[Federal Register Volume 81, Number 103 (Friday, May 27, 2016)]
[Notices]
[Pages 33716-33718]
[FR Doc No: 2016-12512]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77885; File No. SR-NYSEArca-2016-75]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Amending the NYSE
Arca Options Fee Schedule

May 23, 2016.
    Pursuant to section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that, on May 17, 2016, NYSE Arca, Inc. (the ``Exchange'' or ``NYSE
Arca'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 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 the NYSE Arca Options Fee Schedule
(``Fee Schedule''). The Exchange proposes to implement the fee change
effective May 17, 2016. The proposed rule change is available on the
Exchange's Web site at www.nyse.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.

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

    In its filing with the Commission, the self-regulatory organization
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 those 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 parts of such statements.

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

1. Purpose
    The purpose of this filing is to restructure the Lead Market Maker
(``LMM'') Rights Fees (``Rights Fee'') and to provide new opportunities
for LMMs to achieve a discounted Rights Fee based on volume executed on
the Exchange. The Exchange proposes to implement the fee change
effective May 17, 2016.
    Currently, the Exchange charges a Rights Fee on each issue in an
LMM's allocation, with rates based on the Average National Daily
Customer Contracts (``CADV''). The monthly Rights Fee ranges from $45
per month to $1,500 per month. With one exception, under the current
Fee Schedule the more active an issue, the higher the Rights Fee. The
one exception to this general rule is that the Exchange currently
charges a higher rate for the lowest-volume issues (i.e., less than 101
CADV) to balance the Exchange's revenue with the cost of listing and
maintaining these low-volume issues.
    The Exchange proposes to restructure the LMM Rights Fee to be more
aligned with the economic benefit of being the LMM in a given issue,
based on trading activity in an issue. The Exchange proposes that some
rates would decrease (for lower-volume issues) and others would
increase (for higher-volume issues). Using the same CADV levels
currently in place, the Exchange proposes to modify the Rights Fee as
follows:

                             LMM Rights Fee
------------------------------------------------------------------------
                                                    Current    Proposed
   Average national daily customer  contracts         fee         fee
------------------------------------------------------------------------
0-100...........................................        $125         $25
101-1,000.......................................          45          35
1,001-2,000.....................................          75          75
2,001-5,000.....................................         200         200
5,001-15,000....................................         375         750
15,001-100,000..................................         750       1,500
100,000+........................................       1,500       3,000
------------------------------------------------------------------------

    As shown in the chart above, the Exchange proposes to significantly
decrease the Rights Fee for the lowest-volume issues (i.e., between 0-
100 contracts) to better account for the costs to each LMM,
irrespective of costs and revenue to the Exchange associated with
listing an issue.\4\ The Exchange also proposes to slightly decrease
the Rights Fee for option issues trading between 101-1,000 CADV to
similarly align with the cost to the Exchange associated with such
issues. The Exchange believes the proposed reduction in the Rights Fee
for issues trading under 1,001CADV [sic] would create an incentive for
LMMs to request appointments in these lower-volume issues, which may
result in increased liquidity to the benefit of market participants. In
addition, the Exchange proposes to increase the Rights Fees associated
with the three most active CADV categories of issues to better reflect
the economic benefits of being an LMM in more actively-traded issues
(i.e., option issues trading more than 5,000 CADV). The Exchange
believes the proposed modifications to the Rights Fee are appropriate
as an LMM would have an opportunity to interact with fewer than 101
contracts per day to cover the proposed $25 per month Rights Fee and
would have the opportunity to interact with more than 100,000 contracts
per day to cover the proposed $3,000 per month Rights Fee.
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    \4\ In line with the proposed changes to the Rights Fee for the
lowest-volume issues, the Exchange also proposes to delete from the
Fee Schedule language regarding when the issues were listed and
whether certain issues are ``grandfathered'' such that the LMM
Rights Fee for the next highest tier applies, in addition to the
related asterisk appearing after the 0-100 CADV level.
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    To potentially offset the proposed increase in Rights Fees for the
most actively traded issues, the Exchange also proposes to adopt two
additional discounts to the Rights Fee for the three most active CADV
categories of issues. Specifically, the proposed discounts would be
available to LMMs with issues in their appointment with a CADV above
5,000 and would be based on the amount of monthly (i) total electronic
volume and/or (ii) total posted volume executed by an LMM in the Market
Maker range relative to other Marker [sic] Makers appointed in that
issue.\5\ The Exchange notes that there is only one LMM per issue, and
only LMMs are subject to the Rights Fee. Under the proposal, each month
the LMM in an issue would be ranked against non-LMM Market Makers that
quote and trade in that LMM's issue. For each issue, each month, if the
LMM achieves the highest total electronic volume amongst all Market
Makers, the LMM would receive a 50% discount to its Rights Fee. In
addition, as proposed, for each issue, each month, if the LMM achieves
the second highest total electronic volume amongst all Market

Makers, the LMM would receive a 25% discount to its Rights Fee. The
Exchange believes the proposed discounts would incentivize an LMM to
compete against non-LMMs in that issue to more aggressively quote in
order to reduce the LMM's Rights Fee.
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    \5\ Total posted volume executed by an LMM refers to the total
volume executed from posted liquidity.
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    Similarly, for each issue, each month, if the LMM that [sic]
achieves the highest total posted volume amongst all Market Makers, the
LMM would receive a 50% discount to [sic] Rights Fee. And, for each
issue, each month, if the LMM achieves the second highest posted volume
amongst all Market Makers, the LMM would receive a 25% discount to
[sic] Rights Fee. Again, the Exchange believes the proposed discounts
would incentivize [sic] to compete against non-LMM Market Makers to
reduce its own Rights Fee. For example, if one or more non-LMM Market
Makers were ranked first and second in (i) total electronic volume and
(ii) total posted volume, the LMM would not receive a discount to its
Rights Fee. However, when the LMM achieves one or both of the top
volume rankings, the LMM would be eligible for a reduction.
    The Exchange notes that the proposed discounts would be cumulative
and the same LMM would be eligible to achieve the discount for each
monthly volume category. For example, if in a given month an LMM ranked
1st in Total Electronic Volume in the issue and also ranked 2nd in
Total Posting Volume in the issue, that LMM would achieve a combined
75% discount in that issue. The Exchange believes that the proposed
discounts may incent LMMs that already transact a significant amount of
business on the Exchange to quote and trade competitively in their
issues to achieve the highest (or second highest) monthly ranking in
total electronic volume and total posted volume. The Exchange also
believes the proposed changes may generate interest in LMMs to apply
for new issue allocations, which would increase not only an LMM's
volume, but would encourage liquidity on the Exchange to the benefit of
all market participants.
    The Exchange currently provides a 50% discount to an LMM's
aggregate Rights Fees across all issues. This 50% discount is applied
to an LMM that trades at least 50,000 contracts CADV, of which 10,000
such contracts are in its LMM appointment (the ``Existing LMM
Discount''), which discount is not being altered by this proposal.\6\
The Exchange would first determine whether an LMM qualified for the
proposed per issue discounts and would apply any such discounts. Next,
the Exchange would determine whether the LMM had qualified for the
Existing LMM Discount. The 50% discount under the Existing LMM Discount
would be applied only after any discount under the proposal is applied.
Consider, for example, that an LMM has 10 issues in its allocation each
of which are subject to a $500 per month Rights Fee (totaling $5,000).
If the LMM achieved the proposed 50% discount for posted volume in two
issues in its allocation, the LMM's Rights Fee for these issues would
be reduced by $250 (reducing the LMM's overall Rights Fee to $4,500).
If the LMM also qualified for the Existing LMM Discount, the Exchange
would reduce the total Rights Fee of $4,500 by 50% to $2,250.
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    \6\ See Fee Schedule, Endnote 2, available here, https://www.nyse.com/publicdocs/nyse/markets/arca-options/NYSE_Arca_Options_Fee_Schedule.pdf. The Exchange is not making any
changes to this discount.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with section 6(b) of the Act,\7\ in general, and furthers the
objectives of sections 6(b)(4) and (5) of the Act,\8\ in particular,
because it provides for the equitable allocation of reasonable dues,
fees, and other charges among its members, issuers and other persons
using its facilities and does not unfairly discriminate between
customers, issuers, brokers or dealers.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that the proposed modifications to the LMM
Rights Fees are reasonable, equitable and not unfairly discriminatory
as the proposed Rights Fees are more closely aligned with the economic
benefit of being LMM in a given issues. For example, an LMM would have
an opportunity to interact with fewer than 101 contracts per day to
cover the proposed $25 per month Rights Fee and would have the
opportunity to interact with more than 100,000 contracts per day to
cover the proposed $3,000 per month Rights Fee. The Exchange also
believes that proposed Rights Fees are not unfairly discriminatory
because they apply solely to LMMs (non-LMMs are not subject to this
Fee) and LMMs trading issues with similar activity levels would be
subject to the same Rights Fees. Moreover, the Exchange notes that an
LMM can opt to relinquish any issue in its allocation to reduce its
Rights Fee, so the proposed Rights Fees are completely voluntary.
    The Exchange also believes the proposed discounts on the Rights
Fees available to LMMs with issues in their appointment with a CADV of
5,001 or above are reasonable, equitable and not unfairly
discriminatory for a number of reasons. First, all LMMs trading issues
with similar activity levels would be eligible to achieve the discount
(e.g., those LMMs trading issues with a CADV of 5,001 or above). The
Exchange notes that there is only one LMM per issue, and only LMMs are
subject to the Rights Fee. Under the proposal, each month the LMM in an
issue would be ranked against non-LMM Market Makers that quote and
trade in that LMM's issue. Because the non-LMM Market Makers are not
subject to the Rights Fee, the proposed discount would not disadvantage
Market Makers. Instead, the proposed volume-based discounts would
operate to incentivize each LMM to achieve first or second ranking in
monthly volume for each issue, relative to non-LMM Market Makers to
reduce its own Rights Fee. In addition, such discounts would reduce the
overhead costs of LMM firms that are most actively trading in the
issues, which reduced costs would enhance the ability of LMMs to
provide liquidity to the benefit of all market participants.
    Finally, the Exchange is subject to significant competitive forces,
as described below in the Exchange's statement regarding the burden on
competition.
    For these reasons, the Exchange believes that the proposal is
consistent with the Act.

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

    In accordance with section 6(b)(8) of the Act,\9\ the Exchange does
not believe that the proposed rule change would impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. The Exchange believes that the proposed
modifications on the LMM Rights Fees would not impose an unfair burden
on competition because the proposed Rights Fees would more closely
align with the economic benefit of being LMM in a given issue. Because
the non-LMM Market Makers are not subject to the Rights Fee, the
proposed discount would not disadvantage Market Makers. Instead, the
proposed volume-based discounts would operate to incentivize each LMM
to achieve first or second ranking in monthly volume for each issue,
relative to non-LMM Market Makers to reduce its own Rights Fee. The
Exchange believes that the proposed discounts would encourage LMMs to
quote and trade competitively in their issues and would reduce the
burden on competition among LMMs in

the most actively-traded issues because LMMs that achieve the discounts
would have reduced overhead.
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    \9\ 15 U.S.C. 78f(b)(8).
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    The Exchange notes that it operates in a highly competitive market
in which market participants can readily favor competing venues. In
such an environment, the Exchange must continually review, and consider
adjusting, its fees and credits to remain competitive with other
exchanges. For the reasons described above, the Exchange believes that
the proposed rule change reflects this competitive environment.

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

    No written comments were solicited or received with respect to the
proposed rule change.

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

    The foregoing rule change is effective upon filing pursuant to
section 19(b)(3)(A) \10\ of the Act and subparagraph (f)(2) of Rule
19b-4 \11\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(2).
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    At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
section 19(b)(2)(B) \12\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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    \12\ 15 U.S.C. 78s(b)(2)(B).
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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-NYSEArca-2016-75 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-NYSEArca-2016-75. 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-NYSEArca-2016-75 and should
be submitted on or before June 17, 2016.
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    \13\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-12512 Filed 5-26-16; 8:45 am]
 BILLING CODE 8011-01-P


February 2003 Statement Supporting the Renewal of the Information Collection Procedure for Title III Trade Secrecy Regulations 1. Identification of the Information Collection 1 ( a) Trade Secret Claims for Community Right to Know and Emergency Planning ( EPCRA Section 322)  EPA No. 1428.06 1 ( b) Short Characterization This information collection request pertains to trade secrecy claims submitted under section 322 of the Emergency Planning and Community Right to Know Act of 1986 ( EPCRA), also known as Title III of SARA, the Superfund Amendments and Reauthorization Act. Title III contains provisions requiring facilities to report to State and local authorities, and EPA, the presence, use and release of extremely hazardous substances ( described in sections 302 and 304) and hazardous and toxic chemicals ( described in sections 311, 312 and 313 respectively). Section 322 of Title III allows a facility to withhold the specific chemical identity from these Title III reports if the facility asserts a claim of trade secrecy for that chemical identity. The provision establishes the requirements and procedures that facilities must follow to request trade secrecy treatment of chemical identities, as well as the procedures for submitting public petitions to the Agency for review of the " sufficiency" of trade secrecy claims. EPA published the trade secrecy regulations on July 29, 1988 ( 58 FR 28772), codified in 40 CFR Part 350.

Trade secrecy protection is provided for specific chemical identities contained in reports submitted under each of the following Title III sections:

o 303 ( d)( 2) Facility notification of changes that have or are about to occur;

o 303 ( d)( 3) Local Emergency Planning Committee ( LEPC) requests for facility information to develop or implement emergency plans;

o 311 Material Safety Data Sheets ( MSDSs) submitted by facilities, or lists of those chemicals submitted in place of the MSDSs;

o 312 Tier II emergency and hazardous chemical inventory forms; and,

o 313 Toxic chemical release inventory forms.

Section 322 requires that facilities requesting trade secrecy protection submit to EPA, in conjunction with their Title III report, an explanation showing that their claim for the chemical identity meets the four statutory criteria of trade secrecy enumerated in subsection ( b) of that provision. 2 February 2003 Facility owners and operators submit trade secrecy claims only to EPA. Claims consist of either one or two versions of the Title III report depending on the type of report, and two versions of an up front substantiation of the trade secrecy claim. The substantiation is designed to gather sufficient factual support to indicate whether the claim will meet the four statutory criteria of trade secrecy. It is an EPA developed form, and is discussed in detail in Part 3( b)( i) below.

Section 322( d) also provides for a public petition process to request the disclosure of chemical identities claimed as trade secret. The final rule does not specify a petition format, but does require that a petition contain certain elements set forth below in Part 3( b)( ii).

EPA is required by section 322( h) to identify the adverse health and environmental effects associated with the section 313 toxic chemicals claimed as trade secret and to include this information in the Toxic Chemical Release Inventory database required by section 313( j). This provision also instructs the governor or State Emergency Response Commission to identify the adverse health effects of the chemicals claimed as trade secret under sections 303, 311 and 312 and provide this information to persons requesting the information.

Section 323 regulations contain provisions allowing health professionals to gain access to trade secret chemical identities under three different circumstances:

o Non emergency treatment and diagnosis. The chemical identity of a hazardous chemical, extremely hazardous substance or toxic chemical must be given to a health professional if the information is needed in the diagnosis or treatment of an exposed individual;

o Medical emergencies. Expedited access to the identity of chemicals to which people have been exposed is provided for health professionals; and,

o Preventative measures. Health professionals studying chemical exposure and health effects for local governments are also given access to chemical identities upon written request.

Two preconditions must be met in order for health professionals to gain access to trade secret chemical identity in non emergency and preventative measure situations: they must submit a written statement of need and a written confidentiality agreement to the facility owner or operator prior to obtaining the information. No such requirements exist in the medical emergency situation, but the owner or operator disclosing the information may require a written confidentiality agreement and statement of need as soon as circumstances permit.

The Offices that will use trade secret information are the Chemical Emergency Preparedness and Prevention Office ( CEPPO) in the Office of Solid Waste and Emergency Response ( OSWER) and the TRI Program Division in the Office of Environmental Information. Trade ( OEI) secrecy claims are stored in areas designed to assure the confidentiality of the 3 February 2003 collected information.

2. Need/ Authority for Collection; Use/ Users of the Data 2 ( a) Need/ Authority for Collection The specific provision of Title III authorizing this collection is section 322, Trade Secrets. Congressional intent in writing trade secrecy provisions under Title III was to balance industry's concern with the protection of legitimate trade secrets, with communities' right to know chemical identification information. Congress established procedures for companies to assert claims, for the public to obtain review of their validity, and for an Agency claim review process which eliminates legally invalid and frivolous claims.

Section 322( a)( 1)( B) requires a facility that requests trade secrecy protection for a Title III chemical to substitute a generic chemical class or category name in the place on the Title III submittal where the withheld specific chemical identity is normally reported. A copy of this Title III submittal, as well as the chemical identification information that is withheld, are to be submitted separately to the EPA pursuant to sections 322( a)( 2)( A)( iii) and ( a)( 2)( B)( ii).

A facility is entitled to withhold chemical identification information according to section 322( a)( 2)( A)( i), only if that facility claims that such information is a trade secret on the basis of the following four factors which are enumerated in the provisions of section 322( b)( 1)( 4):

o The facility has not disclosed the chemical identity to any other person, other than a member of a local emergency planning committee, an officer or employee of the United States or a State or local government, an employee of such person, or a person who is bound by a confidentiality agreement, and the facility has taken reasonable measures to protect the confidentiality of such information and will continue to take such measures;

o The information is not required to be disclosed or otherwise made available to the public under any other Federal or State law;

o Disclosure of the information is likely to cause substantial harm to the competitive position of the facility; and,

o The chemical identity is not readily discoverable through reverse engineering.

A facility is required under section 322( a)( 2)( A) to make its claim of trade secrecy by submitting, in conjunction with its Title III report, an explanation containing the reasons, including specific descriptions, why the subject information satisfies the four statutory criteria. Within 30 days after receipt of a public petition, EPA is required under section 322( d) to review the information contained in a claimant's explanation to determine whether a claim is " sufficient." 4 February 2003 If the Agency determines a claim is sufficient, section 322( d)( 3)( A) provides for the claimant's submission of supplemental information to establish the veracity of the assertions contained in the substantiation. If the Agency determines that a claim is insufficient, or that the chemical identity is not a trade secret, and further determines that the claim is frivolous, section 325( d) requires that the Agency assess a civil or administrative penalty for the claim.

Section 322( f) permits a facility to designate, apart from the specific chemical identity, information which is contained in their claim explanation to be entitled to protection under the Trade Secrets Act, 18 U. S. C., section 1905. Except for information entitled to such protection, the provision requires that the Agency make all claim explanations publicly available. Further, Title III section 324( a) mandates that EPA, the States, and local authorities, make each hardcopy Title III report publicly available during normal working hours at locations designated by the above entities, as appropriate, in a manner consistent with the provisions of section 322, ( i. e., with the generic chemical name substituted for the specific chemical identity where a trade secrecy claim is made for the latter).

The regulations contained in 40 CFR Part 350 provides for the submission of two versions of the report and the substantiation, enables EPA, State Emergency Response Commissions ( SERCs) and LEPCs to fulfill the statutory mandate that public access be readily available to documents containing only the generic chemical descriptions, and that the specific chemical identity and other designated trade secret information be accorded confidential treatment. The regulations also provides for submission to EPA of a sanitized and an unsanitized version of the substantiation form, a sanitized and where indicated, an unsanitized version of the Title III report by a facility requesting trade secrecy protection for a Title III reported chemical. The sanitized and unsanitized versions of these documents are identical in all respects except that the trade secret chemical identification information reported in the unsanitized version is deleted from the sanitized version and a generic class or category name is substituted in its place. Also, other information provided in the unsanitized substantiation that is designated as a trade secret by a facility is deleted from the sanitized substantiation. Claimants submit only a sanitized version of section 303( d)( 2) and ( d)( 3) reports, and section 311 MSDS' to appropriate State and local authorities.

Answers to the substantiation questions described below provide the " specific description" stipulated in section 322( a)( 2)( ii) on why a facility believes trade secrecy should apply. Without this information, the Agency would not be in a position to evaluate whether or not a claim to withhold the chemical identity is sufficient, nor would it have the time ( statutorily set at 30 days) required to request and review the data in response to a petition for identity disclosure. Further, this information is needed in order for the Agency to evaluate claims for frivolousness and seek related penalties under section 325. On a broader scale, the information collection request is also necessary in order for EPA to evaluate whether the claim is complete under sections 322( a)( 1) and ( a)( 2). 5 February 2003 The Agency developed a standardized claim substantiation form to help it assess the sufficiency, validity and frivolousness of claims. The Agency anticipated that the form would reduce confusion about what information is to be supplied to meet the four statutory criteria. The Agency also anticipated that the form would help submitters more easily determine if they have a sufficient basis to make trade secrecy claims, ensure that all submissions are evaluated on the basis of comparable information, and " flag" the documents for procedural safeguards to quickly identify, review and protect the confidentiality of the claim.

Based on reviews of the substantiations submitted in past reporting years, EPA's experience has been that use of a standardized substantiation form has: ( 1) enabled submitters to adequately understand and develop information necessary to submit a sufficient claim; ( 2) enabled EPA to ensure that all submissions are evaluated on the basis of comparable information, and; ( 3) served as an efficient identifier of the trade secret status of the document and associated report, and hence, has ensured the use of appropriate Agency handling and routing procedures protective of their confidentiality.

2 ( b) Use/ Users of the Data The trade secrecy claim information is used only by OSWER and OEI and is needed by these Offices in order to: ( 1) perform the Agency's review of claims as required by section 322( d) to determine whether the claims are sufficient to support a finding that the specific chemical identity withheld is a trade secret; ( 2) ensure that claims for all withheld chemical identities are complete in accordance with the requirements of sections 322 ( a)( 1) and ( a)( 2), and; ( 3) evaluate claims for frivolousness and the attendant assessment of penalties stipulated in section 325 ( d)( 1).

3. Respondents/ SIC Codes; Information Requested 3 ( a) Respondents/ SIC Codes Sections 303, 311 and 312 claims are submitted by both the manufacturing sector, ( SIC codes 20 39) and the non manufacturing sector. No range of SIC codes exists for the nonmanufacturing sector. Examples of this sector include the construction industry and dry cleaners. Examples of the manufacturing sector include chemical manufacturers and paper manufacturers. Section 313 claims are submitted by covered sectors, which, as of reporting year 2002, include: metal mining (( SIC code 10 ( except 1011, 1081, and 1094)); coal mining (( SIC code 12 ( except 1241)); manufacturers ( SIC codes 20 39); electric utilities ( SIC codes 4911 ( limited to facilities that combust coal and/ or oil for the purpose of generating electricity for distribution in commerce), 4931 ( limited to facilities that combust coal and/ or oil for the purpose of generating electricity for distribution in commerce), and 4939 ( limited to facilities that combust coal and/ or oil for the purpose of generating electricity for distribution in commerce)); commercial hazardous waste treatment ( SIC code 4953 ( limited to facilities regulated under the RCRA Subtitle C, 42 U. S. C. section 6921 et seq.)); chemical and allied products wholesale ( SIC code 5169); petroleum bulk terminals and plants ( also known as stations) wholesale ( SIC code 5171); and, solvent recovery services ( SIC code 7389 ( limited to facilities primarily engaged in solvents 6 February 2003 recovery services on a contract or fee basis)). In addition, federal facilities were added to the respondent community by Executive Order 12856, and were required to report beginning calendar year 1994.

3 ( b) Information Requested ( i) Data Items for Trade Secrecy Claims Based on the four substantiation requirements in section 322( b), the Agency developed six core questions to comprise a standard substantiation form. ( See Attachment 1)

Questions one and two refer directly to the first criterion of section 322( b). The first question, on " specific measures" is the detail required by the submitter to prove to the EPA reviewer that reasonable safeguards have been taken to prevent unauthorized disclosure of the specific chemical identity. Answers to the second question will be used by the Agency to evaluate the facility's claim that the specific chemical identity has not been disclosed to anyone not bound by a confidentiality agreement.

Question three corresponds to the statute's second criterion that the submitter show either that a State or Federal agency has not already determined that the chemical identity is not a trade secret, or that no existing State or Federal statutes prohibit claiming the chemical identity as a trade secret.

Questions four and five require information about the facility's known connection with the use of the chemical, and estimates of competitive harm that would result from disclosure. Submitters must provide EPA with a description of their unique use of the chemical ( 3.4i), known linkages of the chemical to the facility in publications and patents ( 3.4ii), an explanation of how competitors could deduce use from disclosure of the chemical identity ( 3.4iii), and why knowledge of this use would be valuable to competitors ( 3.4iv). Specific indications of the competitive harm resulting from disclosures must be provided in question five. These questions refer back to the third criterion of section 322.

Question six enables EPA to identify the prevalence of the chemical in the company's products or releases, and the corresponding ability of competitors to identify the chemical through reverse engineering. This issue is specifically addressed in the fourth criterion.

In addition, blocks on the first page of the form provide space for accurate identification of the claimed trade secret chemical ( CAS number, chemical identity), a field for substitution of the generic class or category, a check off box to clearly identify the type of Title III report for which the claim is being asserted, and the facility's Dun and Bradstreet number ( for precise facility and record identification). Collecting this information generates no additional burden because it is transferred directly from the reports required under the various sections of Title III for which a 7 February 2003 claim is being made.

Finally, the submitter must sign a certification statement, found on the last page of the form, that the information is true to the best knowledge and belief of the submitter.

( ii) Data Items for Public Petition Process No specific petition format is required. However, the rule does require that the following be included in a petition:

o The name, address and telephone number of the petitioner;

o The name and address of the company claiming the chemical identity as trade secret;

o A copy of the relevant sanitized Title III report ( e. g., MSDS, Tier II or toxic chemical release form); and,

o A specific indication of the chemical identity that is being requested for disclosure.

EPA requires a copy of the Title III report in order to prevent any confusion about the particular disclosure in question. By statute, copies of facility filings are available at the offices of designated State or local entities. In writing the proposed and final regulations, the Agency considered these elements to be the minimum needed to successfully identify and begin the review of a trade secrecy claim.

4. The Information Collected  Agency Activities, Collection Methodology, and Information Management 4 ( a) Agency Activities o Process and store the data;

o Review the claims for completeness, sufficiency, and frivolousness;

o Respond to requests for confidential information from State governors, and nonconfidential information from the public;

o Respond to petitions from the public for disclosure of chemical identities claimed as trade secret; and,

o Prepare adverse health and environmental effects data for relevant chemical identities claimed as trade secret. 8 February 2003 4 ( b) Collection Methodology and Management The collection of trade secrecy claims is accomplished by respondents sending their claim submissions to EPA. The sanitized or non trade secret versions of the Title III report and the substantiation are stored so as to be easily accessible to the public. Data reported on the sanitized version of a Title III, section 313 report are entered in the Toxic Chemical Inventory database. The unsanitized versions of the Title III report and the substantiation are handled, labeled and stored in a manner protective of their confidentiality.

The unsanitized trade secret versions of these documents are reviewed to determine the sufficiency, validity and frivolousness of the claims. Both the sanitized and unsanitized documents are used to review the generic chemical class or category name in light of the specific chemical identity claimed as trade secret, to ensure the appropriateness of the generic description. For section 313 claims, both chemical descriptions are reviewed and used to develop adverse health and environmental effects data which are representative of the characteristics of the specific chemical identity withheld, and protective of the trade secret chemical identity.

While use of magnetic tape or information technology is being encouraged in the relatively uniform Title III reporting sections, the unique nature and length of trade secrecy substantiation responses will not confer any special advantage to their being reported on alternative media. Standardized responses are not expected, or encouraged, to questions about facility safeguards to protect confidentiality of a chemical; the extent of disclosure to local, State and Federal government entities; discussions of the use of the chemical and competitors' ability to discover it; and, statements on harm to competitive position.

The public petition process applies only to a chemical identity that a facility claims as trade secret, and not to other information contained in a substantiation which a facility has claimed as a trade secret. After receiving a petition, EPA has 30 days to determine whether the assertions on a facility's substantiation form ( if true) would form a sufficient basis for a trade secrecy claim. If the form meets the criteria of sufficiency, EPA will notify the submitter that they have 30 days to submit supplemental material supporting the truth of the assertions made in the substantiation. If the claim does not meet the criteria of sufficiency, EPA will notify the submitter that the claim will be denied. The facility may appeal to the Office of General Counsel or submit a statement of good cause to amend the substantiation. EPA will then accept or reject the statement, allowing or disallowing the submission of additional information. Finally, based on all the information a facility has submitted, EPA will determine whether the claim warrants trade secrecy protection.

EPA initiated reviews are conducted following the same steps involved in the public petition process and may result in an Agency decision regarding the sufficiency of the trade secrecy claims. However, EPA initiated reviews may be less formal and culminate in the withdrawal of a claim by a facility prior to the issuance of a formal Agency decision on the merits 9 February 2003 of the claim. The less formal reviews usually involve claims which are determined incomplete upon EPA review or complete claims which are thought by EPA to demonstrate obvious problems or weaknesses. In these circumstances, the Agency has contacted the facilities by telephone or by issuing a Notice of Noncompliance ( NON). The facilities have responded by formally withdrawing their claims prior to a formal decision on the merits of the claims.

4 ( c) Small Entity Flexibility The regulatory provisions of sections 311/ 312 and the statutory provision of section 313 inherently minimize the burden for small entities. Sections 311/ 312 have reporting thresholds below which facilities are not required to report. Section 313 applies only to facilities with 10 or more full time employees.

The decision to submit a trade secrecy claim on a Title III report is voluntary. Facilities that submit trade secrecy claims are doing so because they believe it is to their benefit. In addition, the need to claim trade secrecy protection for a chemical identity is just as important to small companies as it is to large companies. Therefore, the need to supply information to support a submission, as well as to review it, is dependent upon a firm's demonstration that it can adequately answer the four criteria found in the statute. Any firm, regardless of size, need only provide as much, or as little, detail as it feels necessary to support its claim under the statute.

4 ( d) Collection Schedule Under section 322, a specific chemical identity claimed as a trade secret is withheld from the face of Title III reports. That provision requires that claim explanations, and the information claimed as a trade secret, be submitted concurrently with the submission of the Title III reports. Apart from the statutory mandate that requires the filing of a claim each time the subject chemical is reported in a Title III submission, an updated claim is necessary to establish the current applicability of the four statutory criteria of trade secrecy. Even the slightest change in the circumstances which support the claim can be pivotal to the sufficiency, validity, and frivolousness of the claim. Even where previously created substantiations are relevant and appropriate for use at a later time, EPA encourages submitters to carefully review the substantiations.

In the case of sections 312 and 313, the reporting is annual and facilities submit a current claim annually with those reports. Under section 311, a claim must be resubmitted to EPA if an MSDS or list is updated. Under sections 311 and 312, an initial MSDS or list must be updated within three months after the facility owner or operator discovers significant new information regarding an aspect of a hazardous chemical. Under section 303( d)( 2) and ( d)( 3), a claim need not be resubmitted to EPA after the initial communication to the relevant LEPC unless further communication follows between the facility and LEPC which discusses the specific chemical identity in question. 10 February 2003 5. Nonduplication, Consultations, and other Collection Criteria 5 ( a) Nonduplication The information that EPA requires from trade secrecy claim submitters is not duplicated by any other Agency collection because the collection of information is entirely Title III oriented. In addition, unlike other statutes permitting confidential business information claims, Title III: ( 1) permits trade secrecy claims only for specific chemical identification information; ( 2) permits claims for a chemical identity only in very narrowly defined circumstances which are stipulated in the statute; and, ( 3) requires an up front substantiation of the applicability of those narrowly defined circumstances by a claimant at the time the report for a chemical claimed as trade secret is filed.

5 ( b) Consultations In earlier ICRs, EPA estimated that it would take 16 to 29 hours to prepare a trade secrecy claim package for sections 303, 311 and 312. EPA obtained this information by contacting a few submitters of claims in 1993. EPA later contacted a few submitters of trade secrecy claims in reporting years 1996 through 1998. Submitters informed EPA that the fixed costs of 22 hours remained the same as had been estimated previously; however, the variable costs estimated previously are now lower. Submitters informed EPA that it only requires between two and four hours to prepare new claims and between one and three hours to prepare resubmittals of trade secret claims. ( Memorandum from Sicy Jacob, OSWER/ EPA, 8/ 12/ 99).

5( c) Public Notice In compliance with the Paperwork Reduction Act ( 44 U. S. C. 3501 et seq.), the Agency has notified the public through the Federal Register notice on the renewal of this ICR on XX XX, 20XX( XX FR XXXXX). This renewal ICR based upon the previous ICRs burden estimations developed from the consultations and public comments that were received previously.

5( d) Effects of Less Frequent Collection Although submitting answers to the questions on the trade secrecy substantiation form is a necessary step towards ensuring eventual protection of a chemical identity, the decision to seek that protection is entirely voluntary. The submission process involves one initial collection of information for sufficiency, with the possibility of a request for supplementary information [ as provided in section 322 ( d)( 3)( A)] to establish veracity of the assertions stated in the substantiation if EPA determines that a claim is initially sufficient during a review initiated by public petition or the Agency. 11 February 2003 5 ( e) Confidentiality and Sensitive Questions All trade secrecy claims submitted to EPA under Title III are handled and stored according to procedures set out in the Interim OSWER Procedures For Protecting Title III Trade Secret Documents. These procedures were developed expressly for Title III trade secrecy claims with the knowledge that these documents are sensitive. Handling and review of documents containing Title III trade secret information is permitted only by persons who have obtained formal clearance to access the information based on a work related need to engage in these activities. When not being processed or reviewed by authorized individuals, the claim submissions containing trade secret information are stored in restricted access areas. To ensure that appropriate handling procedures are activated and the confidentiality of Title III trade secret submissions is maintained, the Agency attaches a cover sheet to the top of each trade secret document and otherwise marks the document to clearly identify the document as Title III confidential.

6. Estimating the Burden and Cost of the Collection 6( a) Estimated Number of Trade Secrecy Claims Costs to the Government and to respondents are based on actual numbers of trade secrecy claims received during reporting years ( RYs) 1999 through 2001and on estimates of future activity for the upcoming three year period. The reporting year corresponds to the calendar year. The deadline for submitting claims for a given reporting year falls in the following calendar year. For example, the deadline for submitting claims under section 311/ 312 for RY 2000 is March 1, 2001 ( the deadline for submitting the hazardous chemical inventory reports under section 312), and the deadline for section 313 claims is July 1, 2001 ( the deadline for submitting Toxic Chemical Release Reporting Form). Any facilities that wish to file trade secrecy claims in these reporting forms must submit the trade secrecy claim package with these reports.

The cost and burden of processing the claims submitted for RY 2000 are incurred in FY01. There is a one year lag between the reporting year for submitting claims ( e. g., RY00) and the fiscal year for processing claims under sections 311/ 312 ( e. g. FY01). There may be a twoyear lag between the reporting year ( e. g., 2000) for submitting claims and the fiscal year for processing claims under section 313 if some of the claims submitted in July 2001 are processed in October or later of 2001, which is FY02. However, to be consistent, in this ICR all section 311/ 312 and section 313 claims from one reporting year will be treated as having been processed in the following fiscal year.

Table 1 presents the actual number of submissions indicating trade secret claims for all sections of Title III for FY00 to FY02 ( corresponding to RY99 through RY01). For the threeyear period, the total number of claims submitted under section 313 was eight, with three in FY00 and FY01 each, and two in FY02. In previous ICRs, the number of claims submitted under 12 February 2003 section 313 was reported to be much higher, because the number included claims that were later withdrawn by submitters. This year, all claims fell under one of two categories. They were either submitted complete, with the necessary supporting documentation, or submitters had mistakenly checked the trade secret claim box on Form R or Form A but had no intention of actually submitting a claim. EPA is not reporting as actual trade secret claims cases where the box was checked purely in error and no supporting documentation was submitted. No burden was incurred by the facility, and EPA corrected the error with a Notice of Data Change ( NDC). The facility has an opportunity to refute the NDC, but no facilities chose to do so. ( Memorandum from Larry Reisman and Wendy Timm, OEI/ EPA 2/ 6/ 03).

Table 2 shows the estimated numbers of trade secret claims under sections 303, 311 and 312 expected to be filed by facilities in the new ICR period of FY03 through FY05. No claims are expected to be filed under section 303. ( Memoranda from Sicy Jacob, OSWER/ EPA, 2/ 6/ 03.)

.

Table 1 Actual Number of Trade Secret Claims FY 2000  FY 2002 ( RY 1999  RY 2001) _________________________________________________________________________ SARA Section FY00 FY01 FY02 Total _________________________________________________________________________

303( d) 2 and ( d)( 3) 0 2 0 0 311/ 312 282 335 417 1,034 313 3 3 2 8 _________________________________________________________________________ Total 285 338 419 1,042 _________________________________________________________________________ 13 February 2003 Table 2 Estimated Number of Trade Secret Claims FY 2003  FY 2005 ( RY 2002  RY 2004) __________________________________________________________________________ SARA Section FY03 FY04 FY05 Total __________________________________________________________________________ 303( d) 2 and ( d)( 3) 0 0 0 0 311/ 312 345 345 345 1,035 313 5 5 5 15 __________________________________________________________________________ Total 350 350 350 1,050 __________________________________________________________________________

6( b) Estimating Agency Burden and Cost Costs to the Federal Government for processing trade secret claims, the petition and review processes, and for providing adverse health effects data, are presented in Table 3. Each of the three cost areas is discussed below.

( i) Processing and Storage of Trade Secret Claims EPA incurs expenses to process and store each trade secret claim submission. These activities include affixing document control number labels and trade secret cover sheets, processing basic information about the claims, checking for completeness, and storing the submissions. EPA must store all trade secret submissions and be prepared to respond to public petitions for disclosure of the subject chemical identities. Both fixed and variable costs are estimated.

Fixed costs are incurred for maintenance and operation of the existing storage and filing system for section 313 claims. Fixed costs for the three year period ( FY00 through FY02) covered by the expiring ICR for storage space were $ 2,404 ( Memorandum from Larry Reisman and Wendy Timm, OEI/ EPA, 2/ 6/ 03). Storage of section 311/ 312 records requires a minimum amount of space, and is handled by the Federal Records Center at no charge to the Agency ( Memorandum from Sicy Jacob, OSWER/ EPA, 2/ 6/ 03). 14 1Government labor costs are calculated using the following fully loaded wage rates for 2002: GS 13, Step 5, $ 57.54/ hr; GS 12, Step 5, $ 48.38/ hr; GS 9 Step 5, $ 33.38/ hr; and GS 7, Step 5, $ 27.28/ hr.

February 2003 Variable costs are estimated by program. 1 For sections 303 and 311/ 312 of EPCRA, costs supporting inventory of new claims; and storage, retrieval, and checking of claims for completeness, are estimated to be approximately $ 129 ( 2.25 hours) per claim ( Memorandum from Sicy Jacob, OSWER/ EPA 8/ 12/ 99). Variable costs associated with processing section 313 claims are estimated to be approximately $ 1,630 ( 28.33 hours at GS13, Step 5 rate) per claim for FY03 through FY05 ( Memorandum from Janette Petersen, IMD/ EPA, 9/ 30/ 96).

Based on these figures, costs for processing trade secret submissions for OEI and OSWER are estimated to be $ 55,059 per year for FY03 through FY05, or a total of $ 165,177 for the three year period. The weighted average cost per claim is $ 151 for FY03 through FY05.

The total burden hours are estimated to be 2,754 for the three year period. The weighted average burden per claim is 2.6 hours for the period.

( ii) Petition/ Claim Review In addition to the costs associated with processing and storing trade secret claim documents, the Federal government will also incur costs by responding to petitions filed by the public requesting the Agency's review of specific claims, and as a result of EPA initiated review of claims.

The process established for petitioning and reviewing trade secret claims follows a standard series of steps. The costs of this process, however, are dependent on the merits of the claims and decisions that facilities make to contest an EPA finding if a trade secret claim is disallowed. The costs are also dependent on the number of petitions that the public files and the number and magnitude of EPA initiated reviews.

The actual number of petitions which has been filed over the history of the program is two; the first petition during FY89 pertained to one claim, and the second during FY90 pertained to 10 claims asserted by one facility. No new petitions have been received by the Agency during the period of the expiring ICR.). In the absence of any new petition activity in recent years, the Agency is continuing to use the assumption of one petition per year ( assuming each petition pertains to one claim) for this ICR, as it has in the previous two ICRs. ( Memoranda from Sicy Jacob, OSWER/ EPA, 2/ 6/ 03).

The estimates for the costs of the petition process to the government included in the initial ICR originated from the Regulatory Impact Analysis ( RIA), which developed three scenarios to 15 February 2003 identify the potential steps and time involved for EPA, as well as petitioners and facilities in claim reviews. The scenarios ranged from a low level to a high level, or complex review. Based on State community right to know programs, an estimate of the likelihood of occurrence for each petition scenario was identified and a weighted average cost of petition review was calculated. The RIA assumed that no public petitions would result in a petitioner, the EPA, or a facility taking legal action. In the event of a court challenge, the RIA recognized that the costs of the process would likely be much higher than the estimated cost of the most complicated review case. However, the RIA did not consider the cost associated with a court challenge because estimating legal costs is difficult and there were no cases under existing programs on which to base such an estimate.

These assumptions, in combination with the actual costs incurred to review the 10 claims pertaining to the 1990 petition and the actual costs incurred in connection with the internallygenerated Agency review of trade secret claims, were used to determine the estimated costs to EPA shown in Table 3. Burden and cost for low level and complex review are estimated separately.

Low level review burden and cost were estimated based on an actual public citizen petition received, pertaining to one claim asserted by one facility. The review involved approximately 30 hours of Agency time primarily spent by professional staff at the GS 13, Step 5 level. The Agency's finding of insufficiency was not challenged.

In the previous ICR, the Agency based its estimates of future burden and costs for complex reviews on data pertaining to actual reviews conducted under section 313, which were estimated to be five per year. However, no high level, complex reviews were performed in the previous three year ICR period. This ICR is estimating that three high level Agency reviews, or nine for the three year period of FY03 through FY05, will take place during the next three year period.( Memorandum from Larry Reisman and Wendy Timm, OEI/ EPA, 2/ 6/ 03). The average burden per complex review is estimated at 37 hours, and the average cost per review is estimated to be $ 2,129 ( all labor at fully loaded GS 13, Step 5, rate for 2002). The annual burden for three complex reviews is thus estimated to be 111 hours and the total annual cost, $ 6,387. For the three year period, the total burden is estimated to be 333 hours, and the cost, $ 19,161. All Agency initiated reviews were carried out under section 313; the Agency does not initiate reviews of claims made under sections 311 and 312 ( Memorandum from Sicy Jacob, OSWER/ EPA, 8/ 12/ 99).

EPA recognizes that the estimated burden hours per review presented here for complex reviews exceed those estimated for low level reviews by only about 20 percent on average ( 30 hours versus 37 hours). However, based on review activities conducted for previous ICRs, this narrow range was believed to provide the most reasonable estimate of anticipated resource requirements over the three year period. Agency staff do not expect the hourly burden estimates 16 February 2003 to change over the next three year period ( Memoranda from Sicy Jacob, OSWER/ EPA, 8/ 12/ 99, and Larry Reisman and Wendy Timm, OEI/ EPA, 2/ 6/ 03).

Under section 322( g), EPA has the responsibility to provide trade secret information to States that request such information. One such request was received, but the company withdrew its trade secret claim. Therefore, this ICR does not estimate costs or burdens because no additional requests are expected, and the Agency does not have adequate experience on which to base an estimate.

( iii) Provision of Adverse Health Effects Information Table 3 also shows the estimated costs incurred to collect and distribute health hazard data for EPCRA section 313 chemicals claimed as trade secret. During the previous three years ( FY00 through FY02), a total of six profiles were prepared ( two per year) using a total of approximately 67 hours, or 11.2 hours per profile. Three profiles are expected to be prepared each year during FY03 through FY05. The burden estimate for FY02 through FY05 shown in the table is based on an annual projected burden of 11.2 hours per profile, or 33.6 hours per year at the GS 13, Step 5 level ($ 57.54/ hr, 2002). The estimated burden per profile has not changed from the previous ICR. The total annual cost is estimated to be $ 1,932. For the three year period, the total burden is estimated to be 102 hours, at a cost of $ 5,796. ( Memorandum from Larry Reisman and Wendy Timm, OEI/ EPA, 2/ 6/ 03).

Although the RIA identified three additional tasks included as part of the provision of health effects data, no additional burden was estimated to be associated with these tasks. This is because these tasks ( sanitizing hazard profiles, provision of section 313 data to the public upon request, and provision of section 313 data to states upon request) are either not performed ( e. g., no requests for trade secret data have been received from the states) or are performed routinely as part of the normal Toxic Release Inventory ( TRI) data release ( Personal communication from Tim Crawford, IMD/ EPA, 8/ 17/ 99).

The total burden to the Federal government for managing claims and petitions submitted under sections 303, and 311/ 312 over the three year period covered by this ICR will be 2,418 hours, at a cost of $ 138,693. For handling section 313 claims and reviews, and providing adverse health effects information, the Federal government burden is estimated to be 861 hours for the three year period, at a total cost of $ 49,407. The grand total hours for sections 303, 311/ 312 and 313 is 1,093 hours per year, or 3,279 hours over the three year period. The grand total cost is $ 62,700 per year, or $ 188,100 for the three year period. 17 February 2003 Table 3 Cost to Federal Government  Sections 322/ 323 Cost Type FY03 FY04 FY05 Total _____________________________________________________________________________________________________

1. Processing and Storing Trade Secret Claims Fixed Costs Section 313:

Cost $ 2,404 $ 2,404 $ 2,404 $ 7,212 Variable Costs Sections 303, 311/ 312:

Number of Claims 345 345 345 1,035 Hours per Claim 2.25 2.25 2.25 Cost Per Claim $ 129 $ 129 $ 129 Section 313: Number of Claims 5 5 5 15 Hours per Claim 28.33 28.33 28.33 Cost per Claim $ 1,630 $ 1,630 $ 1,630 Hours All Claims ( Variable Costs) 918 918 918 2,754 Cost All Claims ( Variable Costs) $ 52,655 $ 52,655 $ 52,655 $ 157,965 ______________________________________________________________________________________________________

Subtotals for Processing and Storing Trade Secret Claims Hours 918 918 918 2,754 Cost $ 55,059 $ 55,059 $ 55,059 $ 165,177 Weighted Average Burden per Claim 2.6 2.6 2.6 18 February 2003 Weighted Average Cost per Claim $ 151 $ 151 $ 151 ______________________________________________________________________________________________________

Cost Type FY03 FY04 FY05 Total ______________________________________________________________________________________________________

2. Agency Review Process A. Low Level Review  Sections 311/ 312 ( Assumes each petition pertains to one claim)

Number of Petitions 1 1 1 3 Hours per Petition 30 30 30 Cost per Petition $ 1,726 $ 1,726 $ 1,726 Hours all Petitions 30 30 30 90 Cost all Petitions $ 1,726 $ 1,726 $ 1,726 $ 5,178 B. Complex Review  Section 313 Number of Reviews 3 3 3 9 Hours per Review 37 37 37 Cost per Review $ 2,129 $ 2,129 $ 2,129 Hours all Reviews 111 111 111 333 Cost all Reviews $ 6,387 $ 6,387 $ 6,387 $ 19,161 Subtotals for Agency Review Process Hours 141 141 141 423 Cost $ 8,113 $ 8,113 $ 8,113 $ 24,339  19 February 2003

Cost Type FY03 FY04 FY05 Total

3. Provision of Adverse Health Effects Information  Section 313 Number of Profiles 3 3 3 9 Hours per Profile 11.2 11.2 11.2 Cost per Profile $ 644 $ 644 $ 644 Hours all Profiles 33.6 33.6 33.6 100.8 Cost all Profiles $ 1,932 $ 1,932 $ 1,932$ 5,796

Federal Government Totals A. Sections 303, 311/ 312 Hours 806 806 806 2,418 Cost $ 46,231 $ 46,231 $ 46,231 $ 138,6 93 B. Section 313 Hours 287 287 287 861 Cost $ 16,469 $ 16,469 $ 16,469 $ 49,407 Grand Totals Hours 1,093 1,093 1,093 3,279 Cost $ 62,700 $ 62,700 $ 62,700 $ 188,100 20 February 2003

Note: Totals may not add up exactly due to rounding. 21 February 2003 6( c) Estimating Respondent Burden and Costs ( i) Forms Completion One of the major cost components associated with trade secret claims is the cost to facilities to prepare substantiations. The time required to complete this process for each chemical will vary with the complexity of the situation, the number of chemicals that a facility seeks to claim as trade secrets, and the amount of detail that a facility includes in each answer. The cost estimates presented in Table 4 are based on phone conversations with trade secret submitters and on assumptions about the time it takes to complete various activities, which are explained briefly below.

Facilities will incur two types of costs in the handling and filing of trade secret claims: fixed costs ( i. e., costs that do not vary with the number of chemicals claimed trade secret) and variable costs, which are incurred on a per claim basis. In all cases, all facilities that file trade secret claims will incur fixed costs; these costs will be incurred only once, however, reflecting the fact that actions such as rule familiarization, chemical selection, and preparation of facility identification information will be undertaken only once. This analysis assumes that only facilities making first time trade secret claims incur fixed costs; although other facilities may spend time reading the rule and deciding whether to make a claim, this analysis does not attribute those costs to the regulation.

The number of first time claims prepared annually was estimated based on an assumption that approximately one quarter of the claims received are submitted by new facilities ( first time filers) or pertain to chemicals for which an existing submitter is claiming a trade secret for the first time. ( Memorandum from Sicy Jacob, OSWER/ EPA 8/ 12/ 99). ( See Table 4, 1. Forms Completion  Facilities, Fixed Costs: 350 x .25 = 87.5, rounded up to 88.) While the burden associated with claims falling into the second category will not include rule familiarization, it does include time spent by the submitter to determine whether a trade secret claim is necessary ( chemical selection). This effort is a major portion of overall fixed costs. The 22 hours allocated to forms completion, fixed costs are broken down as follows: 10.8 hours, management; 11 hours, technical; and .2 hours, secretarial ( Memorandum from Bob Andrei, EETD/ EPA, 1993).

The second type of costs that facilities will incur are variable costs; facilities will incur these costs for each chemical claimed as trade secret. These costs include preparing the trade secret substantiation, sanitizing the report, and mailing the report to EPA. Burden hours used to calculate variable costs for all trade secret claims reflect the effort required to prepare original substantiations for a given chemical that does not have a previously submitted substantiation prepared, as well as resubmittal of previously submitted claims. Repeat submitters incur somewhat lower per unit preparation cost than those incurred by facilities filing first time, or original claims for several reasons. 22 2Memorandum from Cody Rice, " Wage Rates for Economic Analyses of the Toxics Release Inventory Program," Analytical Support Branch, Environmental Analysis Division, Office of Environmental Information, U. S. EPA, April 11, 2002. February 2003 First, resubmitting facilities that assert a claim repeatedly for the same chemical under the same Title III section 313, 311/ 312 or 303 can use essentially the same substantiation form answers that were used in the original substantiation claim. Second, facilities save money by filing essentially the same substantiation with reports submitted under multiple Title III sections during the same reporting year. Third, facilities save by submitting essentially the same substantiation form answers to support claims for multiple chemicals reported pursuant to the same Title III section. These cost savings occur when, for instance, a facility makes claims for multiple chemicals which comprise the same formulation or portions of a formulation.

For the previous ICR update, OSWER contacted five actual submitters of trade secret claims under sections 311/ 312 to obtain more recent burden estimates for submitting claims. Submitters of new claims reported time requirements of two to four hours, with an average of three hours. Submitters of previously submitted claims, who submitted between one and 40 claims, reported times of one to three hours, with an average of two hours total for all claims. ( Memorandum from Sicy Jacob, OSWER/ EPA, 8/ 12/ 99). Erring on the conservative side, this ICR assumes that each facility spends the highest amount, four hours per claim, for variable costs. The hours are broken down as follows: .25 hour, management; 2 hours, technical; and 1.75 hours, secretarial ( Breakdown proportionally same as previous ICRs, and originated from Memorandum from Bob Andrei, EETD/ EPA, 1993).

The cost to respondents is estimated based on the time needed to complete the tasks described above, and the hourly labor wage rates at appropriate levels. Hourly wage rates, including fringe costs and overhead, are $ 52.38 for management labor, $ 42.57 for technical labor, and $ 23.09 for clerical labor.

Wage rates have been revised downward from those used in the previous ICR based on a change in the construction of the composite labor levels that comprise each category ( managerial, technical, and clerical). 2 Wages rates used in previous ICRs following the CAIR based method ( Comprehensive Assessment Information Rule) were developed as weighted composites from the U. S. Bureau of Labor Statistics wages using the assumption that TRI reporting under section 313 is conducted primarily by top level personnel who are very highly compensated. Over the years, as TRI reporting has become more routine and standardized, and industry has gained reporting experience, assumptions that only the highest paid personnel are responsible for TRI reporting are no longer realistic. Furthermore, the original wage data that were used to develop the composite wage rates for the occupational groups have been discontinued by the government and were last updated in 1996. The only way of continuing to use those data is to inflate them with the Employment Cost Index, which will not provide the most accurate picture of current conditions. A more representative set of composite wages for each labor category was developed by the TRI 23 3U. S. Department of Labor, Bureau of Labor Statistics, Employer Costs for Employee Compensation. February 2003 program, using data from the Employer Costs for Employee Compensation ( ECEC) report from the Bureau of Labor Statistics. These data are updated annually, and the data used here are from March 2002.3 ii) Petition and Review The petition and review process will also cause certain facilities and public petitioners to incur costs when the Agency reviews the validity of trade secrets claims. Petitioner efforts involve preparing the petition requesting that EPA review the trade secret claim. The requisite elements of a petition include the following: the petitioner's name, address and telephone number; the name and address of the company claiming trade secrecy; and a copy of the submission in which the chemical identity is claimed as trade secret with a specific indication as to which chemical identity the petitioner seeks to have disclosed. In the absence of any petitions during the past three year reporting period, this ICR is continuing to assume that one petition will be submitted from the public each year, and will require 2.5 hours to prepare, costed at the technical wage rate. ( Memorandum from Sicy Jacob, OSWER/ EPA, 2/ 6/ 03).

The Agency assumes that the two scenarios regarding complexity of claims which were considered in estimating EPA costs ( see Table 3) also apply to costs to petitioners and facilities in the petition process and to facilities in EPA initiated reviews. The previous ICR assigned no facility burden in connection with Agency initiated reviews of trade secret claims. As in the previous ICR, the Agency assumes that all Agency initiated reviews would involve facilities at an increased level of effort, relative to a low level petition initiated review. The additional effort was assumed proportional to the additional effort required by EPA ( 20 percent above low level). Table 4 incorporates the burden required by these additional reviews in a weighted average cost per review. This weighted average cost was calculated based on the estimate of 28 burden hours required for low level petition review used in previous ICRs ( Memorandum from Dorothy McManus, OSWER/ EPA, 10/ 21/ 93). Thus, 28 hours was used as the burden estimate for all low level reviews. For Agency initiated reviews, 33.6 hours ( 28 x 1.20) was used. The Agency did not receive any petitions from the public during the previous ICR period for sections 311/ 312. The number of one petition for section 313 is from the assumption of an average of one petition ( containing 1 claim) per year, and the projected number of three Agency initiated complex reviews is from Table 3. Costs were calculated using the technical hourly wage rate of $ 42.57 for the one petition from the general public, and the managerial hourly wage rate of $ 52.38 for the three complex petitions/ reviews. 24 February 2003 Table 4 Burden/ Costs to Respondents by Activity Sections 322/ 323 ___________________________________________________________________________________________________

Affected Entity FY03 FY04 FY05 Total ___________________________________________________________________________________________________

1. Forms Completion  Facilities Fixed Costs Number Affected 88 88 88 264 Hours per Facility 22 22 22 Cost per Facility $ 1,039 $ 1,039 $ 1,039 Hours All 1,936 1,936 1,936 5,808 Cost All $ 91,432 $ 91,432 $ 91,432 $ 274,296 Variable Costs Number Affected 350 350 350 1,050 Hours per Facility 4 4 4 Cost per Facility $ 139 $ 139 $ 139 Hours All 1,400 1,400 1,400 4,200 Cost All $ 48,650 $ 48,650 $ 48,650 $ 145,950

Subtotals for Forms Completion  Facilities Hours All 3,336 3,336 3,336 10,008 Cost All $ 140,082 $ 140,082 $ 140,082 $ 420,246  25 February 2003 ______________________________________________________________________________________________________

Affected Entity FY03 FY04 FY05 Total ______________________________________________________________________________________________________

2. Petition Process Petitioners ( General Public)

Number of Petitions 1 1 1 3 Hours Per Petition 2.5 2.5 2.5 Cost per Petition $ 106 $ 106 $ 106 Hours All 2.5 2.5 2.5 7.5 Cost All $ 106 $ 106 $ 106 $ 318

Facilities Number of Petitions/ Reviews 4 4 4 12 Weighted Avg. Hours Per Petition 32.5 32.5 32.5 Cost per Petition $ 1,702 $ 1,702 $ 1,702 Hours All 130 130 130 390 Cost All $ 6,809 $ 6,809 $ 6,809 $ 220,427

Subtotal Petition Process Hours All 132.5 132.5 132.5 398 Cost All $ 6,915 $ 6,915 $ 6,915 $ 20,74 5

_ 26 February 2003 _____________________________________________________________________________________________________

Affected Entity FY03 FY04 FY05 Total _____________________________________________________________________________________________________

3. Third Party Notification State Gov'ts/ SERCS Number of Inquiries 3 3 3 9 Hours per Inquiry 1 1 1 Cost per Inquiry $ 42 $ 42 $ 42 Health Professionals Number of Inquiries 3 3 3 9 Hours per Inquiry 1 1 1 Cost per Inquiry $ 43 $ 43 $ 43 Facilities Number of Inquiries 6 6 6 18 Hours per Inquiry 1 1 1 Cost per Inquiry $ 38 $ 38 $ 38 Subtotal Third Party Notification Hours All 12 12 12 36 Cost All $ 546 $ 546 $ 546 $ 1,638 Total Respondent Burden Hours All 3,483 3,483 3,483 10,449 Cost All $ 147,543 $ 147,543 $ 147,543 $ 442,629 27 February 2003   Note: Totals may not add up exactly due to rounding.

( iii) Third Party Notification Also under the heading of variable costs is the burden and cost to facilities responding to requests for information on the health effects of trade secret chemicals in non emergency and preventative measure situations from health professionals and state governors or State Emergency Response Commissions ( SERCs). The state government inquiries can be made as the result of a public request for the information. These costs and burdens were not required to be included in previous ICRs.

Based on limited telephone inquiries made in 1996, in 1995 the estimated number of information requests from state governors was one, and from health professions, one ( Memorandum from Lea Anne Gleason, OSWER/ EPA, 10/ 30/ 96.) Even though no activity was reported in the previous three year ICR period, this ICR is making the conservative assumption that three inquiries will be made each year by three different state governments and health professionals each, for a total of six inquiries each year. This number is reduced from a total of 10 in the previous ICR. Facilities are therefore assumed to respond to six inquiries each year, and the burden per inquiry is not expected to change from the previous ICR. ( Memorandum from Sicy Jacob, OSWER/ EPA, 2/ 6/ 03).

The estimated burden for each organization is one hour (. 5 hour management, or GS 13, Step 5 equivalent for the State government, and .5 hour for secretarial, or GS 7, Step 5 for States). For health professionals, the estimated burden is one hour technical labor ( Memorandum from Lea Anne Gleason, OSWER/ EPA, 10/ 30/ 96)). The cost per inquiry is estimated to be $ 42 for state governments, $ 43 for health professionals, and $ 38 for facilities. The total burden for all three types of organizations is estimated to be 12 hours per year, and the cost, $ 546 per year.

( iv) Respondent Burden Table 5 presents the corresponding burden hours for each category of respondent discussed in the previous sections.

( v) Capital and O& M Costs No capital and operation and maintenance costs are associated with any requirements in this ICR. 28 February 2003 ( vi) Explanation of Difference of Annual Reporting Burden The previous ICR requested an average annual burden of 3,121 hours, while this ICR requests 3,483 hours, a 12 percent increase. The average annual burden per respondent has fallen very slightly from 9.9 hours to 9.8 hours, which is most likely caused by rounding. All changes in total burden hour estimates are caused by changes in the volume of activity, and consequently, respondents performing those activities, not by changes in the underlying assumptions of how long it takes to perform an activity.

The estimated annual number of respondents making trade secrecy claims under sections 303, 311/ 312, and 313 is 350 for the next three years. Of those respondents, 345 are estimated to fall under sections 303, 311/ 312 each year. This is a 19 percent increase for sections 303 and 311/ 312 from 280 claims for the previous ICR period. Only five respondents are expected to make trade secrecy claims under section 313, down from estimates of 24 per year ( and 29 in FY02). This reduction occurred because the Agency is no longer including in the totals forms that contain trade secret claims checked completely by mistake, with no supporting documentation submitted, no intention to submit a valid claim, and no burden incurred by the facility. Also, based on lower levels of activity during the previous three year ICR period, the Agency is further reducing from five to three the number of complex reviews of claims it is expecting to carry out in the new ICR period. This decline has caused a drop in the government burden for complex reviews, from 185 hours to 111 hours. The burden hours per review, however, are unchanged from the previous ICR. The number of profiles prepared by the government is expected to drop from four to three per year for the upcoming ICR period, but the burden estimate of 11.2 hours per profile has not changed.

The number of facilities responding to requests from States and health professionals for health effects information on trade secret chemicals is estimated to decline from five requests per year each, to three each per year, or a total of six during the upcoming three year period. This reduction was made based on a low level of activity during the past three years. The burden of one hour per inquiry remains unchanged. 29 February 2003 Table 5 Burden to Respondents  Sections 322/ 323 of SARA Title III _______________________________________________________________________________________________

Group Affected/ Activity FY03 FY04 FY05 Total _______________________________________________________________________________________________

1. Facilities Forms Completion Number Affected 350 350 350 1,050 Average Hours per Facility 9.5 9.5 9.5 Hours All 3,336 3,336 3,336 10,008 Petition Review Number Affected 4 4 4 12 Weighted Avg. Hours per Review 32.5 32.5 32.5 Hours All 132.5 132.5 132.5 397.5 Third Party Notification Number Affected 6 6 6 18 Average Hours per Notification 1 1 1 Hours All 6 6 6 18 30 February 2003 ________________________________________________________________________________________________

Group Affected/ Activity FY03 FY04 FY05 Total ________________________________________________________________________________________________

2. Petitioners Petition/ Review Number Affected 1 1 1 3 Hours per Petition/ Review 2.5 2.5 2.5 Hours All 2.5 2.5 2.5 7.5 3. Others ( State Governments and Health Professionals)

Third Party Notification Number Affected 6 6 6 18 Hours per Notification 1 1 1 Hours All 6 6 6 18 Total for All Affected Non Federal Respondents Number Affected 357 357 357 1,071 Hours per Respondent 9.8 9.8 9.8 Burden All 3,483 3,483 3,483 10,449 31 February 2003 6( d) Burden Statement The annual public reporting and recordkeeping burden for this collection of information is estimated to average 9.8 hours per claim. Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information. An agency may not conduct or sponsor such a request, and a person or facility is not required to respond to a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations are listed in 40 CFR Part 9 and 48 CFR Chapter 15.

Send comments on the Agency's need for this information, the accuracy of the provided burden estimates, and any suggested methods for minimizing respondent burden, including through the use of automated collection techniques to the Director, Collection Strategies Division, U. S. Environmental Protection Agency ( 2822), 1200 Pennsylvania Ave., NW, Washington, D. C. 20460; and to the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street, NW, Washington, DC 20503, Attention: Desk Officer for EPA. Include the EPA ICR number and OMB control number in any correspondence.