RFA/ SBREFA SCREENING ANALYSIS FOR THE PROPOSED WATER QUALITY STANDARDS RULE FOR THE STATE OF OREGON September 2003 Prepared for:

U. S. Environmental Protection Agency Office of Water, Office of Water Science 1201 Constitution Avenue, N. W. 5th Floor Connecting Wing Washington, D. C. 20460 Prepared by:

Science Applications International Corporation 11251 Roger Bacon Drive Reston, Virginia 20190 EPA Contract No. 68 C 99 252 SAIC Project No. 01 0833 04 5532 xxx September 2003 RFA/ SBREFA Screening Analysis i Table of Contents Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ES 1 1.0 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2.0 Analysis Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 2.1 Definition of Small Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 2.2 Identifying Small Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 2.3 Evaluating Potential Economic Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 3.0 Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 4.0 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 List of Exhibits Exhibit 2 1. Summary of Facilities Potentially Affected by the Rule . . . . . . . . . . . . . . . . . . . . . . 4 Exhibit 2 2. Small Entities Potentially Affected by the Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Exhibit 3 1. Results of Screening Analysis for Small Municipalities in Oregon1 . . . . . . . . . . . . . 7 Exhibit 3 2. Results of Screening Analysis for All Small Entities in Oregon . . . . . . . . . . . . . . . . 8 September 2003 RFA/ SBREFA Screening Analysis ii Acronyms CFR Code of Federal Regulations CWA Clean Water Act EPA U. S. Environmental Protection Agency NAICS North American Industry Classification System NPDES National Pollutant Discharge Elimination System RFA Regulatory Flexibility Act ODEQ Oregon Department of Environmental Quality SBA Small Business Administration SBREFA Small Business Regulatory Enforcement Fairness Act WQS Water quality standards September 2003 RFA/ SBREFA Screening Analysis ES 1 Executive Summary The U. S. Environmental Protection Agency ( EPA) is proposing water quality standards applicable to waters of the United States in the State of Oregon. Section 303( c) of the Clean Water Act authorizes the EPA Administrator to promulgate water quality standards to supersede State standards that have been disapproved, or in cases where the Administrator determines that a new or revised standard is needed to meet the Act's requirements.

On March 31, 2003, the U. S. District Court for the District of Oregon ruled in Northwest Environmental Advocates v. EPA & NMFS ( No. CV 01 510 HA) that EPA had violated the CWA and the ESA when it approved certain water quality standards for the protection of salmonids that were contained in Oregon's 1996 submission. The Court directed EPA to promulgate new temperature water quality standards to address deficiencies in " time and place" designations among the State standards, to promulgate new water quality criteria for intergravel dissolved oxygen, and to promulgate an antidegradation implementation plan. The proposed rule addresses these Court orders.

EPA's proposed rule does not itself establish any requirements directly applicable to regulated entities. The provisions would not be enforceable against new or existing discharges until separate steps are taken by the State of Oregon to implement them. That is, until actions are taken to adopt and implement this proposed rule, there will be no economic effect on any dischargers. To comply with the standards, however, the State may alter the National Pollutant Discharge Elimination System permit limits for point sources that discharge to the affected waters. Thus, the proposed rule may have an economic impact on point sources, including small businesses and governments. EPA developed an estimate of this impact. However, because small communities may pursue alternative compliance approaches ( e. g., water quality standards variances, changes in designated uses) or obtain grant monies and state loans, EPA's estimates may overstate the impact of the proposed rule.

Nonetheless, EPA used its estimates to consider potential impacts on small entities pursuant to the Regulatory Flexibility Act of 1980 ( RFA), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 ( SBREFA). The RFA was enacted to increase agency awareness of the impact of regulations on small entities, to allow for public comments on regulations that affect small entities, and to encourage agency use of flexibility in regulating small entities. SBREFA amended the RFA to strengthen its analytical and procedural requirements. This report provides EPA's screening level analysis of small entity impacts.

Based on its estimated costs of the proposed rule, EPA observed that 3 small government entities could incur costs that equal or exceed 1% of revenues. For 2 of these entities, costs may equal or exceed 3% of revenues ( the ratios are 4.5% and 8.3%). For comparison, based on population in 2002, there are approximately 230 small municipalities in the State. Data are not available to determine if 85 businesses affected by the proposed rule would be classified as small, or what percent of revenues the estimated costs would represent. Nonetheless, EPA estimated that at most, 13 may incur costs. For comparison, there are over 83,000 small businesses in the State. Therefore, the results suggests that the proposed rule will not have a significant economic impact September 2003 RFA/ SBREFA Screening Analysis ES 2 on a substantial number of small entities, either by category ( small governments and small businesses), or in combination. September 2003 RFA/ SBREFA Screening Analysis 1 1.0 Introduction The U. S. Environmental Protection Agency ( EPA) is proposing water quality standards ( WQS) applicable to waters of the United States in the State of Oregon. This proposed rule would not itself establish any requirements directly applicable to regulated entities. That is, until actions are taken to adopt and implement EPA's proposed rule, there will be no economic effect on any dischargers or the community. To comply with the standards, however, the State may need to alter the National Pollutant Discharge Elimination System ( NPDES) permit limits for point sources that discharge to the affected waters. Thus, the proposed rule may have an economic impact on point sources, including small businesses and governments. This report contains EPA's analysis of whether there may be a significant economic impact on a substantial number of these small entities.

The Clean Water Act ( CWA) directs States, with oversight by EPA, to adopt WQS to protect the public health and welfare, enhance the quality of water, and serve the purposes of the CWA. Under Section 303, States' water quality standards must include at a minimum: ( 1) designated uses for all water bodies within their jurisdictions, ( 2) water quality criteria sufficient to protect the most sensitive of the uses, and ( 3) an antidegradation policy consistent with the regulations at 40 CFR 131.12. States are also required to hold public hearings once every three years for the purpose of reviewing applicable water quality standards and, as appropriate, modifying and adopting standards. The results of this triennial review must be submitted to EPA and EPA must approve or disapprove any new or revised standards. Section 303( c) also directs the EPA Administrator to promulgate WQS to supersede State standards that have been disapproved or in cases where the Administrator determines that a new or revised standard is needed to meet the CWA's requirements.

With respect to antidegradation, EPA requires that States identify implementation procedures to provide three levels of water quality protection under their policy. The first level of protection at 40 CFR 131.12( a)( 1) requires the maintenance and protection of existing in stream water uses, and the level of water quality necessary to protect these existing uses ( i. e., those uses actually attained on or after November 28, 1975). The second level of protection is for high quality waters, defined in 40 CFR 131.12( a)( 2) as waters where the quality of the water exceeds levels necessary to support the propagation of fish, shellfish, and wildlife, and recreation in and on the water. The quality of high quality waters is to be maintained and protected unless the State finds, after public participation and intergovernmental review, that allowing lower water quality is necessary to accommodate important economic or social development in the area in which the waters are located. Finally, EPA designates the third and highest level of protection for Outstanding National Resource Waters ( ONRWs). If an authorized entity determines that the characteristics of a water body constitute an ONRW, such as waters of National and State parks, wildlife refuges, and waters of exceptional recreational or ecological significance, those characteristics must be maintained and protected ( see 40 CFR 131.12( a)( 3)).

On July 23, 1996, the State of Oregon submitted revisions to its water quality standards to EPA for review, and approval or disapproval, pursuant to CWA section 303( c)( 2)( A). Certain of these revisions identified specific numeric temperature criteria to protect critical life stages of September 2003 RFA/ SBREFA Screening Analysis 2 salmonids, including criteria for salmonid rearing, spawning, bull trout rearing and spawning, and intergravel dissolved oxygen ( IGDO) to protect salmonid incubation and fry emergence. Oregon also revised the temperature criteria for salmonid rearing in the Lower Willamette River from 70

F ( 21

C) to 68

F ( 20

C). In addition, Oregon adopted new or revised narrative criteria and other provisions establishing a process for adopting site specific numeric criteria or temporary revisions to its standards.

On September 15, 1998, prior to approving or disapproving the submitted standards revisions, EPA entered into formal consultation under Section 7( a)( 2) of the Endangered Species Act ( ESA) with both the National Marine Fisheries Service ( NMFS) and Fish and Wildlife Service ( FWS) in regard to listed and endangered species including chinook, coho, sockeye, chum, coastal cutthroat, steelhead, and bull trout. On July 1, 1999, the FWS issued a biological opinion that EPA's approval of the standards revisions was not likely to jeopardize the continued existence of listed threatened and endangered species, including bull trout. On July 7, 1999, NMFS issued a biological opinion that EPA's approval of the standards revisions was not likely to jeopardize the continued existence of listed threatened and endangered species, including Snake River sockeye salmon, Upper Columbia River spring chinook salmon, Upper Columbia River steelhead, Snake River spring/ summer chinook salmon, Snake River fall chinook salmon, Upper Willamette River chinook salmon, Lower Columbia River chinook salmon, Southern Oregon/ California Coastal chinook salmon, Oregon Coast coho salmon, Southern Oregon/ Northern California coho salmon, Snake River Basin steelhead trout, Middle and Lower Columbia steelhead trout, Upper Willamette steelhead trout, Oregon Coast steelhead trout, Klamath Mountains Provice steelhead trout, Columbia River chum salmon, Umpqua River sea run cutthroat trout, southwestern Washington/ Columbia River coastal cutthroat trout, Columbia River Basin bull trout, and Klamath River Basin bull trout.

On July 22, 1999, EPA approved the majority of the revised standards submitted by Oregon, including the temperature and dissolved oxygen standards. EPA disapproved the 68

F ( 20

C) numeric criteria for salmonid rearing in the Lower Willamette River because it did not include a justification for how the criterion would protect salmonid rearing given that elsewhere salmonid rearing was protected with a 64

F ( 17.8

C) criterion. Furthermore, EPA's own technical analysis of the criterion showed significant adverse impacts to salmonids. EPA took no action with respect to Oregon's existing water quality criteria for the Columbia River or its antidegradation implementation plan because Oregon had not submitted new or revised standards in 1996 on either issue.

Both EPA's approval action and NMFS Biological Opinion of " no jeopardy" were challenged in 2001 by Northwest Environmental Advocates. The plaintiff also alleged that EPA had a nondiscretionary duty to promulgate Federal water quality criteria for the lower Willamette River and the Columbia River and to promulgate an implementation plan for Oregon's antidegradation policy.

On March 31, 2003, the U. S. District Court for the District of Oregon ruled in Northwest Environmental Advocates v. EPA & NMFS ( No. CV 01 510 HA) that EPA had violated the CWA and the ESA when it approved certain water quality standards for the protection of salmonids that were contained in Oregon's 1996 submission. Although the Court deferred to September 2003 RFA/ SBREFA Screening Analysis 3 EPA's scientific judgment regarding the protectiveness of the specific numeric temperatures, the Court found that these criteria violated EPA's regulations because Oregon had failed to designate when and where these criteria would apply. The Court invalidated EPA's decision to approve the criteria because the absence of such " time and place" designations failed to protect the use categories created by Oregon, in this case salmonid rearing and bull trout rearing and spawning. The Court directed EPA to promulgate new temperature water quality criteria to address this deficiency.

For similar reasons, the Court also vacated EPA's approval of a water quality criterion for intergravel dissolved oxygen. For this criterion, the Court found that the 6 mg/ l adopted by Oregon would not adequately protect threatened and endangered salmonid species, and ordered EPA to promulgate new water quality criteria for this pollutant parameter. The Court also ordered EPA to promulgate an antidegradation implementation plan for Oregon waters. Finally, the Court vacated NMFS' finding of " no jeopardy" in connection with EPA's approval of these standards, and ruled that EPA had violated the ESA by relying on NMFS's erroneous " no jeopardy" finding. EPA's proposed rule addresses the Court's rulings.

As part of its preparation of this proposed rule, EPA estimated the potential regulatory compliance costs for point source dischargers. These estimates are presented in EPA's economic analysis of the proposed rule ( U. S. EPA, 2003). EPA's analysis indicates that small municipal wastewater treatment plants and small businesses may incur costs for treatment controls to meet the proposed water quality standards for temperature and for analyses required under the proposed antidegradation implementation plan. EPA does not expect any of the small entities potentially affected by the IGDO provision to incur compliance costs.

EPA evaluated the extent of the potential economic impact on these facilities to meet its obligations under the Regulatory Flexibility Act of 1980 ( RFA), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 ( SBREFA). The RFA was enacted to increase agency awareness of the impact of regulations on small entities, to allow for public comments on regulations that affect small entities, and to encourage agency use of flexibility in regulating small entities. SBREFA amended the RFA to strengthen its analytical and procedural requirements.

This report describes EPA's method for evaluating potential impacts, and presents the results that suggest that the proposed rule will not have a significant economic impact on a substantial number of small entities. September 2003 RFA/ SBREFA Screening Analysis 4 2.0 Analysis Method To evaluate the potential economic impact on small entities, EPA compared estimated annual facility level compliance costs to the annual revenues of potentially affected small entities ( i. e., NPDES permit holders that discharge into the affected State waters). This section describes the methods that EPA used to identify the small entities potentially affected by the proposed rule's provisions and the entities that potentially incur compliance costs, and to evaluate the potential severity of economic impact of those costs.

2.1 Definition of Small Entities EPA used the definitions of small entities ( i. e., nonmunicipal establishments, municipalities, and nonprofit organizations) established by the Small Business Administration ( SBA) and the RFA. The SBA defines small nonmunicipal establishments, or businesses, based on industrial classification codes and size standards that are usually expressed either in number of employees or annual receipts in millions of dollars ( 13 CFR § 121.201). For most of the industries represented by entities in the analysis, the threshold is 500 employees; those with a revenue based threshold generally have a $ 6 million threshold. The RFA/ SBREFA defines a small governmental jurisdiction as the government of a city, county, town, school district, or special district or a tribal jurisdiction with a population of fewer than 50,000.

2.2 Identifying Small Entities EPA's economic analysis shows that there are 382 dischargers with NPDES permits in Oregon. Of these, the temperature provision potentially affects 48 entities, the IGDO provision potentially affects 192 entities, and the antidegradation provision potentially affects 152 entities. Because of overlaps between these sets of entities, there are only 269 unique dischargers potentially affected by one or more provisions of the proposed rule. Exhibit 2 1 shows the number of unique dischargers by provision.

Exhibit 2 1. Summary of Facilities Potentially Affected by the Rule Proposed Rule Provision Municipal Nonmunicipal Total Major Minor Major Minor Major Minor Temperature 3 30 1 14 4 44 IGDO1 28 57 11 51 39 108 Antidegradation2 12 26 2 34 14 60 Subtotal 43 113 14 99 57 212 Total 156 113 269 1. The estimates shown account for unique facilities that are not also subject to the temperature provision. 2. The estimates shown account for unique facilities that are not also subject to either the temperature provision or the IGDO provision.

EPA used the applicable population size standard of 50,000 to determine which major and minor municipal entities are small entities. Most of these entities are publicly owned treatment works 1 The primary source of population data is the Bureau of Census data for places, which is located at http:// www. census. gov/ ( accessed August 2003). Additional data for minor civil divisions is located at http:// www. census. gov/ ( accessed August 2003).

September 2003 RFA/ SBREFA Screening Analysis 5 ( POTWs). EPA obtained 2002 population estimates for the Census place or minor civil division that corresponds with the name of each municipal discharge. 1 For example, EPA assumed that the City of Adair Village Wastewater Treatment Plant serves the City of Adair Village, which has a population estimate of 525. Based on these population estimates, EPA determined that there are 128 small municipalities with one or more potentially affected municipal dischargers. Exhibit 2 2 provides a summary of small entities by rule provision.

Exhibit 2 2. Small Entities Potentially Affected by the Rule Proposed Rule Provision Municipal Nonmunicipal Total Major Minor Major Minor Major Minor Temperature 2 27 0 13 2 40 IGDO1 23 45 6 38 29 83 Antidegradation2 7 24 1 27 8 51 Total 32 96 7 78 39 174 Grand Total 128 85 213 1. The estimates shown account for unique facilities that are not also subject to the temperature provision. 2. The estimates shown account for unique facilities that are not also subject to either the temperature provision or the IGDO provision.

The 113 potentially affected nonmunicipal facilities represents a wide array of industrial sectors and, therefore, a variety of SBA size standards apply. For example, the industrial sector with the largest representation is Wood Product Manufacturing ( North American Industry Classification System or NAICS 3 digit sector 321), which accounts for 29 facilities. This sector includes businesses engaged in activities ranging from sawmills to manufactured home construction. The SBA size standard for all relevant subsectors is 500 employees. EPA does not have employment data for many of these facilities and, therefore, cannot determine how many would qualify as small businesses. Consequently, EPA assumed that all nonmunicipal dischargers are small business entities unless information from PCS indicates otherwise. For example, the company names of several private dischargers indicates that they are owned by large corporations ( e. g., Boise Cascade Corp. and Weyerhaeuser Co.) and, therefore, not small businesses. Using this approach, 85 of the 113 nonmunicipal facilities cannot be excluded from the set of potentially small entities. Exhibit 2 2 shows the breakdown of these facilities by provision.

2.3 Evaluating Potential Economic Impact To evaluate the potential economic impact on individual municipal facilities, EPA calculated the ratio of annualized compliance cost to annual revenue for each facility. For small businesses, sales data are not available to calculate the ratio of potential compliance costs to sales. Therefore, EPA September 2003 RFA/ SBREFA Screening Analysis 6 conducted a sensitivity analysis to evaluate the potential for significant impacts on a substantial number of small businesses.

2.3.1 Municipal Costs Annual costs are documented in EPA's economic analysis for the proposed rule ( U. S. EPA, 2003). Only dischargers potentially affected by the temperature provision or the antidegradation provision might incur costs; there are no compliance costs associated with the IGDO provision. Also, EPA cannot evaluate the potential impacts of the antidegradation provision of the rule on small entities because, although it can estimate the number of antidegradation reviews that may be triggered by the rule, there is no way to predict which dischargers might request an increase in loadings ( or the timing of such requests). Therefore, EPA cannot determine whether affected dischargers would be small entities. Note that the economic analysis indicates that, on average, at most one municipal discharger might be affected by the antidegradation requirements per year.

For the temperature provision, EPA estimated costs for all affected major facilities and a sample of minor facilities. Among the major dischargers, only 1 of the 2 small entities may incur an annual cost of $ 5,190. For the minor dischargers, EPA estimated the potential impact on small entities based on the estimated average annual cost to the sample facilities ($ 2,720). The compliance costs for temperature controls include capital and O& M costs. EPA calculated total annual costs by annualizing capital costs at 7% over 20 years and adding annual O& M costs.

The appendix reports annual cost estimates for each small entity. All costs are in 2003 dollars.

2.3.2 Municipal Revenues EPA obtained annual revenue data for each of the 29 small municipalities potentially affected by the temperature provision from the Oregon State Auditor's Office. EPA then calculated median per capita revenue of $ 860 for all of these municipalities, and multiplied that value by the population estimates for the remaining municipalities to estimate their annual revenues. EPA used the median value rather than the average value ($ 1,294) to generate conservative revenue estimates ( i. e., tending to err on the low side). This approach may result in an overestimate of the ratio of potential costs to revenues. September 2003 RFA/ SBREFA Screening Analysis 7 3.0 Results Exhibit 3 1 summarizes the results of the screening analysis for small municipalities. Based solely on the analysis of small government entities, the screening level analysis supports a conclusion that the proposed rule will not have a significant economic impact on a substantial number of small entities. EPA estimates that at most, 3 small government entities may incur annual costs that equal or exceed 1% of annual revenues. For 2 of these entities, costs may exceed 3% of revenues ( the ratios are 4.5% and 8.3%). For comparison, there are 230 small municipalities in the State.

Exhibit 3 1. Results of Screening Analysis for Small Municipalities in Oregon1 Category Number of Facilities Total small municipalities potentially affected by at least one provision 128 Municipalities with ratios

1% 3 Municipalities with ratios

3% 2 1. Does not include potential impacts of the antidegradation provision because the facilities affected are unknown. However, EPA estimates that the average annual impact is, at most, one municipal discharger incurs costs to prepare analyses for an antidegradation review.

A complete analysis must also consider the potential impact on small businesses, which include the 85 nonmunicipal dischargers shown in Exhibit 2 2 that EPA assumed to be small businesses. EPA's economic analysis indicates that only 13 of these facilities may incur costs as a result of the temperature control provision. EPA does not have sales data for these facilities and cannot estimate impact ratios. However, at most, only 13 entities may experience significant impacts. This estimate is small ( less than 100) and implies that the proposed rule will not have a significant economic impact on a substantial number of small businesses. For comparison, there are more than 83,000 small businesses in the State of Oregon ( SBA, 2003).

The results for small governments can be combined with those for small businesses to make an overall evaluation of the potential economic impact on all small entities. Exhibit 3 2 shows the combined results for two different small business impact scenarios. For a low estimate of impact, EPA assumed that none of the 13 small businesses potentially incurring costs have costs that equal or exceed 1% of sales. Thus, Exhibit 3 2 shows that the total number of small entities potentially affected by the rule increases to 213, but the number for which costs may equal or exceed 1% and 3% of revenues or sales remains the same as in Exhibit 3 1. For a high estimate of relative impact, EPA assumed that all 13 commercial facilities potentially incurring costs have costs that exceed 3% of sales. September 2003 RFA/ SBREFA Screening Analysis 8 Exhibit 3 2. Results of Screening Analysis for All Small Entities in Oregon1 Low Estimate High Estimate Total small entities2 213 213 Small entities with ratios > 1% 3 3 16 Small entities with ratios > 3% 4 2 15 1. Does not include potential impacts of the antidegradation provision because the facilities affected are unknown. However, EPA estimates that the average annual impact is, at most, one municipal discharger and one nonmunicipal discharger incur costs to prepare analyses for antidegradation reviews. 2. The small entities include 128 small municipalities and 85 small nonmunicipal entities. 3. Low estimate reflects the assumption that no commercial facilities incur costs that equal or exceed 1% of sales. High estimate reflects the assumption that the13 commercial facilities incurring costs are small entities, and would have ratios of greater than 1%. 4. Low estimate reflects the assumption that no commercial facilities incur costs that equal or exceed 3% of sales. High estimate reflects the assumption that the 13 commercial facilities incurring costs are small entities, and would have ratios of greater than 3%.

The combined results show that at most, 16 entities may incur costs that equal or exceed 1% of revenue or sales, and for 15 of these, costs may equal or exceed 3%. However, this worst case result relies on the conservative ( i. e., erring on the side of estimating maximum impact) assumption that 13 nonmunicipal entities potentially affected by the temperature provision are small entities, and that costs for these 13 entities would exceed 3% of sales. Since these entities are private entities, this information is unknown. If the 13 businesses are not small or do not have costs that exceed 1% of sales, the combined results are the same as for municipalities. Thus, the screening analysis suggests that the proposed rule will not have a significant economic impact on a substantial number of small entities. September 2003 RFA/ SBREFA Screening Analysis 9 4.0 References U. S. Environmental Protection Agency ( U. S. EPA). 2003. Economic Analysis of the Proposed Water Quality Standards for the State of Oregon. Prepared by Science Applications International Corporation ( SAIC). Washington, D. C.: U. S. Environmental Protection Agency, Office of Water, Office of Science and Technology.

U. S. Small Business Administration ( U. S. SBA). 2003. 2003 State Small Business Profile: Oregon. Document located at www. sba. gov/ advo/ stats/ profiles/ 03or. pdf ( accessed August 2003). September 2003 RFA/ SBREFA Screening Analysis A 1 Appendix Screening Analysis for Small Municipal Facilities Potentially Affected by the Proposed Rule Exhibit A 1 provides the data for the screening analysis of small municipalities potentially affected by the proposed rule.

Exhibit A 1. Screening Analysis for Small Municipal Facilities Potentially Affected by the Proposed Rule Municipality Number of Entities Potentially Affected1 Estimated Temperature Control Cost ($ 2003) Population Annual Revenue ($) 2 Cost to Revenue Ratio Temperature IGDO Antidegradation Adair Village 0 1 0 0 525 451,731 0.0%

Albany 0 0 1 0 42,190 36,301,938 0.0%

Amity 0 1 0 0 1,477 1,270,869 0.0%

Ashland 0 0 1 0 20,215 17,393,782 0.0%

Astoria 0 0 1 0 9,730 8,372,075 0.0%

Athena 0 1 0 0 1,220 1,049,736 0.0%

Aumsville 0 1 1 0 3,087 2,656,176 0.0%

Aurora 0 1 0 0 655 563,588 0.0%

Bandon 0 1 1 0 2,819 2,425,579 0.0%

Bay City 0 1 1 0 1,158 996,389 0.0%

Bear Creek Valley Sanitary Authority 1 0 1 2,720 30,631 6,843,894 0.0%

Brownsville 1 0 0 2,720 1,478 1,063,409 0.3%

Butte Falls 1 1 1 2,720 435 429,589 0.6%

Cannon Beach 1 2 2 2,720 1,610 4,559,606 0.1%

Canyonville 0 0 1 0 1,370 1,178,802 0.0%

Cascade Locks 0 0 1 0 1,124 967,134 0.0%

Cave Junction 0 0 1 0 1,378 1,185,685 0.0%

Chiloquin 0 1 0 0 720 619,516 0.0%

Clackamas County District 1 2 2 2 5,440 5,177 20,892,328 0.0%

Clatskanie 0 0 1 0 1,533 1,319,054 0.0%

Cloverdale Cdp 1 1 1 2,720 242 60,609 4.5%

Coos Bay 0 2 0 0 15,281 13,148,374 0.0% Exhibit A 1. Screening Analysis for Small Municipal Facilities Potentially Affected by the Proposed Rule Municipality Number of Entities Potentially Affected1 Estimated Temperature Control Cost ($ 2003) Population Annual Revenue ($) 2 Cost to Revenue Ratio Temperature IGDO Antidegradation September 2003 RFA/ SBREFA Screening Analysis A 2 Corvallis 0 0 1 0 49,781 42,833,533 0.0%

Cottage Grove 0 0 1 0 8,451 7,271,573 0.0%

Creswell 0 1 0 0 3,810 3,278,274 0.0%

Dallas 0 0 2 0 12,865 11,069,553 0.0%

Dayton 0 1 0 0 2,175 1,871,456 0.0%

Dayville 0 0 1 0 127 109,276 0.0%

Depoe Bay 0 0 1 0 1,287 1,107,385 0.0%

Drain 0 0 1 0 1,016 874,206 0.0%

Dufur 1 0 0 2,720 586 318,592 0.9%

Dundee 0 0 1 0 2,676 2,302,536 0.0%

Echo 0 1 1 0 677 582,517 0.0%

Elgin 0 1 1 0 1,643 1,413,702 0.0%

Enterprise 1 0 1 2,720 1,827 1,290,563 0.2%

Estacada 1 0 1 2,720 2,386 3,059,007 0.1%

Falls City 0 1 1 0 984 846,672 0.0%

Forest Grove 0 1 1 0 18,724 16,110,867 0.0%

Garibaldi 0 1 0 0 908 781,279 0.0%

Glendale 1 0 1 2,720 872 2,108,348 0.1%

Gold Hill 0 0 1 0 1,067 918,089 0.0%

Government Camp3 1 1 1 0 753 252,780 0.0%

Grande Ronde Cdp 0 1 1 0 271 233,179 0.0%

Grants Pass 0 0 1 0 24,843 21,375,896 0.0%

Halsey 0 1 0 0 728 626,400 0.0%

Harrisburg 0 0 1 0 2,884 2,481,507 0.0%

Hebo Cdp 1 1 1 2,720 231 216,306 1.3%

Hermiston 0 1 1 0 13,572 11,677,883 0.0%

Hood River 0 0 1 0 6,075 5,227,169 0.0%

Hubbard 0 1 0 0 2,502 2,152,819 0.0%

Independence 0 0 1 0 6,782 5,835,500 0.0%

Jefferson 0 0 1 0 2,580 2,219,934 0.0%

Joseph 1 0 1 2,720 1,017 838,784 0.3% Exhibit A 1. Screening Analysis for Small Municipal Facilities Potentially Affected by the Proposed Rule Municipality Number of Entities Potentially Affected1 Estimated Temperature Control Cost ($ 2003) Population Annual Revenue ($) 2 Cost to Revenue Ratio Temperature IGDO Antidegradation September 2003 RFA/ SBREFA Screening Analysis A 3 Junction City 0 2 0 0 5,153 4,433,844 0.0%

Klamath Falls 0 3 0 0 19,315 16,619,387 0.0%

La Grande 0 1 0 0 12,259 10,548,126 0.0%

Lake Oswego 0 0 1 0 35,839 30,837,287 0.0%

Lakeside 0 1 0 0 1,382 1,189,127 0.0%

Lebanon 0 0 1 0 13,156 11,319,941 0.0%

Lincoln City 0 0 1 0 7,400 6,367,251 0.0%

Malin 0 1 0 0 634 545,519 0.0%

Merrill 0 1 0 0 895 770,093 0.0%

Milwaukie 0 0 2 0 20,563 17,693,215 0.0%

Molalla 0 1 0 0 5,943 5,113,591 0.0%

Mosier 0 0 1 0 412 354,501 0.0%

Mount Vernon 0 0 1 0 555 477,544 0.0%

Myrtle Creek 0 0 1 0 3,441 2,960,772 0.0%

Myrtle Point 0 0 1 0 2,442 2,101,193 0.0%

Nehalem Bay Wastewater Agency 0 0 1 0 1,161 998,970 0.0%

Newport 0 0 1 0 9,588 8,249,893 0.0%

North Bend 0 1 0 0 9,509 8,181,918 0.0%

Oakland 0 0 1 0 953 819,999 0.0%

Oakridge3 1 0 1 13,600 3,137 3,261,180 0.4%

Odell Cdp 0 1 0 0 1,849 1,590,952 0.0%

Ontario 0 0 1 0 10,947 9,419,230 0.0%

Oregon City 0 1 1 0 27,775 23,898,704 0.0%

Pacific City Cdp 0 1 1 0 1,027 883,671 0.0%

Parkdale Cdp 0 1 1 0 266 228,877 0.0%

Pendleton 0 1 0 0 16,407 14,117,229 0.0%

Port Orford 0 1 1 0 1,133 974,878 0.0%

Powers 1 0 1 2,720 733 514,679 0.5%

Rainier 0 0 1 0 1,744 1,500,606 0.0%

Reedsport 0 1 1 0 4,322 3,718,819 0.0% Exhibit A 1. Screening Analysis for Small Municipal Facilities Potentially Affected by the Proposed Rule Municipality Number of Entities Potentially Affected1 Estimated Temperature Control Cost ($ 2003) Population Annual Revenue ($) 2 Cost to Revenue Ratio Temperature IGDO Antidegradation September 2003 RFA/ SBREFA Screening Analysis A 4 Rockaway Beach 0 2 0 0 1,267 1,090,177 0.0%

Rogue River 0 0 1 0 1,856 1,596,975 0.0%

Roseburg3 1 0 1 0 1,300 1,118,571 0.0%

Saint Helens 0 0 1 0 10,767 9,264,351 0.0%

Sandy 1 1 1 2,720 6,688 7,052,472 0.0%

Scappoose 0 1 0 0 5,326 4,582,700 0.0%

Seaside 0 0 1 0 5,888 5,066,267 0.0%

Shady Cove3 1 1 1 0 2,317 1,833,820 0.0%

Siletz3 1 0 1 0 1,133 621,666 0.0%

Silverton 0 0 1 0 7,690 6,616,779 0.0%

Stanfield 0 1 1 0 1,984 1,707,112 0.0%

Stayton3 1 0 1 5,190 6,980 6,827,247 0.1%

Sutherlin3 1 0 1 2,720 6,962 5,990,379 0.0%

Sweet Home 1 1 1 0 8,145 6,065,413 0.0%

Tangent 0 1 0 0 943 811,394 0.0%

The Dalles 0 0 1 0 12,006 10,330,435 0.0%

Tillamook 1 2 2 2,720 4,514 4,315,499 0.1%

Toledo 0 0 1 0 3,431 2,952,168 0.0%

Troutdale 0 0 1 0 14,892 12,813,663 0.0%

Union 1 1 1 2,720 1,947 1,909,045 0.1%

Veneta 0 1 0 0 2,834 2,438,485 0.0%

Vernonia 1 0 1 2,720 2,243 1,555,778 0.2%

Waldport 0 0 1 0 2,043 1,757,878 0.0%

Wallowa 1 0 1 2,720 837 1,888,728 0.1%

Warrenton 0 1 2 0 4,185 3,600,939 0.0%

Wasco 0 0 1 0 350 301,154 0.0%

Westfir 1 0 1 2,720 274 1,892,945 0.1%

Weston 0 1 0 0 715 615,214 0.0%

Westport 1 1 1 2,720 100 32,751 8.3%

Willamina 0 0 1 0 1,846 1,588,371 0.0%

Winchester Bay Cdp 0 0 1 0 488 419,894 0.0% Exhibit A 1. Screening Analysis for Small Municipal Facilities Potentially Affected by the Proposed Rule Municipality Number of Entities Potentially Affected1 Estimated Temperature Control Cost ($ 2003) Population Annual Revenue ($) 2 Cost to Revenue Ratio Temperature IGDO Antidegradation September 2003 RFA/ SBREFA Screening Analysis A 5 Yachats 0 0 1 0 628 540,356 0.0%

Yamhill 0 0 1 0 794 683,189 0.0%

Yoncalla 0 1 1 0 1,039 893,997 0.0%

Private Facility Assumed Small 13 59 56 NA NA NA NA NA = not available. 1. In most instances, the proposed rule affects only one entity per municipality. In a few cases, however, there are multiple entities that are potentially affected by the rule. Where applicable, EPA combined the cost estimates across the facilities within a municipality before calculating cost to revenue ratios. 2. EPA obtained actual revenues from the Oregon State Auditor's Office for the 29 small municipalities potentially affected by the temperature provision ( municipalities with a nonzero entry in column 2), and used those data to estimate revenues for the remaining municipalities. 3. Sample facilities for which EPA had actual cost estimates.


[Federal Register: August 29, 2007 (Volume 72, Number 167)]
[Rules and Regulations]
[Page 49660-49666]
[DOCID:fr29au07-5]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 180

[EPA-HQ-OPP-2007-0327; FRL-8135-6]

Flutriafol; Time-Limited Pesticide Tolerance

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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

SUMMARY: This regulation establishes a time-limited tolerance for
residues of flutriafol per se in or on soybean. This action is in
response to EPA's granting of an emergency exemption under section 18
of the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA)
authorizing use of the pesticide on soybean. This regulation
establishes a maximum permissible level for residues of flutriafol per
se in this food commodity. The tolerance will expire and is revoked on
December 31, 2010.

DATES: This regulation is effective August 29, 2007. Objections and
requests for hearings must be received on or before October 29, 2007,
and must be filed in accordance with the instructions provided in 40
CFR part 178 (see also Unit I.C. of the SUPPLEMENTARY INFORMATION.

ADDRESSES: EPA has established a docket for this action under docket
identification (ID) number EPA-HQ-OPP-2007-0327. To access the
electronic docket, go to http://www.regulations.gov, select ``Advanced

Search,'' then ``Docket Search.'' Insert the docket ID number where
indicated and select the ``Submit'' button. Follow the instructions on
the regulations.gov web site to view the docket index or access
available documents. All documents in the docket are listed in the
docket index available in regulations.gov. Although listed in the
index, some information is not publicly available, e.g., Confidential
Business Information (CBI) or other information whose disclosure is
restricted by statute. Certain other material, such as copyrighted
material, is not placed on the Internet and will be publicly available
only in hard copy form. Publicly available docket materials are
available either in the electronic docket at http://www.regulations.gov
, or, if only available in hard copy, at the OPP

Public Docket, in Rm. S-4400, One Potomac Yard (South Bldg.), 2777 S.
Crystal Dr., Arlington, VA. The Docket Facility is open from 8:30 a.m.
to 4 p.m., Monday through Friday, excluding legal holidays. The Docket
Facility telephone number is<PHONE_NUMBER>.

FOR FURTHER INFORMATION CONTACT: Princess Campbell, Registration
Division (7505P), Office of Pesticide Programs, Environmental
Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-
0001; telephone number:<PHONE_NUMBER>; e-mail
<EMAIL_ADDRESS>

SUPPLEMENTARY INFORMATION:

I. General Information

A. Does this Action Apply to Me?

    You may be potentially affected by this action if you are an
agricultural producer, food manufacturer, or pesticide manufacturer.
Potentially affected entities may include, but are not limited to:
     Crop production (NAICS code 111).
     Animal production (NAICS code 112).
     Food manufacturing (NAICS code 311).
     Pesticide manufacturing (NAICS code 32532).
    This listing is not intended to be exhaustive, but rather provides
a guide for readers regarding entities likely to be affected by this
action. Other types of entities not listed in this unit could also be
affected. The North American Industrial Classification System (NAICS)
codes have been provided to assist you and others in determining
whether this action might apply to certain entities. If you have any
questions regarding the applicability of this action to a particular
entity, consult the person listed under FOR FURTHER INFORMATION
CONTACT.

 B. How Can I Access Electronic Copies of this Document?

    In addition to accessing an electronic copy of this Federal
Register document through the electronic docket at http://www.regulations.gov
, you may access this Federal Register document

electronically through the EPA Internet under the ``Federal Register''
listings at

http://www.epa.gov/fedrgstr. You may also access a frequently updated

electronic version of 40 CFR part 180 through the Government Printing
Office's pilot e-CFR site at http://www.gpoaccess.gov/ecfr.

C. Can I File an Objection or Hearing Request?

    Under section 408(g) of the FFDCA, as amended by the FQPA, any
person may file an objection to any aspect of this regulation and may
also request a hearing on those objections. The EPA procedural
regulations which govern the submission of objections and requests for
hearings appear in 40 CFR part 178. You must file your objection or
request a hearing on this regulation in accordance with the
instructions provided in 40 CFR part 178. To ensure proper receipt by
EPA, you must identify docket ID number EPA-HQ-OPP-2007-0327 in the
subject line on the first page of your submission. All requests must be
in writing, and must be mailed or delivered to the Hearing Clerk on or
before October 29, 2007.
    In addition to filing an objection or hearing request with the
Hearing Clerk as described in 40 CFR part 178, please submit a copy of
the filing that does not contain any CBI for inclusion in the public
docket that is described in ADDRESSES. Information not marked
confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA
without prior notice. Submit your copies, identified by docket ID
number EPA-HQ-OPP-2007-0327, by one of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov.

Follow the on-line instructions for submitting comments.
     Mail: Office of Pesticide Programs (OPP) Regulatory Public
Docket (7502P), Environmental Protection Agency, 1200 Pennsylvania
Ave., NW., Washington, DC 20460-0001.
     Delivery: OPP Regulatory Public Docket (7502P),
Environmental Protection Agency, Rm. S-4400, One Potomac Yard (South
Bldg.), 2777 S. Crystal Dr., Arlington, VA. Deliveries are only
accepted during the Docket's normal hours of operation (8:30 a.m. to 4
p.m., Monday through Friday, excluding legal holidays). Special
arrangements should be made for deliveries of boxed information. The
Docket Facility telephone number is<PHONE_NUMBER>.

II. Background and Statutory Findings

    EPA, on its own initiative, in accordance with sections 408 (e) and
408 (l)(6) of the Federal Food, Drug and Cosmetic Act (FFDCA), 21
U.S.C. 346a 21 U.S.C. 346a, is establishing a time-limited tolerance
for residues of the fungicide flutriafol per se in or on soybean at
0.10 parts per million (ppm). The tolerance will expire and is revoked
on December 31, 2010.
    Section 408(l)(6) of the FFDCA allows EPA to establish a time-
limited tolerance or exemption from the requirement for a tolerance for
pesticide chemical residues in food that will result from the use of a
pesticide under an emergency exemption granted by EPA under section 18
of FIFRA. Such tolerances can be established without providing notice
or period for public comment. EPA does not intend for its actions on
section 18 related tolerances to set binding precedents for the
application of section 408 of the FFDCA and the new safety standard to
other tolerances and exemptions. Section 408(e) of the FFDCA allows EPA
to establish a tolerance or an exemption from the requirement of a
tolerance on its own initiative, i.e., without having received any
petition from an outside party.
     Section 408 (b)(2)(A)(i) of the FFDCA allows EPA to establish a
tolerance or exemption from the requirement for a tolerance for
pesticide (the legal limit for a pesticide chemical residue in or on a
food) only if EPA determines that the tolerance is ``safe.'' Section
408(b)(2)(A)(ii) of the FFDCA defines ``safe'' to mean that ``there is
a reasonable certainty that no harm will result from aggregate exposure
to the pesticide chemical residue, including all anticipated dietary
exposures and all other exposures for which there is reliable
information.'' This includes exposure through drinking water and in
residential settings, but does not include occupational exposure.
Section 408(b)(2)(C) of the FFDCA requires EPA to give special
consideration to exposure of infants and children to the pesticide
chemical residue in establishing a tolerance and to ``ensure that there
is a reasonable certainty that no harm will result to infants and
children from aggregate exposure to the pesticide chemical residue. . .
.''

III. Emergency Exemption for Flutriafol on Soybeans and FFDCA
Tolerances

     EPA has authorized under section 18 of FIFRA the use of flutriafol
on soybeans for control of Australasian soybean rust initially in
Minnesota and South Dakota and subsequently in multiple states. After
having reviewed the submissions, EPA concurs that emergency conditions
exist for these States.
     As part of its assessment of this emergency exemption, EPA
assessed the potential risks presented by residues of flutriafol per se
in or on soybean seed. In doing so, EPA considered the safety standard
in section 408(b)(2) of the FFDCA, and EPA decided that the necessary
tolerance under section 408(l)(6) of the FFDCA would be consistent with
the safety standard and with section 18 of FIFRA. Consistent with the
need to move quickly on the emergency exemption in order to address an
urgent non-routine situation and to ensure that the resulting food is
safe and lawful, EPA is issuing this tolerance without notice and
opportunity for public comment as provided in section 408(l)(6) of the
FFDCA. Although this tolerance will expire and is revoked on December
31, 2010, under section 408(l)(5) of the FFDCA, residues of the
pesticide not in excess of the amounts specified in the tolerance
remaining in or on soybean after that date will not be unlawful,
provided the pesticide is applied in a manner that was lawful under
FIFRA, and the residues do not exceed a level that was authorized by
this tolerance at the time of that application. EPA will take action to
revoke this tolerance earlier if any experience with, scientific data
on, or other relevant information on this pesticide indicates that the
residues are not safe.
     Because this tolerance is being approved under emergency
conditions EPA has not made any decisions about whether flutriafol
meets EPA's registration requirements for use on soybeans or whether a
permanent tolerance for this use would be appropriate. Under these
circumstances, EPA does not believe that this tolerance serves as a
basis for registration of flutriafol by a State for special local needs
under section 24(c) of FIFRA. Nor does this tolerance serve as the
basis for any States other than those following all provisions of EPA's
regulations implementing FIFRA section 18 as identified in 40 CFR part
166. For additional information regarding the emergency exemption for
flutriafol, contact the Agency's Registration Division at the address
provided under FOR FURTHER INFORMATION CONTACT.

IV. Aggregate Risk Assessment and Determination of Safety

    EPA performs a number of analyses to determine the risks from
aggregate exposure to pesticide residues. For further discussion of the
regulatory requirements of section 408 of the FFDCA and a complete
description of the risk assessment process, see http://www.epa.gov/fedrgstr/EPA-PEST/1997/November/Day-26/p30948.htm
.

    Consistent with section 408(b)(2)(D) of the FFDCA, EPA has reviewed
the

available scientific data and other relevant information in support of
this action. EPA has sufficient data to assess the hazards of and to
make a determination on aggregate exposure, consistent with section
408(b)(2) of the FFDCA, for a tolerance for residues of flutriafol per
se on soybean at 0.10 ppm. EPA's assessment of exposures and risks
associated with establishing the tolerance follows.

A. Toxicological Profile

    EPA has evaluated the available toxicity data and considered its
validity, completeness, and reliability as well as the relationship of
the results of the studies to human risk. EPA has also considered
available information concerning the variability of the sensitivities
of major identifiable subgroups of consumers, including infants and
children. Specific information on the studies received and the nature
of the toxic effects caused by flutriafol as well as the no-observed-
adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-
level (LOAEL) from the toxicity studies can be found in the docket at
http://www.regulations.gov, docket ID number EPA-HQ-OPP-2007-0327 (see

memo from Tyler, et al. dated March 30, 2006).

B. Toxicological Endpoints

    For hazards that have a threshold below which there is no
appreciable risk, the dose at which no adverse effects are observed
(the NOAEL) from the toxicology study identified as appropriate for use
in risk assessment is used to estimate the toxicological level of
concern (LOC). However, the LOAEL is sometimes used for risk assessment
if no NOAEL was achieved in the toxicology study selected. An
uncertainty factor (UF) is applied to reflect uncertainties inherent in
the extrapolation from laboratory animal data to humans and in the
variations in sensitivity among members of the human population as well
as other unknowns.
    The linear default risk methodology (Q*) is the primary method
currently used by the Agency to quantify non-threshold hazards such as
cancer. The Q* approach assumes that any amount of exposure will lead
to some degree of cancer risk, and estimates risk in terms of the
probability of occurrence of additional cancer cases. Under certain
specific circumstances, margin of exposure (MOE) calculations will be
used for the carcinogenic risk assessment. In this non-linear approach,
a ``point of departure'' is identified below which carcinogenic effects
are not expected. The point of departure is typically a NOAEL based on
an endpoint related to cancer effects though it may be a different
value derived from the dose response curve. To estimate risk, a ratio
of the point of departure to exposure (MOEcancer = point of
departure/exposures) is calculated. A summary of the toxicological
endpoints for flutriafol used for human risk assessment is shown as
follows:

      Table 1.--Summary of Toxicological Dose and Endpoints for flutriafol for Use in Human Risk Assessment
----------------------------------------------------------------------------------------------------------------
                                                                 FQPA SF* and level of
          Exposure/Scenario               Dose used in risk         concern for risk     Study and toxicological
                                            assessment, UF             assessment                effects
----------------------------------------------------------------------------------------------------------------
Acute dietary (Females 13-50 years of  NOAEL = < 10.0 millgrams/ FQPA SF = 10X            Developmental toxicity
 age)                                   kilogram/day (mg/kg/    acute population           rat
                                        day)                     adjusted dose (aPAD) =  LOAEL = 10.0 mg/kg/day
                                       UF = 1,000X............   acute Reference Dose     based on increased
                                       Acute RfD = 0.01 mg/kg/   (RfD).                   number of unossified
                                        day.                                              odontoids, variations
                                                                                in occipitals and
                                                                                calcanea of hindlimbs
                                                                                and increased scores
                                                                                of m,anus and pes
----------------------------------------------------------------------------------------------------------------
Acute dietary (General population      NOAEL = Not applicable   FQPA SF = Not            An endpoint of concern
 including infants and children)                                 applicable               attributable to a
                                                                                single dose for
                                                                                general population was
                                                                                not identified
----------------------------------------------------------------------------------------------------------------
Chronic dietary (All populations)      NOAEL = < 10.0 mg/kg/day  FQPA SF = 10X            Developmental toxicity-
                                       UF = 1,000X............  cPAD = chronic RfD.....   rat
                                       Chronic RfD = 0.01 mg/                            LOAEL = 10.0 mg/kg/day
                                        kg/day.                                           based on increased
                                                                                number of unossified
                                                                                odontoids, variations
                                                                                in occipitals and
                                                                                calcanea of hindlimbs
                                                                                and increased scores
                                                                                of m,anus and pes
----------------------------------------------------------------------------------------------------------------
Short-term dermal (1 to 7 days)        Dermal (or oral) study   LOC for MOE = 1,000      Developmental toxicity
 (Residential)                          NOAEL = < 10.0 mg/kg/     (residential)            rat
                                        day                                              LOAEL = 10.0 mg/kg/day
                                       (Dermal absorption rate                            based on increased
                                        = 11.0%).                                         number of unossified
                                                                                odontoids, variations
                                                                                in occipitals and
                                                                                calcanea of hindlimbs
                                                                                and increased scores
                                                                                of m,anus and pes
----------------------------------------------------------------------------------------------------------------
Intermediate-term dermal (1 week to    Dermal (or oral) study   LOC for MOE = 1,000      Developmental toxicity
 several months) (Residential)          NOAEL = < 10.0 mg/kg/     (residential)            rat
                                        day                                               LOAEL = 10.0 mg/kg/day
                                       (Dermal absorption rate                            based on increased
                                        = 11.0%.                                          number of unossified
                                                                                odontoids, variations
                                                                                in occipitals and
                                                                                calcanea of hindlimbs
                                                                                and increased scores
                                                                                of m,anus and pes
----------------------------------------------------------------------------------------------------------------
Long-term dermal (Several months to    Dermal (or oral) study   LOC for MOE = 1,000      Developmental toxicity
 lifetime) (Residential)                NOAEL = < 10.0 mg/kg/     (residential)            rat
                                        day                                              LOAEL = 10.0 mg/kg/day
                                       (Dermal absorption rate                            based on increased
                                        = 11.0% when                                      number of unossified
                                        appropriate).                                     odontoids, variations
                                                                                in occipitals and
                                                                                calcanea of hindlimbs
                                                                                and increased scores
                                                                                of m,anus and pes
----------------------------------------------------------------------------------------------------------------
Short-term inhalation (1 to 7 days)    Inhalation (or oral)     LOC for MOE = 1,000      Developmental toxicity
 (Residential)                          study NOAEL = < 10.0 mg/  (residential)            rat
                                        kg/day                                           LOAEL = 10.0 mg/kg/day
                                       (Inhalation absorption                             based on increased
                                        rate = 100%).                                     number of unossified
                                                                                odontoids, variations
                                                                                in occipitals and
                                                                                calcanea of hindlimbs
                                                                                and increased scores
                                                                                of m,anus and pes
----------------------------------------------------------------------------------------------------------------

Intermediate-term inhalation (1 week   Inhalation (or oral)     LOC for MOE = 1,000      Developmental toxicity
 to several months) (Residential)       study NOAEL = < 10.0 mg/  (residential)             rat
                                        kg/day                                           LOAEL = 10.0 mg/kg/day
                                       (Inhalation absorption                             based on increased
                                        rate = 100%).                                     number of unossified
                                                                                odontoids, variations
                                                                                in occipitals and
                                                                                calcanea of hindlimbs
                                                                                and increased scores
                                                                                of m,anus and pes
----------------------------------------------------------------------------------------------------------------
Long-term inhalation (several months   Inhalation (or oral)     LOC for MOE = 1,000      Developmental toxicity
 to lifetime) (Residential)             study NOAEL = < 10.0 mg/  (residential)            rat
                                        kg/day (inhalation                               LOAEL = 10.0 mg/kg/day
                                        absorption rate =                                 based on increased
                                        100%)                                             number of unossified
                                                                                odontoids, variations
                                                                                in occipitals and
                                                                                calcanea of hindlimbs
                                                                                and increased scores
                                                                                of m,anus and pes
Cancer (oral, dermal, inhalation)      NA. not carcinogenic to  NA                       NA
                                        humans based on the
                                        lack of evidence for
                                        carcinogenicity in
                                        mice and rats
----------------------------------------------------------------------------------------------------------------
* The reference to the FQPA SF refers to any additional safety factor retained. UF = uncertainty factor; FQPA SF
  = Special FQPA safety factor; NOAEL = no observed adverse effect level; LOAEL = lowest observed adverse effect
  level; PAD = population adjusted dose (a = acute, c = chronic); RfD = reference dose; MOE = margin of
  exposure; and LOC = level of concern.

C. Exposure Assessment

    1. Dietary exposure from food and feed uses. Flutriafol is a new
pesticide ingredient for the U.S. Therefore, there are no existing
tolerances for flutriafol in 40 CFR part 180. Based on the available
residue data on soybeans, residues of flutriafol are not expected to
exceed 0.10 ppm on soybeans that have been treated in accordance with
the emergency exemption use directions. Risk assessments were conducted
by EPA to assess dietary exposures from flutriafol in food as follows:
    i. Acute exposure. Quantitative acute dietary exposure and risk
assessments are performed for a food-use pesticide if a toxicological
study has indicated the possibility of an effect of concern occurring
as a result of a one day or single exposure. The Dietary Exposure
Evaluation Model (DEEM\TM\) analysis evaluated the individual food
consumption as reported by respondents in the United States Department
of Agriculture (USDA) Nationwide Continuing Surveys of Food Intake by
Individuals (CSFII) and accumulated exposure to the chemical for each
commodity. The following assumptions were made for the acute exposure
assessments: An acute dietary exposure assessment was performed for
females 13-49 years old using tolerance level residue, and 100 per cent
treated (PCT) information for all soybean commodities. Dietary Exposure
and Risk Assessment, DP322530, J. Tyler, 3/30/06.
     This assessment concludes that the acute dietary exposure
estimates are below the Agency's level of concern (< 100% aPAD) for the
general U.S. population and all population subgroups.
    ii. Chronic exposure. In conducting this chronic dietary exposure
and risk assessment the DEEM\TM\ analysis evaluated the individual food
consumption as reported by respondents in the USDA Nationwide CSFII and
accumulated exposure to the chemical for each commodity. The following
assumptions were made for the chronic exposure assessments: A chronic
dietary exposure assessment was performed for the general U.S.
population and various population subgroups using tolerance level
residue, and 100% CT information for all soybean commodities.
     This assessment concludes that the chronic dietary exposure
estimates are below the Agency's level of concern (< 100% cPAD) for the
general U.S. population and all population subgroups. The most highly
exposed population subgroup is all infants (< 1 year old) at 2.7% cPAD
    iii. Cancer. Preliminary analysis of tumor data indicated a
significant increased trend in combined adenomas and carcinomas in male
rat liver tumors. However, there were no significant differences noted
in pair-wise comparison with controls in either male or female liver
tumors. Thus, based on lack of evidence of carcinogenicity in both rats
and mice carcinogenicity studies, the chemical was considered as ``not
likely'' to be carcinogenic to humans.
    2. Dietary exposure from drinking water. This emergency exemption
use of flutriafol is the first use for this fungicide in the U.S. As
such, there are no monitoring exposure data for water for this
ingredient. Thus, in this risk assessment, drinking water concentration
estimates are made by reliance on simulation or modeling taking into
account data on the physical characteristics of flutriafol. Further
information regarding EPA drinking water models used in pesticide
exposure assessment can be found at http://www.epa.gov/oppefed1/models/water/index.htm
.

    The Pesticide Root Zone Model/Exposure Analysis Modeling System
(PRZM/EXAMS) and (SCI-GROW) screening models were used to estimate
surface water and ground water concentrations of flutriafol. Based on
the PRZM/EXAMS and SCI-GROW models the estimated environmental
concentrations (EECs) of flutriafol for acute exposures are estimated
to be 4.0 [mu]g/L for surface water and 2.0 [mu]g/L for ground water.
The EECs of flutriafol for chronic exposures are estimated to be 2.0
[mu]g/L for surface water and 1.0[mu]g/L for ground water.
     Modeled estimates of drinking water concentrations were directly
entered into the dietary exposure model. For acute dietary risk
assessment, the water concentration value of 4.0 [mu]g/L was used to
assess the contribution to drinking water. For chronic dietary risk
assessment, the water concentration of value 2.0 [mu]g/L was used to
assess the contribution to drinking water.
    3. From non-dietary exposure. The term ``residential exposure'' is
used in this document to refer to non-occupational, non-dietary
exposure (e.g., for lawn and garden pest control, indoor pest control,
termiticides, and flea and tick control on pets).

    Flutriafol is not registered for use on any sites that would result
in residential exposure.
    4. Cumulative effects from substances with a common mechanism of
toxicity. Section 408(b)(2)(D)(v) of the FFDCA requires that, when
considering whether to establish, modify, or revoke a tolerance, the
Agency consider ``available information'' concerning the cumulative
effects of a particular pesticide's residues and ``other substances
that have a common mechanism of toxicity.''
     Unlike other pesticides for which EPA has followed a cumulative
risk approach based on a common mechanism of toxicity, EPA has not made
a common mechanism of toxicity finding as to flutriafol and any other
substances Flutriafol is a member of the triazole-containing class of
pesticides commonly referred to as the conazoles. Although conazoles
act similarly in plants (fungi) by inhibiting ergosterol biosynthesis,
there is not necessarily a relationship between their pesticidal
activity and their mechanism of toxicity in mammals. Structural
similarities do not constitute a common mechanism of toxicity. Evidence
is needed to establish that the chemicals operate by the same, or
essentially the same, sequence of major biochemical events (EPA, 2002).
In conazoles, however, a variable pattern of toxicological responses is
found. Some are hepatotoxic and hepatocarcinogenic in mice. Some induce
thyroid tumors in rats. Some induce developmental, reproductive, and
neurological effects in rodents. Furthermore, the conazoles produce a
diverse range of biochemical events including altered cholesterol
levels, stress responses, and altered DNA methylation. It is not
clearly understood whether these biochemical events are directly
connected to their toxicological outcomes. Thus, there is currently no
evidence to indicate that conazoles share common mechanisms of toxicity
and EPA is not following a cumulative risk approach based on a common
mechanism of toxicity for the conazoles. For information regarding
EPA's procedures for cumulating effects from substances found to have a
common mechanism of toxicity, see EPA's website at  http://www.epa.gov/pesticides/cumulative/
.

    Flutriafol is a triazole-derived pesticide. This class of compounds
can form the common metabolite 1,2,4-triazole and two triazole
conjugates (triazole alanine and triazole acetic acid). To support
existing tolerances and to establish new tolerances for triazole-
derivative pesticides. U.S. EPA conducted a human health risk
assessment for exposure to 1,2,4-triazole, triazole alanine, and
triazole acetic acid resulting from the use of all current and pending
uses of any triazole-derived fungicide. The risk assessment is a highly
conservative, screening-level evaluation in terms of hazards associated
with common metabolites (e.g., use of a maximum combination of
uncertainty factors) and potential dietary and non-dietary exposures
(i.e., high end estimates of both dietary and non-dietary exposures).
In addition, in assessing the risks for this group of chemicals the
Agency retained the additional 10X FQPA safety factor for the
protection of infants and children. The assessment includes evaluations
of risks for various subgroups, including those comprised of infants
and children. The Agency's complete risk assessment for the conazole
group is found in the propiconazole reregistration docket at http://www.regulations.gov
, Docket ID Number EPA-HQ-OPP-2005-0497.

D. Safety Factor for Infants and Children

    1.  In general. Section 408 of the FFDCA provides that EPA shall
apply an additional tenfold margin of safety for infants and children
in the case of threshold effects to account for pre-natal and post-
natal toxicity and the completeness of the data base on toxicity and
exposure unless EPA determines that a different margin of safety will
be safe for infants and children. Margins of safety are incorporated
into EPA risk assessments either directly through use of a MOE analysis
or through using uncertainty (safety) factors in calculating a dose
level that poses no appreciable risk to humans.
    2. Pre-natal and post-natal sensitivity. There is no evidence of
increased susceptibility in the developmental study in rabbits or in
the 2-generation reproduction study in the rat. Although some effects
were seen in the rat developmental study, in the rat 2-generation
reproduction toxicity study the effects occurred at the same dose that
caused maternal toxicity indicating there was no increased
susceptibility. These effects were considered to be study variations,
and the Agency also retained the 10X safety factor to account for these
variations due to the lack of a well defined NOAEL in the critical
study. Therefore, there is no residual uncertainty for pre-natal and/or
post-natal susceptibility. (See memo from Tyler, et al. dated March 30,
2006.
    3. Conclusion. The Agency evaluated the quality of the hazard and
exposure data and determined that based on the available hazard and
exposure data, the FQPA SF should be retained.

E. Aggregate Risks and Determination of Safety

     EPA conducted human-health risk assessments for acute and chronic
dietary exposures (food and drinking water only). Because there are no
uses of flutriafol that are expected to result in residential
exposures, this aggregate risk assessment takes into consideration
dietary food and drinking water exposure only. Therefore, the acute and
chronic aggregate estimates would be the same as the dietary exposure
results. All aggregate exposure and risk estimates are below EPA's
level of concern.
    1. Acute risk. Including the proposed use on soybeans, human-health
risk assessments have been conducted for the following exposure
scenarios: Acute and chronic dietary exposures (food and drinking water
only). All aggregate exposure and risk estimates are below the Agency's
level of concern. Because there are no uses of flutriafol that are
expected to result in residential exposures, this aggregate risk
assessment takes into consideration dietary food and drinking water
exposure only. The acute (95th percentile) dietary exposure
estimates are below HED's level of concern < 100% aPAD for females 13-49
year old (10% aPAD).
    2. Chronic risk. The chronic dietary exposures estimates are below
HED's level of concern < 100% chronic population adjusted dose (cPAD)
for the general population and all population subgroups. The most
highly-exposed population subgroup is all infants (< 1 year old) at 2.7%
cPAD:
    3. Short-term risk. Short-term aggregate exposure takes into
account residential exposure plus chronic exposure to food and water
(considered to be a background exposure level).
    4. Aggregate cancer risk for U.S. population. For this assessment,
EPA has concluded that flutriafol is, ``not likely to be carcinogenic
to humans.''
    5. Determination of safety. Based on these risk assessments, EPA
concludes that there is a reasonable certainty that no harm will result
to the general population, and to infants and children from aggregate
exposure to flutriafol residues.

IV. Other Considerations

A. Analytical Enforcement Methodology

    Adequate enforcement methodology (Method RAM 219/04) submitted by
the registrant, (email from C. Rodia to J. Tyler, 3/23/06) is available
to enforce

the tolerance expression. The method may be requested from: Chief,
Analytical Chemistry Branch, Environmental Science Center, 701 Mapes
Rd., Ft. Meade, MD 20755-5350; telephone number:<PHONE_NUMBER>; e-mail
address<EMAIL_ADDRESS>
B. International Residue Limits

    There are currently tolerances of 0.10 ppm for soybean in Brazil
and South Africa.

V. Conclusion

    Therefore, the tolerance is established for residues of flutriafol,
in or on soybean at 0.10 ppm.

VI. Statutory and Executive Order Reviews

    This final rule establishes a tolerance under section 408(d) of
FFDCA in response to a petition submitted to the Agency. The Office of
Management and Budget (OMB) has exempted these types of actions from
review under Executive Order 12866, entitled Regulatory Planning and
Review (58 FR 51735, October 4, 1993). Because this rule has been
exempted from review under Executive Order 12866, this rule is not
subject to Executive Order 13211, Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use (66 FR 28355,
May 22, 2001) or Executive Order 13045, entitled Protection of Children
from Environmental Health Risks and Safety Risks (62 FR 19885, April
23, 1997). This final rule does not contain any information collections
subject to OMB approval under the Paperwork Reduction Act (PRA), 44
U.S.C. 3501 et seq., nor does it require any special considerations
under Executive Order 12898, entitled Federal Actions to Address
Environmental Justice in Minority Populations and Low-Income
Populations (59 FR 7629, February 16, 1994).
     Since tolerances and exemptions that are established on the basis
of a petition under section 408(d) of FFDCA, such as the tolerance in
this final rule, do not require the issuance of a proposed rule, the
requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et
seq.) do not apply.
     This final rule directly regulates growers, food processors, food
handlers and food retailers, not States or tribes, nor does this action
alter the relationships or distribution of power and responsibilities
established by Congress in the preemption provisions of section
408(n)(4) of FFDCA. As such, the Agency has determined that this action
will not have a substantial direct effect on States or tribal
governments, on the relationship between the national government and
the States or tribal governments, or on the distribution of power and
responsibilities among the various levels of government or between the
Federal Government and Indian tribes. Thus, the Agency has determined
that Executive Order 13132, entitled Federalism (64 FR 43255, August
10, 1999) and Executive Order 13175, entitled Consultation and
Coordination with Indian Tribal Governments (65 FR 67249, November 6,
2000) do not apply to this rule. In addition, This rule does not impose
any enforceable duty or contain any unfunded mandate as described under
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Public Law
104-4).
     This action does not involve any technical standards that would
require Agency consideration of voluntary consensus standards pursuant
to section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272
note).

VII. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. 801 et seq., generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report to each House of the Congress and to
the Comptroller General of the United States. EPA will submit a report
containing this rule and other required information to the U.S. Senate,
the U.S. House of Representatives, and the Comptroller General of the
United States prior to publication of this final rule in the Federal
Register. This final rule is not a ``major rule'' as defined by 5
U.S.C. 804(2).

List of Subjects in 40 CFR Part 180

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

    Dated: August 22, 2007.
Martha Monell,
Acting Director, Office Pesticide Programs.

0
Therefore, 40 CFR chapter I is amended as follows:

PART 180--[AMENDED]

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

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

0
 2. Section 180.629 is added to read as follows:

Sec.  180.629  Flutriafol; tolerance for residues.

    (a) General. [Reserved]
    (b) Section 18 emergency exemptions. Time-limited tolerances
specifed in the above table are established for residues of the
fungicide flutriafol per se (2,4'-difluoro-[alpha]-(1H -1,2,4-triazol-
1-yl-methyl)-benzhydryl alcohol) in or on the specified agricultural
commodities, resulting from use of the pesticide pursuant to section 18
emergency exemptions. The tolerances expire and are revoked on the date
specified in the following table.

----------------------------------------------------------------------------------------------------------------
                                                                                Expiration/revocation
                                                                   Parts per million               date
----------------------------------------------------------------------------------------------------------------
Soybean                                                                            0.10        December 31, 2010
----------------------------------------------------------------------------------------------------------------

    (c) Tolerances with regional registrations. [Reserved]
    (d) Indirect or inadvertent residues. [Reserved]
[FR Doc. E7-17112 Filed 8-28-07; 8:45 am]

BILLING CODE 6560-50-S


[Federal Register Volume 82, Number 15 (Wednesday, January 25, 2017)]
[Notices]
[Pages 8477-8479]
[FR Doc No: 2017-01604]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79816; File No. SR-CBOE-2017-003]

Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend the Fees Schedule

January 18, 2017.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on January 3, 2017, Chicago Board Options Exchange, Incorporated
(the ``Exchange'' or ``CBOE'') filed with the Securities and Exchange
Commission (the ``Commission'') the proposed rule change as described
in Items I, II, and III below, which Items have been prepared by the
Exchange. The Commission is publishing this notice to solicit comments
on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend its Fees Schedule. The text of the
proposed rule change is also available on the Exchange's Web site
(http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the
Exchange's Office of the Secretary, and at the Commission's Public
Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to make a number of amendments to its Order
Routing Subsidy (ORS) and Complex Order Routing Subsidy (CORS) Programs
(collectively ``Programs''). By way of background, the ORS and CORS
Programs allow CBOE to enter into subsidy arrangements with any CBOE
Trading Permit Holder (``TPH'') (each, a ``Participating TPH'') or Non-
CBOE TPH broker-dealer (each a ``Participating Non-CBOE TPH'') that
meet certain criteria and provide certain order routing functionalities
to other CBOE TPHs, Non-CBOE TPHs and/or use such functionalities
themselves.\3\ (The term ``Participant'' as used in this filing refers
to either a Participating TPH or a Participating Non-CBOE TPH).
Participants in the ORS Program receive a payment from CBOE for every
executed contract for simple orders routed to CBOE through their
system. CBOE does not make payments under the ORS Program with respect
to executed contracts in single-listed options classes traded on CBOE,
or with respect to complex orders or spread orders. Similarly,
participants in the CORS Program receive a payment from CBOE for every
executed contract for complex orders routed to CBOE through their
system. CBOE does not make payments under the CORS Program with respect
to executed contracts in single-listed options classes traded on CBOE
or with respect to simple orders. Currently, under both programs the
Exchange pays a subsidy of $0.02 per contract for all customer (origin
code ``C'') orders and a subsidy of $0.06 per contract for all non-
customer orders.
---------------------------------------------------------------------------

    \3\ See CBOE Fees Schedule, ``Order Router Subsidy Program'' and
``Complex Order Router Subsidy Program'' tables for more details on
the ORS and CORS Programs.
---------------------------------------------------------------------------

    The Exchange first proposes to exclude customer orders from the
Programs and eliminate the customer order subsidy. The Exchange also
proposes to increase the subsidy for non-customer orders from $0.06 per
contract to $0.07 per contract under both ORS and CORS. The Exchange
notes that another Exchange with a similar subsidy program also does
not provide subsidies for customer orders.\4\
---------------------------------------------------------------------------

    \4\ See NASDAQ PHLX LLC Pricing Schedule, Section IV(e) [sic],
Other Transaction Fees, Market Access and Routing Subsidy
(``MARS'').

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

    The Exchange next proposes to amend one of the system requirements
under the Programs. Specifically, the Exchange notes that to qualify
for the subsidy arrangement under ORS and CORS, a Participant's order
routing functionality has to, among other things, cause CBOE to be the
default destination exchange for simple (under ORS) and complex (under
CORS) orders, but allow any user to manually override CBOE as the
default destination on an order-by-order basis. As the Exchange is
proposing to eliminate subsidies for customer orders, the Exchange does
not believe it's necessary to require that CBOE be set as the default
destination exchange for customer orders. As such, the Exchange
proposes to amend the Fees Schedule to provide that under the ORS and
CORS programs, CBOE must be set as the default exchange for non-
customer orders only (and still allow any user to manually override
CBOE as the default destination on an order-by-order basis).
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\5\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \6\ requirements that the rules of an exchange be
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest. Additionally,
the Exchange believes the proposed rule change is consistent with
Section 6(b)(4) of the Act,\7\ which requires that Exchange rules
provide for the equitable allocation of reasonable dues, fees, and
other charges among its Trading Permit Holders and other persons using
its facilities.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
    \7\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    In particular, the Exchange believes the proposed amendments to the
ORS and CORS Programs are reasonable because the proposed changes still
affords Participants an opportunity to receive payments to subsidize
the costs associated with providing certain order routing
functionalities that would otherwise go unsubsidized. Additionally, the
Exchange believes the increased $0.07 per contract subsidy for non-
customer orders is reasonable because it is within the range of
subsidies paid by another exchange under a similar subsidy program.\8\
The Exchange also believes it is reasonable, equitable and not unfairly
discriminatory to maintain a subsidy for non-customer orders only under
the Programs. Particularly, the Exchange notes that customer orders
already have the opportunity to earn various rebates, discounts or fee
caps.\9\ Moreover, the Exchange notes that another exchange also does
not provide subsidies for customer orders.\10\
---------------------------------------------------------------------------

    \8\ See supra note 4.
    \9\ See e.g., CBOE Fees Schedule, Customer Large Trade Discount
and Volume Incentive Program.
    \10\ See supra note 4.
---------------------------------------------------------------------------

    The Exchange believes the elimination of the requirement to set
CBOE as the default destination for customer orders is reasonable,
equitable and not unfairly discriminatory because the Exchange will no
longer be providing a subsidy for such orders.

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

    CBOE does not believe that the proposed rule change will impose any
burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange does not believe
that the proposed changes will impose an unnecessary burden on
intramarket competition because they will apply equally to all
participating parties. Although the subsidy for orders routed to CBOE
through a Participant's system only applies to Participants of the
Programs, the subsidies are designed to encourage the sending of more
orders to the Exchange, which should provide greater liquidity and
trading opportunities for all market participants. Additionally,
although customer orders will no longer be eligible for subsidies under
the programs, customer orders are eligible for other rebates, discounts
or fee caps.\11\ The Exchange also does not believe that such changes
will impose any burden on intermarket competition that is not necessary
or appropriate in furtherance of the purposes of the Act. The Exchange
notes that, should the proposed changes make CBOE more attractive for
trading, market participants trading on other exchanges can always
elect to provide order routing functionality to CBOE. Additionally, to
the extent that the proposed changes to the ORS and CORS Programs
result in increased trading volume on CBOE and lessened volume on other
exchanges, the Exchange notes that market participants trading on other
exchanges can always elect to become TPHs on CBOE to take advantage of
the trading opportunities.
---------------------------------------------------------------------------

    \11\ See e.g., CBOE Fees Schedule, Customer Large Trade Discount
and Volume Incentive Program.
---------------------------------------------------------------------------

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

    The Exchange neither solicited nor received comments on the
proposed rule change.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \12\ and paragraph (f) of Rule 19b-4 \13\
thereunder. At any time within 60 days of the filing of the proposed
rule change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission will institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-CBOE-2017-003 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-CBOE-2017-003. This file
number should be included on the subject line if email is used. To help
the Commission process and review your

comments more efficiently, please use only one method. The Commission
will post all comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent
amendments, all written statements with respect to the proposed rule
change that are filed with the Commission, and all written
communications relating to the proposed rule change between the
Commission and any person, other than those that may be withheld from
the public in accordance with the provisions of 5 U.S.C. 552, will be
available for Web site viewing and printing in the Commission's Public
Reference Room, 100 F Street NE., Washington, DC 20549, on official
business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of
the filing also will be available for inspection and copying at the
principal office of the Exchange. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-CBOE-2017-003 and should be submitted on or before
February 15, 2017.
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    \14\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-01604 Filed 1-24-17; 8:45 am]
 BILLING CODE 8011-01-P