[Federal Register Volume 75, Number 221 (Wednesday, November 17, 2010)]
[Notices]
[Pages 70558-70568]
[FR Doc No: 2010-28812]

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Part IV

Environmental Protection Agency

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Endocrine Disruptor Screening Program; Draft Policies and Procedures
for Screening Safe Drinking Water Act Chemicals, Second List of
Chemicals for Tier 1 Screening, Agency Information Collection
Activities; Proposed Collection; Comment Request; Addendum for the
Second List of Chemicals; Tier 1 Screening of Certain Chemicals;
Notices

Federal Register / Vol. 75 , No. 221 / Wednesday, November 17, 2010 /
Notices

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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OPPT-2007-1080; FRL-8848-9]

Endocrine Disruptor Screening Program; Draft Policies and
Procedures for Screening Safe Drinking Water Act Chemicals

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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SUMMARY: This document describes EPA's draft policies and procedures
for requiring Tier 1 screening under the Endocrine Disruptor Screening
Program (EDSP) of substances for which EPA may issue testing orders
pursuant to section 1457 of the Safe Drinking Water Act (SDWA) and
section 408(p) of the Federal Food, Drug, and Cosmetic Act (FFDCA).
FFDCA section 408(p) directed EPA to develop a chemical screening
program using appropriate validated test systems and other
scientifically relevant information to determine whether certain
substances may have hormonal effects. These draft policies and
procedures are intended to supplement the existing EDSP policies and
procedures that were published in the Federal Register on April 15,
2009 (74 FR 17560); however, this document was drafted with the intent
of explaining the policies and procedures relevant to EDSP Safe
Drinking Water Act chemicals.

DATES: Comments must be received on or before January 18, 2011.

ADDRESSES: Submit your comments, identified by docket identification
(ID) number EPA-HQ-OPPT-2007-1080, by one of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov.
Follow the on-line instructions for submitting comments.
     Mail: Document Control Office (7407M), Office of Pollution
Prevention and Toxics (OPPT), Environmental Protection Agency, 1200
Pennsylvania Ave., NW., Washington, DC 20460-0001.
     Hand Delivery: OPPT Document Control Office (DCO), EPA
East Bldg., Rm. 6428, 1201 Constitution Ave., NW., Washington, DC.
Attention: Docket ID Number EPA-HQ-OPPT-2007-1080. The DCO is open from
8 a.m. to 4 p.m., Monday through Friday, excluding legal holidays. The
telephone number for the DCO is<PHONE_NUMBER>. Such deliveries are
only accepted during the DCO's normal hours of operation, and special
arrangements should be made for deliveries of boxed information.
    Instructions: Direct your comments to docket ID number EPA-HQ-OPPT-
2007-1080. EPA's policy is that all comments received will be included
in the docket without change and may be made available on-line at
http://www.regulations.gov, including any personal information
provided, unless the comment includes information claimed to be
Confidential Business Information (CBI) or other information whose
disclosure is restricted by statute. Do not submit information that you
consider to be CBI or otherwise protected through regulations.gov or e-
mail. The regulations.gov Web site is an ``anonymous access'' system,
which means EPA will not know your identity or contact information
unless you provide it in the body of your comment. If you send an e-
mail comment directly to EPA without going through regulations.gov,
your e-mail address will be automatically captured and included as part
of the comment that is placed in the docket and made available on the
Internet. If you submit an electronic comment, EPA recommends that you
include your name and other contact information in the body of your
comment and with any disk or CD-ROM you submit. If EPA cannot read your
comment due to technical difficulties and cannot contact you for
clarification, EPA may not be able to consider your comment. Electronic
files should avoid the use of special characters, any form of
encryption, and be free of any defects or viruses.
    Docket: 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., CBI or other
information whose disclosure is restricted by statute. Certain other
material, such as copyrighted material, is not placed on the Internet
and will be publicly available only in hard copy form. Publicly
available docket materials are available either in the electronic
docket at http://www.regulations.gov, or, if only available in hard
copy, at the OPPT Docket. The OPPT Docket is located in the EPA Docket
Center (EPA/DC) at Rm. 3334, EPA West Bldg., 1301 Constitution Ave.,
NW., Washington, DC. The EPA/DC Public Reading Room hours of operation
are 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal
holidays. The telephone number of the EPA/DC Public Reading Room is
(202) 566-1744, and the telephone number for the OPPT Docket is (202)
566-0280. Docket visitors are required to show photographic
identification, pass through a metal detector, and sign the EPA visitor
log. All visitor bags are processed through an X-ray machine and
subject to search. Visitors will be provided an EPA/DC badge that must
be visible at all times in the building and returned upon departure.

FOR FURTHER INFORMATION CONTACT: For technical information contact:
Susan Sharkey, Chemical Control Division, Office of Pollution
Prevention and Toxics, Environmental Protection Agency, 1200
Pennsylvania Ave., NW., Washington, DC 20460-0001; telephone number:
(202) 564-8789; e-mail address<EMAIL_ADDRESS>or Bill Wooge,
Office of Science Coordination and Policy, Environmental Protection
Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-0001;
telephone number:<PHONE_NUMBER>; e-mail address:
<EMAIL_ADDRESS>    For general information contact: The TSCA-Hotline, ABVI-Goodwill,
422 South Clinton Ave., Rochester, NY 14620; telephone number: (202)
554-1404; e-mail 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 manufacture
or import chemical substances (including pesticide chemicals) that may
be found in sources of drinking water; if you manufacture or import
chemical substances that degrade to chemical substances found in
sources of drinking water; or if you are, or may otherwise be, involved
in the testing of chemical substances for potential endocrine effects.
Potentially affected entities may include, but are not limited to:
     Chemical manufacturers, importers and processors (NAICS
code 325), e.g., persons who manufacture, import or process chemical
substances.
     Pesticide, fertilizer, and other agricultural chemical
manufacturing (NAICS code 3253), e.g., persons who manufacture, import
or process pesticide, fertilizer and agricultural chemicals.
     Scientific research and development services (NAICS code
5417), e.g., persons who conduct testing of chemical substances for
endocrine effects.
    This listing is not intended to be exhaustive, but rather provides
a guide for readers regarding entities likely to be affected by this
action. Other types of entities not listed in this unit could also be
affected. The North American Industrial Classification System (NAICS)
codes have been provided to assist you and others in determining

whether this action might apply to certain entities. To determine
whether you or your business may be affected by this action, you should
carefully examine the applicability provisions in Unit III.C. of this
document, and examine the Federal Food Drug and Cosmetic Act (FFDCA)
section 408(p). If you have any questions regarding the applicability
of this action to a particular entity, consult the technical person
listed under FOR FURTHER INFORMATION CONTACT.

B. What should I consider as I prepare my comments for EPA?

    1. Submitting CBI. Do not submit this information to EPA through
regulations.gov or e-mail. Clearly mark the part or all of the
information that you claim to be CBI. For CBI information in a disk or
CD-ROM that you mail to EPA, mark the outside of the disk or CD-ROM as
CBI and then identify electronically within the disk or CD-ROM the
specific information that is claimed as CBI. In addition to one
complete version of the comment that includes information claimed as
CBI, a copy of the comment that does not contain the information
claimed as CBI must be submitted for inclusion in the public docket.
Information so marked will not be disclosed except in accordance with
procedures set forth in 40 CFR part 2.
    2. Tips for preparing your comments. When submitting comments,
remember to:
    i. Identify the document by docket ID number and other identifying
information (subject heading, Federal Register date and page number).
    ii. Follow directions. The Agency may ask you to respond to
specific questions or organize comments by referencing a Code of
Federal Regulations (CFR) part or section number.
    iii. Explain why you agree or disagree; suggest alternatives and
substitute language for your requested changes.
    iv. Describe any assumptions and provide any technical information
and/or data that you used.
    v. If you estimate potential costs or burdens, explain how you
arrived at your estimate in sufficient detail to allow for it to be
reproduced.
    vi. Provide specific examples to illustrate your concerns and
suggest alternatives.
    vii. Explain your views as clearly as possible, avoiding the use of
profanity or personal threats.
    viii. Make sure to submit your comments by the comment period
deadline identified.

II. Background

A. What action Is the agency taking?

    The Agency is proposing, and seeking public comment on, a number of
draft policies and procedures for issuing EDSP test orders for
substances based on the Agency's authority under the Safe Drinking
Water Act (SDWA) section 1457 (i.e., ``SDWA chemicals''). SDWA
authorizes EPA to issue EDSP test orders to manufacturers and importers
of substances that may be found in sources of drinking water and to
which a substantial population may be exposed (42 U.S.C. 300j-17). SDWA
chemicals encompass a wide variety of substances, including industrial
and pesticide chemicals, ingredients in pharmaceuticals and personal
care products, and degradates.
    These draft policies and procedures are intended to supplement the
existing EDSP policies and procedures that were published in the
Federal Register on April 15, 2009 (74 FR 17560) (FRL-8399-9) (FIFRA/
FFDCA policies and procedures) (Ref. 1). The policies discussed in the
April 15, 2009, document were developed based primarily on
considerations applicable to the issuance of EDSP test orders on
pesticide active and inert ingredients, which were the chemicals
comprising the first EDSP chemical list. It is important to note that
chemicals on the first EDSP list may also fit the criteria to be
considered a SDWA chemical and, therefore, these draft policies and
procedures also may apply to those chemicals. Consequently, some of the
existing policies and procedures reflect issues uniquely associated
with the pesticide market and the specific regulatory context under
which EPA regulates pesticide chemicals, i.e., FIFRA. In this document,
EPA describes the policies and procedures associated with Tier 1
screening of SDWA chemicals, including certain modifications to those
original policies and procedures that are intended to address issues
that are unique to SDWA chemicals, or to address the circumstances
where other competing considerations for SDWA chemicals warrant a
modification of those earlier policies.
    This document discusses the policy considerations for SDWA
chemicals and the procedural modifications and clarifications the
Agency is considering for the following areas:
     Who would receive EDSP test orders on SDWA chemicals?
[Unit V.A.]
     How will recipients of orders on SDWA chemicals be
notified? [Unit V.B.]
     How will the public know who has received a test order on
a SDWA chemical or who has supplied the needed data? [Unit V.C.]
     How will the Agency minimize duplicative testing? [Unit
V.D.]
     What are the potential responses to test orders on SDWA
chemicals? [Unit V.E.]
     How can order responses and data be submitted
electronically? [Unit V.F.]
     How will EPA facilitate joint data development and cost
sharing for SDWA chemicals? [Unit V.G.]
     What procedures can EPA apply for handling CBI for SDWA
chemicals? [Unit V.H.]
     What is the process for contesting a test order or
consequences for failure to respond or comply with a test order? [Unit
V.I.]
     What is the informal administrative review procedure?
[Unit V.J.]
     What are the adverse effects reporting requirements? [Unit
V.K.]
    The FIFRA/FFDCA policies and procedures remain relevant to
recipients of FIFRA chemical test orders. SDWA chemical test order
recipients should refer to this document and any subsequent revised
document for policies and procedure guidelines. In addition, a new
draft order template for issuance of orders under SDWA section 1457 and
FFDCA section 408(p)(5) is available in the docket for this Federal
Register notice (Ref. 2).
    EPA has also published two related documents elsewhere in today's
Federal Register. One announces the second list of EDSP chemicals,
which includes both SDWA chemicals and pesticide active ingredients
(PAIs). Some of the listed chemicals may be both SDWA chemicals and
PAIs. The other requests public comment on a draft supplemental
Information Collection Request (ICR), which describes the estimated
paperwork burden and costs associated with the second list of EDSP
chemicals.

B. What are the statutory authorities for the policies discussed in
this document?

    SDWA is the primary Federal law that ensures the quality of
Americans' drinking water. Under SDWA, EPA sets standards for drinking
water and works closely with states, localities, and water suppliers to
implement these standards. SDWA authorizes EPA to set national
standards for drinking water to protect against both naturally
occurring and man-made contaminants that may be found in drinking water
(42 U.S.C. 300g-1).
    Section 1457 of SDWA authorizes EPA to require testing, under FFDCA
section 408(p) (21 U.S.C. 346(a)(p)), of

any substance that may be found in sources of drinking water, based on
a determination that a substantial population may be exposed to such a
substance. (42 U.S.C. 300j-17).
    Section 408(p)(1) of FFDCA requires EPA ``to develop a screening
program, using appropriate validated test systems and other
scientifically relevant information, to determine whether certain
substances may have an effect in humans that is similar to an effect
produced by a naturally occurring estrogen, or such other effects as
[EPA] may designate.'' (21 U.S.C. 346a(p)(1)).
    Section 408(p)(3) of FFDCA expressly requires that EPA ``shall
provide for the testing of all pesticide chemicals.'' (21 U.S.C.
346a(p)(3)). Section 201 of FFDCA defines ``pesticide chemical'' as
``any substance that is a pesticide within the meaning of the Federal
Insecticide, Fungicide, and Rodenticide Act (FIFRA), including all
active and pesticide inert ingredients of such pesticide.'' (21 U.S.C.
231(q)(1)).
    Section 408(p)(5)(A) of FFDCA provides that the Administrator
``shall issue an order to a registrant of a substance for which testing
is required [under FFDCA section 408(p)], or to a person who
manufactures or imports a substance for which testing is required
[under FFDCA section 408(p)], to conduct testing in accordance with the
screening program, and submit information obtained from the testing to
the Administrator within a reasonable time period'' that the Agency
determines is sufficient for the generation of the information. Based
on the statutes discussed in this subsection, EPA has the discretion to
require testing of a pesticide chemical under FFDCA solely, FIFRA/
FFDCA, SDWA/FFDCA or FIFRA/SDWA/FFDCA.
    Section 408(p)(5)(B) of FFDCA requires that, ``to the extent
practicable, the Administrator shall minimize duplicative testing of
the same substance for the same endocrine effect, develop, as
appropriate, procedures for fair and equitable sharing of test costs,
and develop, as necessary, procedures for handling of confidential
business information. * * *'' (21 U.S.C. 346a(p)(5)(B)).
    Section 408(p)(5)(D) of FFDCA provides that any person (other than
a registrant) who fails to comply with a FFDCA section 408(p)(5) test
order shall be liable for the same penalties and sanctions as are
provided for under section 16 of the Toxic Substances Control Act
(TSCA). (21 U.S.C. 346a(p)(5)(D)). Such penalties and sanctions shall
be assessed and imposed in the same manner as provided in TSCA section
16. Under TSCA section 16, civil penalties may be assessed, after
notice and an administrative hearing held on the record in accordance
with section 554 of the Administrative Procedure Act (APA). (15 U.S.C.
2615(a)(1)-(2)(A)).

C. Does this document contain binding requirements?

    While the requirements in the statutes and in any test orders
ultimately issued under FFDCA section 408(p) are binding, the policies
outlined in this notice are not. The policies outlined in this notice
merely represent the general procedures and statutory interpretations
on which EPA may rely to implement the existing goals of the statutory
program. These policies and procedures may be modified at any time by
EPA and the Agency may depart from these policies and procedures where
circumstances warrant and without prior notice.

III. Background on the EDSP

A. What is the EDSP?

    EPA developed the EDSP in response to a Congressional mandate in
FFDCA ``to determine whether certain substances may have an effect in
humans that is similar to an effect produced by naturally occurring
estrogen, or such effects as [EPA] may designate'' (21 U.S.C. 346a(p)).
As part of the EDSP, EPA issues orders to collect certain test data on
selected chemical substances. In general, EPA intends to use the data
collected under the EDSP, along with other information, to determine if
a pesticide chemical, or other substances, may pose a risk to human
health or the environment due to disruption of the endocrine system.
The determination that a chemical does or is not likely to have the
potential to interact with the endocrine system will be made on a
weight of evidence basis taking into account data from the Tier 1
assays and/or other scientifically relevant information. Chemicals that
go through Tier 1 screening and are found to have the potential to
interact with the estrogen, androgen, or thyroid hormone systems will
proceed to the next stage of EDSP where EPA will determine which, if
any, of the Tier 2 tests are necessary based on the available data.
Tier 2 testing is designed to identify any adverse endocrine-related
effects caused by the substance, and establish a quantitative
relationship between the dose and that endocrine effect. Further
information regarding the EDSP and requirements for Tier 1 and Tier 2
can be found on the Agency's EDSP Web site, at http://www.epa.gov/endo/
(Ref. 3). EPA is aware of no issue specific to the chemicals in the
second list of screening that would warrant any modification to the
existing testing scheme, and is not proposing to adopt any.

B. Why is EPA publishing a second edsp policies and procedures used to
require the submission of test data?

    As stated in the April 15, 2009, document (Ref. 1), EPA generally
developed EDSP policies and procedures that could be used in subsequent
data collection efforts, including those under SDWA, but indicated that
EPA may make modifications as appropriate. The Agency believes that
some significant modifications are needed because the existing policies
were designed to address screening of pesticide chemicals which are
regulated under FIFRA, a statute that does not apply to non-pesticides.
For example, much of the data that would be generated in response to an
EDSP test order (particularly for pesticide active ingredients) would
be entitled to the data compensation protections available under FIFRA
(7 U.S.C. 136a(c)(1)(F); FFDCA 21 U.S.C. 346a(i)). Additionally, FIFRA
section 10 prohibits EPA from releasing study data on pesticide
chemicals unless the person seeking access to the information certifies
that he is not an agent or employee of any multinational pesticide
company (7 U.S.C. 136h(g)). Because FFDCA section 408(p) did not
authorize EPA to modify these FIFRA requirements, EPA needed to ensure
that the procedures adopted to implement section 408(p) would operate
in a manner that would be compatible with EPA's implementation of the
existing FIFRA mandates. Moreover, the fact that a long-standing FIFRA
mechanism was already effectively minimizing duplicative testing and
promoting cost sharing among order recipients meant that EPA could rely
on the existing mechanisms as a uniquely relevant model for screening
of pesticides under the EDSP. By contrast, the SDWA chemicals that may
be subject to EDSP screening include pesticide chemicals, industrial
(non-pesticide) chemicals, as well as ingredients in pharmaceuticals
and personal care products, among others.
    EPA has also drafted these new policies and procedures to address
issues specific to SDWA chemicals beyond those associated with the
applicability of FIFRA. The rationale and statutory authority for
listing SDWA chemicals, the sources of SDWA chemicals and EPA's ability
to identify manufacturers and importers, and other considerations
unique to SDWA

chemicals create a need for policies and procedures specific to EDSP
screening under SDWA/FFDCA authority. For example, some registered
pesticide ingredients have additional uses that account for a much
larger percentage of total manufacture and import. In such cases, the
Agency seeks to be able to identify, and issue orders to, all relevant
manufacturers and importers in a manner that creates a fair and level
playing field for complying with the order. In addition, many of the
companies likely to receive SDWA/FFDCA test orders may be unfamiliar
with the initial policies and procedures because those companies are
not associated with the pesticide market, were unaffected by that
earlier proposal, and consequently had no interest in commenting. EPA
also believes it would be inappropriate to publish this document in a
manner identifying only the changes to the existing policies and
procedures because the procedures are inherently complex and would
require numerous cross referencing by parties unfamiliar with the
referenced regulation.

C. When do these policies and procedures apply?

    These policies and procedures apply to all SDWA chemicals listed
for screening under the EDSP. EPA has the discretion to issue EDSP test
orders under the authorities of SDWA section 1457 and FFDCA section
408(p) for all SDWA chemicals, including PAIs. As described in this
document, EPA generally intends to use SDWA authority (1) to require
testing of SDWA chemicals that are not PAIs, and (2) to require testing
of SDWA chemicals that are also PAIs if the initial FIFRA/FFDCA orders
to technical registrants did not generate the required data. Note that,
in the event that FIFRA/FFDCA order recipients exercise the option to
exit the pesticide market and the Agency subsequently sends such
recipients a SDWA/FFDCA order, the recipient would be required to
submit data or otherwise respond to the SDWA/FFDCA test order, even if
they previously responded to an earlier FIFRA/FFDCA order.
    For a variety of reasons, EPA generally intends to issue FIFRA/
FFDCA orders to manufacturers and registrants of PAIs. For such order
recipients, the policies discussed in the April 15, 2009, document
would be applicable, rather than the policies discussed in this
document. EPA believes that this will minimize administrative burdens
and ultimately be less confusing to order recipients. Burdens and
confusion should be reduced because many of the policies for these
chemicals were driven by existing statutory requirements applicable to
the test order recipients for these chemicals, such as the requirements
for data compensation and confidentiality established by FIFRA sections
3(c)(1)(F) and 12, as well as FFDCA section 408(i). These requirements
would remain applicable, whether or not the test orders are issued for
SDWA chemicals, and EPA lacks the authority to modify them. Thus, EPA
believes that continuing to issue FIFRA/FFDCA orders to the
manufacturers and registrants of these chemicals would generally be
appropriate, to avoid any confusion, and to simplify Agency policies,
even though EPA has determined that these chemicals meet the standards
laid out in SDWA section 1457.

IV. EDSP Policy Considerations for SDWA Chemicals

    The Agency used the following policy considerations to guide
development of procedures for issuing EDSP Tier 1 screening test orders
on SDWA chemicals:
     A core part of EPA's mission is to promote public
understanding of the potential risks posed by chemicals in commerce.
     The basis for an order with respect to SDWA chemicals is
that a substance may be found in sources of drinking water and a
determination that a substantial population may be exposed to such
substance. Thus, SDWA procedures should not be unnecessarily tied to
the use of the chemical in any given market and should instead focus on
obtaining data from companies that might be expected to contribute to a
chemical's presence in drinking water.
     For simplicity, procedures for SDWA chemicals should be
consistent with existing EDSP procedures unless there is a reason for
modifying them (e.g., different statutory requirements), though for the
sake of clarity EPA has written these draft policies and procedures as
a complete, stand alone document.
     Procedures for EDSP testing of SDWA chemicals should
strive to minimize duplicative testing and promote fair and equitable
sharing of test costs, as described in section 408(p)(5)(B) of FFDCA.
     The Agency expects to issue SDWA/FFDCA orders for
pesticide inert ingredients that are listed for EDSP screening with a
SDWA section 1457 finding; it has also been the Agency's experience
that pesticide inerts generally have a much larger market than solely
as ingredients in pesticide formulations. For these reasons EPA
believes it is reasonable and equitable to initially issue SDWA/FFDCA
orders on all SDWA chemicals that are not PAIs.
     EPA intends, where appropriate, to rely on FIFRA and FFDCA
when issuing orders to technical registrants of a pesticide chemical.
If, however, recipients of such test orders fail to provide the
required information, EPA may choose to reissue test orders under SDWA/
FFDCA authority based on the SDWA criteria. EPA would then rely on the
policies and procedures established in this document.

V. Proposed Procedures for Requiring Testing Under the EDSP Pursuant to
SDWA

    For purposes of discussing the EDSP procedures in this document,
SDWA chemicals can be described as either currently registered PAIs
(SDWA PAIs) or Other SDWA Chemicals (including currently registered
pesticide inert ingredients). As previously noted, EPA generally
intends to issue FIFRA/FFDCA orders to manufacturers and registrants of
PAIs. EPA would retain, however, the discretion to issue an SDWA/FFDCA
order to any substance that meets the statutory criteria in SDWA
section 1457. Consequently, in the event that no FIFRA/FFDCA test order
recipient generates the required data, either because all registrations
containing the PAI or inert ingredient has been cancelled, or because
all manufacturers decide to ``opt out'' of the pesticide market, EPA
may determine to issue testing orders based on the SDWA authority in
order to obtain the data. In such instances, the policies outlined in
this document would be applicable.
    By contrast, for SDWA chemicals that are not PAIs (i.e., ``Other
SDWA Chemicals''), EPA may determine to issue test orders relying on
both SDWA section 1457 and FFDCA section 408(p)(5). For readers
associated with the pesticide community, EPA notes that in several
respects, the Other SDWA Chemicals are similar to the non-food use
inert ingredients discussed in EPA's April 15, 2009 policies; the
similarities are reflected in the policies that EPA is proposing in
this document. Subsections A-K of this unit describes the policies and
procedures that relate to EDSP test orders issued under SDWA/FFDCA
authority.

A. Who would receive EDSP test orders on SDWA chemicals?

    Under FFDCA section 408(p)(5)(A), EPA ``shall issue'' EDSP test
orders ``to a registrant of a substance for which testing is required *
* * or to a person who manufactures or imports a

substance for which testing is required * * *'' (21 U.S.C.
346(a)(p)(5)(A)). The process for issuing test orders for SDWA
chemicals depends on whether the chemical is a SDWA PAI or an Other
SDWA Chemical. A chart depicting the process for issuing test orders on
SDWA chemicals is included in the docket (Ref. 4).
    As noted for SDWA PAIs, the Agency is not proposing to modify the
FIFRA policies and procedures. Readers potentially affected by FIFRA/
FFDCA test orders should review the April 15, 2009, document. As
described in that document, EPA intends to use internal databases--
principally the Office of Pesticide Program's Information Network
(OPPIN)--to identify technical registrants with a current pesticide
registration containing a SDWA chemical as the active ingredient, and
anticipates issuing a FIFRA/FFDCA test order to all identified
technical registrants.
    For Other SDWA Chemicals, EPA intends to issue SDWA/FFDCA test
orders following the polices and procedures proposed in this document.
Generally, EPA intends to rely primarily on information reported to the
Agency under the TSCA Inventory Update Reporting (IUR) Rule (Ref. 5) to
identify the initial SDWA/FFDCA test order recipients. The IUR Rule
requires manufacturers and importers of certain chemical substances
included on the TSCA Inventory to report site and manufacturing
information for chemicals manufactured (including imported) in amounts
of 25,000 lb. or more at a single site. The Agency believes that the
IUR information is an appropriate source for identifying test order
recipients for four primary reasons:
    (1) It has been EPA's experience that relying on companies that
have reported to the IUR is the most reliable mechanism for identifying
manufacturers and importers of (non-pesticide) industrial chemicals.
Such manufacturers and importers are required, by regulation, to report
under the IUR rule.
    (2) Companies that report under the IUR Rule generally account for
most of a chemical in commerce; therefore these companies can be
expected to account for most of a chemical when it is found in drinking
water, which is the basis for listing a chemical under SDWA authority
(see Unit II.B.). As relatively large manufacturers and importers, EPA
also believes that companies reporting under IUR comprise the majority
of the volume associated with the chemical; these companies are more
likely to be able to afford the cost of EDSP testing than companies
manufacturing volumes below the IUR reporting threshold. EPA believes
that, in general, these manufacturers are analogous to the technical
registrants, who received orders in the first round of EDSP screening.
    (3) Using the IUR information to identify order recipients will
facilitate joint data development as reporters for these chemicals are
generally publicly known and not numerous.
    (4) EPA anticipates that initially sending orders on Other SDWA
Chemicals to all potential manufacturers and importers may lead to
unnecessary administrative costs to the regulated industry and EPA.
EPA's experience in the first round of EDSP screening identified that,
to date, for the nine inert pesticide chemicals, only 10 of the 524
orders issued have resulted in an initial response of entering a
consortia or otherwise providing the data. The remaining 514 responses
have been either no response, returned to the Agency as undeliverable,
or a response indicating not subject to the order, discontinued
manufacture or import, or will not sell for a pesticide use. Should EPA
send a SDWA/FFDCA order to these recipients as a follow-up, the Agency
anticipates that the 115 responses of ``will not sell for a pesticide
use'' are manufacturers or importers which would need to provide data
under the SDWA/FFDCA order. (Ref. 6) A de minimis exemption for very
low volume producers is discussed later in this subsection.
    If there are no companies reporting in response to the IUR rule for
a given chemical, EPA intends to use other publicly-available
databases, such as the Toxic Release Inventory (TRI), to identify
possible test order recipients. For Other SDWA Chemicals that are also
regulated or tracked by another agency (e.g., pharmaceuticals by the
Food and Drug Administration), EPA may also consult with that agency as
appropriate to identify main manufacturers and importers. EPA is
interested in finding other sources of information for reliably
identifying test order recipients and requests comment on other means
of identifying potential test order recipients.
    In addition to using IUR, TRI, and other Federal Agency data, EPA
intends to issue orders to manufacturers and importers who are
subsequently identified as such. In the interest of equity and shared
test cost burden, EPA believes it is important to identify and issue
orders to all significant manufacturers and importers of a listed
chemical; the Agency will follow up on any new information it receives
to this effect and issue orders accordingly. Of particular interest to
the Agency are companies whose production or import of a listed
chemical fluctuates year-by-year or who can otherwise be considered
current manufacturers or importers even though they did not report
under the most recent IUR. Information submitted that identifies
potential test order recipients not listed on the most recent IUR
should pertain to those companies who manufacturer or import the
chemical in relevant quantities. That is, EPA does not intend to issue
orders to companies who manufacture or import a chemical for research
and development purposes only, or who otherwise manufacture or import
quantities of a chemical that are more appropriately measured in grams
(as opposed to thousands of pounds). The rationale for this de minimis
exemption is also based on the authority for listing an Other SDWA
Chemical for EDSP screening (see Unit II.B.).
    The Agency is also considering issuing catch-up orders for
manufacturers or importers who are identified as beginning manufacture
or import within five years of the issuance of the SDWA/FFDCA test
order. The catch-up order process would be similar to the catch-up
order process described in the April 15, 2009, document, except EPA
intends to rely on the public to identify such manufacturers. A
recipient of such catch-up orders would be expected to participate in
the cost sharing if it relies on data developed or submitted by another
recipient or consortia to satisfy its test order obligation.
    If, after going through this process, all test order recipients
have ceased to manufacture a SDWA chemical and the Agency has not
received the required data, the SDWA chemical would be considered an
``orphan.'' The Agency seeks comment on the value of EDSP testing on
orphan chemicals and the strategy EPA should use to obtain EDSP data on
orphan chemicals.

B. How will recipients of orders on SDWA chemicals be notified?

    Order recipients would receive a test order in one of two ways: By
registered mail or electronically, once a process has been established.
In addition to the test order, EPA will send each recipient a packet
that contains the instructions, background materials, and forms needed
to comply with the order or will provide directions as to the location
of such materials.
    EPA is moving toward electronic exchange of information in many of
its programs. For instance, reporting for the IUR Rule is anticipated
to be fully

electronic sometime in 2011. The Agency seeks comment as to whether
companies who already have a Central Data Exchange (CDX) (Ref. 7)
account would prefer to receive the notification electronically, either
as a standard procedure or upon request. EPA requests that commenters
include some discussion of the mechanisms by which EPA can ensure that
accurate records documenting that the individual has received the
order, as well as the date of receipt of the test order, can be
obtained through the use of electronic reporting mechanisms.

C. How will the public know who has received a test order on a SDWA
chemical or who has supplied data?

    EPA intends to publish the list of all test order recipients on the
Agency's public Web site, https://www.epa.gov/endo. EPA invites the
submission of information (with proper substantiation) identifying
additional entities--including entities who manufacture for export
only--who should have received a test order. Commenters could either
identify themselves or another person as additional candidates for the
receipt of an order.

D. How will the agency minimize duplicative testing?

    The Agency also intends to post the status of the test orders,
including recipients' responses, on the EPA Web site so that both order
recipients and the public can determine the status of responses. EPA is
making such information available to enable test order recipients to
identify and join other order recipients to develop the data in
response to the order, thereby helping to achieve EPA's goals of
minimizing duplicative testing and promoting fair and equitable sharing
of test costs.

E. What are the potential responses to test orders on SDWA chemicals?

    The options for responding to a SDWA/FFDCA test order are similar
to those established in the existing policies and procedures except
that the option of exiting the pesticide market will not be available.
The basis for a SDWA/FFDCA order is that a chemical may be found in
sources of drinking water to which substantial populations may be
exposed. Exiting any given market (e.g., the pesticide market) is not
sufficient if the SDWA chemical is manufactured or imported for other
uses because the chemical may still be found in sources of drinking
water. Accordingly, if sufficient data on a SDWA chemical is not
generated in response to a FIFRA/FFDCA order (e.g., all FIFRA/FFDCA
order recipients exit the market or otherwise indicate that they are
not providing data), a subsequent SDWA/FFDCA order may be issued.
    Order recipients provide their initial responses on an ``Initial
Response Form for Individual Order Recipients'' (Ref. 8). Response
options that EPA anticipates including in SDWA/FFDCA test orders are as
follows:
    Option 1: Recipient indicates that it intends to generate data. The
test order recipient may decide to generate new data for each test
specified in the order, and would then comply with the procedures
prescribed in the test order. In general, this option would be
identical to the option discussed in the original policies and
procedures. EPA is not proposing to make any changes for SDWA
chemicals. Data generated and submitted would need to comply with Good
Laboratory Practices (GLP). Good Practices have been set out both in
FIFRA for pesticides in 40 CFR part 160 and for TSCA chemicals in 40
CFR part 792. Test order recipients would need to follow appropriate
GLPs, protocol requirements identified in the order, and procedures
described in test order for submitting the data.
    Option 2: Recipient indicates that it is submitting or citing
existing data or other scientifically relevant information (OSRI). The
recipient would choose this option to indicate that it is submitting or
citing existing data (including citing data previously submitted to the
Agency) that it believes is relevant to one or more of the requests in
the test order. The recipient's initial response would include either
the data or a reference to the data for each assay specified in the
order. In submitting or citing existing data, the order recipient or
other party should follow, as appropriate, relevant format guidelines
described in the test order and provide an explanation of the relevance
of the data to the order, including, where appropriate, a cogent and
complete rationale for why it believes the information is or is not
sufficient to satisfy part or all of the Tier 1 order.
    Data compensation procedures may apply to data previously submitted
to the Agency. If the data cited or submitted are from a study that was
not conducted exactly as specified in the protocols referenced in the
test order or in accordance with accepted scientific methodology or
protocol, including but not limited to those presented in EPA's
harmonized test guideline compendium (see http://www.epa.gov/ocspp/pubs/frs/home/guidelin.htm) (Ref. 9), the recipient would also identify
the deviations from the applicable protocol(s), along with an
explanation for the deviations, including an explanation as to why,
notwithstanding the deviations, the protocol used for developing the
cited or submitted data should still be considered as providing an
accepted scientific methodology or protocol, and any other information
relevant to a decision to accept the data as satisfaction of the order.
    EPA would review any existing relevant information submitted or
cited (including other scientifically relevant information) to
determine whether the information is acceptable i.e., the study was not
rejected by the Agency for any reason related to completeness or
quality) and satisfies the order. Decisions about whether the
information satisfies part or all of the Tier 1 order will be based on
the weight-of-evidence from all relevant information available. The
Agency would notify the recipient in writing of its determination.
    If the Agency determines that the information cited or submitted as
part of the initial response received from an order recipient can be
used to satisfy the Tier 1 order, which will be based on the weight-of-
evidence from all relevant information available to the Agency, the
Initial Response Form is the only response required.
    If, however, EPA determines that the information cited or submitted
as part of the initial response is insufficient to satisfy the Tier 1
order, although it may satisfy part of the order, the recipient would
still need to satisfy the remainder of the order.
    As indicated previously, EPA intends to use a weight-of-evidence
basis, taking into account data from the Tier 1 assays and any other
scientifically relevant information available, to determine whether the
chemical has the potential to interact with the endocrine system.
Chemicals that go through Tier 1 screening and are found to have the
potential to interact with the estrogen, androgen, or thyroid hormone
systems will proceed to the next stage of the EDSP where EPA will
determine which, if any, of the Tier 2 tests are necessary based on the
available data. Tier 2 testing is designed to identify any adverse
endocrine-related effects caused by the substance, and establish a
quantitative relationship between the dose and that endocrine effect.
    EPA is not currently able to provide definitive examples of the
specific circumstances in which a chemical would be able to go directly
to Tier 2 testing; however, if an order recipient chooses to make such
a request, EPA will consider it, along with any justification provided.
In general, it may in some cases be possible to determine

that a particular chemical has the potential to interact with the
endocrine system and therefore could proceed to Tier 2 even if Tier 1
data are limited. However, if only some of the Tier 1 data are
available, there may not be sufficient information to determine that
some of the Tier 2 data are not necessary. These determinations will be
made in a weight-of-evidence judgment on a case-by-case basis and made
publicly available for consideration by others with the same or similar
circumstances.
    Option 3: Recipient indicates that it intends to enter (or offer to
enter) into an agreement to form a consortium to provide the data. The
recipient may choose to form a consortium to share in the cost of
producing the required data. All participants of the consortium must
submit their own ``Initial Response Form for Individual Order
Recipients,'' providing the name of the party who will be submitting
the data on the recipient's behalf.
    The designated lead for the consortium would need to complete the
``Initial Response Form for Consortium'' to provide the primary contact
for the consortium, the list of participants, and an indication of the
consortium's planned response for each assay, along with documentation
of its formation (such as a copy of the joint agreement or a written
statement by all the parties that an agreement exists). The joint
agreement to produce the data would not need to specify all of the
terms of the final arrangement between the parties or the mechanism to
resolve the terms. The designated lead for the consortium would need to
follow the mailing instructions on the order to submit the consortium's
initial response and accompanying information to EPA by the due date
for the consortium's response, which would be indicated in the test
order.
    Once the consortium submits the data and EPA has completed its
initial review, EPA would provide written notification to the contact
of the consortium indicating whether the order has been satisfied. If
satisfied, such an action would satisfy test order obligations for each
of the consortium participants.
    If the consortium fails to submit the data or meet the requirements
of the order in a timely and adequate manner, each recipient would be
subject to penalties, unless it were to commit to submit, and then did
submit, the required data by the dates specified in the order. The
Agency would generally not grant time extensions for the submission of
data.
    The Agency intends to provide to every test order recipient a list
of the other manufacturers and/or importers (to the extent permitted by
confidentiality requirements) that have also received an EDSP order for
the specified SDWA chemical. This list would be intended to help order
recipients identify other companies with whom they could form
agreements to develop data jointly, or otherwise collaborate on a
response to satisfy the requirements in the order. If the identity of a
company subject to the SDWA/FFDCA test order is claimed as CBI, EPA
intends to offer the company an opportunity to identify an agent who
would act on their behalf in all matters relating to the EDSP program.
For any company that chooses to designate an agent, the Agency intends
to make the name of the agent (instead of the company) public by
including it on the list of recipients of SDWA/FFDCA test orders. This
name use would be similar to the process used for FIFRA/FFDCA test
orders and presented in the April 15, 2009, document. If the identity
of a company subject to the test order is claimed as CBI, and yet the
company does not name an agent, that company's ability to obtain data
compensation from other parties (or rely on compensable data submitted
by other parties) would likely be affected. EPA generally intends to
publish the list of order recipients in the Federal Register and post
it on the Agency's Web site. EPA intends to update the list with
subsequent publication(s) and posting(s) as appropriate. For example,
the Agency intends to post the status of the test orders, including the
recipient's response, on the Agency Web site so that both order
recipients and the public can check on the status of responses to the
orders. This public listing is intended to also facilitate the
formation of consortia to develop data jointly since recipients would
know all other entities required to generate the same data.
    Option 4: Recipient claims that it is not subject to the test
order. Under this option, a recipient would claim that it is not
subject to the order because it does not manufacture or import the
chemical identified for testing, or because it believes the order was
otherwise erroneously sent. An explanation of the basis for the claim,
along with appropriate information to substantiate the claim, would
accompany the Initial Response. The Agency intends to evaluate the
claim and respond to any request in writing within 90 days of receipt.
If EPA was unable to verify the claim, the original requirements and
deadlines in the order would be expected to remain. If EPA could verify
the claim, such a response would satisfy the order and no further
response would be necessary. This option would be similar to the option
discussed in the original policies and procedures for manufacturers of
inert ingredients. EPA is not proposing to make any changes for SDWA
chemicals.
    Option 5: Recipient intends to discontinue the manufacture or
import of the chemical. Under this option, the recipient would indicate
it has or is in the process of discontinuing all manufacture and import
of the chemical. As noted previously, manufacture would also include
manufacture for the purposes of export only. The recipient's ``Initial
Response Form'' would need to include an explanation and documentation
supporting its claim, which EPA could verify. If EPA verifies the
claim, the initial response is all that would be required to satisfy
the order. If EPA could not verify the claim, the recipient's
obligation to comply with the test order would remain.
    Unlike the existing policies and procedures, which enable a
manufacturer or importer of a pesticide chemical to comply with the
FIFRA/FFDCA test order by discontinuing the sale of the chemical into
the pesticide market, SDWA/FFDCA test orders cannot be satisfied in
this manner. A chemical manufacturer or importer that receives a SDWA/
FFDCA test order would need to cease all manufacture and import of that
chemical. Simply exiting the pesticide market would not necessarily
address the chemical's potential presence in ``sources of drinking
water to which a substantial population may be exposed'' and it would
therefore be inappropriate to allow companies to satisfy a test order
with such a response.
    Option 6: Recipient responds according to one of three other
response options. As part of the Initial Response, a recipient may also
ask EPA to reconsider some or all of the testing specified in the order
if:
    6a. The recipient can demonstrate (supported by appropriate data)
that the chemical is an endocrine disruptor and that additional EDSP
Tier 1 screening is unnecessary.
    6b. The recipient can demonstrate (supported by appropriate data)
that the chemical meets the standard for an exemption under FFDCA
section 408(p)(4) (i.e., ``that the substance is not anticipated to
produce any effect in humans similar to an effect produced by a
naturally occurring estrogen'').
    6c. The chemical was used by EPA as a ``positive control'' to
validate one or more of the screening assays. EPA generally expects
that if the chemical

was used by EPA as a ``positive control'' to validate one or more of
the screening assays, only the data submitted related to those assays
for which the chemical was used to complete the testing as part of the
validation effort would be sufficient to satisfy the Tier 1 Order.
    The Agency intends to make a determination on any claim and respond
to the recipient in writing within 90 days of receipt. If EPA cannot
verify the claim, the original requirements and deadlines in the order
would remain. If EPA could verify the claim, EPA would consider the
response to fully satisfy the order and no further response would be
required.

F. How can order responses and data be submitted electronically?

    EPA is developing a new electronic submission system for data
submitted in response to SDWA/FFDCA test orders following the general
process established for TSCA Section 5 Premanufacture Notices and under
development for other TSCA reporting, including TSCA Section 8 IUR. The
order electronic reporting system will take advantage of the Agency's
CDX to allow order recipients to respond to an order and to submit test
data via the Internet. See http://www.epa.gov/cdx for additional
information about CDX. (Ref. 7) Recipients, if not already registered
with CDX, will need to complete a simple registration process, thereby
establishing a secure log-on to CDX. Specific requirements associated
with these orders will be provided directly to the order recipients,
and are expected to include:
     Registration with CDX, resulting in the establishment of
an electronic signature usable for electronically submitting test order
responses;
     Access to a web-based response form, including the ability
to attach PDF files;
     Encrypted submission to EPA via CDX.
    Each test order would contain specific, updated information
regarding the most current process to use to respond to the order. If
the CDX registration process and/or web-based response form are not
fully established at the time of your response, EPA intends to provide
an alternate methodology in each order which may be one or more of the
following:
     Fillable-PDF response form available from the Agency's Web
site, which can be completed, printed, signed, and mailed or delivered
to EPA with attachments included as PDF files on a CD;
     Form provided along with the order which can be completed,
signed, and mailed or delivered to EPA with attachments included as PDF
files on a CD.
    Specific instructions for mailing or delivering the response
package to the Agency would be provided on the Order Response Form.

G. How will EPA facilitate joint data development and cost sharing for
SDWA chemicals?

    As described in the existing policies and procedures (74 FR 17560),
the Agency has concluded that FFDCA section 408(p)(5) does not provide
the authority to create requirements for joint data development,
including a requirement to use binding arbitration to resolve disputes,
as does FIFRA section 3. In EPA's view, FFDCA section 408(p)(5)(B)
merely establishes a qualified direction that the Agency ``[t]o the
extent practicable * * * minimize duplicative testing * * *.'' This,
standing alone, does not create new authority to compel companies to
use arbitration to resolve disputes arising from an effort to develop
data jointly, nor does it even authorize EPA to impose a requirement
for joint data development. Rather, EPA believes that this provision
directs the Agency to create procedures that operate within the
confines of existing statutory authorities. While FFDCA section 408(p)
does not allow EPA to impose requirements identical to those authorized
by FIFRA section 3, EPA has the authority under FFDCA section 408(p) to
develop Agency procedures that would facilitate joint data generation.
Specifically, the Agency has discretion to determine what actions
constitute compliance with a FFDCA section 408(p) test order, and EPA
intends to apply this discretion in a manner that creates strong
incentives for companies to voluntarily develop data jointly. Section
408(p) of FFDCA confers adequate discretion for EPA to consider whether
a recipient has fulfilled its obligation to provide data when the
recipient individually or jointly submits results from the required
studies, or when EPA judges that it would be equitable to allow the
recipient to rely on, or cite, results of studies submitted by another
person.
    At the same time, however, each recipient of an order under FFDCA
section 408(p) has a separate obligation to satisfy the Tier I order
that it received. EPA thinks that FFDCA section 408(p) confers adequate
discretion to consider that a recipient has fulfilled its obligation to
provide data when:
     The recipient individually or jointly submits results from
the required assays.
     EPA judges that it would be equitable to allow the
recipient to rely on, or cite, results of studies submitted by another
person.
    The determination of whether it would be equitable to allow
citation to another recipient's data will be necessarily based on a
case-by-case review of the specifics of the individual circumstances.
However, the Agency believes that it would generally be equitable to
allow a recipient of a FFDCA section 408(p) test order to rely on the
results of studies submitted by another person where:
     The data generator has given permission to the recipient
to cite the results, or
     Within a reasonable period after receiving the FFDCA
section 408(p) test order, the recipient has made an offer to commence
negotiations regarding the amount and terms of paying a reasonable
share of the cost of testing; has included an offer to resolve any
dispute over the recipients' shares of the test costs by submitting the
dispute to a neutral third party with authority to bind the parties
(e.g. through binding arbitration); and, if arbitration is requested,
participates in the arbitration proceeding and complies with the terms
of any arbitration award.
    The Agency believes this approach to minimizing duplicative
testing, which parallels that used under FIFRA section 3(c)(2)(B),
provides all recipients of FFDCA section 408(p) test orders adequate
incentives to develop data jointly. In the first instance, where the
data generator had granted permission for another party to cite its
data, the equities are clear, and EPA has no reason for refusing to
allow it. In the second instance, where the data generator received an
offer to commence negotiations regarding the amount and terms of
compensation and to go to a neutral decisionmaker with authority to
bind the parties failing successful negotiations, EPA believes that the
company has demonstrated a good faith effort to develop data jointly,
and consequently would typically consider that the order recipient had
complied with the order. Based on EPA's experience under FIFRA, there
would be little or no reason for a data generator to decline such an
offer. Moreover, if EPA did not adopt such an approach, the end result
would effectively confer the sort of ``exclusive use'' property rights
established under FIFRA section 3(c)(1)(F), on a broad category of
data, and EPA does not believe that FFDCA section 408(p)(5) creates
such rights, or

provides EPA with the authority to create such rights. These conditions
would also apply to recipients of any ``catch up'' FFDCA 408(p) orders,
who enter the market after the data have been submitted.

H. What procedures can EPA apply for handling CBI for SDWA chemicals?

    As stated in the April 15, 2009, document, FFDCA does not authorize
EPA to either create new rights or to modify existing rights to
confidentiality, but directs the Agency to create procedures that
operate within the existing confines of FIFRA, the Freedom of
Information Act (FOIA), and the Trade Secret Act (TSA). SDWA has no
provisions that authorize EPA to extend protections for handling CBI
beyond those established by TSA. Thus data submitted in response to
SDWA/FFDCA orders would only be subject to the protections under FOIA
and TSA, with the notable possible exception of data for pesticide
food-use inert chemicals. Registrants of a food-use inert ingredient
that is also identified as a SDWA chemical should expect to receive
SDWA/FFDCA test orders; however, all CBI and data compensation
provisions established in FIFRA would still apply. Test order
recipients with a current registration for the food-use inert, or a
pesticide with a food tolerance or exemption, should consult the April
15, 2009, document for a more detailed explanation of the FIFRA
provisions that apply.
    For chemicals on the non-confidential TSCA Inventory (i.e., the
chemical identity of the chemical substance is publicly known), health
and safety data may not be claimed as CBI when it is submitted to EPA.
Because the chemical identity is public for all SDWA chemicals on the
second EDSP chemical list, EPA expects that there would be no need to
claim submitted information as confidential. EPA also believes that it
would be particularly difficult to substantiate such a claim, given
that the information would already be publicly available.
    As described in Unit V.E. under Option 3, when the identity of a
company subject to the SDWA/FFDCA test order is claimed as CBI, EPA
intends to offer the company an opportunity to identify an agent who
would act on their behalf in all matters relating to the EDSP program.
For any company that chooses to designate an agent, the Agency intends
to make the name of the agent (instead of the company) public by
including it on the list of recipients of SDWA/FFDCA test orders.

I. What is the process for contesting a test order or consequences for
failure to respond or comply with a test order?

    Section 408(p) of FFDCA [21 U.S.C. 34a] does not explicitly address
the process for contesting a test order. EPA's interpretation is that a
test order is final agency action subject to review by all order
recipients, including non-registrants. (EPA believes this is an
appropriate conclusion because the provisions in FFDCA section
408(p)(5)(A) describing ``Collection of Information'' for a test order
does not distinguish between FIFRA registrants and other test order
recipients.)
    If anyone potentially subject to an order wishes to challenge the
validity of the factual predicate for issuance of the Order,
specifically the EPA determination that the chemical or substance for
which testing is required by the order is a ``substance that may occur
in sources of drinking water'' and/or that ``a substantial population
may be exposed to such substance,'' that person would only be able to
do so under SDWA section 1448 [42 U.S.C. 300j-7(a)] by filing a
petition for review in the United States Court of Appeals for the
circuit in which the recipient resides or transacts business within 45
days of the date of the SDWA determination, plus 14 days provided under
40 CFR 23.7. EPA interprets the date of the determination to be the
date that EPA publishes the finalized EDSP list along with the Schedule
for Issuance of Orders.
    If the order recipient wishes to challenge the validity of any
other the provisions of the order, including the requirement to conduct
any test or use the specific test protocols required by the order, it
must submit to the Agency a detailed explanation of the basis for its
challenge that provides sufficient information for the Agency to
evaluate the issue. While EPA is considering the submission, the
original deadline would remain. The Agency intends to respond to a
request in writing within 90 days of receipt. If EPA does not grant the
recipient's request, the original deadline remains.
    FFDCA does specify procedures available to non-registrants who fail
to comply with a test order (see FFDCA section 408(p)(5)(D)). Non-
registrants who fail to comply with a test order shall be liable for
the same penalties and sanctions as are provided for under TSCA section
16. [15 U.S.C. 2615(a) (1), (2)(A)]. Section 16 provides that after
notice and an administrative hearing held on the record in accordance
with APA section 554, civil penalties may be assessed. Additionally,
for EDSP test orders issued under the authorities of FIFRA/FFDCA or
SDWA/FFDCA, the enforcement response described in the FIFRA policies
and procedures apply (Ref. 1).

J. What is the informal administrative review procedure?

    As described in the April 15, 2009, document, EPA generally intends
to include a provision in test orders issued under FFDCA section 408(p)
by which recipients could raise any questions or challenges concerning
the issuance of the order. EPA expects order recipients who file a
challenge to present their objections with sufficient specificity and
detail to allow the Agency to effectively evaluate the issue(s)
presented. The filing of a challenge or objection does not extend the
test order timeline, and EPA recommends that order recipients who
respond with a challenge do so in a timely manner, and with adequate
detail. EPA would review the objections and respond in writing. The
Agency understands the appropriateness of responding to such objections
with sufficient time for an aggrieved order recipient to comply with
the orders, or to pursue judicial review.

K. What are the adverse effects reporting requirements?

    Adverse effects reporting requirements for pesticide chemicals in
registered products are established in FIFRA section 6(a)(2) and can be
found in the existing policies and procedures (74 FR 17560). In
addition to requirements under FIFRA, TSCA section 8(c) allows EPA to
request that companies record, retain and/or report ``allegation of
significant adverse reactions'' to a chemical substance or mixture that
the company produces, imports, processes or distributes (15 U.S.C.
2607(c)). Additional information can be found in 40 CFR part 717.
Chemical substance is defined in TSCA (15 U.S.C. 2602(2)).
    Under TSCA section 8(e), U.S. chemical manufacturers, importers,
processors, and distributors are required to notify EPA within 30 days
of new unpublished information regarding their chemical substance if
the information may lead to a conclusion that the chemical substance
poses substantial risk to human health or the environment (15 U.S.C.
2607(e)). ``Substantial risk'' information is information that offers
reasonable support for a conclusion that the subject chemical substance
or mixture poses a substantial risk of injury to health or the
environment. The information need not, and typically

does not, establish conclusively that a substantial risk exists.
    Any information that has been previously submitted under FIFRA
section 6(a)(2), TSCA section 8(c), or TSCA section 8(e), to the extent
the test order recipient believes that it is responsive to the test
order, need not be resubmitted to satisfy the FFDCA section 408(p) test
orders. The test order recipient need only cite the previously
submitted information in lieu of re-submission.

VI. Request for Comment

A. Response Option To Cease Manufacture

    EPA seeks comment on the option for test order recipients of a
SDWA/FFDCA order to comply with the order by ceasing to manufacture or
import the chemical. Under SDWA, EPA issues a test order based upon a
finding that a chemical ``may be found in sources of drinking water''
and ``that a substantial population may be exposed.'' The chemical's
current presence in sources of drinking water and the corresponding
potential for public exposure is not altered by the fact that a
particular company may subsequently choose to no longer manufacture or
import the chemical in response to the order. The potential for
continued exposure to the chemical exists despite any potential
decrease that might be caused by the exit of one or more test order
recipients. Moreover, given that past actions contributed to the source
of the current exposure, the company should remain responsible for
generating the data to allow the Agency to characterize the
significance of that exposure. On the other hand, if test order
recipient stops manufacturing and importing a chemical, it will lead to
less exposure to the chemical in sources of drinking water. (The
decline will happen at different rates, depending on the chemical and
whether the chemical is found in surface water or ground water.)
Moreover, an order recipient who ceases to manufacture or import a
chemical that is subject to EDSP screening will no longer receive any
economic benefit from the sale of the chemical with which to defray the
cost of testing. Finally, requiring a company to provide EDSP data on a
chemical, even if it ceases manufacture and import of the chemical,
removes a major incentive for companies to stop producing chemicals for
which test orders are issued. Consequently, EPA seeks comment on
whether it is generally inappropriate to allow companies to comply with
an order by agreeing to cease manufacture or import of a SDWA chemical.

B. Persistence

    EPA seeks comment on whether and how to factor a chemical's
persistence in the environment into EDSP policies and procedures. As
discussed previously, the Agency generally intends FFDCA section 408(p)
as giving the Agency authority to issue orders to current registrants,
manufacturers, and importers of a chemical. For persistent chemicals,
past registrants, manufacturers, and importers (as well as processors
and users) are likely to have contributed to current and ongoing
contamination. EPA requests comment on the ways in which this could be
taken into account. For example, one option would be for EPA to issue
orders to such manufacturers, to ensure that they share in the costs of
generating the data. Another option would be for EPA to issue orders to
such parties only where the chemical is no longer manufactured or
imported in the United States.

C. Catch-Up Orders and Data Compensation

    EPA seeks comment on whether 5 years is the appropriate length of
time that the Agency should continue to issue SDWA/FFDCA catch-up
orders as a means to ensure equitable sharing of test costs. Under
FIFRA, new pesticide registrants who did not generate data on an EDSP
pesticide chemical are required to pay data compensation to the
registrant who sponsored the testing. Test data are compensable for a
15 year period (7 U.S.C. 136a(c)(1)(F)(ii)-(iii)). For this reason, EPA
stated in the existing policies and procedures that it intends to issue
catch-up orders for 15 years after the initial data were submitted.
Requirements in FIFRA ensure that any new manufacturer of a pesticide
chemical registers with the EPA, thus enabling EPA to identify test
order recipients and issue orders accordingly. Neither SDWA nor FFDCA
enable EPA to identify manufacturers or importers of SDWA chemicals so
readily, and EPA would bear a substantial burden if it were to issue
SDWA catch-up orders on every chemical for 15 years following issuance
of the first order(s) (or receipt of the data), simply based on the
effort required to identify new manufacturers and importers. Data
compensation requirements are also established in TSCA for data
generated in response to section 4 test rules. The reimbursement period
for TSCA test data ends ``after an amount of time equal to that which
had been required to develop data or after five years, whichever is
later.'' (40 CFR part 790). The Agency seeks comment in regards to the
appropriate amount of time to require data compensation for EDSP data
generated in response to SDWA/FFDCA orders. This data will be made
public after the EPA has received it, and data compensation measures
exist solely to maintain fair and equitable sharing of test costs. EPA
also notes that a five-year window for issuing catch-up orders would
include the next IUR collection.

D. Orphan Chemicals

    As stated in Unit V.A. the Agency seeks comment on the value of
testing orphan chemicals (those for which test orders do not generate
the necessary data). EPA is interested in strategies for obtaining the
data or sources of funding to conduct EDSP screening.

E. Electronic Notification

    As stated in Unit V.B. The Agency seeks comment as to whether
companies who already have a Central Data Exchange (CDX) account would
prefer to receive the notification electronically, either as a standard
procedure or upon request. EPA requests that commenters include some
discussion of the mechanisms by which EPA can ensure that accurate
records documenting that the individual has received the order, as well
as the date of receipt of the test order, can be obtained through the
use of electronic reporting mechanisms.

VII. References

    1. EPA. Endocrine Disruptor Screening Program; Polices and
Procedures for Initial Screening: Notice. Federal Register (74 FR
17560, April 15, 2009) (FRL-8399-9).
    2. EPA. FFDCA section 408(p) Order Template for Manufacturers/
Importers of SDWA Chemicals. Draft. September 22, 2010.
    3. EPA. OCSPP. Endocrine Disruptor Screening Program. Available
online at http://www.epa.gov/endo/.
    4. EPA. OCSPP. Process for Issuing EDSP Second List Test Orders.
September 20, 2010.
    5. EPA. OCSPP. Inventory Update Reporting (IUR). Available online
at http://www.epa.gov/iur.
    6. EPA. Status of EDSP Orders/DCIs as of Thursday, September 16,
2010 (Next update September 23, 2010). Updated tables available online
at http://www.epa.gov/endo/.
    7. EPA. Central Data Exchange. Available online at http://www.epa.gov/cdx.
    8. EPA. [DRAFT] FFDCA section 408(p) Order for SDWA Chemicals--
Initial Response Form for Individual Order Recipients (EPA Form No.
tba). September 20, 2010.

    9. EPA. Harmonized Test Guidelines. Available online at http://www.epa.gov/ocspp/pubs/frs/home/guidelin.htm.

List of Subjects

    Environmental protection, Chemicals, Endocrine disruptors,
Pesticides and pests, Safe drinking water, Reporting and recordkeeping.

    Dated: September 28, 2010.
Stephen A. Owens,
Assistant Administrator, Office of Chemical Safety and Pollution
Prevention.
[FR Doc. 2010-28812 Filed 11-16-10; 8:45 am]
BILLING CODE 6560-50-P


Technical Appendices

For

Redesignation Request,

Maintenance Plan

and 2002 Base Year Inventory

Harrisburg-Lebanon-Carlisle

 Ozone Nonattainment Area

March  2007

Commonwealth of Pennsylvania

Department of Environmental Protection

Bureau of Air Quality

TABLE OF CONTENTS

Appendix A:  	Stationary Point Sources

A-1  	Methodology – Preparation of Pennsylvania Point Source Inventories and Instructions for Completing the Annual Emissions Reporting Forms

A-2  	Facility Annual Emissions by SCC

A-3	Facility Daily Emissions by SCC

A-4	Banked Emissions Reduction Credits

	Appendix B:  	Stationary Area Sources

B-1    	Pennsylvania 2002 Area Source Criteria Air Pollutant Emission Estimation Methods (EH Pechan, Feb. 2004)

B-2	Area Source Annual Emissions by SCC

B-3	Area Source Daily Emissions by SCC

	Appendix C:  	Highway Vehicles  (includes Executive Summary)

C-1   	Mobile Source Highway Emissions Inventory – An Explanation of Methodology

C-2	Highway Emissions Estimates

2002 Annual and Daily CO, NOx, VOC & VMT by SCC; Daily NOx, VOC and VMT by Facility and Vehicle Type.

2004, 2009, 2018 Daily VOC, NOx and VMT by Facility Type, Vehicle Type and SCC; Daily CO by SCC

C-3   	MOBILE6.2 Input Parameter Summary

C-4	MOBILE6.2 Sample Input File

C-5	Traffic Growth Forecasting System Report

	Appendix D:  	Nonroad Sources

D-1	Emissions Estimation Methodology

D-2	Nonroad Source Emissions by Category and SCC

	Appendix E:	Source Emissions Projection Methodology

	Appendix F:	Pennsylvania Projected EGU Emissions

	Appendix G:	Supplemental Air Quality Information


[Federal Register Volume 78, Number 240 (Friday, December 13, 2013)]
[Notices]
[Pages 75952-75954]
[FR Doc No: 2013-29741]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71029; File No. SR-NYSE-2013-67]

Self-Regulatory Organizations; New York Stock Exchange LLC; Order
Granting Approval to Proposed Rule Change to Amend the Quantitative
Continued Listing Standards Applicable to Companies Listed Under
Sections 102.01C and 103.01B of the Listed Company Manual

December 9, 2013.

I. Introduction

    On October 8, 2013, the New York Stock Exchange, LLC (``NYSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to amend the quantitative continued listing
standards applicable to companies listed under one of the financial
standards of Sections 102.01C and 103.01B of the Exchange's Listed
Company Manual (``Manual''). The proposed rule change was published for
comment in the Federal Register on October 25, 2013.\3\ The Commission
received no comments on the proposal. This order approves the proposed
rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 70728 (October 25,
2013), 78 FR 64043.
---------------------------------------------------------------------------

II. Description of the Proposal

    The Exchange proposes to amend the continued listing standards in
Section 802.01B of the Manual. Under current Exchange initial listing
rules, companies applying to list equity securities on the NYSE must
meet one of the specific financial standards,\4\ in addition to the
other listing requirements set out in Section 102.00 for domestic
companies and Section 103.00 for non-U.S. companies. Once listed,
companies have to meet the Exchanges continued listing criteria set out
in Section 802.01 of the Manual. In addition to the other minimum
continued listing requirements that apply to capital or common
stock,\5\ companies with such securities listed on the Exchange must
also meet certain quantitative financial continued listing standards
which correspond to the standard under which the securities were
initially listed.\6\ There are currently four different financial
continued listing standards which apply to the capital or common stock
of a listed company, depending under which standard it was originally
listed under.\7\
---------------------------------------------------------------------------

    \4\ See Section 102.01C of the Manual (for domestic issuers) and
Section 103.01B (for non-U.S. issuers). See also note 7, infra.
    \5\ See Section 802.01A of the Manual (distribution criteria for
capital or common stock); Section 802.01C of the Manual (maintaining
a stock price on a 30-day average basis of $1.00 per share); and
Section 802.01B (stating that ``the Exchange will promptly initiate
suspension and delisting procedures with respect to a company that
is listed under any financial standard set out in Sections 102.01C
or 103.01B if a company is determined to have average global market
capitalization over a consecutive 30 trading-day period of less than
$15,000,000, regardless of the original standard under which it
listed''). See also Section 802.01D of the Manual (listing other
additional criteria for continued listing). The Commission notes
that the Exchange has represented that the continued listing
standards would apply to American Depositary Receipts.
    \6\ See Section 802.01B of the Manual.
    \7\ See Sections 802.01B(I), (II), (III) and (IV) of the Manual.
The filing states that these continued listing standards apply to
operating companies, however, the Commission notes that the Manual
does not specifically refer to the term operating companies.
---------------------------------------------------------------------------

    A company that qualified to list under the Earnings Test or Assets
and Equity Test, would be considered to be below compliance if over a
consecutive 30 trading-day period, the average global market
capitalization of its securities is less than $50,000,000 and the total
stockholders' equity is less than $50,000,000.\8\
---------------------------------------------------------------------------

    \8\ See Section 802.01B(I) of the Manual.
---------------------------------------------------------------------------

    A company qualifying to list under the Valuation/Revenue with Cash
Flow Test, would be considered to be below compliance if (A) over a
consecutive 30 trading-day period, the average global market
capitalization of its securities is less than $250,000,000 and the
total revenues are less than $20,000,000 over the last 12 months
(unless the listed company qualifies as an original listing under one
of the other original listing standards) or (B) the average global
market capitalization over a consecutive 30 trading-day period is less
than $75,000,000.
    A company that qualified to list under the Pure Valuation/Revenue
Test would be considered to be below compliance if (A) over a
consecutive 30 trading-day period, the average global market
capitalization of the company's securities is less than $375,000,000
and

the total revenues are less than $15,000,000 over the last 12 months
(unless the listed company qualifies as an original listing under one
of the other original listing standards \9\ or (B) the average global
market capitalization over a consecutive 30 trading-day period is less
than $100,000,000.\10\
---------------------------------------------------------------------------

    \9\ See Section 802.01B(II) of the Manual.
    \10\ See Section 802.01B(III) of the Manual.
---------------------------------------------------------------------------

    Finally, listed companies that originally listed under the
Affiliated Company Test would be considered to be below compliance if
(A) the parent or affiliated company ceases to control the listed
company, or the listed company's parent or affiliated company falls
below the applicable continued listing standards and (B) over a
consecutive 30 trading-day period, the average global market
capitalization of the company's securities is less than $75,000,000 and
the total stockholders' equity is less than $75,000,000.\11\
---------------------------------------------------------------------------

    \11\ See Section 802.01B(IV) of the Manual.
---------------------------------------------------------------------------

    The Exchange proposes to delete these four current continued
listing standards, and to use one continued listing standard, which is
identical to the one currently applicable to companies listing under
the Earnings Test and Assets and Equity Test. Under the proposal, a
listed company will be considered to be below compliance if its average
global market capitalization over a consecutive 30 trading-day period
is less than $50,000,000 and, at the same time, the stockholders'
equity is less than $50,000,000.

III. Discussion and Commission Findings

    The Commission has carefully reviewed the proposed rule change and
finds that it is consistent with the requirements of the Act and the
rules and regulations thereunder applicable to a national securities
exchange, and in particular, Section 6(b)(5) of the Act,\12\ which
among other things, requires that the rules of a national securities
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;
and are not designed to permit unfair discrimination between customers,
issuers, brokers or dealers.\13\
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78f(b)(5).
    \13\ In approving the proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. 15 U.S.C. 78c(f).
---------------------------------------------------------------------------

    The development and enforcement of adequate standards governing the
initial and continued listing of securities on an exchange is an
activity of critical importance to financial markets and the investing
public. Adequate standards are especially important given the
expectations of investors regarding exchange trading and the imprimatur
of listing on a particular market. Listing standards, among other
things, serve as a means for an exchange to screen issuers and to
provide listed status only to bona fide companies that have or, in the
case of an IPO, will have sufficient public float, investor base, and
trading interest to provide the depth and liquidity necessary to
promote fair and orderly markets. Once a security has been approved for
initial listing, maintenance criteria allow an exchange to monitor the
status and trading characteristics of that issue to ensure that it
continues to meet the exchange's standards for market depth and
liquidity so that fair and orderly markets can be maintained.
    The Exchange proposes to delete the current four separate tracks of
continued listing standards and replace them with one continued listing
standard applicable to all operating companies listing their capital or
common stock, regardless of the initial listing standard that the
company originally qualified for listing under. Listed companies would
still be required to meet, and comply with, other standards, such as
the distribution criteria,\14\ price criteria,\15\ and the minimum
market capitalization requirement.\16\ The Exchange stated its belief
that it would be fairer to use a single continued listing standard that
would apply to all operating companies (for the listing of their
capital or common stock), since under the current rules a listed
security may be below its applicable continued listing standards and
deemed non-compliant or delisted notwithstanding that it would have
remained compliant if another continued listing standard applied. The
Exchange noted that this creates the anomalous result that two
companies that have identical quantitative characteristics would be
treated differently based on how it originally qualified to list, which
could have been many years ago. According to the Exchange, the approach
of assigning different quantitative continued listing requirements to
companies that originally listed under different listing standards was
adopted in 2004 \17\ and the quality of listed companies has not been
enhanced by this approach. The Exchange represented that a review of
data over a period of five years indicates that all of the securities
that were delisted under the current applicable standard would have
been delisted under the proposed standard, or the other applicable
minimum listing criteria.\18\ We note that under the Exchange's
proposal, the additional minimum listing criteria is remaining
unchanged and will continue to apply.\19\
---------------------------------------------------------------------------

    \14\ See Section 802.01A of the Manual.
    \15\ See Section 802.01C of the Manual.
    \16\ See Section 802.01B of the Manual (requiring average global
market capitalization over a consecutive 30 trading-day period of
$15,000,000).
    \17\ The Commission notes that prior to the 2004 change in
continued listing standards, the Exchange's continued listing
requirements generally applied to all companies, except for a
separate standard for companies qualifying for the global market
capitalization standard.
    \18\ See note 5, supra. In particular, the Exchange was
referring to the $1 per share price requirement and the $15 million
minimum global market capitalization requirement.
    \19\ See note 5, supra.
---------------------------------------------------------------------------

    After careful consideration, the Commission finds that the proposal
is consistent with the requirements of the Act. The Commission believes
that the proposal is not designed to permit unfair discrimination
between issuers since under the proposal, all operating companies
listing common or capital stock on the Exchange will be subject to the
same financial continued listing standards. To the extent other types
of listed securities, such as debt, and other types of issuers, such as
trusts and partnerships, have different continued listing standards,
these differences are based on the different type, and characteristics
of those securities and issuers, and those differences currently exist
and have been previous approved by the Commission consistent with the
requirements of the Act.
    The Commission has also considered whether the proposed changes
will continue to ensure that only those companies with adequate market
depth and liquidity can continue to trade on the Exchange so that fair
and orderly markets can be maintained, consistent with investor
protection and the public interest under Section 6(b)(5) of the Act. In
this regard, we note that the Exchange represented that 87% of the
operating companies currently listed on the Exchange are already
subject to a continued listing standard which is identical to the
proposed continued listing standard. As a result, for these listed
companies the proposed continued listing standard will have no change
as to their continued listing

requirements. In addition, because the vast majority of listed
companies have to comply with the proposed continued listing standard,
the Exchange should have sufficient experience monitoring for
compliance with the proposed standard. As noted above, the Exchange
also found, based on a review of data of companies below compliance
under the NYSE's financial standards from 2006 to 2012, that all of the
securities that were delisted under the current applicable standard
would have been delisted under the proposed standard, or the other
applicable minimum listing criteria.\20\ Based on the Exchange's review
and experience in administering the proposed standard, the Exchange
concluded that the proposed continued listing standard, in combination
with the other minimum continued listing criteria, is a rigorous
measure to ensure companies and their securities remain suitable for
listing.\21\ Based on the above, the Commission believes that that
proposal is consistent with the requirements of the Act. We, however,
would expect the Exchange to monitor its continued listing standards to
ensure that they remain adequate and make adjustments to its rules
where necessary.
---------------------------------------------------------------------------

    \20\ See Notice at supra note 3 and note 18, supra. The Exchange
further noted that the minority of companies that would not have
fallen below the proposed standard or other minimum continued
listing standards, have all regained compliance with the
quantitative continued listing standards.
    \21\ As to companies listed under the Affiliated Company Test,
the Commission notes that although the current quantitative market
capitalization and stockholder equity continued listing standards
applicable to such listings are higher than the proposed standards,
these standards only applied if the parent or affiliated company
ceased control of the listed company or the parent or affiliate also
fell below continued listing standards. Under the new standards,
however, companies listed under the Affiliated Company Test will be
subject to the new continued listing requirement irrespective of
whether the parent or affiliated company ceases to control the
listed company or the parent or affiliate falls below continued
listing standards, which arguably may be a stronger standard despite
the lower numerical criteria.
---------------------------------------------------------------------------

    Finally, in approving the proposal, we recognize that some of the
current continued listing standards have substantially higher market
capitalization requirements than under the new standard.\22\ We
understand some of the rationale for the higher standards was related
to the higher market capitalization requirements in the initial listing
standards. For the reasons, however, noted above, including the
Exchange's representation that the proposed standard, along with the
additional minimum standards, should adequately ensure the quality of
companies that continue to list on the exchange based on its experience
with monitoring companies for compliance, and the fact that the
proposed standard had previously been approved as one of several
continued financial listing standards, and thus already applies to a
large majority of currently listed companies, we are approving the
proposal.\23\ We also note that the adoption of the proposed continued
listing standard does not appear to set a new low when comparing the
continued listing standards of other named markets under Section 18 of
the Securities Act of 1933, both currently and at the time Section 18
was adopted in 1996.\24\ Taken as a whole, the Exchange's continued
listing standards appear to be as high as NYSE MKT's continued listing
standards for common stock of operating companies.\25\
---------------------------------------------------------------------------

    \22\ For example, under the current Pure Valuation/Revenue Test,
companies would need to meet average global market capitalization
over a consecutive 30 trading-day period of $100,000,000. The
Commission notes, however, that the proposed standard includes an
additional requirement on stockholders equity.
    \23\ The Commission notes that the Exchange rules give it the
flexibility to commence delisting proceedings should any event or
condition makes further dealings or listing of the securities on the
Exchange inadvisable or unwarranted. Accordingly, we would expect
the Exchange to continue to monitor a listed company that has lost a
significant percentage of its market capitalization when compared to
the original standard it was listed under, especially if the
substantial loss in value indicates issues with the company that
would raise whether further dealings on the Exchange are warranted.
See Section 802.01D of the Manual.
    \24\ 15 U.S.C. 77r (Section 102 of the National Securities
Markets Improvement Act (``NSMIA'') of 1996 amended Section 18 of
the Securities Act of 1933).
    \25\ See email from Patrick Troy, Chief Counsel, NYSE, to Steve
L. Kuan, Special Counsel, Division of Trading and Markets,
Commission, on November 25, 2013. The Commission notes that the a
direct comparison of NYSE MKT's continued listing standards with the
proposed NYSE continued listing standards is not possible, since
some of the standards use different criteria. For example, NYSE MKT
uses a public stockholder requirement, while NYSE uses a total
stockholders requirement. Taken as a whole, however, the Commission
believes that the proposed NYSE standards appear to be as high as
NYSE MKT's standards.
---------------------------------------------------------------------------

IV. Conclusion

    For the foregoing reasons, the Commission finds that the proposed
rule change is consistent with the requirements of the Act and the
rules and regulations thereunder applicable to a national securities
exchange, and, in particular, with Section 6(b)(5) of the Act.\26\
---------------------------------------------------------------------------

    \26\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    It is therefore ordered, pursuant the Section 19(b)(2) of the Act,
that the proposed rule change (SR-NYSE-2013-67), is hereby approved.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\27\
---------------------------------------------------------------------------

    \27\ See 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-29741 Filed 12-12-13; 8:45 am]
BILLING CODE 8011-01-P