[Federal Register Volume 83, Number 94 (Tuesday, May 15, 2018)]
[Notices]
[Pages 22543-22546]
[FR Doc No: 2018-10255]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83195; File No. SR-Phlx-2018-35]

Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Relating to the
Zero-Bid Option Series

May 9, 2018.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on April 27, 2018, Nasdaq PHLX LLC (``Phlx'' or ``Exchange'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II below, which Items
have been prepared by the Exchange. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to relocate the rule text relating to zero-
bid option series currently located at Rule 1080(i) to new Rule 1035
and amend the current rule text to describe the current operation of a
zero bid series.
    The text of the proposed rule change is available on the Exchange's
website at http://nasdaqphlx.cchwallstreet.com/, at the principal
office of the Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to relocate the zero-bid options series rule
text currently located in Rule 1080(i) to Rule 1035, which is currently
reserved. The Exchange desires to rename Rule 1035 as ``Zero-Bid Option
Series.'' The Exchange believes it will make it easier to locate this
rule text in a separate rule. The Exchange also proposes to amend the
current rule text which does not accurately describe the operation of
the System.
    Current Rule 1080(i) states that the System \3\ will convert market
orders to sell a particular option series to limit orders to sell with
a limit price of the minimum trading increment applicable to such
series that are received when, for options listed only on the Exchange,
(1) the Exchange's disseminated bid price in such option series is
zero; \4\ and (2) the Exchange's disseminated quotation in the series
has a bid/ask differential less than or equal to $0.25. For options
that are listed on multiple exchanges: (1) The disseminated NBBO
includes a bid price of zero in the series; and (2) the Exchange's
disseminated quotation in the series has a bid/ask differential less
than or equal to $0.25. Such orders will be automatically placed on the
limit order book in price-time priority.
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    \3\ The current rule refers to the ``AUTOM System''. The term
``AUTOM'' is outdated and is being removed from the rule.
    \4\ A zero bid refers to an option where the bid price is $0.00.
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Background
    The Exchange adopted Rule 1080(i) in 2005 to permit Phlx's former
order entry system, AUTOM, to automatically

convert market orders to sell when the bid price is zero to limit
orders to sell with a limit price of $.05.\5\ The Adopting Filing also
noted that market orders to sell, as well as limit orders to sell,
would be placed on the limit order book in price-time priority in an
effort to reduce the manual handling of such orders and automate the
processing of market orders to sell when the Exchange's bid price is
zero.\6\ The Adopting Filing noted that the provision established the
time priority of market orders to sell when the bid price in the
particular series is zero (and thus no execution could occur). The
Adopting Filing provided that in the event that the bid price in the
particular series becomes $.05 or greater, thus establishing a bid
price that makes the booked limit orders to sell marketable, such
orders to sell at the $.05 limit price or better would be executed in
the order in which they were received (i.e., price-time priority).
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    \5\ See Securities Exchange Act Release No. 51352 (March 9,
2005), 70 FR 12935 (March 16, 2005) (SR-Phlx-2005-03) (``Adopting
Filing'').
    \6\ Former Phlx Rule 1080(c)(iv)(G) provided that sell orders
received in a particular series in which the disseminated bid price
is zero were handled manually by the specialist. The Adopting Filing
was intended to eliminate the manual handling of orders by
automating this process.
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    Thereafter, in 2006, Phlx amended Rule 1080(i) to limit the
circumstances in which the Exchange's trading system, as it existed in
2006, would convert a market order to sell into a limit order to sell a
zero-bid option at $ 0.05.\7\ Since the Adopting Filing, the Exchange
concluded that not all options with a zero bid are the same. With the
adoption of zero bid, the Exchange treated options that have an offer
price of a few dollars on the Exchange, as well as options that are not
``zero-bid'' on other exchanges, as zero-bid options. The Subsequent
Filing outlined additional factors that the Exchange would consider
when determining whether an option is a zero-bid option for purposes of
Rule 1080(i), including the Exchange's bid/ask differential and the
NBBO. The Exchange noted in the Subsequent Filing that the new criteria
would clarify when an option is truly a zero-bid option for which
orders in that option should be subject to automated handling versus
orders for non-zero-bid options that would require manual handling. The
Exchange also noted in the Subsequent Filing that taking the bid/ask
differential into consideration would help limit the conversion of
market orders to sell to only those for true zero-bid options, because
options with an offer higher than $0.25 are likely not to be worthless
options. Similarly, for options traded on more than one exchange, the
NBBO is relevant for validating whether an option truly is a zero-bid
option.
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    \7\ See Securities Exchange Act Release No. 53822 (May 17,
2006), 71 FR 29701 (May 23, 2006) (SR-Phlx-2006-32) (``Subsequent
Filing'').
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    The Exchange notes that the System checked the bid/ask differential
less than or equal to $0.25 as mentioned in 1080(i)(A)(2) and
1080(i)(B)(2) \8\ until such time as the Exchange eliminated Market
Exhaust \9\ in connection with other enhancements to the Phlx XL
automated trading system, which was adopted in 2008. The Exchange
discontinued Market Exhaust in 2011.\10\ Once Market Exhaust was
discontinued on the Exchange, Phlx noted that orders received, when
there are no participant quotations in the Exchange's disseminated
market for the affected series, would be handled in accordance with
existing Exchange rules regarding electronic order entry, execution,
routing, trade reporting, and firm quotations, which included Rule
1080(i) regarding zero bid. At that time, Phlx also amended Rule
1082(a)(ii)(B)(4) by adopting Rule 1082(a)(ii)(B)(4)(a), which provided
that, if there are no offers both on the Exchange and on away markets
in the affected series, market orders to buy in the affected series
would be cancelled immediately, and an electronic report of such
cancellation will be transmitted to the sender. The Exchange would
cancel such a market order because in this rare circumstance there
would be no disseminated market on the Exchange and no disseminated
market on any away market against which such market order could be
routed and executed, and there would be no price at which the Exchange
could place such a market order on the Exchange's limit order book.\11\
Pursuant to the 2012 rule change which eliminated Market Exhaust
functionality, Rule 1082(a)(ii)(B)(4)(c) addressed the System's
functionality in the circumstance where there are no bids or a zero
priced bid on the Exchange and there are no bids on away markets in the
affected series. In such a circumstance, the Exchange would disseminate
a bid price of zero, and market orders to sell will be handled pursuant
to Exchange Rule 1080(i).
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    \8\ The Exchange notes that it provided notice to members of the
manner in which the functionality operated. See Options Trader Alert
2015-38.
    \9\ PHLX XL, the Exchange's INET proprietary trading system
which was established in 2008, initiated Market Exhaust when there
were no PHLX XL participant quotations in the Exchange's
disseminated market for a particular series and an initiating order
in the series is received. The system initiated a ``Market Exhaust
Auction'' for the initiating order, and then went through a series
of steps depending on the market conditions present for the affected
series, including a broadcast to participants, execution of all or
part of the initiating order, routing the initiating order (or
remaining contracts following execution) to better priced away
markets, and a ``Provisional Auction,'' after which any unexecuted
contracts from the initiating order was subject to, and not
executable outside of, an Auction Quote Range. See Securities
Exchange Act Release No. 66087 (January 3, 2012), 77 FR 1095
(January 9, 2012) (SR-Phlx-2011-182).
    \10\ The Exchange determined that Market Exhaust only affected a
small number of orders, given the specific set of circumstances that
must occur in order for Market Exhaust to be initiated. See
Securities Exchange Act Release No. 66087 (January 3, 2012), 77 FR
1095 (January 9, 2012) (SR-Phlx-2011-182).
    \11\ See Securities Exchange Act Release No. 66087 (January 3,
2012), 77 FR 1095 (January 9, 2012) (SR-Phlx-2011-182).
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    At this time, the Exchange proposes to remove the bid/ask
differential and NBBO checks mentioned in 1080(i)(A)(2) and
1080(i)(B)(2) and instead, where the bid price for any options series
is $0.00, convert market orders to sell to limit orders regardless of
the bid/ask differential and NBBO. The Exchange no longer manually
handles orders. The Exchange's System automatically handles all zero-
bid options. The Exchange believes that all zero bid options should be
uniformly treated in the same manner and have an equal opportunity to
execute on Phlx. While options with an offer which is lower than $0.25
continue to be likely to be worthless options, the Exchange does not
believe those zero-bid options entered by market participants should be
treated in a disparate matter as compared to those zero bid options
with an offer higher than $0.25. Further, where the disseminated NBBO
includes a bid price of zero the Exchange proposes to similarly convert
these market orders to limit orders as proposed. The Exchange intends
to accept and convert market orders to sell allowing them an equal
opportunity to trade if interest should arrive in the case of a no bid
option. The Exchange notes that the orders would rest on the Order Book
at the minimum price increment. The Exchange proposes to amend the rule
to state, similar to Nasdaq ISE LLC's (``ISE'') Rule 713, ``In the case
where the bid price for any options series is $0.00, a market order
accepted into the System to sell that series shall be considered a
limit order to sell at a price equal to the minimum trading increment
as defined in Rule 1034.'' Phlx is specifically utilizing the words
``accepted into the System'' to account for market orders that may not
be accepted into the System due to Limit Up-Limit Down restrictions
which may prevent the market order from being accepted. The Limit Up-
Limit Down requirements must be met first before

the proposed rule would apply. Only after acceptance into the System
will market orders be treated as a sell limit order at a price equal to
the minimum trading increment. Further, the Exchange proposes to
continue to provide that orders will be automatically placed on the
limit order book in price-time priority, but proposes to restate this
sentence for clarity, to make clear that ``Orders will be placed on the
limit order book in the order in which they were received by the
System.'' \12\ The Exchange proposes to note that with respect to
market orders to sell in zero bid options which are submitted prior to
the Opening Process and persist after the Opening Process, those orders
are posted at a price equal to the minimum trading increment as defined
in Rule 1034.\13\ The Exchange notes that it has posted market orders
to sell in zero bid options which are submitted prior to the Opening
Process and persist after the Opening Process in this fashion since the
Exchange introduced the Opening Process. This detail was not included
in the rule. The Exchange proposes to add this detail to provide market
participants with greater insight into the handling of orders where
there is a zero bid. The Exchange believes that this proposed amendment
will accurately describe the manner in which a zero-bid options series
operates within the System both before and after the Opening
Process.\14\
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    \12\ The time of receipt for an order is the time such message
is processed by the System.
    \13\ Phlx Rule 1034, entitled ``Minimum Increments'' provides
for the minimum increments of trading.
    \14\ The Exchange's Opening Process is described in Rule 1017.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\15\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\16\ in particular, in that it is designed to
promote just and equitable principles of trade and to protect investors
and the public interest by amending the text of zero-bid options series
to accurately describe the manner in which the System handles these
types of orders.
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    \15\ 15 U.S.C. 78f(b).
    \16\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that eliminating the System check for bid/ask
differentials less than or equal to $0.25 and NBBO as mentioned in
1080(i)(A)(2) and 1080(i)(B)(2), is consistent with the Act because the
Exchange is treating all market orders to sell in zero bid options,
regardless of the bid/ask differential, in the same fashion by
converting all those orders, provided that the Exchange's disseminated
bid price in such option is zero for an option listed only on the
Exchange or, for an option listed on multiple exchanges and the
disseminated NBBO includes a bid price of zero in the series. The
Exchange no longer handles orders manually. All orders are
automatically handled by the Exchange's System. The proposed Phlx rule
text proposes to continue to provide that such orders will be
automatically placed on the limit order book in price-time priority but
restates this language to make clear that the market orders to sell in
zero bid options will be placed on the limit order book in the order in
which they were received by the System. While the Exchange notes that
offers higher than $0.25 are likely not to be worthless options,
nonetheless the Exchange would permit the order to rest on the Order
Book at the minimum price increment and permit that market order to
have the same opportunities for execution as offers lower than $0.25.
The Exchange desires to prevent members from submitting market orders
to sell in no bid series, which would execute at a price of $0.00. The
Exchange believes that the proposed rule will achieve this objective
and continue to permit the Exchange to execute orders within its System
at prices which reflect some value. The Exchange believes that its
proposal is consistent with the Act because it is in the interest of
market participants to have these order executed regardless of the bid/
ask differential or NBBO, provided that the Exchange's disseminated bid
price in such option is zero for any option, regardless of where the
option is listed.
    The Exchange's proposal to add rule text regarding market orders to
sell in zero bid options submitted prior to the Opening Process and
persisting after the Opening Process is consistent with the Act because
it provides more transparency as to the operation of this rule and as
to how those market orders to sell in zero bid options will be handled
by the System. Further, the Exchange believes that memorializing its
current practice within the rule text will bring more clarity to the
manner in which the zero bid rule operates to the benefits of all
market participants.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange believes that the
proposed amendments do not impose an undue burden on competition
because the proposed rule change will continue to apply uniformly for
all market participants who enter market orders to sell into the System
when there is a zero-bid.
    Sell market orders in zero bid options will continue to be placed
on the limit order book in price-time priority. The Exchange does not
believe that no longer considering the bid/ask differential and the
NBBO when determining when to convert sell market orders in zero bid
options to limit orders and instead convert all sell market orders in
zero bid options will impose an undue burden on competition because the
Exchange will treat all sell market orders in zero bid options in a
uniform fashion. The proposed rule will permit market orders to sell in
zero bid options to have the same opportunities for execution as offers
with lower than $0.25 and regardless of the NBBO. The Exchange's
proposal to add rule text regarding market orders to sell submitted
prior to the Opening Process and persisting after the Opening Process
does not impose an undue burden on competition, rather this proposal
provides more transparency as to the operation of this rule and as to
how those market orders to sell in zero bid options will be handled by
the System.

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

    No written comments were either solicited or received.

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

    Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) Impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \17\ and Rule 19b-
4(f)(6) thereunder.\18\
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    \17\ 15 U.S.C. 78s(b)(3)(A).
    \18\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the

Act \19\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \20\ permits the
Commission to designate a shorter time if such action is consistent
with the protection of investors and the public interest. The Exchange
has requested that the Commission waive the 30-day operative delay so
that the proposed rule change may become operative upon filing. The
Exchange states that waiver of the operative delay would allow the
Exchange to update its rules to immediately reflect the correct
operation of zero-bid series on Phlx. Therefore, the Commission
believes that waiver of the 30-day operative delay is consistent with
the protection of investors and the public interest. Accordingly, the
Commission hereby waives the operative delay and designates the
proposed rule change operative upon filing.\21\
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    \19\ 17 CFR 240.19b-4(f)(6).
    \20\ 17 CFR 240.19b-4(f)(6)(iii).
    \21\ For purposes only of waiving the 30-day operative delay,
the Commission also has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File Number SR-Phlx-2018-35 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-Phlx-2018-35. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-Phlx-2018-35, and should be submitted on
or before June 5, 2018.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\22\
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    \22\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-10255 Filed 5-14-18; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 88, Number 26 (Wednesday, February 8, 2023)]
[Rules and Regulations]
[Pages 8233-8236]
[FR Doc No: 2023-02536]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 180

[EPA-HQ-OPP-2021-0396; FRL-10572-01-OCSPP]

Peptide Derived From Harpin Protein; Exemption From the
Requirement of a Tolerance

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: This regulation establishes an exemption from the requirement
of a tolerance for residues of Peptide Derived from Harpin Protein
(PDHP) 25279 in or on all food commodities when used in accordance with
label directions and good agricultural practices. Plant Health Care
Inc., submitted a petition to EPA under the Federal Food, Drug, and
Cosmetic Act (FFDCA), requesting an exemption from the requirement of a
tolerance. This regulation eliminates the need to establish a maximum
permissible level for residues of PDHP 25279 under FFDCA when used in
accordance with this exemption.

DATES: This regulation is effective February 8, 2023. Objections and
requests for hearings must be received on or before April 10, 2023 and
must be filed in accordance with the instructions provided in 40 CFR
part 178 (see also Unit I.C. of the SUPPLEMENTARY INFORMATION).

ADDRESSES: The docket for this action, identified by docket
identification (ID) number EPA-HQ-OPP-2021-0396, is available at
https://www.regulations.gov or at the Office of Pesticide Programs
Regulatory Public Docket (OPP Docket) in the Environmental Protection
Agency

Docket Center (EPA/DC), West William Jefferson Clinton Bldg., Rm. 3334,
1301 Constitution Ave. NW, Washington, DC 20004. The Public Reading
Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday,
excluding legal holidays. The telephone number for the Public Reading
Room and OPP Docket is<PHONE_NUMBER>. For the latest status
information on EPA/DC services, docket access, visit https://www.epa.gov/dockets.

FOR FURTHER INFORMATION CONTACT: Charles Smith, Biopesticides and
Pollution Prevention Division (7511M), Office of Pesticide Programs,
Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington,
DC 20460-0001; main telephone number:<PHONE_NUMBER>; email address:
[email protected].

SUPPLEMENTARY INFORMATION:

I. General Information

A. Does this action apply to me?

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

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

    You may access a frequently updated electronic version of 40 CFR
part 180 through the Office of the Federal Register's e-CFR site at
https://www.ecfr.gov/current/title-40.

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

    Under FFDCA section 408(g), 21 U.S.C. 346a(g), any person may file
an objection to any aspect of this regulation and may also request a
hearing on those objections. You must file your objection or request a
hearing on this regulation in accordance with the instructions provided
in 40 CFR part 178. To ensure proper receipt by EPA, you must identify
docket ID number EPA-HQ-OPP-2021-0396 in the subject line on the first
page of your submission. All objections and requests for a hearing must
be in writing and must be received by the Hearing Clerk on or before
April 10, 2023. Addresses for mail and hand delivery of objections and
hearing requests are provided in 40 CFR 178.25(b), although EPA
strongly encourages those interested in submitting objections or a
hearing request to submit objections and hearing requests
electronically. See Order Urging Electronic Service and Filing (April
10, 2020), https://www.epa.gov/sites//default/files/2020-05/documents/2020-04-10_-_order_urging_electronic_service_and_filing.pdf. At this
time, because of the COVID-19 pandemic, the judges and staff of the
Office of Administrative Law Judges are working remotely and not able
to accept filings or correspondence by courier, personal delivery, or
commercial delivery, and the ability to receive filings or
correspondence by U.S. Mail is similarly limited. When submitting
documents to the U.S. EPA Office of Administrative Law Judges (OALJ), a
person should utilize the OALJ e-filing system at https://yosemite.epa.gov/oa/eab/eab-alj_upload.nsf.
    Although EPA's regulations require submission via U.S. Mail or hand
delivery, EPA intends to treat submissions filed via electronic means
as properly filed submissions during this time that the Agency
continues to maximize telework due to the pandemic; therefore, EPA
believes the preference for submission via electronic means will not be
prejudicial. If it is impossible for a person to submit documents
electronically or receive service electronically, e.g., the person does
not have any access to a computer, the person shall so advise OALJ by
contacting the Hearing Clerk at<PHONE_NUMBER>. If a person is without
access to a computer and must file documents by U.S. Mail, the person
shall notify the Hearing Clerk every time it files a document in such a
manner. The address for mailing documents is U.S. Environmental
Protection Agency, Office of Administrative Law Judges, Mail Code
1900R, 1200 Pennsylvania Ave. NW, Washington, DC 20460.
    In addition to filing an objection or hearing request with the
Hearing Clerk as described in 40 CFR part 178, please submit a copy of
the filing (excluding any Confidential Business Information (CBI)) for
inclusion in the public docket. Information not marked confidential
pursuant to 40 CFR part 2 may be disclosed publicly by EPA without
prior notice. Submit the non-CBI copy of your objection or hearing
request, identified by docket ID number EPA-HQ-OPP-2021-0396, by one of
the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov.
Follow the online instructions for submitting comments. Do not submit
electronically any information you consider to be CBI or other
information whose disclosure is restricted by statute.
     Mail: OPP Docket, Environmental Protection Agency Docket
Center (EPA/DC), (28221T), 1200 Pennsylvania Ave., NW, Washington, DC
20460-0001.
     Hand Delivery: To make special arrangements for hand
delivery or delivery of boxed information, please follow the
instructions at https://www.epa.gov/ets/send-comments-epa-dockets.
    Additional instructions on commenting or visiting the docket, along
with more information about dockets generally, is available at https://www.epa.gov/dockets.

II. Background

    In the Federal Register of June 17, 2022 (87 FR 36438) (FRL-9929-
01), EPA issued a notice pursuant to FFDCA section 408(d)(3), 21 U.S.C.
346a(d)(3), announcing the filing of a pesticide tolerance exemption
petition (PP 1F8901) by Plant Health Care Inc., 2626 Glenwood Ave.,
Suite 350, Raleigh, NC 27608. The petition requested that 40 CFR part
180 be amended by establishing an exemption from the requirement of a
tolerance for residues of fungicide PDHP 25279 in or on growing crops
or seeds. That notice referenced a summary of the petition prepared by
the petitioner Plant Health Care Inc., and available in the docket via
https://www.regulations.gov. EPA received one comment on the notice of
filing. EPA's response to this comment is discussed in Unit III.C.

III. Final Rule

A. EPA's Safety Determination

    Section 408(c)(2)(A)(i) of FFDCA allows EPA to establish an
exemption from the requirement of a tolerance (the legal limit for a
pesticide chemical residue in or on a food) only if EPA determines that
the exemption is ``safe.'' Section 408(c)(2)(A)(ii) of FFDCA defines
``safe'' to mean that ``there is a reasonable certainty that no harm
will result from aggregate exposure to the pesticide chemical residue,
including all anticipated dietary exposures and all other exposures for
which there is reliable information.'' This includes exposure through
drinking water and in residential settings but does not include
occupational exposure. Pursuant to FFDCA section 408(c)(2)(B), in
establishing or maintaining in effect an exemption from the requirement
of a

tolerance, EPA must take into account the factors set forth in FFDCA
section 408(b)(2)(C), which require EPA to give special consideration
to exposure of infants and children to the pesticide chemical residue
in establishing a tolerance or tolerance exemption and to ``ensure that
there is a reasonable certainty that no harm will result to infants and
children from aggregate exposure to the pesticide chemical residue. . .
.'' Additionally, FFDCA section 408(b)(2)(D) requires that EPA consider
``available information concerning the cumulative effects of [a
particular pesticide's] . . . residues and other substances that have a
common mechanism of toxicity.''
    EPA evaluated the available toxicological and exposure data on PDHP
25279 and considered their validity, completeness, and reliability, as
well as the relationship of this information to human risk. A full
explanation of the data upon which EPA relied and its risk assessment
based on those data can be found within the document entitled ``Human
Health Risk Assessment, Review of Product Characterization and
Manufacturing Processes of the New End-Use Product PHC 25279 Containing
the New Active Ingredient Harpin Protein PDHP 25279. Data was Provided
in Support of a FIFRA Section 3 Registration and Establishment of a
Permanent Tolerance Exemption'' (Human Health Risk Assessment). This
document, as well as other relevant information, is available in the
docket for this action as described under ADDRESSES.
    Available data have demonstrated that, with regard to humans,
Peptide Derived from Harpin Protein (PDHP) 25279 is not anticipated to
be toxic or allergenic via any reasonably foreseeable route of
exposure. The active ingredient in PDHP 25279 is a 28 amino acid
peptide derived from the harpinW protein found in the phytopathogenic
bacterium Erwinia amylovora, a plant pathogen responsible for causing
fire blight in plants such as apple, pear, and raspberry. PDHP 25279 is
a third-generation PDHP that does not directly affect the target pest.
Instead, the mode of action for PDHP 25279 is proposed to be through
the induction of natural defense mechanisms in the plant by way of
salicylic acid (SA) and ethylene/jasmonic acid-dependent signaling,
which in turn activate the ``hypersensitive response'' (HR) and
ultimately elicit systemic acquired resistance in the plant. HR is
characterized as rapid, localized cell death in plant tissue after
infiltration of the peptide into the intercellular spaces of plant
leaves. This reaction initiates a complex set of metabolic responses in
the treated plant, causing systemic gene expression and eliciting a
plant's natural growth and defense system, which results in enhanced
resistance of the plant to fungal and bacterial diseases.
    The Agency has concluded that any potential dietary risk from the
use of PDHP 25279 to human health is considered negligible for the
following reasons: (1) PDHP 25279 was found to have low toxicity via
the oral route of exposure, did not show any homology to known or
putative allergens, and is rapidly degraded in simulated gastric
fluids. The submitted mammalian toxicity studies and the studies that
are bridged from similar already registered harpin proteins to support
the tolerance exemption for the active ingredient PDHP 25279 are
summarized with their classifications in the Human Health Risk
Assessment, Table 2; (2) Dietary exposure to residues of the active
ingredient in food and drinking water is expected to be negligible.
PDHP 25279 is a protein and as such is generally expected to be
biodegradable through microbial activity in the soil. Supporting this
conclusion is the observation that PDHP 25279 is degraded within 5
minutes by subtilisin A, an environmental protease. It is therefore
expected that biological processes will reduce run-off and potential
exposure of drinking water to negligible levels. The presence of PDHP
25279 on treated crops is likely to be further reduced through normal
washing and handling processes. For non-occupational exposure, there is
a potential for dermal exposure by handling of plants treated with PDHP
25279. However, PDHP 25279 is expected to be of low toxicity through
the dermal route of exposure given the low toxicity through the oral
and inhalation routes and dermal studies conducted with the similar
harpin protein Ea peptide 91398, which was found to be of low toxicity
and not a skin sensitizer.
    Based upon the evaluation in the Human Health Risk Assessment,
which found no risks of concern from aggregate exposure to PDHP 25279,
EPA concludes that there is a reasonable certainty that no harm will
result to the U.S. population, including infants and children, from
aggregate exposure to residues of PDHP 25279. In addition, because no
threshold effects have been identified for infants and children, EPA
determined that an additional Food Quality Protection Act (FQPA) safety
factor is not necessary to protect infants and children from
anticipated residues of PDHP 25279.

B. Analytical Enforcement Methodology

    An analytical method is not needed for PDHP 25279 since the Agency
is establishing an exemption from the requirement of a tolerance
without any numerical limitation based on a lack of adverse effects.

C. Response to Comment

    One comment was received during the public comment period for the
notice of filing. The commentor supported the proposed tolerance
exemption and noted the low toxicity, the mode of action, rapid
degradation, and low anticipated dietary exposure of PDHP 25279. Based
on its review of the data and other information submitted for the
proposed tolerance exemption, EPA agrees with the comment in support of
the petition to establish a tolerance exemption for residues of PDHP
25279 applied to food commodities.

D. Conclusion

    Based on the conclusions detailed in Unit III.A. an exemption from
the requirement of a tolerance is established for residues of PDHP
25279 in or on all food commodities when used in accordance with label
directions and good agricultural practices.

IV. Statutory and Executive Order Reviews

    This action establishes a tolerance exemption under FFDCA section
408(d) in response to a petition submitted to EPA. The Office of
Management and Budget (OMB) has exempted these types of actions from
review under Executive Order 12866, entitled ``Regulatory Planning and
Review'' (58 FR 51735, October 4, 1993). Because this action has been
exempted from review under Executive Order 12866, this action is not
subject to Executive Order 13211, entitled ``Actions Concerning
Regulations That Significantly Affect Energy Supply, Distribution, or
Use'' (66 FR 28355, May 22, 2001), or Executive Order 13045, entitled
``Protection of Children from Environmental Health Risks and Safety
Risks'' (62 FR 19885, April 23, 1997). This action does not contain any
information collections subject to OMB approval under the Paperwork
Reduction Act, 44 U.S.C. 3501 et seq., nor does it require any special
considerations under Executive Order 12898, entitled ``Federal Actions
to Address Environmental Justice in Minority Populations and Low-Income
Populations'' (59 FR 7629, February 16, 1994).
    Since tolerances and exemptions that are established on the basis
of a petition under FFDCA section 408(d), such as

the tolerance exemption in this action, do not require the issuance of
a proposed rule, the requirements of the Regulatory Flexibility Act (5
U.S.C. 601 et seq.) do not apply.
    This action directly regulates growers, food processors, food
handlers, and food retailers, not States or Tribes. As a result, this
action does not alter the relationships or distribution of power and
responsibilities established by Congress in the preemption provisions
of FFDCA section 408(n)(4). As such, EPA has determined that this
action will not have a substantial direct effect on States or Tribal
Governments, on the relationship between the National Government and
the States or Tribal Governments, or on the distribution of power and
responsibilities among the various levels of government or between the
Federal Government and Indian Tribes. Thus, EPA has determined that
Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August 10,
1999), and Executive Order 13175, entitled ``Consultation and
Coordination with Indian Tribal Governments'' (65 FR 67249, November 9,
2000), do not apply to this action. In addition, this action does not
impose any enforceable duty or contain any unfunded mandate as
described under Title II of the Unfunded Mandates Reform Act (2 U.S.C.
1501 et seq.).
    This action does not involve any technical standards that would
require EPA's consideration of voluntary consensus standards pursuant
to section 12(d) of the National Technology Transfer and Advancement
Act (15 U.S.C. 272 note).

V. Congressional Review Act

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

List of Subjects in 40 CFR Part 180

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

    Dated: February 1, 2023.
Edward Messina,
Director, Office of Pesticide Programs.

    Therefore, for the reasons stated in the preamble, EPA is amending
40 CFR part 180 as follows:

PART 180--TOLERANCES AND EXEMPTIONS FOR PESTICIDE CHEMICAL RESIDUES
IN FOOD

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

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

0
2. Add Sec.  180.1398 to subpart D to read as follows:

Sec.  180.1398  Peptide Derived from Harpin Protein (PDHP) 25279;
exemption from the requirement of a tolerance.

    An exemption from the requirement of a tolerance is established for
residues of Peptide Derived from Harpin Protein (PDHP) 25279 in or on
all food commodities when used in accordance with label directions and
good agricultural practices.

[FR Doc. 2023-02536 Filed 2-7-23; 8:45 am]
BILLING CODE 6560-50-P


Summary of Consultation on Proposed Federal Plan for Certifying Restricted Use Pesticide Applicators within Indian Country
                    November 29, 2010 and December 13, 2010

Participants  -  November 29, 2010
Cherokee Nation
Kootenai Tribe
Ak-Chin Indian Community
Confederated Salish and Kootenai Tribes
Gila River Indian Community
Aroostook Band of Micmacs
Coeur D'Alene Tribe
Yakama Nation
Three Affiliated Tribes
Two other tribes not clearly identifiable
EPA OPP Deputy Office Director and staff
EPA Office of General Counsel
EPA Office of Enforcement and Compliance Assurance

Participants  -  December 13, 2011
Aroostook Band of Micmacs
Mashantucket Pequot
Winnebago Tribe of Nebraska
Chickasaw Nation
Kashia Band of Pomo Indians of the Stewarts Point Rancheria
Confederated Salish and Kootenai Tribes
Ramona Band of Cahuilla
Paulo Band of Mission Indians
Yurok Tribe
Elk Valley Rancheria
Inter Tribal Council of Arizona
Salt River Maricopa-Pima Indians
St. Regis Mohawk Tribe
Three other tribes not clearly identifiable
EPA OPP FEAD Acting Division Director and staff
EPA Regions 1, 4, 6, 7, 8, 9, 10

Overall Summary of Consultation Calls

EPA provided an overview of the plan. The tribes were ok with many of the approaches EPA has proposed for the plan.  The biggest issue discussed was whether EPA should provide a notification provision, the benefits of such a provision, and how it could be done.  Other issues discussed included enforcement concerns, private applicator certification, opt-in/opt-out and making sure that the plan is specific to Indian country needs.

Both calls were scheduled for two hours.  Even though EPA provided many opportunities for tribal input, including long pauses, the first call ended after one hour.  The second call ended after nearly 2 hours.

Discussion of Issues

Consultation
   * One tribe stated that it does not consider the calls to be a formal consultation and reserved the right for additional consultation.  OPP stated that they believe the call is government to government consultation.  In addition, additional consultation can be arranged if a tribe feels their questions were not addressed or they did not have an opportunity to offer their views on the draft Plan during the two consultation calls provided.

Language
   * Language needs to make it clear that the plan applies to Indian country and it is differentiated from states.

Notification
   * OPP gave an overview of the request and our thoughts on the request.
         o At the October 2010 TPPC meeting, the TPPC proposed adding a notification provision to the draft Federal Certification Plan for Indian Country.  This provision would require that applicators of RUPs to notify the tribe before each application.  This type of provision would provide tribes some benefit in knowing where and when RUP applications occur.
         o OPP has been looking into this request with the Office of General Counsel. Although this provision may be possible for commercial applicators, under FIFRA, it doesn't look like we can require prior notification for private applicators.
         o From a practical standpoint, implementation of such a provision could be burdensome.   Tribes may see receiving notifications as burdensome and an unfunded mandate. It has also been suggested that the applicators could submit this information to a website but it is not clear who would develop and maintain the website.  Developing and maintaining a website for this purpose may be too resource intensive for EPA.
         o One idea is that the EPA could maintain a website that contains a list of applicators with the federal certification organized by the state or tribe of their underlying certificate (e.g., list all of the applicators who have received a federal certificate using their state certificate from New Mexico under New Mexico).  This would at least allow tribes to see potential applicators that have federal certificates contiguous to their area of Indian country and could allow the tribe the information needed to contact applicators.
         o We'd like to move forward with publishing the draft Federal Register Notice and highlight the notification provision as an issue for comment.  We think it would be useful to get broader tribal and public input on it.
   * Tribes want to know if an applicator is going to apply pesticides/RUPs to their lands.
   * Benefits of notification are:
         o It would provide some ability for tribes to say no to an application if around a cultural site or tribal resources. As written, the plan does not provide a way for the tribe to refuse an application and this would give a way while the tribe develops its own ordinances.
         o Even if there isn't authority to stop a pesticide based on the notification provision, the information may allow tribes to target inspections or help them develop ordinances to protect tribal cultural resources in the future.
   * EPA needs to inform applicators of tribal requirements and where will applicators get that information.
   * EPA should have a database that include tribal contacts and specific ordinances for each of the tribes
   * Suggestion that EPA include in application a field for applicators to let EPA know where the applicator intends to apply RUPs
   * Suggestion that the Region notify tribes of applicator certification and maintain database of tribal contacts and ordinances within the Region
   * Several tribes agreed that an applicator should notify the tribe or the Region prior to each use.  But one tribe did indicate that it could be an unfunded mandate.  Another tribe saw it as a Notice of Intent, and agreed that it would take time to receive and track incoming notifications but that the notification should be done.  Not for prior approval but to make tribes aware.  Also indicated that managing the notification system for their tribe is a large time burden.
   * When OPP asked how tribes feel about receiving notifications, the response was that some tribes may see it as an burden because then may feel obligation to act on notifications but felt that the tribe could decide what they want to do with the information.
   * Tribes have had similar notification systems, e.g., through the Clean Air Act.  Tribes also receive notifications on National Historic Preservation, which can result in a large volume. Tribes may ignore those not relevant and may only take action on those of particular interest to tribe.
   * There was some discussion about state maintained databases with applicator information and whether EPA could work with the states. Could tribes access this information? Tribe would have be ok with giving that type of information to the state.  Tribes could impose these types of requirements but can look into this federally.  Would also need to distinguish why we would do this for Indian country but not the rest of the country.
   * One tribe mentioned the use of tribal law for a preservation ordinance permits.
   * Notification important for public health of tribal members.
   * Ability for notification through tribal ordinance  -  several tribal participants mentioned ability to do so but would take resources/time.
   * Discussed ways tribes could receive notifications:
         o Online
         o Information exchange  -  tribe can receive notifications
         o Database that would notify pesticide contacts
         o Paper system  -  fill out form and fax (e.g., Arizona system)
         o Could set up on TPPC website?  May be possible but not sure of logistics.

Enforcement
Tribes expressed many concerns about enforcement.
   * Discussed enforcement responsibilities: EPA is responsible for enforcing federal requirements and tribes are responsible for tribal requirements.
   * Discussed how EPA would handle enforcement if the tribes does not have any inspectors with federal credentials  -  refer to the EPA Region for inspection/enforcement since expect most enforcement of the plan to come from tips and complaints.
   * If a tribe has an ordinance, e.g., no spraying of RUPs, and an applicator applies, concerned about who will inspect and don't think the plan is enforceable.  EPA explained that the ordinance would take precedence and that the tribe could enforce their ordinance.
   * The tribes expressed a desire for EPA to backup tribal laws, ordinances, etc.  EPA stated that the tribe is responsible for enforcing more stringent requirements that they place on RUP use on their lands.
   * The tribes wanted to know if an applicator has a violation on tribal lands, would EPA consider revoking based on tribal violations?  EPA stated they could revoke a certificate or apply civil penalties if there was a FIFRA violation.
   * Tribes suggested that EPA should consider revoking a federal certificate if an applicator violates tribal ordinances.

Opt-Out/Opt-In
   * On the November 29[th] call, there was only one comment.  Only one comment.  Agreed that an opt-in/opt-out provision is not needed. The plan should cover everyone unless the tribe has their own plan or program in place.  [Note:  When EPA asked for other thoughts, there were none.]
   * There was more discussion on opt-out/opt-in on the December 13[th] call.
         o Some tribes supported an opt-out provision with the idea that a tribe could change their position at the end of each year
         o Opt-in or out should be based on a tribe's capacity
         o EPA described some of the concerns with an opt-out provision, e.g., EPA doesn't provide an opt-out provision for other actions, practicality of informing applicators

Contiguous States/Tribes Issue
   * Makes sense to choose applicators familiar with tribal areas.  May be special instances where need to contract out the work or may be other considerations and type of application.

   * Need to be clear in the Federal Register Notice in what we mean by contiguous (e.g., need to clear with regards to checkerboarding)

Private Applicator Certification
   * Private applicators should know about pertinent tribal regulations and the appropriate people to contact
   * Need certain number of hours over a period of time to remain certified for a state certificate.  The draft plan does include a time frame to renew and document that they've completed the documented training and self-study evaluation.
   * One suggestion is to include Indian country specific training  -  unique conditions, process, what subsistence gathering is, domestic water supply source information, etc.  EPA noted that we are not planning to create a new training program.  Curriculum for other programs (e.g., state training) don't exclude Indian country but doesn't go into tribal specific issues either.

"Other Tribal Requirements" Language
   * Only one comment on November 29[th] call. Thought was good language.
   * On December 13[th] call, this topic led to a discussion of enforcement.

Other Questions
   * A tribe with a tribal plan asked about recertification period.  Explained that tribes if a tribe has a plan, that plan takes precedence over the federal plan. Also explained the situation for expiration dates under the federal plan for any interested tribes.  Also, the tribe explained how they notify of their plan requirements (cooperate with county extension agents).  This tribe does not require notification of pesticide use.