14. Absent this regulation, EPA costs to administer these sections of
TSCA would be borne by taxpayers through budget appropriations from
general revenue. As a result of this rule, 25% of EPA costs to
administer TSCA section 4, 5, 6, and collecting, processing, reviewing,
and providing access to and protecting information about chemical
substances from disclosure as appropriate under TSCA section 14, and
activities paid from general revenue would be transferred via the fees
to industry. Although these user fees may be perceived by industry as
direct private costs, from an economic perspective, they are transfer
payments rather than real social costs. Therefore, the total social
cost of this rule does not include the fees collected from industry by
EPA. Rather, it includes the opportunity costs incurred by industry,
such as the cost to read and familiarize themselves with the rule;
determine their eligibility for paying reduced fees; register for CDX;
form, manage and notify EPA of participation in consortia; notify EPA
and certify whether they will be subject to the action or not; and
arrange to submit fee payments via Pay.gov. Total social costs also
include the additional costs to EPA to administer fee assessment and
collection for TSCA sections 4, 5, 6, and collecting, processing,
reviewing, and providing access to and protecting information about
chemical substances from disclosure as appropriate under TSCA section
14. The total annualized opportunity cost to industry is approximately
$231,000 and the additional annualized Agency cost is $7,000, yielding
a total annualized social cost of approximately $238,000.

V. References

    The following is a listing of the documents that are specifically
referenced in this document. The docket includes these documents and
other information considered by EPA, including documents that are
referenced within the documents that are included in the docket, even
if the referenced document is not physically located in the docket. For
assistance in locating these other documents, please consult the
technical person listed under FOR FURTHER INFORMATION CONTACT.

1. 2016. The Frank R. Lautenberg Chemical Safety for the 21st
Century Act. June 22, 2016.
2. 2017. EPA. Economic Analysis for the TSCA Section 26(b) Proposed
Fees Rule. December 2017.
3. 2018. EPA. Updated Technical Background Document for TSCA Fees.
September 2018.
4. 2017. EPA. Interagency Agreement and Oil Indirect Cost Rates for
FY 2018 and Beyond. September 28, 2017.
5. 2002. EPA. 67 FR 76282. Sustainable Futures--Voluntary Pilot
Project Under the TSCA New Chemicals Program.
6. 2016. Abt Associates. Memorandum: Inflation of Small Business
Definition under section 5 of TSCA. August 31, 2016.
7. 1987. EPA. Proposed Fees for Processing Premanufacture Notices,
Exemption Applications and Notices, and Significant New Use Notices.
42 FR 12940.
8. 2017. EPA. Information Collection Request for the TSCA Section
26(b) Proposed Reporting Requirements Associated with the Payment of
TSCA Fees (EPA ICR No. 2569.01; OMB Control No. 2070-[NEW]).
December 2017.
9. 2018. EPA. TSCA Fee Reporting Notice. September 2018.

VI. Statutory and Executive Order Reviews

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

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

    This action is a significant regulatory action that was submitted
to the Office of Management and Budget (OMB) for review under Executive
Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821,
January 21, 2011). Any changes made in response to OMB recommendations
have been documented in the docket for this action as required by
section 6(a)(3)(E) of Executive Order 12866. EPA prepared an economic
analysis of the potential costs and benefits associated with this
action (Ref. 2), which is available in the docket and discussed in Unit
IV.

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

    This action is subject to the requirements for regulatory actions
specified in Executive Order 13771 (82 FR 9339, February 3, 2017).
Details on the estimated costs of this rule can be found in EPA's
analysis (Ref. 2) of the potential costs and benefits associated with
this action, which is available in the docket and is summarized in Unit
IV.

C. Paperwork Reduction Act (PRA)

    The information collection requirements in this final rule have
been submitted to OMB for review and approval under the PRA, 44 U.S.C.
3501 et seq. The Information Collection Request (ICR) prepared by EPA
has been assigned EPA ICR No. 2569.01 and OMB Control No. 2070-0208.
You can find a copy of the ICR in the docket (Ref. 8), and it is
briefly summarized here.
    The information collection activities associated with the rule
include familiarization with the regulation; reduced fee eligibility
determination; CDX registration; formation, management and notification
to EPA of participation in consortia; self-identification and
certification; and electronic payment of fees through Pay.gov.
    Respondents/affected entities: Persons who manufacture, distribute
in commerce, use, dispose, process a chemical substance (or any
combination of such activities) and are required to submit information
to EPA under TSCA sections 4 or 5, or manufacture or process a chemical
substance that is the subject of a risk evaluation under TSCA section
6(b).
    Respondent's obligation to respond: Mandatory.
    Estimated number of respondents: 1,418 respondents.
    Frequency of response: On occasion to EPA as needed.
    Total estimated burden: 539 hours (per year). Burden is defined at
5 CFR 1320.3(b).
    Total estimated cost: $230,607 (per year), includes $0 annualized
capital or operation and maintenance costs.
    An agency may not conduct or sponsor, and a person is not required
to respond to a collection of information unless it displays a
currently valid OMB control number. The OMB control numbers are
displayed either by publication in the Federal Register or by other
appropriate means, such as on the related collection instrument or
form, if applicable. The OMB control numbers for certain EPA
regulations are listed in 40 CFR part 9.

D. Regulatory Flexibility Act (RFA)

    Pursuant to section 605(b) of the RFA, 5 U.S.C. 601 et seq., I
certify that this action will not have a significant economic impact on
a substantial number of small entities under the RFA. The small
entities expected to be subject to the requirements of this action are
small chemical manufacturers and processors, small petroleum
refineries, and small chemical and petroleum wholesalers. There may be
some potentially affected firms within other sectors, but not all firms
within those sectors will be potentially affected firms.
    EPA has determined that 84 small businesses may be affected
annually by section 4 actions; 190 small businesses may be affected by
section 5 actions; and 24 small businesses may be affected by section 6
actions. For section 5 actions, the total discounted annual fee
collections and opportunity cost for the affected small businesses is
expected to be about $344,000. For section 4 and section 6 actions,
total discounted annual fee collections and opportunity cost for the
affected small business is expected to be about $14,000 and $927,000
respectively. In total, the annual fee collections and opportunity
costs for the 298 affected small businesses is expected to be about
$1.3 million.
    As a result, EPA estimates that, of the 298 small businesses paying
fees every year, all may have annual cost-revenue impacts less than 1%.
EPA estimates the median annual sales for small businesses likely to be
affected by TSCA section 4 and TSCA section 6 actions to be
approximately $5,445,000; and $3,475,000 for small businesses likely to
be affected by TSCA section 5 actions. The average annual cost per
affected small business is expected to be about $170 for section 4;
$1,800 for section 5, and $38,600 for section 6.

E. Unfunded Mandates Reform Act (UMRA)

    This action does not contain an unfunded mandate of $100 million or
more as described in UMRA, 2 U.S.C. 1531-1538, and does not
significantly or uniquely affect small governments. As such, the
requirements of sections 202, 203, 204, or 205 of UMRA, 2 U.S.C. 1531-
1538, do not apply to this action.

F. Executive Order 13132: Federalism

    This action does not have federalism implications. It will not have
substantial direct effects on the States, on the relationship between
the national government and the States, or on the distribution of power
and responsibilities among the various levels of government, as
specified in Executive Order 13132 (64 FR 43255, August 10, 1999).

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

    This action does not have tribal implications because it will not
have any effect on tribal governments, on the relationship between the
Federal government and the Indian tribes, or on the distribution of
power and responsibilities between the Federal government and Indian
tribes, as specified in Executive Order 13175 (65 FR 67249, November 9,
2000).

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

    EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997),
as applying only to those regulatory actions that concern environmental
health or safety risks that EPA has reason to believe may
disproportionately affect children, per the definition of ``covered
regulatory action'' in section 2-202 of Executive Order 13045. This
action is not subject to Executive Order 13045 because it does not
establish an environmental standard intended to mitigate environmental
health risks or safety risks.

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

    This action is not a ``significant energy action'' as defined in
Executive Order 13211 (66 FR 28355, May 22, 2001), because it is not
likely to have a significant adverse effect on energy supply,
distribution, or use. This action would establish service fees for
TSCA, which will not have a significant effect on the supply,
distribution or use of energy.

J. National Technology Transfer and Advancement Act (NTTAA)

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

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

    This action does not have disproportionately high and adverse human
health or environmental effects on minority populations, low-income
populations and/or indigenous peoples, as specified in Executive Order
12898 (59 FR 7629, February 16, 1994). This action does not affect the
level of protection provided to human health or the environment.
    The fees collected under this rule will assist the Agency in
carrying out various requirements under TSCA, including conducting risk
evaluations, requiring testing of chemical substances and mixtures, and
evaluating and reviewing new chemical submissions, as required under
TSCA sections 4, 5, and 6.

Although not directly impacting environmental justice-related concerns,
the fees will enable the Agency to better protect human health and the
environment, including in low-income and minority communities.

L. Congressional Review Act (CRA)

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

List of Subjects

40 CFR Part 700

    Chemicals, Environmental protection, Hazardous substances,
Reporting and recordkeeping requirements, User fees.

40 CFR Part 720

    Chemicals, Environmental protection, Hazardous substances, Imports,
Reporting and recordkeeping requirements.

40 CFR Part 723

    Chemicals, Environmental protection, Hazardous substances,
Phosphate, Reporting and recordkeeping requirements.

40 CFR Part 725

    Administrative practice and procedure, Chemicals, Environmental
protection, Hazardous substances, Imports, Labeling, Occupational
safety and health, Reporting and recordkeeping requirements.

40 CFR Part 790

    Administrative practice and procedure, Chemicals, Confidential
business information, Environmental protection, Hazardous substances,
Reporting and recordkeeping requirements.

40 CFR Part 791

    Administrative practice and procedure, Chemicals, Environmental
protection, Hazardous substances, Reporting and recordkeeping
requirements.

    Dated: September 27, 2018.
Andrew R. Wheeler,
Acting Administrator.

    Therefore, 40 CFR chapter I, subchapter R, is amended as follows:

PART 700--[AMENDED]

0
1. The authority citation for part 700 is revised to read as follows:

    Authority:  15 U.S.C. 2625 and 2665, 44 U.S.C. 3504.

0
2. Section 700.40 is revised to read as follows:

Sec.  700.40  Purpose and applicability.

    (a) Purpose. The purpose of this subpart is to establish and
collect fees from manufacturers and processors to defray part of EPA's
cost of administering the Toxic Substances Control Act (15 U.S.C. 2601-
2692), as amended by the Frank R. Lautenberg Chemical Safety for the
21st Century Act (Pub. L. 114-182).
    (b) Applicability. This subpart applies to all manufacturers who
are required to submit information under section 4 of the Act, who
submit certain notices and exemption requests to EPA under section 5 of
the Act, who manufacture a chemical substance that is subject to a risk
evaluation under TSCA section 6(b)(4) of the Act, and who process a
chemical substance that is the subject of a Significant New Use Notice
(SNUN) or Test Market Exemption (TME) under section 5 of the Act and
who are required to submit information under section 4 of the Act
related to a SNUN submission.
    (c) Effective date. After October 18, 2018, all persons specified
in Sec.  700.45 and paragraph (a) of this section must comply with this
subpart.

0
3. Section 700.43 is amended by:
0
a. Revising the section heading;
0
b. Revising the introductory text;
0
c. Adding in alphabetical order definitions for ``Consortium'',
``Enforceable consent agreement'', and ``EPA-initiated risk
evaluation'';
0
d. Removing the definitions of ``Exemption application'' and
``Intermediate premanufacture notice'';
0
e. Revising the definition of ``Joint submitters'';
0
f. Adding in alphabetical order a definition for ``Manufacturer-
requested risk evaluation'';
0
g. Revising the definition of ``Person'';
0
h. Adding in alphabetical order definitions for ``Principal sponsor''
and ``Risk evaluation'';
0
i. Revising the definitions of ``Significant new use notice'' and
``Small business concern''; and
0
k. Adding in alphabetical order definitions for ``Test order'' and
``Test rule''.
    The revisions and additions read as follows:

Sec.  700.43  Definitions applicable to this subpart.

    Definitions in section 3 of the Act (15 U.S.C. 2602), as well as
definitions contained in Sec. Sec.  704.3, 720.3, 723.175(b), 725.3,
and 790.3 of this chapter, apply to this subpart unless otherwise
specified in this section. In addition, the following definitions
apply:
* * * * *
    Consortium means an association of manufacturers and/or processors
who have made an agreement to jointly split the cost of applicable
fees.
* * * * *
    Enforceable consent agreement means a consent agreement used by EPA
to accomplish testing where a consensus exists among EPA and interested
parties (as identified in Sec.  790.22(b)(2)) concerning the need for
and scope of testing under section 4 of the Act.
    EPA-initiated risk evaluation means any risk evaluation conducted
pursuant to section 6(b)(4)(C)(i) of the Act.
* * * * *
    Joint submitters mean two or more persons who submit a TSCA section
5 notice together.
    Manufacturer-requested risk evaluation means any chemical substance
risk evaluation conducted at the request of one or more manufacturers
of that chemical substance pursuant to section 6(b)(4)(C)(ii) of the
Act.
* * * * *
    Person means a manufacturer or processor.
* * * * *
    Principal sponsor means a person who assumes primary responsibility
for the direction of study, the payment of fees to EPA, and for oral
and written communication with EPA.
    Risk evaluation means any risk evaluation conducted pursuant to
section 6(b) of the Act.
* * * * *
    Significant new use notice or SNUN means any notice submitted to
EPA pursuant to section 5(a)(1)(B) of the Act in accordance with part
721 of this chapter.
    Small business concern means a manufacturer or processor who meets
the size standards identified in the following table. The number of
employees indicates the maximum allowed for a manufacturer or processor
to be considered small. If the North American Industry Classification
System (NAICS) code of a manufacturer or processor is not represented
in the table, it will be considered small if it has 500 or fewer
employees. When calculating the number of employees, a manufacturer or
processor must include the employees of all of its ``parent companies''
(if any) and all companies it ``owns or controls,'' as defined by 40
CFR 704.3. The number of employees are calculated as the average number
of people employed for each pay period of

the business' latest 12 calendar months, regardless of hours worked or
temporary status.

----------------------------------------------------------------------------------------------------------------
                                                                         Small business concern size standards
     Potentially affected NAICS              NAICS description                   (number of employees)
----------------------------------------------------------------------------------------------------------------
324110..............................  Petroleum Refineries...........  1,500 or fewer.
325110..............................  Petrochemical Manufacturing....  1,000 or fewer.
325120..............................  Industrial Gas Manufacturing...  1,000 or fewer.
325130..............................  Synthetic Dye and Pigment        1,000 or fewer.
                                       Manufacturing.
325180..............................  Other Basic Inorganic Chemical   1,000 or fewer.
                                       Manufacturing.
325193..............................  Ethyl Alcohol Manufacturing....  1,000 or fewer.
325194..............................  Cyclic Crude, Intermediate, and  1,250 or fewer.
                                       Gum and Wood Chemical
                                       Manufacturing.
325199..............................  All Other Basic Organic          1,250 or fewer.
                                       Chemical Manufacturing.
325211..............................  Plastics Material and Resin      1,250 or fewer.
                                       Manufacturing.
325212..............................  Synthetic Rubber Manufacturing.  1,000 or fewer.
325220..............................  Artificial and Synthetic Fibers  1,000 or fewer.
                                       and Filaments Manufacturing.
325311..............................  Nitrogenous Fertilizer           1,000 or fewer.
                                       Manufacturing.
325312..............................  Phosphatic Fertilizer            750 or fewer.
                                       Manufacturing.
325314..............................  Fertilizer (Mixing Only)         500 or fewer.
                                       Manufacturing.
325320..............................  Pesticide and Other              1,000 or fewer.
                                       Agricultural Chemical
                                       Manufacturing.
325411..............................  Medicinal and Botanical          1,000 or fewer.
                                       Manufacturing.
325412..............................  Pharmaceutical Preparation       1,250 or fewer.
                                       Manufacturing.
325413..............................  InVitro Diagnostic Substance     1,250 or fewer.
                                       Manufacturing.
325414..............................  Biological Product (except       1,250 or fewer.
                                       Diagnostic) Manufacturing.
325510..............................  Paint and Coating Manufacturing  1,000 or fewer.
325520..............................  Adhesive Manufacturing.........  500 or fewer.
325611..............................  Soap and Other Detergent         1,000 or fewer.
                                       Manufacturing.
325612..............................  Polish and Other Sanitation      750 or fewer.
                                       Good Manufacturing.
325613..............................  Surface Active Agent             750 or fewer.
                                       Manufacturing.
325620..............................  Toilet Preparation               1,250 or fewer.
                                       Manufacturing.
325910..............................  Printing Ink Manufacturing.....  500 or fewer.
325920..............................  Explosives Manufacturing.......  750 or fewer.
325991..............................  Custom Compounding of Purchased  500 or fewer.
                                       Resins.
325992..............................  Photographic Film, Paper, Plate  1,500 or fewer.
                                       and Chemical Manufacturing.
325998..............................  All Other Miscellaneous          500 or fewer.
                                       Chemical Product and
                                       Preparation Manufacturing.
424690..............................  Other Chemical and Allied        150 or fewer.
                                       Products Merchant Wholesalers.
424710..............................  Petroleum Bulk Stations and      200 or fewer.
                                       Terminals.
424720..............................  Petroleum and Petroleum          200 or fewer.
                                       Products Merchant Wholesalers
                                       (except Bulk Stations and
                                       Terminals).
----------------------------------------------------------------------------------------------------------------

    Test order means an order to develop information pursuant to
section 4(a) of the Act.
    Test rule refers to a regulation requiring the development of
information pursuant to section 4(a) of the Act.

0
4. Section 700.45 is revised to read as follows:

Sec.  700.45  Fee payments.

    (a) Persons who must pay fees. (1) Manufacturers submitting a TSCA
section 5 notice to EPA shall remit for each such notice the applicable
fee identified in paragraph (c) of this section in accordance with the
procedures in paragraphs (f) and (g) of this section.
    (2) Manufacturers of chemical substances and mixtures required to
test these chemical substance and mixtures under a TSCA section 4(a)
test rule, test order, or enforceable consent agreement shall remit for
each such test rule, order, or enforceable consent agreement the
applicable fee identified in paragraph (c) of this section in
accordance with the procedures in paragraphs (f) and (g) of this
section.
    (3) Manufacturers of a chemical substance that is subject to a risk
evaluation under section 6(b) of the Act, shall remit for each such
chemical risk evaluation the applicable fee identified in paragraph (c)
of this section in accordance with the procedures in paragraphs (f) and
(g) of this section.
    (4) Processors submitting a SNUN or TME under TSCA section 5 to EPA
shall remit for each such notice the applicable fee identified in
paragraph (c) of this section in accordance with the procedures in
paragraphs (f) and (g) of this section.
    (5) Processors of chemical substances and mixtures subject to a
TSCA section 4(a) test rule, test order, or enforceable consent
agreement in association with a SNUN submission referenced in paragraph
(a)(4) of this section shall remit for each such test rule, order, or
enforceable consent agreement the applicable fee identified in
paragraph (c) of this section in accordance with the procedures in
paragraphs (f) and (g) of this section.
    (b) Identifying manufacturers subject to fees--(1) In general. For
purposes of identifying manufacturers subject to fees for section 4
test rules and section 6 EPA-initiated risk evaluations, EPA will
publish a preliminary list of manufacturers identified through a review
of data sources described in paragraph (b)(2) of this subsection;
provide an opportunity for public comment; and publish a final list
specifying the manufacturers responsible for payment.
    (2) Data sources. To compile the preliminary list, EPA will rely on
information submitted to the Agency (such as the information submitted
under sections 5(a), 8(a), 8(b), and to the Toxics Release Inventory)
as well as other information available to the Agency, including
publicly available information or information submitted to other
agencies to which EPA has access. To be able to include the most recent
CDR data and to account for annual or other typical fluctuations in
manufacturing, EPA will use the five most recent years of data
submitted or

available to the Agency to develop the preliminary list.
    (3) Publication of preliminary list. (i) For risk evaluations
initiated by EPA under section 6, the preliminary list will be
published at the time of final designation of the chemical substance as
a High-Priority Substance.
    (ii) For test rules under section 4, the preliminary list will be
published with the proposed test rule.
    (4) Public comment period. Following publication of the preliminary
list, EPA will provide a period of public comment that is no less than
30 days.
    (5) Self-identification. All manufacturers who have manufactured or
imported the chemical substance in the previous five years, must submit
notice to EPA, irrespective of whether they are included in the
preliminary list specified in paragraph (b)(3) of this section. The
notice must be submitted electronically via EPA's Central Data Exchange
(CDX), the Agency's electronic reporting portal, using the Chemical
Information Submission System (CISS) reporting tool, and must contain
the following information:
    (i) Contact information. The name and address of the submitting
company, the name and address of the authorized official for the
submitting company, and the name and telephone number of a person who
will serve as technical contact for the submitting company and who will
be able to answer questions about the information submitted by the
company to EPA.
    (ii) Certification of cessation. If a manufacturer has manufactured
in the five-year period preceding publication of the preliminary list,
but has ceased manufacturer prior to the certification cutoff dates
identified in paragraph (b)(6) of this section and will not manufacture
the substance again in the successive five years, the manufacturer may
submit a certification statement attesting to these facts. If EPA
receives such a certification statement from a manufacturer, the
manufacturer will not be obligated to pay the fee under this section.
    (iii) Certification of no manufacture. If a manufacturer is
identified on the preliminary list, but has not manufactured the
chemical in the five-year period preceding publication of the
preliminary list, the manufacturer may submit a certification statement
attesting to these facts. If EPA receives such a certification
statement from a manufacturer, the manufacturer will not be obligated
to pay the fee under this section.
    (6) Certification cutoff date. (i) For a section 6 EPA-initiated
risk evaluation, the cutoff date for purposes of paragraph (b)(5)(ii)
of this section is the day prior to initiation of the prioritization
process for the applicable chemical substance.
    (ii) For a section 4 test rule, the cutoff date for purposes of
paragraph (b)(5)(ii) of this section is the day prior to publication of
the proposed test rule for the applicable chemical substance.
    (7) Publication of final list. EPA expects to publish a final list
of manufacturers to identify the specific manufacturers subject to the
applicable fee. This list will indicate if additional manufacturers
self-identified pursuant to paragraph (b)(5) of this section, if other
manufacturers were identified through credible public comment, and if
manufacturers submitted certification of cessation or no manufacture
pursuant to paragraph (b)(5)(ii) or (iii). The final list will be
published no later than concurrently with the final scope document for
risk evaluations initiated by EPA under section 6, and with the final
test rule for test rules under section 4.
    (8) Effect of final list. Manufacturers who are listed on the final
list are subject to the applicable fee identified in paragraph (c) of
this section.
    (9) Identifying manufacturers for other fee categories. For Section
4 Test Orders and enforceable consent agreements, and Section 6
Manufacturer-Requested Risk Evaluations, EPA will not conduct the
identification process described in paragraphs (b)(1) through (8) of
this section, as manufacturers self-identify through a submission or
are already otherwise known to Agency. However, those manufacturers are
required to provide an information submission to EPA for the purposes
of fee administration. The notice must be submitted electronically via
the Agency's electronic reporting software (e.g., Central Data Exchange
(CDX)) and must contain the manufacturers: Full name, address,
telephone number and email address. Timing of this submission must be
as follows:
    (i) For section 4 test orders and enforceable consent agreements,
the informational submission in this paragraph (b)(9) must be provided
within 30 days following notification from EPA.
    (ii) For section 6 manufacturer-requested risk evaluations, the
informational submission in this paragraph (b)(9) is required as part
of the procedural process for making such requests, and must be
completed at the time of making the request.
    (c) Fees for the 2019, 2020 and 2021 fiscal years. Persons shall
remit fee payments to EPA as follows:
    (1) Small business concerns. Small business concerns shall remit
fees as follows:
    (i) Premanufacture notice and consolidated premanufacture notice.
Persons shall remit a fee totaling $2,800 for each premanufacture
notice (PMN) or consolidated (PMN) submitted in accordance with part
720 of this chapter.
    (ii) Significant new use notice. Persons shall remit a fee totaling
$2,800 for each significant new use notice (SNUN) submitted in
accordance with part 721 of this chapter.
    (iii) Exemption application. Persons shall remit a fee totaling
$940 for each of the following exemption requests submitted under
section 5 of the Act:
    (A) Low releases and low exposures exemption or LoREX request
submitted to EPA pursuant to section 5(a)(1) of the Act in accordance
with Sec.  723.50(a)(1)(ii) of this chapter.
    (B) Low volume exemption or LVE request submitted to EPA pursuant
to section 5(a)(1) of the Act in accordance with Sec.  723.50(a)(1)(i)
of this chapter.
    (C) Test marketing exemption or TME application submitted to EPA
pursuant to section 5 of the Act in accordance with Sec. Sec.  725.300
through 725.355 of this chapter.
    (D) TSCA experimental release application or TERA application
submitted to EPA pursuant to section 5 of the Act for research and
development activities involving microorganisms in accordance with
Sec. Sec.  725.200 through 725.260 of this chapter.
    (E) Tier II exemption application submitted to EPA pursuant to
section 5 of the Act in accordance with Sec. Sec.  725.428 through
725.455 of this chapter.
    (iv) Instant photographic film article exemption notice. Persons
shall remit a fee totaling $940 for each instant photographic film
article exemption notice submitted in accordance with Sec.  723.175 of
this chapter.
    (v) Microbial commercial activity notice and consolidated microbial
commercial activity notice. Persons shall remit a fee totaling $2,800
for each microbial commercial activity notice (MCAN) or consolidated
MCAN submitted in accordance with Sec. Sec.  725.25 through 725.36 of
this chapter.
    (vi) Persons shall remit a total of twenty percent of the
applicable fee under paragraph (c)(2)(vi), (vii) or (viii) of this
section for a test rule, test order, or enforceable consent agreement.
    (vii) Persons shall remit a total fee of twenty percent of the
applicable fee under paragraphs (c)(2)(ix) of this section for an EPA-
initiated risk evaluation.

    (viii) Persons shall remit the total fee under paragraph (c)(2)(x)
or (xi) of this section, as applicable, for a manufacturer-requested
risk evaluation.
    (2) Others. Persons other than small business concerns shall remit
fees as follows:
    (i) PMN and consolidated PMN. Persons shall remit a fee totaling
$16,000 for each PMN or consolidated PMN submitted in accordance with
part 720 of this chapter.
    (ii) SNUN. Persons shall remit a fee totaling $16,000 for each
significant new use notice submitted in accordance with part 721 of
this chapter.
    (iii) Exemption applications. Persons shall remit a fee totaling
$4,700 for each of the following exemption requests, and modifications
to previous exemption requests, submitted under section 5 of the Act:
    (A) Low releases and low exposures exemption or LoREX request
submitted to EPA pursuant to section 5(a)(1) of the Act in accordance
with Sec.  723.50(a)(1)(ii) of this chapter.
    (B) Low volume exemption or LVE request submitted to EPA pursuant
to section 5(a)(1) of the Act in accordance with Sec.  723.50(a)(1)(i)
of this chapter.
    (C) Test marketing exemption or TME application submitted to EPA
pursuant to section 5 of the Act in accordance with Sec. Sec.  725.300
through 725.355 of this chapter, unless the submitting company has
graduated from EPA's Sustainable Futures program, in which case this
exemption fee is waived.
    (D) TSCA experimental release application or TERA application
submitted to EPA pursuant to section 5 of the Act for research and
development activities involving microorganisms in accordance with
Sec. Sec.  725.200 through 725.260 of this chapter.
    (E) Tier II exemption application submitted to EPA pursuant to
section 5 of the Act in accordance with Sec. Sec.  725.428 through
725.455 of this chapter.
    (iv) Instant photographic film article exemption notice. Persons
shall remit a fee totaling $4,700 for each exemption notice submitted
in accordance with Sec.  723.175 of this chapter.
    (v) MCAN and consolidated MCAN. Persons shall remit a fee totaling
$16,000 for each MCAN or consolidated MCAN submitted in accordance with
Sec. Sec.  725.25 through 725.36 of this chapter.
    (vi) Test rule. Persons shall remit a fee totaling $9,800 for each
test rule.
    (vii) Test order. Persons shall remit a fee totaling $29,500 for
each test order.
    (viii) Enforceable consent agreement. Persons shall remit a fee
totaling $22,800 for each enforceable consent agreement.
    (ix) EPA-initiated chemical risk evaluation. Persons shall remit a
fee totaling $1,350,000.
    (x) Manufacturer-requested risk evaluation of a Work Plan Chemical.
Persons shall remit an initial fee of $1,250,000, and final payment to
total 50% of the actual costs of this activity, in accordance with the
procedures in paragraph (g) of this section. The final payment amount
will be determined by EPA, and invoice issued to the requesting
manufacturer.
    (xi) Manufacturer-requested risk evaluation of a non-work plan
chemical. Persons shall remit an initial fee of $2,500,000, and final
payment to total 100% of the actual costs of the activity, in
accordance with the procedures in paragraph (g) of this section. The
final payment amount will be determined by EPA, and invoice issued to
the requesting manufacturer.
    (d) Fees for 2022 fiscal year and beyond. (1) Fees for the 2022 and
later fiscal years will be adjusted on a three-year cycle by
multiplying the fees in paragraph (c) of this section by the current
PPI index value with a base year of 2019 using the following formula:

FA = F x I

Where:

FA = the inflation-adjusted future year fee amount.
F = the fee specified in paragraph (c) of this section.
I = Producer Price Index for Chemicals and Allied Products inflation
value with 2019 as a base year.

    (2) Updated fee amounts for PMNs, SNUNs, MCANs, exemption
applications and manufacturer-requested chemical risk evaluation
requests apply to submissions received by the Agency on or after
October 1 of every three-year fee adjustment cycle beginning in fiscal
year 2022 (October 1, 2021). Updated fee amounts also apply to test
rules, test orders, enforceable consent agreements and EPA-initiated
chemical evaluations that are ``noticed'' on or after October 1 of
every three-year fee adjustment cycle, beginning in fiscal 2022.
    (3) The Agency will initiate public consultation through notice-
and-comment rulemaking prior to making fee adjustments beyond
inflation. If it is determined that no additional adjustment is
necessary beyond for inflation, EPA will provide public notice of the
inflation-adjusted fee amounts most likely through posting to the
Agency's web page by the beginning of each three-year fee adjustment
cycle (i.e., October 1, 2021, October 1, 2024, etc.). If the Agency
determines that adjustments beyond inflation are necessary, EPA will
provide public notice of that determination and the process to be
followed to make those adjustments.
    (e) No fee required. Persons are exempt from remitting any fee for
Tier I exemption submissions under Sec.  725.424 and polymer exemption
reports submitted under Sec.  723.250 of this chapter.
    (f) Multiple parties, including joint submitters and consortia. (1)
Joint submitters of a TSCA section 5 notice are required to remit the
applicable fee identified in paragraph (c) of this section for each
section 5 notice submitted. Only one fee is required for each
submission, regardless of the number of joint submitters for that
notice. To qualify for the fee identified in paragraph (c)(1) of this
section, each joint submitter of a TSCA section 5 notice must qualify
as a small business concern under Sec.  700.43 of this chapter.
    (2) Any consortium formed to split the cost of the applicable fee
under section 4 of the Act is required to remit the appropriate fee
identified in paragraph (c) of this section for each test rule, test
order, or enforceable consent agreement regardless of the number of
manufacturers and/or processors in that consortium. For the consortium
to qualify for the fee identified in paragraph (c)(1) of this section,
each person in the consortium must qualify as a small business concern
under Sec.  700.43 of this chapter. Failure to submit fee payment
pursuant to this paragraph, or to provide notice of failure to reach
agreement pursuant to paragraph (f)(2)(v) of this section constitutes a
violation by each consortium member.
    (i) The consortium must identify a principal sponsor and provide
notification to EPA that a consortium has formed. The notification must
be accomplished within 60 days of the publication date of a test rule
under section 4 of the Act, or within 60 days of the issuance of a test
order under Section 4 of the Act, or within 60 days of the signing of
an enforceable consent agreement under section 4 of the Act. EPA may
permit additional entities to join an existing consortium prior to the
expiration of the notification period if the principal sponsor provides
updated notification.
    (ii) Notification must be submitted electronically via the Agency's
electronic reporting software--Central Data Exchange (CDX)--and include
the following information:

    (A) Full name, address, telephone number and signature of principal
sponsor;
    (B) Name(s) and contact information for each manufacturer and/or
processor associating with the consortium.
    (iii) It is up to the consortium to determine how fees will be
split among the persons in the consortium.
    (iv) Consortia are strongly encouraged to set lower fees for small
business concerns participating in the consortium.
    (v) If a consortium is unable to come to terms on how fees will be
split among the persons in the consortium, the principal sponsor must
notify EPA in writing before the end of the notification period in
paragraph (f)(2)(i) of this section.
    (vi) If a consortium provides notice to EPA under paragraph
(f)(2)(v) of this section that they failed to reach agreement on
payment, EPA will assess fees to all persons as individuals described
under paragraph (f)(4) of this section.
    (3) Any consortium formed to split the cost of the applicable fee
supporting a risk evaluation under section 6(b) of the Act is required
to remit the appropriate fee identified in paragraph (c) of this
section for each risk evaluation, regardless of the number of
manufacturers in that consortium. For the consortium to qualify for the
fee identified in paragraph (c)(1)(vii) of this section, each person in
the consortium must qualify as a small business concern under Sec.
700.43 of this chapter. Failure to provide notice or submit fee payment
pursuant to this paragraph (f)(3) constitutes a violation by each
consortium member.
    (i) Notification must be provided to EPA that a consortium has
formed. The notification must be accomplished within 60 days of the
publication of the final scope of a chemical risk evaluation under
section 6(b)(4)(D) of the Act or within 60 days of EPA providing
notification to a manufacturer that a manufacturer-requested risk
evaluation has been granted.
    (ii) Notification must be submitted electronically via the Agency's
electronic reporting software--Central Data Exchange (CDX)--and include
the following information:
    (A) Full name, address, telephone number and signature of principal
sponsor;
    (B) Name(s) and contact information for each manufacturer and/or
processor associating with the consortium.
    (iii) It is up to the consortium to determine how fees will be
split among the persons in the consortium.
    (iv) Consortia are strongly encouraged to set lower fees for small
business concerns participating in the consortium.
    (v) If a consortium is unable to come to terms on how fees will be
split among the persons in the consortium, the principal sponsor must
notify EPA in writing before the end of the notification period in
paragraph (f)(3)(i) of this section.
    (vi) If a consortium provides notice to EPA under paragraph
(f)(3)(v) of this section that they failed to reach agreement on
payment, EPA will assess fees to all persons as individuals as
described under paragraph (f)(4) of this section.
    (4) If multiple persons are subject to fees triggered by section 4
or 6(b) of the Act and no consortium is formed, EPA will determine the
portion of the total applicable fee to be remitted by each person
subject to the requirement. Each person's share of the applicable fee
specified in paragraph (c) of this section shall be in proportion to
the total number of manufacturers and/or processors of the chemical
substance, with lower fees for small businesses:
[GRAPHIC] [TIFF OMITTED] TR17OC18.018

Where:

Ps = the portion of the fee under paragraph (c) of this
section that is owed by a person who qualifies as a small business
concern under Sec.  700.43 of this chapter.
Po = the portion of the fee owed by a person other than a
small business concern.
F = the total fee required under paragraph (c) of this section.
Mt = the total number of persons subject to the fee
requirement.
Ms = the number of persons subject to the fee requirement
who qualify as a small business concern.

    (5) If multiple persons are subject to fees triggered by section 4
or 6(b) of the Act and some inform EPA of their intent to form a
consortium while others choose not to associate with the consortium,
EPA will take the following steps to allocate fee amounts:
    (i) Count the total number of manufacturers, including the number
of manufacturers within any consortia; divide the total fee amount by
the total number of manufacturers; and allocate equally on a per capita
basis to generate a base fee.
    (ii) Provide all small businesses who are either not associated
with a consortium, or associated with an all-small business consortium
with an 80% discount from the base fee referenced previously.
    (iii) Calculate the total remaining fee and total number of
remaining manufacturers by subtracting out the discounted fees and the
number of small businesses identified;
    (iv) Reallocate the remaining fee across those remaining
individuals and groups in equal amounts, counting each manufacturer in
a consortium as one person; and
    (v) Inform consortia and individuals of their requisite fee amount.
    Small businesses in a successfully-formed consortium, other than a
consortium of all small businesses will not be afforded the 80%
discount by EPA, but consortia managers are strongly encouraged to
provide a discount for small business concerns.
    (g) Remittance procedure. (1) Electronic payment. Each remittance
under this section shall be paid electronically in U.S. dollars, using
one of the electronic payment methods supported by the Department of
the Treasury's Pay.gov online electronic payment service, or any
applicable additional or successor online electronic

payment service offered by the Department of Treasury.
    (2) Fees incurred prior to October 18, 2018. Timing of payment for
fees incurred between October 1, 2018 and October 18, 2018. Fees
required by paragraph (c) of this section for which the fee-triggering
action or event occurred between October 1, 2018, and October 18, 2018
shall be paid in response to invoices EPA will send within 30 days of
October 18, 2018.
    (3) Fees incurred after October 18, 2018. Timing of payment for
fees incurred after October 18, 2018. Fees required by paragraph (c) of
this section for which the fee-triggering action or event occurred
after October 18, 2018 shall be paid at the following time:
    (i) Test orders and test rules. The applicable fee specified in
paragraph (c) of this section shall be paid in full not later than 120
days after the effective date of a test rule or test order under
section 4 of the Act.
    (ii) Enforceable consent agreements. The applicable fee specified
in paragraph (c) of this section shall be paid in full not later than
120 days after the signing of an enforceable consent agreement under
section 4 of the Act.
    (iii) Section 5 notice. The applicable fee specified in paragraph
(c) of this section shall be paid in full immediately upon submission
of a TSCA section 5 notice.
    (iv) Risk evaluations. (A) For EPA-initiated risk evaluations, the
applicable fee specified in paragraph (c) of this section shall be paid
in full not later than 120 days after EPA publishes the final scope of
a chemical risk evaluation under section 6(b)(4)(D) of the Act.
    (B) For manufacturer-requested risk evaluations under section
6(b)(4)(C)(ii) of the Act, the applicable fees specified in paragraph
(c) of this section shall be paid as follows:
    (1) The first payment towards the applicable fee specified in
paragraph (c) of this section shall be paid in full not later than 30
days after EPA provides the submitting manufacture(s) notice that it
has granted the request.
    (2) The final payment towards the applicable fee specific in
paragraph (c) of this section shall be paid in full not later than 30
days after EPA publishes a final risk evaluation in the Federal
Register.
    (4) Payment identity. (i) Persons who submit a TSCA section 5
notice shall place an identifying number and a payment identity number
on the front page of each TSCA section 5 notice submitted. The
identifying number must include the letters ``TS'' followed by a
combination of 6 numbers (letters may be substituted for some numbers).
The payment identity number may be a ``Pay.gov'' transaction number
used to transmit the fee. The same TS number and the submitter's name
must appear on the corresponding fee remittance under this section. If
a remittance applies to more than one TSCA section 5 notice, the person
shall include the name of the submitter and a new TS number for each
TSCA section 5 notice to which the remittance applies, and the amount
of the remittance that applies to each notice.
    (ii) Persons who are required to submit a letter of intent to
conduct testing per Sec.  790.45 of this chapter shall place a payment
identity number on the front page of each letter submitted. The
identifying number must include the letters ``TS'' followed by a
combination of 6 numbers (letters may be substituted for some numbers).
The payment identity number may be a ``Pay.gov'' transaction number
used to transmit the fee. The same TS number and the submitter's name
must appear on the corresponding fee remittance under this section. If
a remittance applies to more than one letter of intent to conduct
testing, the person shall include the name of the submitter and a new
TS number for each letter of intent to conduct testing to which the
remittance applies, and the amount of the remittance that applies to
each letter of intent.
    (iii) Persons who sign an enforceable consent agreement per Sec.
790.60 of this chapter shall place a payment identity number within the
contents of the signed agreement. The identifying number must include
the letters ``TS'' followed by a combination of 6 numbers (letters may
be substituted for some numbers). The payment identity number may be a
``Pay.gov'' transaction number used to transmit the fee. The same TS
number and the submitter's name must appear on the corresponding fee
remittance under this section. If a remittance applies to more than one
enforceable consent agreement, the party or parties shall include the
name of the submitter(s) and a new TS number for each enforceable
consent agreement to which the remittance applies, and the amount of
the remittance that applies to each enforceable consent agreement.
    (5) Small business certification. (i) Each person who remits the
fee identified in paragraph (c)(1) of this section for a PMN,
consolidated PMN, or SNUN shall insert a check mark for the statement,
``The company named in part 1, section A is a small business concern
under 40 CFR 700.43 and has remitted a fee of $2,800 in accordance with
40 CFR 700.45(c).'' under ``CERTIFICATION'' on page 2 of the
Premanufacture Notice for New Chemical Substances (EPA Form 7710-25).
This form is available on EPA's website at https://cdx.epa.gov/SSL/PMN/Outbound/Electronic_PMN_Form_version2.pdf.
    (ii) Each person who remits the fee identified in paragraph (c)(1)
of this section for a LVE, LoREX, TERA, TMEA, or Tier II exemption
request under TSCA section 5 shall insert a check mark for the
statement, ``The company named in part 1, section A is a small business
concern under 40 CFR 700.43 and has remitted a fee of $940 in
accordance with 40 CFR 700.45(c).'' in the exemption application.
    (iii) Each person who remits the fee identified in paragraph (c)(1)
of this section for an exemption notice under Sec.  723.175 of this
chapter shall include the words, ``The company or companies identified
in this notice is/are a small business concern under 40 CFR 700.43 and
has/have remitted a fee of $940 in accordance with 40 CFR 700.45(c).''
in the certification required in Sec.  723.175(i)(1)(x) of this
chapter.
    (iv) Each person who remits the fee identified in paragraph (c)(1)
of this section for a MCAN or consolidated MCAN for a microorganism
shall insert a check mark for the statement, ``The company named in
part 1, section A is a small business concern under 40 CFR 700.43 and
has remitted a fee of $2,800 in accordance with 40 CFR 700.45(c).'' in
the certification required in Sec.  725.25(b) of this chapter.
    (6) Payment certification statement. (i) Each person who remits a
fee identified in paragraph (c)(2) of this section for a PMN,
consolidated PMN, or SNUN shall insert a check mark for the statement,
``The company named in part 1, section A has remitted the fee of
$16,000 specified in 40 CFR 700.45(c).'' under ``CERTIFICATION'' on
page 2 of the Premanufacture Notice for New Chemical Substances (EPA
Form 7710-25).
    (ii) Each person who remits a fee identified in paragraph (c)(2) of
this section for a LVE, LoREX, TERA, TMEA, or Tier II exemption request
under TSCA section 5 shall insert a check mark for the statement, ``The
company named in part 1, section A has remitted the fee of $4,700
specified in 40 CFR 700.45(c).'' in the exemption application.
    (iii) Each person who remits the fee identified in paragraph (c)(2)
of this section for an exemption notice under Sec.  723.175 of this
chapter shall include the words, ``The company or companies identified
in this notice has/have remitted a fee of $4,700 in accordance

with 40 CFR 700.45(c).'' in the certification required in Sec.
723.175(i)(1)(x) of this chapter.
    (iv) Each person who remits the fee identified in paragraph (c)(2)
of this section for a MCAN for a microorganism shall insert a check
mark for the statement, ``The company named in part 1, section A has
remitted the fee of $16,000 in accordance with 40 CFR 700.45(c).'' in
the certification required in Sec.  725.25(b) of this chapter.
    (h) Full fee refunds. EPA will refund, in totality, any fee paid
for a section 5 notice whenever the Agency determines:
    (1) That the chemical substance that is the subject of a PMN,
consolidated PMN, exemption request, or exemption notice, is not a new
chemical substance as of the date of submission of the notice,
    (2) In the case of a SNUN, that the notice was not required,
    (3) That as of the date of submission of the notice: The
microorganism that is the subject of a MCAN or consolidated MCAN is not
a new microorganism; nor is the use involving the microorganism a
significant new use; or
    (4) When the Agency fails to make a determination on a notice by
the end of the applicable notice review period under Sec.  720.75 or
Sec.  725.50 of this chapter, unless the Agency determines that the
submitter unduly delayed the process, or
    (5) When the Agency fails to approve, or deny an exemption request
within the applicable period under Sec.  720.38(d), Sec.  723.50(g), or
Sec.  725.50(b) of this chapter, unless the Agency determines that the
submitter unduly delayed the process.
    (i) Partial fee refunds. (1) If a TSCA section 5 notice is
withdrawn during the first 10 business days after the beginning of the
applicable review period under Sec.  720.75(a) of this chapter, the
Agency will refund all but 25% of the fee as soon as practicable.
    (2) Once withdrawn, any future submission related to the TSCA
section 5 notice must be submitted as a new notice.
    (3) If EPA determines that the initial payment for a manufacturer-
requested risk evaluation exceed the applicable fee in paragraph (c) of
this section, EPA will refund the difference.

0
5. Section 700.49 is revised to read as follows:

Sec.  700.49  Failure to remit fees.

    (a) EPA will not consider a TSCA section 5 notice to be complete
unless the appropriate certification under Sec.  700.45(g) is included
and until the appropriate remittance under Sec.  700.45(c) has been
submitted as provided in Sec.  700.45(g). EPA will notify the submitter
of a section 5 notice that it is incomplete in accordance with
Sec. Sec.  720.65(c) and 725.33(b)(1) of this chapter.
    (b) Failure to submit the appropriate remittance specified under
Sec.  700.45(c) for a test order, test rule, enforceable consent
agreement, or EPA-initiated risk evaluation as provided in Sec.
700.45(g) is a violation of TSCA and enforceable under section 15 of
the Act.
    (c) EPA will not initiate a manufacturer-requested risk evaluation
the request for which the Agency has otherwise determined to be
complete unless EPA has determined to grant the request and the
appropriate initial remittance under Sec.  700.45(c) has been submitted
as provided in Sec.  700.45(g).
    (d) Failure to submit the appropriate final remittance specified
under Sec.  700.45(c) for a manufacturer-requested risk evaluation as
provided in Sec.  700.45(g) is a violation of TSCA and enforceable
under section 15 of the Act.

PART 720--[AMENDED]

0
6. The authority citation for part 720 continues to read as follows:

    Authority:  15 U.S.C. 2604, 2607, and 2613.

0
7. Section 720.38 is amended by adding paragraphs (b)(6) and (f) to
read as follows:

Sec.  720.38  Exemptions for test marketing.

* * * * *
    (b) * * *
    (6) A fee payment identity number, as required in 40 CFR
700.45(g)(4).
* * * * *
    (f) When applying for a test marketing exemption, persons are
subject to fees in accordance with 40 CFR 700.45.

0
8. Section 720.45 is amended by revising paragraph (a)(5) to read as
follows:

Sec.  720.45  Information that must be included in the notice form.

* * * * *
    (a) * * *
    (5) If a manufacturer cannot provide all the information specified
in paragraphs (a)(1) and (2) of this section because the new chemical
substance is manufactured using a reactant having a specific chemical
identity claimed as confidential by its supplier, the manufacturer must
submit a notice directly to EPA containing all the information known by
the manufacturer about the chemical identity of the reported substance
and its proprietary reactant. In addition, the manufacturer must ensure
that the supplier of the confidential reactant submit a letter of
support directly to EPA providing the specific chemical identity of the
confidential reactant, including the CAS number, if available, and the
appropriate PMN or exemption number, if applicable. The letter of
support must reference the manufacturer's name and PMN Fee
Identification Number. The statutory review period will commence upon
receipt of both the notice and the letter of support.
* * * * *

PART 723--[AMENDED]

0
9. The authority citation for part 723 continues to read as follows:

    Authority:  15 U.S.C. 2604.

0
10. Revise section 723.175 to read as follows:

Sec.  723.175  Chemical substances used in or for the manufacture or
processing of instant photographic and peel-apart film articles.

    (a) Purpose and scope. (1) This section grants an exemption from
the premanufacture notice requirements of section 5(a)(1)(A) of the
Toxic Substances Control Act (15 U.S.C. 2604(a)(1)(A)) for the
manufacture and processing of new chemical substances used in or for
the manufacture or processing of instant photographic and peel-apart
film articles. This section does not apply to microorganisms subject to
part 725 of this chapter.
    (2) To manufacture a new chemical substance under the terms of this
exemption, a manufacturer of instant photographic or peel-apart film
articles must:
    (i) Submit an exemption notice when manufacture begins under
paragraph (i) of this section.
    (ii) Comply with certain requirements to limit exposure to the new
chemical substance under paragraphs (e) through (h) of this section.
    (iii) Comply with all recordkeeping requirements under paragraph
(j) of this section.
    (iv) Remit the applicable fee specified in Sec.  700.45(c) of this
chapter.
    (b) Definitions--(1) Act means the Toxic Substances Control Act (15
U.S.C. 2601 et seq.).
    (2) An article is a manufactured item--
    (i) Which is formed to a specific shape or design during
manufacture;
    (ii) Which has end use function(s) dependent in whole or in part
upon its shape or design during end use; and
    (iii) Which has either no change of chemical composition during its
end use or only those changes of composition which have no commercial

purpose separate from that of the article and that may occur as
described in Sec.  710.2 of this chapter except that fluids and
particles are not considered articles regardless of shape or design.
    (3) The terms byproduct, EPA, impurities, person, and site have the
same meanings as in Sec.  710.3 of this chapter.
    (4) The term category of chemical substances has the same meaning
as in section 26(c)(2) of the Act (15 U.S.C. 2625).
    (5) The terms chemical substance, distribute in commerce,
distribution in commerce, environment, manufacture, new chemical
substance, and process have the same meanings as in section 3 of the
Act (15 U.S.C. 2602).
    (6) Director of the Office of Pollution Prevention and Toxics means
the Director of the EPA Office of Pollution Prevention and Toxics or
any EPA employee designated by the Office Director to carry out the
Office Director's functions under this section.
    (7) The term exemption category means a category of chemical
substances for which a person(s) has applied for or been granted an
exemption under section 5(h)(4) of the Act (15 U.S.C. 2604).
    (8) The term instant photographic film article means a self-
developing photographic film article designed so that all the chemical
substances contained in the article, including the chemical substances
required to process the film, remain sealed during distribution and
use.
    (9) Intermediate means any chemical substance which is consumed in
whole or in part in a chemical reaction(s) used for the intentional
manufacture of another chemical substance.
    (10) Known to or reasonably ascertainable means all information in
a person's possession or control, plus all information that a
reasonable person similarly situated might be expected to possess,
control, or know, or could obtain without unreasonable burden or cost.
    (11) The term peel-apart film article means a self-developing
photographic film article consisting of a positive image receiving
sheet, a light sensitive negative sheet, and a sealed reagent pod
containing a developer reagent and designed so that all the chemical
substances required to develop or process the film will not remain
sealed within the article during and after the development of the film.
    (12) Photographic article means any article which will become a
component of an instant photographic or peel-apart film article.
    (13) Special production area means a demarcated area within which
all manufacturing, processing, and use of a new chemical substance
takes place, except as provided in paragraph (f) of this section, in
accordance with the requirements of paragraph (e) of this section.
    (14) Test data means:
    (i) Data from a formal or informal study, test, experiment,
recorded observation, monitoring, or measurement.
    (ii) Information concerning the objectives, experimental methods
and materials, protocols, results, data analyses (including risk
assessments), and conclusions from a study, test, experiment, recorded
observation, monitoring, or measurement.
    (15) Used in or for the manufacturing or processing of an instant
photographic or peel-apart film article, when used to describe
activities involving a new chemical substance, means the new chemical
substance--
    (i) Is included in the article; or
    (ii) Is an intermediate to a chemical substance included in the
article or is one of a series of intermediates used to manufacture a
chemical substance included in the article.
    (16) Wet mixture means a water or organic solvent-based suspension,
solution, dispersion, or emulsion used in the manufacture of an instant
photographic or peel-apart film article.
    (c) Exemption category. The exemption category includes new
chemical substances used in or for the manufacture or processing of
instant photographic or peel-apart film articles which are manufactured
and processed under the terms of this section.
    (d) Applicability. This exemption applies only to manufacturers of
instant photographic or peel-apart film articles who:
    (1) Manufacture the new chemical substances used in or for the
manufacture or processing of the instant photographic or peel-apart
film articles.
    (2) Limit manufacture and processing of a new chemical substance to
the site(s) listed in the exemption notice for that new chemical
substance submitted under paragraph (i) of this section.
    (3) Comply with the requirements of paragraphs (e), (f), (g), (h),
and (j) of this section.
    (4) Do not distribute in commerce or use a peel-apart film article
containing a new chemical substance until submission of a
premanufacture notice under section 5(a)(1)(A) of the Act (15 U.S.C.
2604) and until the review period for the notice has ended without EPA
action to prevent distribution or use.
    (e) Conditions of manufacture and processing in the special
production area. All manufacturing, processing, and use operations
involving the new chemical substance must be performed in a special
production area under the conditions set forth in this paragraph until
the new chemical substance has been incorporated into a wet mixture,
photographic article, or instant photographic or peel-apart film
article.
    (1) Exposure limits. In the special production area, the ambient
air concentration of the new chemical substance during manufacture,
processing, and use cannot exceed an 8-hour time weighted average (TWA)
of 10 ppm for gases and vapors and 50 [micro]g/m\3\ for particulates,
with an allowable TWA excursion of 50 percent above those
concentrations for a duration of 30 minutes or less.
    (2) Respiratory protection--(i) Respirator requirement. Except as
specified in paragraph (e)(2)(ii) of this section, each person in the
special production area must wear an appropriate respiratory protection
device to protect against dusts, fumes, vapors, and other airborne
contaminants, as described in 29 CFR 1910.134. Selection of an
appropriate respirator must be made according to the guidance of
American National Standard Practices for Respiratory Protection Z88.2-
1969 and the NIOSH Certified Equipment List, U.S. Department of Health
and Human Services, NIOSH publication No. 80-144.
    (ii) Waiver of respirator requirement. Employees are not required
to wear respirators if monitoring information collected and analyzed in
accordance with paragraph (e)(3) of this section demonstrates that the
ambient 8-hour TWA concentration of the new chemical substance in the
area is less than 1 ppm for gases and vapors and 5 [micro]g/m\3\ for
particulates with an allowable TWA excursion of 50 percent above these
concentrations for a duration of 30 minutes or less.
    (iii) Quantitative fit test. Each respirator must be issued to a
specific individual for personal use. A quantitative fit test must be
performed for each respirator before its first use by that person in a
special production area.
    (3) Monitoring--(i) When to monitor. (A) When suitable sampling and
analytic methods exist, periodic monitoring in accordance with this
paragraph must be done to ensure compliance with the exposure limits of
paragraphs (e)(1) and (e)(2)(ii) of this section.
    (B) When suitable sampling and analytic methods do not exist,

compliance with the exposure limits of paragraph (e)(1) and the
requirements of paragraph (e)(10) of this section must be determined by
an evaluation of monitoring data developed for a surrogate chemical
substance possessing comparable physical-chemical properties under
similar manufacturing and processing conditions.
    (ii) Monitoring methods. A suitable air sampling method must permit
personal or fixed location sampling by conventional collection methods.
A suitable analytic method must have adequate sensitivity for the
volume of sample available and be specific for the new chemical
substance being monitored. If chemical-specific monitoring methods are
not available, nonspecific methods may be used if the concentration of
the new chemical substance is assumed to be the total concentration of
chemical substances monitored.
    (iii) Monitoring frequency. (A) When suitable air sampling and
analytical procedures are available, monitoring must be done in each
special production area during the first three 8-hour work shifts
involving the manufacture or processing of each new chemical substance.
Thereafter, monitoring must be done in each special production area for
at least one 8-hour period per month, during a production run in which
the new chemical substance is manufactured or processed. Samples must
be of such frequency and pattern as to represent with reasonable
accuracy the mean level and maximum 30-minute level of employee
exposure during an 8-hour work shift. In monitoring for an 8-hour work
shift or the equivalent, samples must be collected periodically or
continuously for the duration of the 8-hour work shift. Samples must be
taken during a period which is likely to represent the maximum employee
exposure.
    (B) If the manufacturer demonstrates compliance with the exposure
limits for 3 consecutive months, further monitoring of the identical
process must be performed only every 6 months thereafter, unless there
is a significant change in the process, process design, or equipment.
If there is such a change, the manufacturer must begin monitoring again
according to the schedule in paragraph (e)(3)(iii)(A) of this section.
    (iv) Location of monitoring. Air samples must be taken so as to
ensure that the samples adequately represent the ambient air
concentration of a new chemical substance present in each worker's
breathing zone.
    (4) Engineering controls and exposure safeguards. Engineering
controls such as, but not limited to, isolation, enclosure, local
exhaust ventilation, and dust collection must be used to ensure
compliance with the exposure limits prescribed in paragraph (e)(1) or
(e)(2)(ii) of this section.
    (5) Training, hygiene, and work practices--(i) Training. No
employee may enter a special production area before the completion of a
training program. The training program must be adapted to the
individual circumstances of the manufacturer and must address: The
known physical-chemical and toxicological properties of the chemical
substances handled in the area; procedures for using and maintaining
respirators and other personal safeguards; applicable principles of
hygiene; special handling procedures designed to limit personal
exposure to, and inadvertent release of, chemical substances; and
procedures for responding to emergencies or spills.
    (ii) Hygiene. Appropriate standards of hygiene must be observed by
all employees handling a new chemical substance in manufacturing,
processing, or transfer operations. The manufacturer must provide
appropriate facilities for employee changing and wash-up. Food,
beverages, tobacco products, and cosmetics must not be allowed in
special production areas.
    (iii) Work practices. Operating procedures such as those related to
chemical weighing and filtering, or the charging, discharging and
clean-up of process equipment, must be designed and conducted to ensure
compliance with the exposure limits prescribed in paragraph (e)(1) or
(e)(2)(ii) of this section. Written procedures and all materials
necessary for responding to emergency situations must be immediately
accessible to all employees in a special production area. Any spill or
unanticipated emission must be controlled by specially trained
personnel using the equipment and protective clothing described in
paragraph (e)(6) of this section.
    (6) Personal protection devices. All workers engaged in the
manufacture and processing of a new chemical substance in the special
production area must wear suitable protective clothing or equipment,
such as chemical-resistant coveralls, protective eyewear, and gloves.
    (7) Caution signs. Each special production area must be clearly
posted with signs identifying the area as a special production area
where new chemical substances are manufactured and processed under
controlled conditions. Each sign must clearly restrict entry into the
special production area to qualified personnel who are properly trained
and equipped with appropriate personal exposure safeguards.
    (8) Removal for storage or transportation. A new chemical substance
that is not incorporated into a wet mixture, photographic article, or
instant photographic or peel-apart film article may be removed from the
special production area for purposes of storage between operational
steps or for purposes of transportation to another special production
area. Such storage or transportation must be conducted in a manner that
limits worker and environmental exposure through the use of engineering
controls, training, hygiene, work practices, and personal protective
devices appropriate to the chemical substance in question.
    (9) Labeling. (i) Any new chemical substance removed from a special
production area or stored or transported between operational steps must
be clearly labeled. The label must show the identity of the new
chemical substance or an appropriate identification code, a statement
of any known hazards associated with it, a list of special handling
instructions, first aid information, spill control directions, and
where applicable, the appropriate U.S. Department of Transportation
notations.
    (ii) No label is required if the new chemical substance has been
incorporated into a photographic article, or if it is contained in a
sealed reaction vessel or pipeline, or if it has been incorporated into
an instant photographic or peel-apart film article.
    (10) Areas immediately adjacent to the special production area. The
ambient air concentration of the new chemical substance in areas
immediately adjacent to the special production area must not exceed the
exposure limit established in paragraph (e)(2)(ii) of this section for
waiver of respirator protection within the special production area.
Periodic monitoring in accordance with paragraph (e)(3) of this section
must be performed in immediately adjacent areas where it is reasonable
to expect a risk of inhalation exposure.
    (f) Conditions of processing outside the special production area. A
wet mixture may be incorporated into a photographic article or an
instant photographic or peel-apart film article outside the special
production area under the conditions listed in this paragraph:
    (1) Engineering controls and exposure safeguards. Engineering
controls must limit the exposure to a new chemical substance contained
in a wet mixture.
    (2) Training, hygiene and work practices--(i) Training. Training of

employees involved in the handling of wet mixtures containing a new
chemical substance must be adapted to the individual circumstances of
the employees' activities and must address: Procedures for using
personal exposure safeguards, applicable principles of hygiene,
handling procedures designed to limit personal exposure, and procedures
for responding to emergencies and spills.
    (ii) Hygiene. Appropriate standards of hygiene that limit exposure
must be observed by all employees handling wet mixtures that contain
new chemical substances.
    (iii) Work practices. Work practices and operating procedures must
be designed to limit exposure to any new chemical substance contained
in wet mixtures. Any spills or unanticipated releases of a wet mixture
must be controlled by trained personnel wearing appropriate protective
clothing or equipment such as gloves, eye protection, and, where
necessary, respirators or chemically impervious clothing.
    (3) Personal protection devices. All workers engaged in the
processing of a wet mixture containing a new chemical substance must
wear suitable protective clothing or equipment such as coveralls,
protective eyewear, respirators, and gloves.
    (g) Incorporation of photographic articles into instant
photographic and peel-apart film articles. A photographic article may
be incorporated into the instant photographic or peel-apart film
article outside the special production area. The manufacturer must take
measures to limit worker and environmental exposure to new chemical
substances during these operations using engineering controls,
training, hygiene, work practices, and personal protective devices.
    (h) Environmental release and waste treatment--(1) Release to land.
Process waste from manufacturing and processing operations in the
special production area that contain a new chemical substance are
considered to be hazardous waste and must be handled in accordance with
the requirements of parts 262 through 267 and parts 122 and 124 of this
chapter.
    (2) Release to water. All wastewater or discharge which contain the
new chemical substance must be appropriately pretreated before release
to a Publicly Owned Treatment Works (POTW) or other receiving body of
water. In the case of release to a POTW, the pretreatment must prevent
structural damage to, obstruction of, or interference with the
operation of the POTW. The treatment of direct release to a receiving
body of water must be appropriate for the new chemical substance's
physical-chemical properties and potential toxicity.
    (3) Release to air. All process emissions released to the air which
contain the new chemical substance must be vented through control
devices appropriate for the new chemical substance's physical-chemical
properties and potential toxicity.
    (i) Exemption notice. An exemption notices must be submitted to EPA
when manufacture of the new chemical substance begins.
    (1) Contents of exemption notice. The exemption notice must include
the following information:
    (i) Manufacturer and sites. The notice must identify the
manufacturer and the sites and locations where the new chemical
substance and the instant photographic or peel-apart film articles will
be manufactured and processed.
    (ii) Chemical identification. The notice must identify the new
chemical substance as follows:
    (A) Class 1 substances. For chemical substances whose composition
can be represented by a definite structural diagram (Class 1
substances), the notice must provide the chemical name (preferably CAS
or IUPAC nomenclature), the molecular formula, CAS Registry Number (if
available), known synonyms (including trade names), and a structural
diagram.
    (B) Class 2 substances. For chemical substances that cannot be
fully represented by a structural diagram, (Class 2 substances), the
notice must provide the chemical name, the molecular formula, the CAS
Registry Number (if available), and known synonyms (including trade
names). The notice must identify the immediate precursors and reactants
by name and CAS Registry Number (if available). The notice must include
a partial or incomplete structural diagram, if available.
    (C) Polymers. For a polymer, the notice must identify monomers and
other reactants used in the manufacture of the polymer by chemical name
and CAS Registry Number. The notice must indicate the amount of each
monomer used (by weight percent of total monomer); the maximum residual
of each monomer present in the polymer; and a partial or incomplete
structural diagram, if available. The notice must indicate the number
average molecular weight of the polymer and characterize the
anticipated low molecular weight species. The notice must include this
information for each typical average molecular weight composition of
the polymer to be manufactured.
    (iii) Impurities. The notice must identify the impurities that can
be reasonably anticipated to be present in the new chemical substance
when manufactured under the exemption by name and CAS Registry Number,
by class of substances, or by process or source. The notice also must
estimate the maximum percent (by weight) of each impurity in the new
chemical substance and the percent of unknown impurities present.
    (iv) Physical-chemical properties. The notice must describe the
physical-chemical properties of the new chemical substance. Where
specific physical-chemical data are not available, reasonable estimates
and the techniques used to develop these estimates must be provided.
    (v) Byproducts. The notice must identify the name, CAS Registry
number (if available), and the volume of each byproduct that would be
manufactured during manufacture of the new chemical substance.
    (vi) Production volume. The notice must include an estimate of the
anticipated maximum annual production volume.
    (vii) Test data. The notice must include all information and test
data on the new chemical substance's health and environmental effects
that are known to or reasonably ascertainable by the manufacturer.
    (viii) Identity of the article. The notice must identify and
describe the instant photographic film article(s) or peel-apart film
article(s) that will contain the new chemical substance.
    (ix) Release to water. The notice must include a description of the
methods used to control and treat wastewater or discharge released to a
POTW or other receiving body of water. The notice must also identify
the POTW or receiving body of water.
    (x) Certification. The manufacturer must certify in the notice that
it is familiar with the terms of the exemption and that the
manufacture, processing, distribution, use, and disposal of the new
chemical substance will comply with those terms.
    (xi) Fee payment ID number. The manufacturer or processor must
include a payment identity number on the front page of the notice.
    (2) Duplication of information in premanufacture notice. If a
manufacturer who submits an exemption notice under this paragraph has
already submitted, or simultaneously submits, a premanufacture notice
under section 5(a)(1)(A) of the Act for the new chemical substance, it
may, in lieu of submitting the information required by

this paragraph, reference the required information to the extent it is
included in the premanufacture notice. At a minimum, the exemption
notice must identify the manufacturer and the new chemical substance,
and contain the certification required by paragraph (i)(1)(x) of this
section.
    (3) Address. The exemption notice must be addressed to the Document
Control Office (DCO) (7407M), Office of Pollution Prevention and Toxics
(OPPT), Environmental Protection Agency, 1200 Pennsylvania Ave. NW,
Washington, DC 20460-0001.
    (j) Recordkeeping. (1) Manufacturers of a new chemical substance
under this exemption must keep the following records for 30 years from
the final date of manufacture.
    (i) Production records. Each manufacturer must maintain records of
the annual production volume of each new chemical substance
manufactured under the terms of the exemption. This record must
indicate when manufacture of the new chemical substance began.
    (ii) Exposure monitoring records. Manufacturers must maintain an
accurate record of all monitoring required by this section. Monitoring
records may be adapted to the individual circumstances of the
manufacturer but, at a minimum, must contain the following information:
The chemical identity of the new chemical substance, date of the
monitoring, the actual monitoring data for each monitoring location and
sampling, and a reference to or description of the collection and
analytic techniques. If the manufacturer does not monitor, the
manufacturer must maintain a record of the reasons for not monitoring
and the methods used to determine compliance with the exposure limits
of paragraph (e)(1) of this section.
    (iii) Training and exposure records. For each employee engaged in
the manufacture or processing of a new chemical substance, the company
must develop and maintain a record of the worker's participation in
required training. This record must also demonstrate the regular use of
personal exposure safeguards, including the results of any personal
exposure monitoring, the results of the quantitative fit test for the
worker's personal respirator, and any additional information related to
the worker's occupational exposure.
    (iv) Treatment records. Manufacturers who release treated
wastewater or discharge containing a new chemical substance to a POTW
or other receiving body of water must maintain records of the method of
treatment.
    (2) The manufacturer must make the records listed in paragraph
(j)(1) of this section available to EPA upon written request by the
Director of the Office of Pollution Prevention and Toxics. The
manufacturer must provide these records within 15 working days of
receipt of this request.
    (k) Confidentiality. If the manufacturer submits information under
paragraph (i) or (j) of this section which it claims to be confidential
business information, the manufacturer must clearly identify the
information at the time of submission to the Agency by bracketing,
circling, or underlining it and stamping it with ``CONFIDENTIAL'' or
some other appropriate designation. Any information so identified will
be treated in accordance with the procedures in part 2 of this chapter.
Any information not claimed confidential at the time of submission will
be made available to the public without further notice to the
submitter.
    (l) Amendment and repeal. (1) EPA may amend or repeal any term of
this exemption if it determines that the manufacture, processing,
distribution, use, and disposal of new chemical substances under the
terms of the exemption may present an unreasonable risk of injury to
health or the environment. EPA also may amend this exemption to enlarge
the exemption category or to reduce the restrictions or conditions of
the exemption.
    (2) As required by section 5(h)(4) of the Act, EPA will amend or
repeal the substantive terms of an exemption granted under this part
only by the formal rulemaking procedures described in section 6(c)(2)
and (3) of the Act (15 U.S.C. 2605(c)).
    (m) Prohibition of use of the exemption. The Director of the Office
of Pollution Prevention and Toxics may prohibit the manufacture,
processing, distribution, use, or disposal of any new chemical
substance under the terms of this exemption if he or she determines
that the manufacture, processing, distribution in commerce, use, or
disposal of the new chemical substance may present an unreasonable risk
of injury to health or the environment.
    (n) Enforcement. (1) A failure to comply with any provision of this
part is a violation of section 15 of the Act (15 U.S.C. 2614).
    (2) Submitting materially misleading or false information in
connection with the requirements of any provision of this part is a
violation of this regulation and therefore a violation of section 15 of
the Act (15 U.S.C. 2614).
    (3) Violators may be subject to the civil and criminal penalties in
section 16 of the Act (15 U.S.C. 2615) for each violation.
    (4) EPA may seek to enjoin the manufacture of a new chemical
substance in violation of this exemption or act to seize any chemical
substances manufactured in violation of the exemption under the
authority of section 17 of the Act (15 U.S.C. 2616).

PART 725--[AMENDED]

0
11. The authority citation for part 725 continues to read as follows:

    Authority:  15 U.S.C. 2604, 2607, 2613, and 2625.

0
12. Section 725.25 is amended by adding paragraph (i) to read as
follows:

Sec.  725.25  General administrative requirements.

* * * * *
    (i) Fees. Persons submitting MCANs and exemption requests to EPA
under this part are subject to the applicable fees and conditions
specified in Sec. Sec.  700.40, 700.45(c), and 700.49 of this chapter.

0
13. Section 725.33 is amended by revising paragraphs (a)(9) and (10) to
read as follows:

Sec.  725.33  Incomplete submissions.

    (a) * * *
    (9) The submitter does not remit the fees required by Sec.
700.45(c) of this chapter.
    (10) The submitter does not include an identifying number and a
payment identity number.
* * * * *

PART 790--[AMENDED]

0
14. The authority citation for part 790 continues to read as follows:

    Authority:  15 U.S.C. 2603.

0
15. Section 790.45 is amended by adding paragraphs (c)(7) and (g) to
read as follows:

Sec.  790.45  Submission of letter of intent to conduct testing or
exemption application.

* * * * *
    (c) * * *
    (7) A payment identity number on the front page of the letter, as
required in Sec.  700.45(g)(4) of this chapter.
* * * * *
    (g) Manufacturers and processors subject to a test rule described
in Sec.  790.40 and required to comply with the requirements of that
test rule as provided in Sec.  790.42(a) must remit the applicable fee
specified in Sec.  700.45(c) of this chapter.

0
16. Section 790.59 is amended by adding paragraph (c) to reads as
follows:

Sec.  790.59  Failure to comply with a test rule.

* * * * *
    (c) Persons who fail to pay the requisite fee as specified in Sec.
700.45(c) of this chapter will be in violation of the rule.

0
17. Section 790.60 is amended by adding paragraphs (a)(18) and (d) to
read as follows:

Sec.  790.60  Contents of consent agreements.

    (a) * * *
    (18) Payment identity number, as required in Sec.  700.45(g)(4) of
this chapter.
* * * * *
    (d) Fees. Manufacturers and/or processors signing the consent
agreement are subject to the applicable fee specified in Sec.
700.45(c) of this chapter.

0
18. Section 790.65 is amended by revising paragraph (b) to read as
follows:

Sec.  790.65  Failure to comply with a consent agreement.

* * * * *
    (b) The Agency considers failure to comply with any aspect of a
consent agreement, including the failure to pay requisite fees as
specified in Sec.  700.45 of this chapter, to be a ``prohibited act''
under section 15 of TSCA, subject to all the provisions of the Act
applicable to violations of section 15. Section 15(1) of TSCA makes it
unlawful for any person to fail or refuse to comply with any rule or
order issued under section 4. Consent agreements adopted pursuant to
this part are ``orders issued under section 4'' for purposes of section
15(1) of TSCA.
* * * * *

PART 791--[AMENDED]

0
19. The authority citation for part 791 continues to read as follows:

    Authority:  15 U.S.C. 2603 and 2607.

0
20. Section 791.39 is amended by removing paragraph (a)(3) and revising
paragraph (b).
    The revision reads as follows:

Sec.  791.39  Fees and expenses.

* * * * *
    (b) Expenses. All expenses of the hearing, including the cost of
recording (though not transcribing) the hearing and required traveling
and other expenses of the hearing officer and of American Arbitration
Association representatives, and the expenses of any witness or the
cost of any proofs produced at the direct request of the hearing
officer, shall be borne equally by the parties, unless they agree
otherwise, or unless the hearing officer, in the award, assesses such
expenses or any part thereof against any specified party or parties.
* * * * *
[FR Doc. 2018-22252 Filed 10-16-18; 8:45 am]
 BILLING CODE 6560-50-P


[Federal Register: May 29, 2008 (Volume 73, Number 104)]
[Notices]
[Page 30987-30988]
[DOCID:fr29my08-132]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57847; File No. SR-ISE-2008-29]

Self-Regulatory Organizations; International Securities Exchange,
LLC; Order Approving Proposed Rule Change Relating to the Price
Improvement Mechanism

May 21, 2008.

I. Introduction

    On March 20, 2008, the International Securities Exchange, LLC
(``ISE'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to allow members to enter orders into the Price
Improvement Mechanism (``PIM'') at a price that matches the national
best bid or offer (``NBBO'') when the ISE market is inferior to the
NBBO. The proposed rule change was published for comment in the Federal
Register on April 14, 2008.\3\ The Commission received one comment
letter regarding the proposal.\4\ This order approves the proposed rule
change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 57632 (April 8,
2008), 73 FR 20079.
    \4\ See letter from Lisa J. Fall, General Counsel, Boston
Options Exchange (``BOX''), to Nancy M. Morris, Secretary,
Commission, dated May 14, 2007 (``BOX Comment'').
---------------------------------------------------------------------------

II. Description of the Proposal

    The PIM currently allows certain ISE members to enter two-sided
orders (``Crossing Transaction'') for execution at a price that
improves upon the NBBO.\5\ The customer side of these orders is then
exposed to other members to give them an opportunity to participate in
the trade at the proposed cross price or better. The Exchange proposes
to extend the application of the PIM to permit a member to enter an
order (``Agency Order'') into the PIM at a price that is equal to the
NBBO when the ISE's best bid or offer (``ISE BBO'') is inferior to the
NBBO. When the ISE BBO equals the NBBO, the member will continue to be
required to enter a price at least one cent better than the NBBO.\6\
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 50819 (December 8,
2004), 69 FR 75093 (December 15, 2004) (approving rules implementing
the PIM).
    \6\ See ISE Rule 723(b)(1).
---------------------------------------------------------------------------

    The Commission received one comment letter regarding the proposed
rule change.\7\ The commenter expresses concern that ISE's proposal
would lead to greater rates of internalization and reduced amounts of
price improvement being made available to public customers on ISE,
especially to small orders under 50 contracts.\8\ The commenter further
believes that the proposal would reduce the incentive for market
participants to quote at the NBBO on ISE.\9\
---------------------------------------------------------------------------

    \7\ See BOX Comment, supra note 4.
    \8\ Id. at 1 and 5.
    \9\ Id. at 4.
---------------------------------------------------------------------------

III. Discussion and Commission Findings

    After carefully considering the proposal and the comment submitted,
the Commission finds that the proposed rule change is consistent with
the requirements of the Act and the rules and regulations thereunder
applicable to a national securities exchange \10\ and, in particular,
the requirements of section 6 of the Act.\11\ Specifically, the
Commission finds that the proposed rule change is consistent with
section 6(b)(5) of the Act,\12\ which requires, among other things,
that the rules of a national securities exchange be designed to promote
just and equitable principles of trade, remove impediments to and
perfect the mechanisms of a free and open market and a national market
system and, in

general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \10\ In approving this proposed rule change the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. 15 U.S.C. 78c(f).
    \11\ 15 U.S.C. 78f.
    \12\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Commission believes that the proposal will continue to provide
customers with an opportunity for price improvement over the NBBO. The
Commission notes that once a Crossing Transaction is submitted into the
PIM auction, the Crossing Transaction may not be cancelled.\13\
Therefore, the Agency Order submitted to the PIM auction when ISE's BBO
is not equal to the NBBO will be guaranteed an execution price of at
least the NBBO and, moreover, will be given an opportunity for
execution at a price better than the NBBO.
---------------------------------------------------------------------------

    \13\ See ISE Rule 723(b)(3).
---------------------------------------------------------------------------

    The Commission does not agree with the concerns raised by the
commenter. Under the proposal, the PIM will continue to provide an
opportunity for customer orders to receive an execution at a price
better than NBBO. All orders entered into the PIM will continue to be
exposed to all ISE members before the submitting member can execute
against the Agency Order. Moreover, the Commission believes the
proposal may increase the likelihood of members entering Agency Orders
into the PIM because the member will only be required to guarantee an
execution at the NBBO when ISE's BBO is not equal to the NBBO, which
would provide additional customer orders an opportunity for price
improvement over the NBBO. The proposal also may encourage increased
participation in a PIM by ISE members willing to trade with an agency
order at the NBBO but not better than the NBBO. Increased participation
by ISE members would decrease the proportion of an Agency Order that
would be internalized by the submitting member.\14\
---------------------------------------------------------------------------

    \14\ See ISE Rule 723(d)(4).
---------------------------------------------------------------------------

    The Commission thus believes that ISE's proposal is consistent with
the requirements of the Act.

IV. Conclusion

    It is therefore ordered, pursuant to section 19(b)(2) of the
Act,\15\ that the proposed rule change (File No. SR-ISE-2008-29), be,
and it hereby is, approved.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
---------------------------------------------------------------------------

    \16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Nancy M. Morris,
Secretary.
[FR Doc. E8-11931 Filed 5-28-08; 8:45 am]

BILLING CODE 8010-01-P