding a 1% change in IQ in the most sensitive
life stage.
    The EPA received comments that the proposed MCLG did not
incorporate an adequate margin of safety to comply with the SDWA. The
EPA disagrees that it failed to use an adequate margin of safety. The
EPA's assessment focused upon the most sensitive subset of the
population, specifically offspring whose mothers had low (75 [micro]g/
day) iodine intake and were hypothyroxinemic (fT4 in the lowest 10th
percentile of the population). In addition, to account for
uncertainties and to ensure that the most sensitive subset of the
population is protected with an adequate margin of safety, a 3-fold
uncertainty factor was applied to the proposed MCLG calculation (USEPA,
2019a). More discussion on the uncertainty factor is presented below,
in the section entitled ``Consideration of Uncertainties.''
    The EPA received some comments stating that the selection of the
study for informing the relationship between maternal hormone levels
(fT4) and IQ was inadequately described. Other comments supported the
EPA's study selection. The EPA concludes that selection of the Korevaar
et al. (2016) study is appropriate because that study provides the most
robust data available with a clear measure of neurodevelopment that can
be expressed as a function of changing maternal fT4 exposure, which is
necessary to the development of the model.

BBDR and PBPK Models
    The EPA received comments indicating that the BBDR model was not
transparent, scientifically valid, or based on robust data. The EPA
disagrees. The model represents the best available peer reviewed
science and uses the best available data to inform a MCLG for
perchlorate. The EPA disagrees with the suggestion that there is a
significant lack of transparency with respect to the assumptions
related to the BBDR model. Appendix A of the EPA's Proposed MCLG
Approaches report outlines the justification for all assumptions used
in the development of the BBDR model (USEPA, 2019a). The EPA also
disagrees with the assertion that the BBDR model is far too uncertain
to be relied upon as the basis for the derivation of the RfD. The EPA
has used the best available science to calibrate the pharmacokinetic
aspects of the BBDR model. The development of the BBDR model was in
response to SAB recommendations, and a model was deemed to be a more
refined approach to estimating a dose-response relationship between
perchlorate exposure and maternal fT4 than anything that was available
in the current scientific literature. The EPA disputes the claim that
the BBDR model is not scientifically valid, as the Agency conducted a
peer review of the approach proposed and the reviewers concluded that
the approach was ``fit for purpose'' to inform a MCLG for perchlorate
(External Peer Reviewers for U.S. EPA, 2018, p. 2).
Consideration of Uncertainties
    The EPA received comments on the Agency's use of Uncertainty
factors (UFs); with most commenters suggesting that the EPA should
consider a higher UF for inter-individual variability. The EPA
thoroughly considered the application of UFs when deriving the RfDs and
followed guidance presented in ``A review of the reference dose and
reference concentration processes'' (USEPA, 2002). The EPA concluded
that the UFs are adequately justified, and subsequently no changes have
been made. Justification for each of the UFs can be found in Section 11
of the Agency's MCLG Derivation report (USEPA, 2019a).
    The EPA selected a UF of 3 for inter-individual variability,
because the Agency specifically modeled groups within the population
that are identified as likely to be at greater risk of the adverse
effects from perchlorate in drinking water (i.e., the fetus of the
iodide deficient pregnant mother). The EPA selected model parameters to
account for the most sensitive individuals in that group (i.e., muted
TSH feedback, low fT4 values, low-iodine intake). As discussed in the
MCLG Derivation report, the EPA has attempted to select the most
appropriate inputs to protect the most sensitive population with an
adequate margin of safety (USEPA, 2019a). The EPA has determined that
the selection of a UF of 3 for inter-individual variability is
justified. As described in the MCLG Derivation report, because the
output from the BBDR model is specific to the sensitive population, the
EPA concluded that the UF of 3 is appropriate. In regard to variation
in sensitivity among the members of the human population (i.e., inter-
individual variability), section <IP_ADDRESS> of the EPA guidance ``A review
of the reference dose and reference concentration process'' (USEPA,
2002) document states, ``In general, the Technical Panel reaffirms the
importance of this UF, recommending that reduction of the intraspecies
UF from a default of 10 be considered only if data are sufficiently
representative of the exposure/dose-response data for the most
susceptible subpopulation(s). Similar to the interspecies UF, the
intraspecies UF can be considered to consist of both a toxicokinetic
and toxicodynamic portion (i.e. 10[caret]0.5 each)'' (USEPA, 2002).
Given that the BBDR model significantly accounts for differences within
the human population, the full UF of 10 is not warranted.
    One commenter suggested using a UF greater than 1 to account for
the extrapolation of the lowest-observed adverse effect level (LOAEL)
to the no-observed-adverse-effect-level (NOAEL). LOAELs and NOAELs were
not identified or used by the EPA in its assessment because the Agency
employed a sophisticated BBDR modeling approach, which was coupled with
extrapolation to changes in IQ using linear regression, to determine a
POD that would not be expected to represent an adverse effect.
Therefore, a UF of 1 is appropriate. Other commenters suggested
incorporating UFs for database deficiencies. Based on the findings of
the NRC report, the EPA has previously concluded that this UF was not
needed for deficiencies in the perchlorate database (NRC, 2005; USEPA,
2005a). The EPA determined that a UF of 1 to account for database
deficiencies is still appropriate, given that the comprehensiveness of
the perchlorate database has only increased since 2005.
Health Advisory
    Several commenters suggest that the EPA should withdraw the 2011
determination to regulate perchlorate and instead issue an updated
health advisory for perchlorate. The EPA issued an interim health
advisory level for perchlorate in 2008. Health advisories provide
information on contaminants that can cause human health effects and are
known or anticipated to occur in drinking water. The EPA's health
advisories are non-enforceable and non-regulatory and provide technical
information to state agencies on health effects, analytical
methodologies, and treatment technologies associated with drinking
water contamination. State and local public health officials have the
discretion to use the perchlorate health advisory as they deem
necessary. The EPA will consider updating the 2008 perchlorate health
advisory in the future.

C. Occurrence Analysis

    The EPA received comments suggesting that the revised UCMR 1 data
did not provide an adequate estimate of the perchlorate occurrence in
drinking water systems. Some commenters indicated that the age of the
collected data rendered the occurrence analysis obsolete and
overestimated, because it no longer captures current lower
contamination conditions that have been achieved due to mitigation
measures taken in the Colorado River Basin. Other commenters criticized
the EPA for replacing UCMR 1 data for systems located in the States of
California and Massachusetts with more recent state compliance data for
perchlorate.
    The EPA recognizes that changes in perchlorate levels (increasing
or decreasing) may have occurred in water systems since the UCMR 1
samples were collected between 2001 to 2005. The EPA updated the UCMR 1
data set to improve its accuracy in representing the current conditions
for states that have enacted perchlorate regulations since the UCMR 1
monitoring was conducted. As outlined in the June 26, 2019 proposal,
the EPA updated occurrence data for California and Massachusetts with
current compliance data as reported by the states. Systems from these
two states that were sampled during the UCMR 1 and that had reported
perchlorate detections were updated with more recently measured values
taken from current compliance monitoring data from Consumer Confidence
Reports and state-level perchlorate compliance monitoring data

to match corresponding water systems and entry points.
    The EPA has determined that the updated UCMR 1 data are the best
available data collected in accordance with accepted methods on the
frequency and level of perchlorate occurrence in drinking water on a
national scale.

V. Conclusion

    With this withdrawal of the 2011 perchlorate regulatory
determination and final determination not to regulate perchlorate, the
EPA announces that there will be no NPDWR for perchlorate at this time.
The EPA could consider re-listing perchlorate on the CCL and could
proceed to regulation in the future if the occurrence or health risk
information changes. As with other unregulated contaminants, the EPA
will consider addressing limited instances of elevated levels of
perchlorate by working with the affected system and state, as
appropriate.

VI. References

Alexander, E.K., Pearce, E.N., Brent, G.A., Brown, R.S., Chen, H.,
Dosiou, C., & Sullivan, S. (2017). 2017 Guidelines of the American
Thyroid Association for the diagnosis and management of thyroid
disease during pregnancy and the postpartum. Thyroid, 27(3), 315-
389.
American Water Works Association (AWWA) 2008. National Cost
Implications of a Potential Perchlorate Regulation.
California Department of Public Health. (2007). State Adoption of a
Perchlorate Standard. Retrieved from https://www.waterboards.ca.gov/drinking_water/certlic/drinkingwater/documents/perchlorate/AdoptionMemotoWaterSystems-10-2007.pdf.
Carlisle, J.C., Dowling, K.C., Siegel, D.M., & Alexeeff, G.V.
(2009). A blood lead benchmark for assessing risks from childhood
lead exposure. Journal of Environmental Science and Health, 44(12),
1200-1208.
Costeira, M.J., Oliveira, P., Santos, N.C., Ares, S., S[aacute]enz-
Rico, B., de Escobar, G.M., & Palha, J.A. (2011). Psychomotor
development of children from an iodine-deficient region. Journal of
Pediatrics, 159(3), 447-453. https://doi.org/10.1016/j.jpeds.2011.02.034.
Endendijk, J.J., Wijnen, H.A., Pop, V.J., & van Baar, A.L. (2017).
Maternal thyroid hormone trajectories during pregnancy and child
behavioral problems. Hormones and Behavior, 94, 84-92.
External Peer Reviewers for U.S. EPA. (2017). External Peer Review
of EPA's Draft Biologically Based Dose-Response Model and Draft BBDR
Model Report for Perchlorate in Drinking Water.
External Peer Reviewers for U.S. EPA. (2018). External peer review
for U.S. EPA's proposed approaches to inform the derivation of a
maximum contaminant level goal for perchlorate in drinking water.
Ghassabian, A., Bongers-Schokking J.J., Henrichs, J., Jaddoe, V.W.,
& Visser, T.J. (2011). Maternal thyroid function during pregnancy
and behavioral problems in the offspring: The Generation R Study.
Pediatric Research, 69(5).
Glinoer, D., & Delange, F. (2000). The potential repercussions of
maternal, fetal, and neonatal hypothyroxinemia on the progeny.
Thyroid, 10(10), 871-887.
Glinoer, D., & Rovet, J. (2009). Gestational hypothyroxinemia and
the beneficial effects of early dietary iodine fortification.
Thyroid, 19(5), 431-434.
Greer, M.A., Goodman, G., Pleus, R.C., Greer, S.E. (2002). Health
effects assessment for environmental perchlorate contamination: The
dose response for inhibition of thyroidal radioiodine uptake in
humans. Environmental Health Perspectives. 110(9), 927-937.
Gyllenberg, D., Sourander, A., Surcel, H.M., Hinkka-Yli-Salomaki,
S., McKeague, I.W., & Brown, A.S. (2016). Hypothyroxinemia During
Gestation and Offspring Schizophrenia in a National Birth Cohort.
Biol Psychiatry, 79(12), 962-970. doi: 10.1016/
j.biopsych.2015.06.014
Henrichs, J., Bongers-Schokking, J.J., Schenk, J.J., Ghassabian, A.,
Schmidt, H.G., Visser, T.J., . . . Tiemeier, H. (2010). Maternal
thyroid function during early pregnancy and cognitive functioning in
early childhood: The generation R study. Journal of Clinical
Endocrinology and Metabolism, 95(9), 4227-4234. doi:10.1210/jc.2010-
0415.
Korevaar, T.I.M., Muetzel, R., Medici, M., Chaker, L., Jaddoe, V.W.,
de Rijke, Y.B., Steegers, E.A., Visser, T.J., White, T., Tiemeier,
H., Peeters, R.P. (2016). Association of maternal thyroid function
during early pregnancy with offspring IQ and brain morphology in
childhood: a population-based prospective cohort study. The Lancet
Diabetes & Endocrinology, 4(1), 35-43. https://doi.org/10.1016/S2213-8587(15)00327-7.
Luis et al. 2019. Luis, S.J., E.A. Miesner, C.L. Enslin, and K.
Heidecorn. 2019. Review of perchlorate occurrence in large public
drinking water systems in the United States of America. Water Supply
19(3): 681-694. Retrieved from https://pdfs.semanticscholar.org/c508/2c66bf61d7e41c700912413e66130c43aaed.pdf.
Lumen, A., Mattie, D.R., & Fisher, J.W. (2013). Evaluation of
perturbations in serum thyroid hormones during human pregnancy due
to dietary iodide and perchlorate exposure using a biologically
based dose-response model. Toxicological Sciences, 133(2), 320-341.
https://doi.org/10.1093/toxsci/kft078.
MassDEP. (2006). Letter to Public Water Suppliers concerning new
perchlorate regulations. Retrieved from https://www.mass.gov/lists/perchlorate-background-information-and-standards#perchlorate---final-standards-.
Morreale de Escobar, G., Obreg[oacute]n, M.J., & Escobar del Rey, F.
(2004). Role of thyroid hormone during early brain development.
European Journal of Endocrinology, 151(Suppl 3), U25-U37.
doi:10.1530/eje.0.151U025
National Research Council (NRC). (2005). Health Implications of
Perchlorate Ingestion. Washington, DC: National Academies Press.
Noten, A.M., Loomans, E.M., Vrijkotte, T.G., van de Ven, P.M., van
Trotsenburg, A.S., Rotteveel, J., van Eijsden, M., & Finken, M.J.
(2015). Maternal hypothyroxinaemia in early pregnancy and school
performance in 5-year-old offspring. Eur J Endocrinol, 173(5), 563-
571. doi: 10.1530/EJE-15-0397.
Pop, V.J., Brouwers, E.P., Vader, H.L., Vulsma, T., van Baar, A.L.,
& de Vijlder, J.J. (2003). Maternal hypothyroxinemia during early
pregnancy and subsequent child development: a 3-year follow-up
study. Clinical Endocrinology, 59, 282-288.
Pop, V.J., Kuijpens, J.L., van Baar, A.L., Verkerk, G., van Son,
M.M., de Vijlder, J.J., Vulsma, T., Wiersinga, W.M., Drexhage, H.A.,
Vader, H.L. (1999). Low maternal free thyroxine concentrations
during early pregnancy are associated with impaired psychomotor
development in infancy. Clinical Endocrinology, 50, 149-155.
SAB for the U.S. EPA. (2013). SAB Advice on Approaches to Derive a
Maximum Contaminant Level Goal for Perchlorate. EPA-SAB-13-004.
Thompson, W., Russell, G., Baragwanath, G., Matthews, J., Vaidya,
B., & Thompson-Coon, J. (2018). Maternal thyroid hormone
insufficiency during pregnancy and risk of neurodevelopmental
disorders in offspring: A systematic review and meta-analysis.
Clinical Endocrinology.
USEPA. (1999). Revisions to the Unregulated Contaminant Monitoring
Regulation for Public Water Systems; Final Rule. Federal Register
Notice. 64 FR, Page 50556. (September 17, 1999).
USEPA. (2002). A review of the reference dose and reference
concentration process. EPA-630-P-02-002F.
USEPA. (2003). Contaminant Candidate List Regulatory Determination
Support Document for Aldrin and Dieldrin. EPA-815-R-03-010. https://www.epa.gov/sites/production/files/2014-09/documents/support_cc1_aldrin-dieldrin_ccl_regdet.pdf.
USEPA. (2005a). Integrated Risk Information System (IRIS) Chemical
Assessment Summary: Perchlorate (ClO4-) and Perchlorate Salts. USEPA
National Center for Environmental Assessment.
USEPA. (2008a). Drinking water: Preliminary regulatory determination
on perchlorate. Federal Register Notice. 73 FR, Page 60262. (October
10, 2008).
USEPA. (2008b). Regulatory Determinations Support Document for
Selected Contaminants from the Second Drinking Water Contaminant
Candidate List (CCL2). EPA-815-R-03-010. https://www.epa.gov/sites/production/files/2014-09/documents/chapter_4_dcpa_mono-_and_di-acid_degradates.pdf.
USEPA. (2009a). Drinking Water: Perchlorate Supplemental Request for
Comments.

Federal Register Notice. 74 FR, Page 41883. (August 19, 2009).
USEPA. (2009b). Inhibition of the Sodium-Iodide Symporter By
Perchlorate: An Evaluation of Lifestage Sensitivity Using
Physiologically Based Pharmacokinetic (PBPK) Modeling (Final Report)
(EPA/600/R-08/106A). Washington, DC.
USEPA. (2011). Drinking Water: Regulatory Determination on
Perchlorate. Federal Register Notice. 76 FR, Page 7762. (February
11, 2011).
USEPA. (2012). Benchmark Dose Technical Guidance. EPA 100-R-12-001.
USEPA. (2018). Proposed Approaches to Inform the Derivation of a
Maximum Contaminant Level Goal for Perchlorate in Drinking Water.
EPA 816-R-19-008.
USEPA. (2019a). Technical Support Document: Deriving a Maximum
Contaminant Level Goal for Perchlorate in Drinking Water. EPA 816-R-
19-007.
USEPA. (2019b). Perchlorate Occurrence and Monitoring Report. EPA
816-R-19-003.
USEPA. (2019c). Health Risk Reduction and Cost Analysis of the
Proposed Perchlorate National Primary Drinking Water Regulation. EPA
816-R-19-004.
USEPA. (2020a). Note to File--Perchlorate Water Systems Contact
Records. Docket Number #EPA-HQ-OW-2018-0780-1688. https://www.regulations.gov/document?D=EPA-HQ-OW-2018-0780-1688.
USEPA. (2020b). Perchlorate Recommendations for Public Water
Systems. EPA 815-F-20-001.
USEPA. (2020c). Comment Response Document for the 2020 Regulatory
Determination for Perchlorate. EPA 815-R-20-001.
van Mil, N.H., Steegers-Theunissen, R.P.M., Bongers-Schokking, J.J.,
El Marroun, H., Ghassabian, A., Hofman, A., Jaddoe, V.W.V.,
Verhulst, F.C., de Rijke, Y.B., Steegers, E.A.P., & Tiemeier, H.
(2012). Maternal hypothryoxinemia during pregnancy and growth of the
fetal and infant head. Reproductive Sciences, 19(12), 1315-1322.
doi: 10.1177/1933719112450338.
Wang, P., Gao, J., Zhao, S., Guo, Y., Wang, Z., & Qi, F. (2016).
Maternal thyroxine levels during pregnancy and outcomes of cognitive
development in children. Molecular Neurobiology, 53(4), 2241-2248.
doi:10.1007/s12035-015-9189-z.
Zoeller, R.T., & Rovet, J. (2004). Timing of thyroid hormone action
in the developing brain: clinical observations and experimental
findings. Journal of neuroendocrinology, 16(10), 809-818.
Zoeller, R.T., Tan, S.W., & Tyl, R.W. (2007). General background on
the hypothalamic-pituitary-thyroid (HPT) axis. Critical reviews in
toxicology, 37(1-2), 11-53.

List of Subjects

40 CFR Part 141

    Environmental protection, Administrative practice and procedure,
Chemicals, Indians--lands, Intergovernmental relations, Radiation
protection, Reporting and recordkeeping requirements, Water supply.

40 CFR Part 142

    Environmental protection, Administrative practice and procedure,
Chemicals, Indians--lands, Radiation protection, Reporting and
recordkeeping requirements, Water supply.

Andrew Wheeler,
Administrator.
[FR Doc. 2020-13462 Filed 7-20-20; 8:45 am]
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[Federal Register: October 17, 2008 (Volume 73, Number 202)]
[Proposed Rules]
[Page 61753-61754]
[DOCID:fr17oc08-22]

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SECURITIES AND EXCHANGE COMMISSION

17 CFR Parts 230 and 240

[Release Nos. 33-8976, 34-58769; File No. S7-14-08]
RIN 3235-AK16

Indexed Annuities and Certain Other Insurance Contracts

AGENCY: Securities and Exchange Commission.

ACTION: Proposed rule; reopening of comment period.

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SUMMARY: The Securities and Exchange Commission is reopening the period
for public comment on new rules that it originally proposed in
Securities Act Release No. 8933 (June 25, 2008) [73 FR 37752 (July 1,
2008)]. The Commission proposed a rule that would, if adopted, define
the terms ``annuity contract'' and ``optional annuity contract'' under
the Securities Act of 1933. The proposed rule is intended to clarify
the status under the federal securities laws of indexed annuities. The
Commission also proposed to exempt insurance companies from filing
reports under the Securities Exchange Act of 1934 with respect to
indexed annuities and other securities that are registered under the
Securities Act, provided that the securities are regulated under state
insurance law, the issuing insurance company and its financial
condition are subject to supervision and examination by a state
insurance regulator, and the securities are not publicly traded.

DATES: Comments should be received on or before November 17, 2008.

ADDRESSES: Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/proposed.shtml);
     Send an e-mail to<EMAIL_ADDRESS>Please include
File No. S7-14-08 on the subject line; or
     Use the Federal eRulemaking Portal (http://
www.regulations.gov). Follow the instructions for submitting comments.

Paper Comments

     Send paper comments in triplicate to Florence E. Harmon,
Acting Secretary, Securities and Exchange Commission, 100 F Street,
NE., Washington, DC 20549-1090.

All submissions should refer to File No. S7-14-08. This file number
should be included on the subject line if e-mail is used. To help us
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). Comments are also available for
public inspection and copying in the Commission's Public Reference
Room, 100 F Street, NE., Washington, DC 20549, on official business
days between the hours of 10 a.m. and 3 p.m. All comments received will
be posted without change; we do not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly.

FOR FURTHER INFORMATION CONTACT: Keith E. Carpenter, Senior Special
Counsel, Office of Disclosure and Insurance Product Regulation,
Division of Investment Management, at<PHONE_NUMBER>, Securities and
Exchange Commission, 100 F Street, NE., Washington, DC 20549-5720.

SUPPLEMENTARY INFORMATION: The Securities and Exchange Commission
(``Commission'') is reopening the period for public comment on a
proposed rule that would define the terms ``annuity contract'' and
``optional annuity contract'' under the Securities Act of 1933. The
proposed rule is intended to clarify the status under the federal
securities laws of indexed annuities, under which payments to the
purchaser are dependent on the performance of a securities index. The
Commission is also reopening the period for public comment on a
proposed rule that would, if adopted, exempt insurance companies from
filing reports under the Securities Exchange Act of 1934 with respect
to indexed annuities and other securities that are registered under the
Securities Act, provided that the securities are regulated under state
insurance law, the issuing insurance company and its financial
condition are subject to supervision and examination by a state
insurance regulator, and the securities are not publicly traded. The
rules were proposed on June 25, 2008,\1\

and the comment period initially closed on September 10, 2008.
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    \1\ Indexed Annuities and Certain Other Insurance Contracts,
Securities Act Release No. 8933 (June 25, 2008) [73 FR 37752 (July
1, 2008)].
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    The Commission has received numerous letters, including from state
insurance commissioners, members of Congress, and others, requesting
that the comment period be extended.\2\ In general, these commenters
indicated that an extension would help them analyze the proposal and
prepare meaningful comments. In order to provide additional time for
the public to thoroughly consider the proposal, and in view of the
significant continuing public interest in the proposal, the Commission
believes that it is appropriate to reopen the comment period.
Accordingly, we will reopen the comment period for an additional 30
days.
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    \2\ Comments on the proposal are available at http://
www.sec.gov/comments/s7-14-08/s71408.shtml.

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    By the Commission.

    Dated: October 10, 2008.
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-24625 Filed 10-16-08; 8:45 am]

BILLING CODE 8011-01-P