[Federal Register Volume 79, Number 211 (Friday, October 31, 2014)]
[Notices]
[Pages 64853-64856]
[FR Doc No: 2014-25878]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-73436; File No. SR-C2-2014-024]

Self-Regulatory Organizations; C2 Options Exchange, Incorporated;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
Relating to the Complex Order Book

October 27, 2014.
    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 October 15, 2014, C2 Options Exchange, Incorporated (the
``Exchange'' or ``C2'') 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend its rules related to the complex
order book (``COB''). The text of the proposed rule change is provided
below.

(additions are italicized; deletions are [bracketed])
* * * * *

C2 Options Exchange, Incorporated Rules

* * * * *

Rule 6.13. Complex Order Execution

    (a)-(c) No change.
    . . . Interpretations and Policies:
    .01-.06 No change.
    .07 Execution of Complex Orders on the COB Open:
    (a) Complex orders, including stock-option orders, do not
participate in opening rotations for individual component option series
legs conducted pursuant to Rule 6.11. When the last of the individual
component option series legs that make up a complex order strategy has
opened (and, in the case of a stock-option order, the underlying stock
has opened), the COB for that strategy will open. The COB will open
with no trade, except as follows:
    ([a]i) The COB will open with a trade against the individual
component option series legs if there are complex orders on only one
side of the COB that are marketable against the opposite side of the
derived net market. The resulting execution will occur at the derived
net market price to the extent marketable pursuant to the rules of
trading priority otherwise applicable to incoming electronic orders in
the individual component legs. To the extent there is any remaining
balance, the complex orders will trade pursuant to subparagraph (ii)
below or, if unable to trade, be processed as they would on an intra-
day basis under Rule 6.13. [(]This subparagraph ([a]i) is not
applicable to stock-option orders because stock-option orders do not
trade against the individual component option series legs when the COB
opens.[)]
    ([b]ii) The COB will open (or continue to open with another trade
if a trade occurred pursuant to subparagraph (i)

above) with a trade against complex orders if there are complex orders
in the COB (including any remaining balance of an order that enters the
COB after a partial trade with the legs pursuant to subparagraph (i))
that are marketable against each other and priced within the derived
net market. The resulting execution will occur at a market clearing
price that is inside the derived net market and that matches complex
orders to the extent marketable pursuant to the allocation algorithm
from Rule 6.12, as determined by the Exchange on a class-by-class
basis[. In determining the priority,] with the addition that the COB
gives priority to complex orders whose net price is better than the
market clearing price first, and then to complex orders at the market
clearing price. To the extent there is any remaining balance, the
complex orders will be processed as they would on an intra-day basis
under Rule 6.13. [(]This subparagraph ([b]ii) is applicable to stock-
option orders.[)]
    ([c]b) The ``derived net market'' for a stock-option order strategy
will be calculated using the Exchange's best bid or offer in the
individual option series leg(s) and the NBBO in the stock leg. The
``derived net market'' for any other complex order strategy will be
calculated using the Exchange's best bid or offer in the individual
option series legs.
    (c) The Exchange may also use the process described in paragraph
(a) of this Interpretation and Policy .07 when the COB reopens a
strategy after a time period during which trading of that strategy was
unavailable.
* * * * *
    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 amend its rules related its COB. Rule
6.13, Interpretation and Policy .07 describes how complex orders
execute when the COB opens. Complex orders do not participate in the
opening rotation for the individual leg series (which occurs pursuant
to Rule 6.11). Rather, the COB for a complex order strategy will open
when the last of the individual legs series that make up the strategy
has opened (and, in the case of a stock-option order, when the
underlying stock has opened). Under the current rules, the COB will
open with no trade, except as follows:
     The COB will open with a trade against the individual
component option series legs if there are complex orders on only one
side of the COB that are marketable against the opposite side of the
derived net market.\3\ The resulting execution will occur at the
derived net market price to the extent marketable. To the extent there
is any remaining balance, the complex orders will be processed as they
would on an intra-day basis under Rule 6.13.\4\ This does not apply to
stock-option orders, which cannot trade against the individual leg
series when the COB opens.
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    \3\ The ``derived net market'' is calculated based on the
Exchange's best bid or offer (``BBO'') in the individual series
legs. For stock-option orders, the derived net market is calculated
based on the BBO in the individual option series leg(s) and the
national best bid or offer (``NBBO'') in the stock leg. See Rule
6.13, Interpretation and Policy .07(c) (which this rule filing
proposes to change to paragraph (b)).
    \4\ Pursuant to Rule 13, complex orders may either enter the COB
or process through a complex order auction (COA).
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     The COB will open with a trade against complex orders if
there are complex orders in the COB that are marketable against each
other and priced within the derived net market. The resulting execution
will occur at a market clearing price that is inside the derived net
market and that matches complex orders to the extent marketable. In
determining the priority, the COB gives priority to complex orders
whose net price is better than the market clearing price first, and
then to complex orders at the market clearing price. To the extent
there is any remaining balance, the complex orders will be processed as
they would on an intra-day basis under Rule 6.13.\5\ This applies to
stock-option orders.
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    \5\ Id.
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    The proposed rule change adds to current paragraph (b) of
Interpretation and Policy .07 \6\ that the Exchange may determine, on a
class-by-class basis, which allocation algorithm from Rule 6.12 \7\
will apply to complex order trades on the COB open pursuant to current
paragraph (b) (proposed paragraph (a)(ii)).\8\ The Exchange may
determine on a class-by-class basis which allocation algorithm from
Rule 6.12 will apply to executions to opening rotations.\9\ This
opening allocation algorithm may be different than the intraday
allocation algorithm. The proposed rule change provides the Exchange
with the same flexibility with respect to executions of complex orders
on the COB open. While Rule 6.13, Interpretation and Policy .05
provides the Exchange with the flexibility to determine on a class-by-
class basis which allocation algorithm from Rule 6.12 will apply to COB
executions (in lieu of the algorithm specified in Rule
6.12(b)(1)(B)),\10\ Interpretation and Policy .07 does not state that
the applicable allocation algorithm for complex order executions on the
COB open may be different than the intraday allocation algorithm for
the COB. The proposed rule change adds this detail to the rules and
allows the Exchange to determine on a class-by-class basis which
allocation algorithm will apply to

complex order trades on the COB open, which may be different than the
allocation algorithm applicable to intraday complex order trades on the
COB.\11\ The Exchange will announce any allocation algorithm
determinations via Regulatory Circular.\12\
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    \6\ The proposed rule change reorganizes Interpretation and
Policy .07. This proposed language appears in proposed paragraph
(a)(ii) (current paragraph (b)), which is the paragraph related to
trades of complex orders on the COB at the open.
    \7\ The allocation algorithms include price-time, pro-rata, and
price-time with primary public customer priority and secondary trade
participation right priority base priorities and a combination of
various optional priority overlays pertaining to public customer
priority, Market-Maker participation entitlements, small order
preference and market turner. See Rule 6.12.
    \8\ The proposed rule change also adds to current paragraph (a)
(proposed paragraph (a)(i)) that executions of complex orders
against the individual legs will be pursuant to the rules of trading
priority otherwise applicable to incoming electronic orders in the
individual component legs. The current rule is silent on what
allocation algorithm applies to executions of complex orders on the
COB against the individual legs. The Exchange believes the proposed
rule text merely eliminates any potential confusion regarding how
complex orders will be allocated in accordance with proposed
paragraph (a)(i).
    \9\ See Rule 6.11, Interpretation and Policy .01.
    \10\ Rule 6.13(b)(1) states that complex orders submitted to the
COB may trade as follows: (a) A complex order in the COB will
automatically execute against individual quotes and orders on the
book provided the complex order can be executed in full or in a
permissible ratio by the orders and quotes in the book; or (b)
complex orders in the COB that are marketable against each other
will automatically execute, and the allocation of complex orders
within the COB will be pursuant to the rules of trading priority
otherwise applicable to incoming orders in the individual component
legs.
    \11\ Currently, complex orders that execute against the COB
(proposed subparagraph (a)(ii)) allocate pursuant to price-time.
    \12\ See Rule 6.13, Interpretation and Policy .01 (which states
that the Exchange will announce to Trading Permit Holders via
Regulatory Circular all pronouncements regarding determinations by
the Exchange pursuant to Rule 6.13).
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    The Exchange is not proposing to adopt any new allocation
algorithms or priority rules nor is it proposing to modify the COB
opening process.\13\ Rather, it is adding detail to the Exchange rule
regarding the COB opening process and providing the Exchange with
flexibility to choose an algorithm from among the existing algorithms
that will apply to complex order trades on the COB open, rather than
simply defaulting to the algorithm in effect for intraday trading on
the COB in that class. The Exchange believes this flexibility is
consistent with its other rules regarding the determination of
allocation algorithms and will further promote fair and orderly
openings of strategies on the COB.\14\
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    \13\ The Exchange represents that complex orders continue to
have opportunities to trade against the leg markets, both at the
open pursuant to proposed paragraph (a)(i) and intraday pursuant to
Rule 6.13(b) (execution of orders in the COB) and (c) (execution of
orders through COA). Additionally, this filing does not change the
complex order priority principles (including public customer
priority) set forth in Rules 6.12 and 6.13.
    \14\ Additionally, because Rules 6.11, Interpretation and Policy
.01, 6.12 and 6.13, Interpretation and Policy .05 provide the
Exchange with flexibility to determine allocation algorithms on a
class-by-class basis, the Exchange believes it is appropriate to
provide the same class-by-class flexibility to trading at the COB
open.
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    The proposed rule change also adds detail to proposed paragraph
(a)(ii) regarding which trades on the COB are deemed to be part of the
opening of the COB (and thus subject to the allocation algorithm in
place for the COB open). To the extent a complex order partially trades
with the leg series on the COB open, and the remaining balance enters
the COB (pursuant to Rule 6.13) as set forth in proposed subparagraph
(a)(i), if that remaining balance is marketable against another complex
order on the COB at the open, those orders will execute as set forth in
proposed subparagraph (a)(ii). Thus, any execution of that remaining
balance on the COB is considered an execution at the COB open, as the
open is intended to cause any marketable complex orders to trade, and
thus subject to proposed subparagraph (a)(ii) (current paragraph (b)).
The proposed rule change makes a corresponding change to proposed
paragraph (a)(i) to provide that any remaining balance may trade
pursuant to proposed paragraph (a)(ii) (if unable to trade, it will be
processed as it would on an intra-day basis). The proposed rule change
also makes a corresponding change to proposed paragraph (a)(ii) to
provide that the COB will open, or continue to open, with a trade of
complex orders on the COB, as the COB opening may already have been
initiated by a trade pursuant to paragraph (a)(i).
    For example, suppose Complex Order X is an order to buy 20 Series A
and 20 Series B for a net price of $2.40 and on the COB at the open. If
the market for Series A is $1.00--$1.20 and the market for Series B is
$1.00--$1.20 (for a net price of $2.00--$2.40), with the offer to sell
at $2.40 for 10 contracts, then when the COB opens, 10 contracts of
Complex Order X will trade against the 10 contracts in the leg markets.
The remaining balance of 10 of Complex Order X then enters the COB
pursuant to Rule 6.13(b). If Complex Order Y to sell 10 Series A and 10
Series B at $2.40 is on the COB at the open, then the remaining balance
of Complex Order X will trade against Complex Order Y. This trade of
Complex Order X against Complex Order Y is part of the COB open. If
there were multiple complex orders at the same price, they would
allocate in accordance with the algorithm in place for the COB open.
    The Exchange believes that the rule text is currently unclear as to
whether any remaining balance from proposed subparagraph (a)(i) enters
the COB and is marketable against the COB would trade in accordance
with COB open or COB intraday rules. Currently, if the remaining
balance is marketable against other complex orders in the COB, the
System will execute the remaining balance against orders in the COB as
part of the COB open (and thus in accordance with the opening matching
algorithm). Generally, the ``opening'' includes all trades that would
``clear'' the market.\15\ The proposed rule change is consistent with
this idea and adds this detail to proposed subparagraph (a)(ii) to
codify the intent of the current rule.
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    \15\ See Rule 6.11 regarding the opening of series at a market-
clearing price and Rule 6.13, Interpretation and Policy .07(b)
regarding the opening of the COB at a market-clearing price.
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    In addition, the proposed rule change adds paragraph (c) to
Interpretation and Policy .07, which states that the Exchange may use
the process described in paragraph (a) when the COB reopens a strategy
after a time period during which trading of that strategy was
unavailable pursuant to the rules. The Exchange may use the opening
rotation process to reopen a class after a trading halt.\16\ The
proposed rule change provides the Exchange with the same flexibility
with respect to reopening the COB. Trading of strategies may be
unavailable on the COB, for example, if there is a trading halt in the
underlying security or if trading on the COB is ``on hold'' because the
derived net market is outside of price check parameters set by the
Exchange to prevent extreme executions.\17\ The Exchange uses the
opening rotation process to reopen after a trading halt to provide for
an orderly reopening, and the Exchange would similarly like to provide
for a fair and orderly reopening of the COB after any period during
which COB trading was unavailable.
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    \16\ See Rule 6.11(i).
    \17\ See Rule 6.13, Interpretation and Policy .04. For example,
pursuant to paragraph (a)(3), if the BBO or derived net market is
not within an acceptable price range, the System holds marketable
limit orders and does not allow trading of complex orders for that
strategy until the market is no longer outside the applicable price
range.
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    The proposed rule change also makes nonsubstantive, technical
changes to Interpretation and Policy .07, including adding and
modifying subparagraph lettering and numbering, indenting
subparagraphs, and deleting unnecessary parentheticals.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations thereunder applicable to the
Exchange and, in particular, the requirements of Section 6(b) of the
Act.\18\ Specifically, the Exchange believes the proposed rule change
is consistent with the Section 6(b)(5) \19\ 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 the Section 6(b)(5) \20\ requirement that the rules of
an exchange not be designed

to permit unfair discrimination between customers, issuers, brokers, or
dealers.
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    \18\ 15 U.S.C. 78f(b).
    \19\ 15 U.S.C. 78f(b)(5).
    \20\ Id.
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    In particular, the proposed rule change adds detail to its rules
regarding the opening of trading on its COB, which benefits investors.
The Exchange believes the flexibility provided by the proposed rule
change is consistent with its other rules. The Exchange already has
flexibility to apply a different allocation algorithm at the open of
trading of simple orders and to use its opening procedure after a
trading halt for simple orders.\21\ It also already has the flexibility
to apply a different allocation algorithm to complex order executions
on the COB.\22\ The Exchange is merely extending this flexibility to
the opening and reopening of trading of complex orders on the COB. The
Exchange notes that the level of trading activity is often different at
the open than during the trading day. To ensure a fair and orderly
opening in light of this trading activity, rules often allow the
Exchange to apply them in a different manner to the opening of trading
(such as different bid-ask differential requirements, different price
reasonability checks and different allocation algorithms). The Exchange
believes extending similar flexibility to the opening of complex order
trading on the Exchange will allow it to similarly ensure a fair and
orderly COB open, which protects investors and promotes just and
equitable principles of trade.
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    \21\ See Rule 6.11(i) (use of opening procedures after a trading
halt) and Interpretation and Policy .01 (determination of allocation
algorithm on a class-by-class basis during opening rotations, which
may be different than allocation algorithm for intraday trading).
    \22\ See Rule 6.13, Interpretation and Policy .05.
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    The proposed rule change that specifies that the remaining balance
of a complex order that partially trades with the individual leg series
may be executed as part of the COB open provision, and that the COB
open may include both trades of complex orders with the legs and with
other complex orders, further benefits investors and promotes an open
market by adding detail to the rules regarding how the System treats
this remaining balance. Openings generally include a series of trades
in order to execute all orders that are marketable upon the open, and
the Exchange believes the proposed rule change is consistent with that
idea.

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

    C2 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 proposed rule change
applies to all complex order trading on the COB when it opens or
reopens. In addition, the proposed rule change applies only to the COB
opening process on the Exchange. Its purpose is to include the COB
opening procedure that is currently in place on the Exchange, which
procedure is designed to open complex order strategies on the Exchange
in a fair and orderly manner. The proposed rule change does not help C2
market participants to the detriment of market participants on other
exchanges.

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

    Because the foregoing proposed rule change does not:
    A. Significantly affect the protection of investors or the public
interest;
    B. impose any significant burden on competition; and
    C. become operative for 30 days from the date on which it was
filed, or such shorter time as the Commission may designate, it has
become effective pursuant to Section 19(b)(3)(A) of the Act \23\ and
Rule 19b-4(f)(6) \24\ 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.
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    \23\ 15 U.S.C. 78s(b)(3)(A).
    \24\ 17 CFR 240.19b-4(f)(6).
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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- C2-2014-024 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- C2-2014-024. 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 such filing also will be available
for inspection and copying at the principal offices 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- C2-2014-024,
and should be submitted on or before November 21, 2014.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\25\
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    \25\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-25878 Filed 10-30-14; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 78, Number 150 (Monday, August 5, 2013)]
[Notices]
[Pages 47316-47317]
[FR Doc No: 2013-18692]

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ENVIRONMENTAL PROTECTION AGENCY

[FRL 9842-9]

National Advisory Council for Environmental Policy and Technology

AGENCY: Environmental Protection Agency (EPA).

ACTION: Request for nominations to the National Advisory Council for
Environmental Policy and Technology (NACEPT).

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SUMMARY: The U.S. Environmental Protection Agency (EPA) invites
nominations from a diverse range of qualified candidates representing
tribal governments and communities to be considered for appointment to
the National Advisory Council for Environmental Policy and Technology
(NACEPT). Vacancies are anticipated to be filled by February, 2014.
Sources in addition to this Federal Register Notice may be utilized in
the solicitation of nominees.
    Background: NACEPT is a federal advisory committee chartered under
the Federal Advisory Committee Act (FACA), Public Law 92-463. EPA
established NACEPT in 1988 to provide advice to the EPA Administrator
on a broad range of environmental policy, management and technology
issues. Members serve as representatives from academia, industry, non-
governmental organizations, and state, local, and tribal governments.
Members are appointed by the EPA Administrator for two year terms. The
Council usually meets 2-3 times annually face-to-face or via video/
teleconference and the average workload for the members is
approximately 10 to 15 hours per month. Members serve on the Council in
a voluntary capacity. However, EPA provides reimbursement for travel
and incidental expenses associated with official government business.
EPA is seeking nominations from candidates representing tribal
governments/communities. Within these sectors, EPA is seeking nominees
with knowledge in community sustainability, public health and health
disparities, land use and sustainable development, green jobs and
economic initiatives, energy, and environmental financing.
    Nominees will be considered according to the mandates of FACA,
which requires committees to maintain diversity across a broad range of
constituencies, sectors, and groups. EPA values and welcomes diversity.
In an effort to obtain nominations of diverse candidates, EPA
encourages nominations of women and men of all racial and ethnic
groups, as well as geographic locale.
    The following criteria will be used to evaluate nominees:

--Professional knowledge of environmental policy, management, and
technology issues, particularly issues dealing with all facets of
sustainability.
--Demonstrated ability to assess and analyze environmental challenges
with objectivity and integrity.
--Middle/Senior-level leadership experience that fills a current need
on the Council.
--Excellent interpersonal, oral and written communication, and
consensus-building skills.
--Ability to volunteer approximately 10 to 15 hours per month to the
Council's activities, including participation on video/teleconference
meetings and preparation of text for Council reports and advice
letters.

    If you are interested in serving on NACEPT, we will need the
following items to process your nomination package:
    Nominations must include a brief statement of interest, resume,
curriculum vitae, or a short biography (no more than two paragraphs)
describing your professional and educational qualifications, including
a list of relevant activities and any current or previous service on
advisory committees. The statement of interest, resume, curriculum
vitae, or short biography should include the candidate's name, name and
address of current organization, position title, email address, and
daytime telephone number(s). In preparing your statement of interest,
please describe how your background, knowledge, and experience will
bring value to the work of the committee, and how these qualifications
would contribute to the overall diversity of the Council. Also, be sure
to describe any previous involvement with the Agency through
employment, grant funding and/or contracting sources. Candidates must
also provide a letter of recommendation, authorizing the nominee to
represent the points of view of a specific entity or group (such as an
industry sector, state or local government, environmental groups, etc.)
that has an interest in the subject matter under the committee's
charge.
    The nomination package should also include a separate
recommendation letter from a third party supporting your nomination.
This letter should describe how your background and skills would enrich
the quality of the Council's work. Please note that interested
candidates may self-nominate. However, be advised that federal
registered lobbyist are not permitted to serve on advisory boards.
    Anyone interested in being considered for nomination is encouraged
to submit a nomination (application) package before the deadline of
September 6, 2013. To help the Agency in evaluating the effectiveness
of its outreach efforts, please tell us how you learned of this
opportunity. Please be aware that EPA's policy is that, unless
otherwise prescribed by statute, members generally are appointed to two
year terms.
    Please submit nominations to: Mark Joyce, Acting Designated Federal
Officer, Office of Federal Advisory Committee Management and Outreach,
U.S. EPA (1601M), 1200 Pennsylvania Avenue NW., Washington, DC 20460.
    To expedite the process, it is preferable to email nominations with
subject line ``NACEPT Membership

Recruitment 2014'' to<EMAIL_ADDRESS>
FOR FURTHER INFORMATION CONTACT: Mark Joyce, Acting Designated Federal
Officer, U.S. EPA; telephone<PHONE_NUMBER>; fax<PHONE_NUMBER>; email
<EMAIL_ADDRESS>
    Dated: July 25, 2013.
Mark Joyce,
Acting Designated Federal Officer.
[FR Doc. 2013-18692 Filed 8-2-13; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register Volume 76, Number 221 (Wednesday, November 16, 2011)]
[Rules and Regulations]
[Pages 70890-70896]
[FR Doc No: 2011-29618]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 180

[EPA-HQ-OPP-2010-0866; FRL-9325-4]

Fenamidone; Pesticide Tolerances

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: This regulation establishes tolerances for inadvertent
residues of fenamidone in or on the cereal grains crop group 15, except
rice and the forage, fodder, and straw of cereal grains crop group 16,
except rice. Bayer Crop Science requested these tolerances under the
Federal Food, Drug, and Cosmetic Act (FFDCA).

DATES: This regulation is effective November 16, 2011. Objections and
requests for hearings must be received on or before January 17, 2012,
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-2010-0866. All documents in the
docket are listed in the docket index available at http://www.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 in the electronic
docket at http://www.regulations.gov, or, if only available in hard
copy, at the OPP Regulatory 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 (703)
305-5805.

FOR FURTHER INFORMATION CONTACT: Rosemary Kearns, Registration
Division, Office of Pesticide Programs, Environmental Protection
Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460-0001;
telephone number:<PHONE_NUMBER>; email address:
<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 those
engaged in the following activities:
     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 to
provide 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 get electronic access to other related information?

    You may access a frequently updated electronic version of EPA's
tolerance regulations at 40 CFR part 180 through the Government
Printing Office's e-CFR site at http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?&c=ecfr&tpl=/ecfrbrowse/Title40/40tab_02.tpl.

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

    Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an
objection to any aspect of this regulation and may also request a
hearing on those objections. You must file your objection or request a
hearing on this regulation in accordance with the instructions provided
in 40 CFR part 178. To ensure proper receipt by EPA, you must identify
docket ID number EPA-HQ-OPP-2010-0866 in the subject line on the first
page of your submission. All objections and requests for a hearing must
be in writing, and must be received by the Hearing Clerk on or before
January 17, 2012. Addresses for mail and hand delivery of objections
and hearing requests are provided in 40 CFR 178.25(b).
    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. Information not marked confidential pursuant to 40 CFR part 2
may be disclosed publicly by EPA without prior notice. Submit a copy of
your non-CBI objection or hearing request, identified by docket ID
number EPA-HQ-OPP-2010-0866, 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 Facility'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. Summary of Petitioned-For Tolerance

    In the Federal Register of December 15, 2010 (75 FR 78240) (FRL-
8853-1), EPA issued a notice pursuant to section 408(d)(3) of FFDCA, 21
U.S.C. 346a(d)(3), announcing the filing of a pesticide petition (PP
0F7764) by Bayer CropScience, 2 T.W. Alexander Dr., Research Triangle
Park, NC 27709. The petition requested that 40 CFR 180.547 be amended
by establishing tolerances for residues of the fungicide fenamidone,
(4H-Imidazol-4-one, 3,5-dihydro-5-methyl-2-(methylthio)-5-phenyl-3
(phenylamino)-, (S)-), in or on grain, cereal, group 15 (except rice)
at 0.1 ppm; grain, forage, group 16 (except rice) at 0.3 ppm; and
grain, stover, group 16 (except rice) at 0.5 ppm. That notice
referenced a summary of the petition prepared by Bayer CropScience, the
registrant, which is available in the docket, http://www.regulations.gov. There were no comments received in response to the
notice of filing.
    EPA has modified the commodity definitions for which tolerances are
being established. The reason for these changes is explained in Unit
IV.C.

III. Aggregate Risk Assessment and Determination of Safety

    Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a
tolerance (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 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 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 * *
*.''
    Consistent with section 408(b)(2)(D) of FFDCA, and the factors
specified in section 408(b)(2)(D) of 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 for fenamidone

including exposure resulting from the tolerances established by this
action. EPA's assessment of exposures and risks associated with
fenamidone 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.
    Fenamidone has low acute toxicity via the oral, dermal and
inhalation routes of exposure. It is a moderate eye irritant, but is
not a dermal irritant or a dermal sensitizer. The liver is the target
organ in chronic studies in the rat, mouse and dog. The thyroid is also
a target organ in the rat. An acceptable guideline immunotoxicity study
in rats has been reviewed. While the study showed a potential
immunosuppression at the highest dose tested, the existing risk
assessment points of departure are lower and are therefore protective
of this potential effect. Fenamidone is not likely to be a human
carcinogen based on the negative carcinogenic potential of fenamidone
in rats and mice and studies indicate that there is no concern for
mutagenicity for fenamidone.
    Fenamidone did not demonstrate any qualitative or quantitative
increased susceptibility of fetuses or offspring in the rat and rabbit
developmental toxicity studies or the 2-generation rat reproduction
study. In the rat reproduction study (Sprague Dawleyrat), decreased
absolute brain weight and pup body weight occurred at the same dose
levels as decreased absolute brain weight and parental body weight,
food consumption and increased liver and spleen weight. Developmental
toxicity (decreased fetal weights and incomplete ossification) was
observed in the rat only at the limit dose. Fenamidone did not produce
developmental toxicity in the rabbit or reproductive toxicity in the
rat.
    No treatment-related effects were observed on motor activity or in
the functional observation battery (FOB) parameters measured in the
subchronic neurotoxicity study in rats. In this subchronic
neurotoxicity study, marginal decreases in brain weights were observed
only in high dose males. In the acute neurotoxicity study in rats, the
most commonly observed clinical sign was staining/soiling of the
anogenital region. Other day-1 FOB findings included mucous in the
feces, hunched posture and unsteady gait. In a developmental
neurotoxicity study in Wistar rats, no neurobehavioral effects and no
neuropathological changes were observed at any dose in the offspring,
but decreased body weight was observed during pre- and post-weaning.
    Specific information on the studies received and the nature of the
adverse effects caused by fenamidone 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 at http://www.regulations.gov in docket ID EPA-HQ-OPP-2010-0866 on pages 25-28 of
the document titled ``Fenamidone: Human Health Risk Assessment to
Support the Label Amendment to Permit Rotation to All Cereal Grain,
Except Rice and Establish Revised Tolerances for Inadvertent
Residues.''

B. Toxicological Points of Departure/Levels of Concern

    Once a pesticide's toxicological profile is determined, EPA
identifies toxicological points of departure (POD) and levels of
concern to use in evaluating the risk posed by human exposure to the
pesticide. For hazards that have a threshold below which there is no
appreciable risk, the toxicological POD is used as the basis for
derivation of reference values for risk assessment. PODs are developed
based on a careful analysis of the doses in each toxicological study to
determine the dose at which no adverse effects are observed (the NOAEL)
and the lowest dose at which adverse effects of concern are identified
(the LOAEL). Uncertainty/safety factors are used in conjunction with
the POD to calculate a safe exposure level--generally referred to as a
population-adjusted dose (PAD) or a reference dose (RfD)--and a safe
margin of exposure (MOE). For non-threshold risks, the Agency assumes
that any amount of exposure will lead to some degree of risk. Thus, the
Agency estimates risk in terms of the probability of an occurrence of
the adverse effect expected in a lifetime. For more information on the
general principles EPA uses in risk characterization and a complete
description of the risk assessment process, see http://www.epa.gov/pesticides/factsheets/riskassess.htm.
    A summary of the toxicological endpoints for fenamidone used for
human risk assessment is shown in Table 1 of this unit.

  Table 1--Summary of Toxicological Doses and Endpoints for Fenamidone for Use in Human Health Risk Assessment
----------------------------------------------------------------------------------------------------------------
                                     Point of departure and
         Exposure/scenario              uncertainty/safety   RfD, PAD, LOC for risk    Study and toxicological
                                             factors                assessment                 effects
----------------------------------------------------------------------------------------------------------------
Acute dietary (All populations)....  NOAEL = 125 milligrams/ Acute RfD = 1.25 mg/kg/ Acute Neurotoxicity in
                                      kilograms/day (mg/kg/   day.                    Rats: LOAEL = 500 mg/kg/
                                      day).                  aPAD = 1.25 mg/kg/day.   day based on urination,
                                     UFA = 10x.............                           staining/soiling of the
                                     UFH = 10x.............                           anogenital region, mucous
                                     FQPA SF = 1x..........                           in the feces, and unsteady
                                                                                gait in the females.
Chronic dietary (All populations)..  NOAEL= 2.83 mg/kg/day.  Chronic RfD = 0.0283    2 Year Chronic Toxicity/
                                     UFA = 10x.............   mg/kg/day.              Carcinogenicity in Rats:
                                     UFH = 10x.............  cPAD = 0.0283 mg/kg/     LOAEL = 7.07/9.24 mg/kg/
                                     FQPA SF = 1x..........   day.                    day (M/F) based on
                                                                                increase in severity of
                                                                                diffuse thyroid C-cell
                                                                                hyperplasia in both sexes.
                                    ----------------------------------------------------------------------------
Cancer (Oral, dermal, inhalation)..     Based on the negative carcinogenic potential of fenamidone in rats and
                                          mice, EPA has classified fenamidone as ``not likely'' to be a human
                                                    carcinogen by all relevant routes of exposure.
----------------------------------------------------------------------------------------------------------------
UFA = extrapolation from animal to human (interspecies). UFH = potential variation in sensitivity among members
  of the human population (intraspecies). FQPA SF = Food Quality Protection Act Safety Factor. PAD = population
  adjusted dose (a = acute, c = chronic). RfD = reference dose.

C. Exposure Assessment

    1. Dietary exposure from food and feed uses. In evaluating dietary
exposure to fenamidone, EPA considered exposure under the petitioned-
for tolerances as well as all existing fenamidone tolerances in 40 CFR
180.579. EPA assessed dietary exposures from fenamidone 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 1-day or single exposure.
    Such effects were identified for fenamidone. In estimating acute
dietary exposure, EPA used food consumption information from the United
States Department of Agriculture (USDA) 1994-1996 and 1998 Nationwide
Continuing Surveys of Food Intake by Individuals (CSFII). As to residue
levels in food, EPA conducted a conservative acute dietary risk
assessment which used maximum field trial residue values and assumed
100 percent crop treated for all commodities.
    ii. Chronic exposure. In conducting the chronic dietary exposure
assessment EPA used the food consumption data from the USDA 1994-1996
and 1998 CSFII. As to residue levels in food, EPA conducted a
conservative acute dietary risk assessment which used maximum field
trial residue values and assumed 100 percent crop treated for all
commodities.
    iii. Cancer. Based on the data summarized in Unit III.A., EPA has
concluded that fenamidone does not pose a cancer risk to humans.
Therefore, a dietary exposure assessment for the purpose of assessing
cancer risk is unnecessary.
    iv. Anticipated residue information. Section 408(b)(2)(E) of FFDCA
authorizes EPA to use available data and information on the anticipated
residue levels of pesticide residues in food and the actual levels of
pesticide residues that have been measured in food. If EPA relies on
such information, EPA must require pursuant to FFDCA section 408(f)(1)
that data be provided 5 years after the tolerance is established,
modified, or left in effect, demonstrating that the levels in food are
not above the levels anticipated. For the present action, EPA will
issue such data call-ins as are required by FFDCA section 408(b)(2)(E)
and authorized under FFDCA section 408(f)(1). Data will be required to
be submitted no later than 5 years from the date of issuance of these
tolerances.
    2. Dietary exposure from drinking water. The Agency used screening
level water exposure models in the dietary exposure analysis and risk
assessment for fenamidone in drinking water. These simulation models
take into account data on the physical, chemical, and fate/transport
characteristics of fenamidone. 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.
    Based on the Pesticide Root Zone Model/Exposure Analysis Modeling
System (PRZM/EXAMS) and Screening Concentration in Ground Water (SCI-
GROW) models the estimated drinking water concentrations (EDWCs) of
fenamidone for acute exposures are estimated to be 47.88 parts per
billion (ppb) for surface water and 178 ppb for ground water. For
chronic exposures for non-cancer assessments these levels are estimated
to be 12.86 ppb for surface water and 178 ppb for ground water.
    Modeled estimates of drinking water concentrations were directly
entered into the dietary exposure model. For both acute and chronic
dietary risk assessments, the water concentration value of 178 ppb 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).
    Fenamidone is not registered for any specific use patterns that
would result in residential exposure.
    4. Cumulative effects from substances with a common mechanism of
toxicity. Section 408(b)(2)(D)(v) of 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.''
    EPA has not found fenamidone to share a common mechanism of
toxicity with any other substances, and fenamidone does not appear to
produce a toxic metabolite produced by other substances. For the
purposes of this tolerance action, therefore, EPA has assumed that
fenamidone does not have a common mechanism of toxicity with other
substances. For information regarding EPA's efforts to determine which
chemicals have a common mechanism of toxicity and to evaluate the
cumulative effects of such chemicals, see EPA's Web site at http://www.epa.gov/pesticides/cumulative.

D. Safety Factor for Infants and Children

    1. In general. Section 408(b)(2)(C) of FFDCA provides that EPA
shall apply an additional tenfold (10X) margin of safety for infants
and children in the case of threshold effects to account for prenatal
and postnatal toxicity and the completeness of the database on toxicity
and exposure unless EPA determines based on reliable data that a
different margin of safety will be safe for infants and children. This
additional margin of safety is commonly referred to as the FQPA Safety
Factor (SF). In applying this provision, EPA either retains the default
value of 10X, or uses a different additional safety factor when
reliable data available to EPA support the choice of a different
factor.
    2. Prenatal and postnatal sensitivity. The pre- and postnatal
toxicity database for fenamidone includes rat and rabbit developmental
toxicity studies, a rat developmental neurotoxicity study (DNT), and a
2-generation reproduction toxicity study in rats. No evidence of
increased quantitative or qualitative susceptibility of rat or rabbit
fetuses to in utero exposure was observed in the developmental toxicity
studies. There was no developmental toxicity in rabbit fetuses up to
100 milligrams/kilogram/day (mg/kg/day), the highest dose tested (HDT);
whereas an increase in absolute liver weight was observed in the dose
at 30 and 100 mg/kg/day. Since the liver was identified as one of the
principal target organs in rodents and dogs, the occurrence of this
finding in rabbits at 30 and 100 mg/kg/day was considered strong
evidence of maternal toxicity. In the rat developmental study,
developmental toxicity manifested as decreased fetal body weight and
incomplete fetal ossification in the presence of maternal toxicity in
the form of decreased body weight and food consumption at the limit
dose (1,000 mg/kg/day). The effects at the limit dose were comparable
between fetuses and dams. No quantitative or qualitative evidence of
increased susceptibility was observed in the 2-generation reproduction
study in rats. In that study, both the parental and offspring LOAELs
were based on decreased absolute brain weight in female F1 adults and
female F2 offspring at 89.2 mg/kg/day. At 438.3 mg/kg/day, parental
effects consisted of decreased body weight and food consumption, and
increased liver and spleen weight. Decreased pup body weight was also
observed at the same dose level of 438.3 mg/kg/day. There were no
effects on reproductive

performance up to 438.3 mg/kg/day (highest dose tested; HDT).
    The results of the DNT study indicated an increased susceptibility
of offspring. There was no maternal toxicity at the HDT (429 mg/kg/
day). Effects in the offspring included decreased body weight (9-11%)
and body weight gain (8-20%) during preweaning and decreased body
weight (4-6%) during post-weaning at 429 mg/kg/day (LOAEL). There were
no neurobehavioral effects and no neuropathological changes at any dose
in the offspring. The concern for the increased susceptibility observed
in the DNT is low because:
    i. There were no neurobehavioral or neuropathological changes in
the offspring at any dose;
    ii. A clear NOAEL for the adverse effects in the study was
identified;
    iii. The endpoints used for the various risk assessment scenarios
are much more sensitive than that of the decreased bodyweight of the
offspring occurring at almost half the limit-dose (429 mg/kg/day); and
    iv. The NOAEL of 2.83 mg/kg/day used for the long-term risk
assessment is 33x lower than the offspring NOAEL of 92.3 mg/kg/day in
the DNT.
    3. Conclusion. EPA has determined that reliable data show the
safety of infants and children would be adequately protected if the
FQPA SF were reduced to 1x. That decision is based on the following
findings:
    i. The toxicology database for fenamidone is complete for purposes
of the characterization of potential pre-natal and/or post-natal risks
to infants and children.
    ii. There was no evidence of neurotoxicity in the subchronic
neurotoxicity study submitted for fenamidone. There was evidence of
neurotoxicity (urination, staining/soiling of the anogenital region,
mucous in the feces and unsteady gait in females) in the acute
neurotoxicity study, and EPA used the NOAEL from this study to assess
acute dietary exposure. There was also evidence of neurotoxicity
(decreased absolute brain weights) in the 2-generation rat reproduction
study; however, there was no indication of increased susceptibility of
offspring with regard to these effects. Finally, there was no evidence
of neurotoxicity at any dose in the submitted DNT study. Based on the
results of these studies, EPA concluded that there is no need for
additional UFs to account for neurotoxicity.
    iii. No qualitative or quantitative increased susceptibility of rat
or rabbit fetuses to in utero exposure in the developmental toxicity
studies was observed. There was no qualitative or quantitative
increased susceptibility in the two generation reproduction study
(rat). There is low concern for residual uncertainties in the DNT study
in the rat since there is a well established offspring NOAEL for the
reasons noted in Unit III.D.2.
    iv. Residue values used in the dietary risk assessments are
unlikely to underestimate risk. Dietary exposure assessments were
conducted using maximum field trial residue values and assumed 100%
crop treated. Therefore, the acute and chronic dietary, food only,
exposure is considered an upper bound conservative estimate. The
contribution from drinking water is minimal. EPA concludes that the
acute and chronic exposure estimates in this analysis are unlikely to
underestimate actual exposure. The drinking water component of the
dietary assessment utilizes water concentration values generated by
modeling parameters which are designed to provide conservative, health
protective, high-end estimates of water concentrations which will not
likely be exceeded.

E. Aggregate Risks and Determination of Safety

    EPA determines whether acute and chronic dietary pesticide
exposures are safe by comparing aggregate exposure estimates to the
acute PAD (aPAD) and chronic PAD (cPAD). For linear cancer risks, EPA
calculates the lifetime probability of acquiring cancer given the
estimated aggregate exposure. Short-, intermediate-, and chronic-term
risks are evaluated by comparing the estimated aggregate food, water,
and residential exposure to the appropriate PODs to ensure that an
adequate MOE exists.
    1. Acute risk. Using the exposure assumptions discussed in this
unit for acute exposure, the acute dietary exposure from food and water
to fenamidone will occupy 5% of the aPAD for children 1-2 years old,
the population group receiving the greatest exposure.
    2. Chronic risk. Using the exposure assumptions described in this
unit for chronic exposure, EPA has concluded that chronic exposure to
fenamidone from food and water will utilize 90% of the cPAD for
children 1-2 years old the population group receiving the greatest
exposure. There are no residential uses for fenamidone.
    3. Short- and intermediate-term risk. Short- and intermediate-term
aggregate exposure takes into account short- and intermediate-term
residential exposure plus chronic exposure to food and water
(considered to be a background exposure level). Short- and
intermediate-term adverse effects were identified; however, fenamidone
is not registered for any use patterns that would result in short- and/
or intermediate-term residential exposure. Short- and/or intermediate-
term risk is assessed based on short- and/or intermediate-term
residential exposure plus chronic dietary exposure. Because there is no
short- or intermediate-term residential exposure and chronic dietary
exposure has already been assessed under the appropriately protective
cPAD (which is at least as protective as the POD used to assess short-
term risk), no further assessment of short- or intermediate-term risk
is necessary, and EPA relies on the chronic dietary risk assessment for
evaluating short- and intermediate-term risk for fenamidone.
    4. Aggregate cancer risk for U.S. population. Based on the lack of
evidence of carcinogenicity in two adequate rodent carcinogenicity
studies, fenamidone is not expected to pose a cancer risk 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, or to infants and children from aggregate
exposure to fenamidone residues.

IV. Other Considerations

A. Analytical Enforcement Methodology

    Adequate enforcement methodology (liquid chromatographic method
coupled with tandem mass spectrum detection (LC/MS/MS)) 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>;
email address<EMAIL_ADDRESS>
B. International Residue Limits

    In making its tolerance decisions, EPA seeks to harmonize U.S.
tolerances with international standards whenever possible, consistent
with U.S. food safety standards and agricultural practices. EPA
considers the international maximum residue limits (MRLs) established
by the Codex Alimentarius Commission (Codex), as required by FFDCA
section 408(b)(4). The Codex Alimentarius is a joint U.N. Food and
Agriculture Organization/World Health Organization food standards
program, and it is recognized as an international food safety
standards-setting organization in trade agreements to which the United
States

is a party. EPA may establish a tolerance that is different from a
Codex MRL; however, FFDCA section 408(b)(4) requires that EPA explain
the reasons for departing from the Codex level.
    There are no Codex MRLs for fenamidone in cereal crops (crop group
15 and 16, except rice).

C. Revisions to Petitioned-For Tolerances

    EPA has modified the commodity definitions that were proposed in
the Notice of Filing to (1) be consistent with Agency policy and
nomenclature and (2) to have all of crop group 16 under a single
tolerance instead of separated into separate ones as proposed.
    EPA is removing the tolerances for corn, field forage; corn, field,
grain; corn, field, stover; corn, sweet, forage, corn, sweet, plus cob
with husks removed; corn, sweet, stover; wheat, grain; wheat, hay;
wheat, forage; and wheat, straw from paragraph (d) that are covered by
the newly created crop group tolerances.
    Also, EPA has revised the tolerance expression to clarify (1) that,
as provided in FFDCA section 408(a)(3), the tolerance covers
metabolites and degradates of fenamidone not specifically mentioned;
and (2) that compliance with the specified tolerance levels is to be
determined by measuring only the specific compounds mentioned in the
tolerance expression.

V. Conclusion

    Therefore, tolerances are established for indirect or inadvertent
residues of fenamidone (4-H-imidazol-4-one, 3,5-dihydro-5-methyl-2-
(methylthio)-5-phenyl-3-(phenylamino, (S)-) and its metabolite RPA
717879 (2,4-imidazolidinedione, 5-methyl-5-phenyl) in or on grain,
cereal, group 15, except rice at 0.1 ppm; and grain, cereal, forage,
fodder and straw, group 16, except rice at 0.5 ppm.

VI. Statutory and Executive Order Reviews

    This final rule establishes tolerances 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 final rule has been
exempted from review under Executive Order 12866, this final rule is
not subject to Executive Order 13211, entitled Actions Concerning
Regulations That Significantly Affect Energy Supply, Distribution, or
Use (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled
Protection of Children from Environmental Health Risks and Safety Risks
(62 FR 19885, April 23, 1997). This 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 9, 2000) do not apply to this final rule. In addition,
this final 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) (Pub. L. 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: October 27, 2011.
Lois Rossi,
Director, Registration Division, Office of Pesticide Programs.

    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. In Sec.  180.579, revise paragraphs (a)(1) introductory text, (a)(2)
introductory text, (c) introductory text, and paragraph (d) to read as
follows:

Sec.  180.579  Fenamidone; tolerances for residues.

    (a) General. (1) Tolerances are established for residues of the
fungicide, fenamidone, including its metabolites and degradates, in or
on the following commodities. Compliance with the tolerance levels is
to be determined by measuring only fenamidone (4H-Imidazol-4-one, 3,5-
dihydro-5-methyl- 2-(methylthio)-5-phenyl-3 (phenylamino)-,(S)-), in or
on the commodities:
* * * * *
    (2) Tolerances are established for residues of the fungicide
fenamidone, including its metabolites and degradates, in or on the
following commodities. Compliance with the tolerance levels is to be
determined by measuring fenamidone (4H-Imidazol-4-one, 3,5-dihydro-5-
methyl-2-(methylthio)-5-phenyl-3 (phenylamino)-,(S)-), and its
metabolite RPA 717879 (2,4-imidazolidinedione, 5-methyl-5-phenyl), in
or on the commodities:
* * * * *
    (c) Tolerances with regional registrations. A tolerance with
regional registration as defined in Sec.  180.1(l) is established for
residues of the fungicide fenamidone, including its metabolites and
degradates, in or on the following commodities. Compliance with the

tolerance levels is to be determined by measuring only fenamidone (4H-
Imidazol-4-one, 3,5-dihydro-5-methyl-2-(methylthio)-5-phenyl-3
(phenylam- ino)-,(S)-), in or on the commodity:
* * * * *
    (d) Indirect or inadvertent residues. Tolerances are established
for residues of the fungicide fenamidone, including its metabolites and
degradates, in or on the following commodities. Compliance with the
tolerance levels is to be determined by measuring fenamidone (4H-
Imidazol-4-one, 3,5-dihydro-5-methyl-2-(methylthio)-5-phenyl-3
(phenylamino)-,(S)-), and its metabolite RPA 717879 (2,4-
imidazolidinedione, 5-methyl-5-phenyl), in or on the following
commodities when present therein as a result of application of
fenamidone to the crops in paragraph (a)(1).

------------------------------------------------------------------------
                                                              Parts per
                         Commodity                             million
------------------------------------------------------------------------
Grain, cereal, group 15, except rice......................          0.1
Grain, cereal, forage, fodder and straw, group 16, except           0.5
 rice.....................................................
Soybean, forage...........................................          0.15
Soybean, hay..............................................          0.25
Soybean, seed.............................................          0.02
Strawberry................................................          0.15
------------------------------------------------------------------------

[FR Doc. 2011-29618 Filed 11-15-11; 8:45 am]
BILLING CODE 6560-50-P


Background

On August 1, 2016, Ecology submitted a package of state-promulgated human health criteria (found at WAC 173-201A-240) to the EPA for review and action pursuant to the EPA's authority under Clean Water Act (CWA) section 303(c). On November 15, 2016, the EPA disapproved 143 of the 192 human health criteria submitted by Ecology. The EPA's partial disapprovals were based on: 1) a comparison between Washington's criteria and criteria that the EPA developed using Washington's fish consumption rate and the EPA's national recommended human health criteria issued in 2015 pursuant to CWA section 304(a), and 2) a finding that Washington had not adequately described its rationale for selecting certain human health criteria values. In accordance with CWA section 303(c) requirements, concurrent with its partial disapproval of Washington's submittal, the EPA finalized a federal rule for the criteria that it disapproved, which became effective December 28, 2016.

On February 21, 2017, several groups filed a petition requesting that the EPA reconsider its disapproval action on Washington's human health criteria and repeal or withdraw the federal rule. Between February and July 2017, three other entities sent the EPA letters requesting that the EPA deny the petition. On August 3, 2018, the EPA provided notice of its intent to reconsider its action in response to the petition. On August 7, 2018, Ecology sent a letter to the EPA opposing reconsideration and indicating the state agency's preference to focus on implementing the federal rule.

Upon reconsideration, if the EPA reverses the previously disapproved criteria and instead approves them, the newly approved human health criteria will not be in effect for CWA purposes in Washington until the corresponding federally promulgated human health criteria are withdrawn via a formal rulemaking process.