[Federal Register Volume 77, Number 71 (Thursday, April 12, 2012)]
[Notices]
[Pages 22015-22019]
[FR Doc No: 2012-8838]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66768; File No. SR-NASDAQ-2012-048]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to Customer Fees and Rebates in Penny Pilot Options

April 6, 2012.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on April 2, 2012, The NASDAQ Stock Market LLC (``NASDAQ'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by NASDAQ. The Commission
is publishing this notice to solicit comments on the proposed rule
change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.

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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    NASDAQ proposes to modify Chapter XV, entitled ``Option Pricing,''
at Section 2 governing pricing for NASDAQ members using the NASDAQ
Options Market (``NOM''), NASDAQ's facility for executing and routing
standardized equity and index options. Specifically, NOM proposes to
amend the Penny Pilot \3\ Options (``Penny Options'') Customer Rebates
to Add Liquidity and Penny Options Customer Fee for Removing Liquidity.
The Exchange also proposes to make other minor amendments to the
Section 2.
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    \3\ The Penny Pilot was established in March 2008 and in October
2009 was expanded and extended through June 30, 2012. See Securities
Exchange Act Release Nos. 57579 (March 28, 2008), 73 FR 18587 (April
4, 2008) (SR-NASDAQ-2008-026) (notice of filing and immediate
effectiveness establishing Penny Pilot); 60874 (October 23, 2009),
74 FR 56682 (November 2, 2009) (SR-NASDAQ-2009-091) (notice of
filing and immediate effectiveness expanding and extending Penny
Pilot); 60965 (November 9, 2009), 74 FR 59292 (November 17, 2009)
(SR-NASDAQ-2009-097) (notice of filing and immediate effectiveness
adding seventy-five classes to Penny Pilot); 61455 (February 1,
2010), 75 FR 6239 (February 8, 2010) (SR-NASDAQ-2010-013) (notice of
filing and immediate effectiveness adding seventy-five classes to
Penny Pilot); 62029 (May 4, 2010), 75 FR 25895 (May 10, 2010) (SR-
NASDAQ-2010-053) (notice of filing and immediate effectiveness
adding seventy-five classes to Penny Pilot); 65969 (December 15,
2011, 76 FR 79268 (December 21, 2011) (SR-NASDAQ-2011-169) (notice
of filing and immediate effectiveness extension and replacement of
Penny Pilot). See also Exchange Rule Chapter VI, Section 5.
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    The text of the proposed rule change is available on the Exchange's
Web site at http://www.nasdaq.cchwallstreet.com, at the principal
office of the Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    NASDAQ proposes to modify Chapter XV, entitled ``Option Pricing,''
at Section 2 governing the rebates and fees assessed for option orders
entered into NOM. Specifically, the Exchange is proposing to modify the
five tier structure for paying Customer Rebates to Add Liquidity in
Penny Options. The Exchange proposes to amend various rebate tiers to
further incentivize NOM Participants to route Customer orders in Penny
Options to the Exchange by paying additional rebates for certain orders
after the NOM Participant has met a volume criteria and also removing
certain criteria to qualify for a rebate. The Exchange believes that
incentivizing NOM Participants to send additional Customer orders in
Penny Options to the Exchange will benefit all market participants by
adding liquidity to the market.
    Specifically, the Exchange currently pays a Customer Rebate to Add
Liquidity in Penny Options based on the following tier structure:
    * * * The Customer Rebate to Add Liquidity in Penny Pilot Options
will be paid as noted below. Each Customer order of 5,000 or more,
displayed or non-displayed contracts, which adds liquidity in Penny
Pilot Options, will qualify for an additional rebate of $0.01 per
contract provided the NOM Participant has qualified for a rebate in
Tier 2, 3, 4 or 5 for that month.

------------------------------------------------------------------------
                                                           Rebate to add
                     Monthly volume                          liquidity
------------------------------------------------------------------------
Tier 1 Participant adds Customer liquidity of up to                $0.26
 14,999 contracts per day in a month....................
Tier 2 Participant adds Customer liquidity of 15,000 to             0.38
 49,999 contracts per day in a month....................
Tier 3 Participant adds Customer liquidity of 50,000 or             0.42
 more contracts per day in a month......................
Tier 4 \a\ Participant adds (1) Customer liquidity of               0.43
 100,000 or more contracts per day in a month, and (2)
 NOM Market Maker liquidity of 40,000 or more contracts
 per day in a month.....................................
Tier 5 \b\ Participant adds (1) Customer liquidity of               0.41
 25,000 or more contracts per day in a month, (2) the
 Participant has certified for the Investor Support
 Program set forth in Rule 7014; and (3) the Participant
 executed at least one order on NASDAQ's equity market..
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\a\ For purposes of Tier 4, the Exchange will aggregate the trading
  activity of separate NOM Participants when computing average daily
  volumes where 75 percent common ownership or control exists between
  NOM Participants.
\b\ For purposes of Tier 5, the Exchange will allow a NOM Participant to
  qualify for the rebate if a NASDAQ member under common ownership with
  the NOM Participant has certified for the Investor Support Program and
  executed at least one order on NASDAQ's equity market. Common
  ownership is defined as 75 percent common ownership or control.

    The Exchange proposes to amend the tier structure for Customer
Rebates to Add Liquidity in Penny Options as follows:
    * * * The Customer Rebate to Add Liquidity in Penny Pilot Options
will be paid as noted below. Each Customer order of 5,000 or more,
displayed or non-displayed contracts, which adds liquidity in Penny
Pilot Options, will qualify for an additional rebate of $0.01 per
contract provided the NOM Participant has qualified for a rebate in
Tier 2, 3, 4 or 5 for that month.

------------------------------------------------------------------------
                                                           Rebate to add
                     Monthly volume                          liquidity
------------------------------------------------------------------------
Tier 1 Participant adds Customer liquidity of up to                $0.26
 14,999 contracts per day in a month....................
Tier 2 Participant adds Customer liquidity of 15,000 to             0.38
 49,999 contracts per day in a month....................
Tier 3 Participant adds Customer liquidity of 50,000 to             0.43
 74,999 contracts per day in a month....................
Tier 4 Participant adds Customer liquidity of 75,000 or             0.44
 more contracts per day in a month......................

Tier 5 \a\ Participant adds (1) Customer liquidity of               0.42
 25,000 or more contracts per day in a month, (2) the
 Participant has certified for the Investor Support
 Program set forth in Rule 7014; and (3) the Participant
 executed at least one order on NASDAQ's equity market..
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\a\ For purposes of Tier 5, the Exchange will allow a NOM Participant to
  qualify for the rebate if a NASDAQ member under common ownership with
  the NOM Participant has certified for the Investor Support Program and
  executed at least one order on NASDAQ's equity market. Common
  ownership is defined as 75 percent common ownership or control.

    Currently, Tier 3 firms that add 50,000 or more contracts per day
in a month of Customer liquidity, in Penny Options, receive a rebate of
$0.42 per contract. The Exchange is proposing to increase the Tier 3
Customer rebate from $0.42 per contract to $0.43 per contract. The
Exchange also proposes to amend the number of contracts required to
qualify for Tier 3 from 50,000 or more contracts per day in a month to
require NOM Participants to add between 50,000 to 74,999 contracts per
day in a month of Customer liquidity in Penny Options to qualify for
the increased $0.43 Customer rebate.
    Currently, Tier 4 firms that (1) add Customer liquidity of 100,000
or more contracts per day in a month of Customer order liquidity in
Penny Options, and (2) provide 40,000 or more contracts per day of NOM
Market Maker liquidity per day in a month receive a rebate of $0.43 per
contract if both criteria are met. For purposes of determining
qualification for this tier, the Exchange currently aggregates \4\ the
trading activity of separate NOM Participants in calculating the
average daily volume if there is at least 75% common ownership or
control between the NOM Participants. The Exchange proposes to amend
the criteria to qualify for Tier 4 from 100,000 or more contracts per
day in a month to 75,000 or more contracts per day in a month of
Customer liquidity in Penny Options and also remove the second criteria
to qualify for Tier 4. The Exchange would therefore remove the
requirement that a NOM Market Maker add liquidity of 40,000 or more
contracts per day in a month. In addition the Exchange proposes to
increase the current Tier 4 Customer rebate of $0.43 per contract to
$0.44 per contract. The Exchange would also remove note ``(a)'', which
was associated with the second criteria of Tier 4, which is no longer
necessary as the NOM Marker Maker requirement would no longer be a
condition to receive the Tier 4 Customer rebate.
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    \4\ Aggregation is necessary and appropriate because certain NOM
participants conduct Customer and NOM Market Maker trading activity
through separate but related broker-dealers.
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    Currently, Tier 5 firms that (1) provide 25,000 or more contracts
per day in a month of Customer order liquidity in Penny Options, (2)
where the Participant has certified for the Investor Support Program
(``ISP'') as set forth in Rule 7014 \5\; and (3) where the Participant
executed at least one order on NASDAQ's equity market receive a $0.41
per contract Customer rebate. The Exchange proposes to amend Tier 5 to
increase the Customer rebate in Penny Options from $0.41 per contract
to $0.42 per contract. The Exchange would also renumber the current
note ``(b)'' as note ``(a).'' The Exchange is not proposing any changes
to current Tiers 1 and 2.\6\
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    \5\ For a detailed description of the ISP, see Securities
Exchange Act Release No. 63270 (November 8, 2010), 75 FR 69489
(November 12, 2010) (NASDAQ-2010-141) (notice of filing and
immediate effectiveness) (the ``ISP Filing''). See also Securities
Exchange Act Release Nos. 63414 (December 2, 2010), 75 FR 76505
(December 8, 2010) (NASDAQ-2010-153) (notice of filing and immediate
effectiveness); and 63628 (January 3, 2011), 76 FR 1201 (January 7,
2011) (NASDAQ-2010-154) (notice of filing and immediate
effectiveness).
    \6\ The Exchange currently pays an additional rebate of $0.01
per contract for each Customer order of 5,000 or more, displayed or
non-displayed contracts, which adds liquidity in Penny Options as
long as the NOM Participant qualified for a rebate in Tier 2, 3, 4
or 5 for that month. This is not being amended in this proposal.
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    The Exchange also proposes to subsidize the proposed increased
Customer Rebates to Add Liquidity in Penny Options by increasing the
Customer Fee for Removing Liquidity in Penny Options from $0.44 per
contract to $0.45 per contract. The Exchange believes that this
increase will allow the Exchange to compete more effectively by
subsidizing rebates offered on Customer orders.
    The Exchange also proposes to make minor amendments to Section 2
including amending the title of Section 2 from ``NASDAQ Options Market
-Fees'' to ``NASDAQ Options Market -Fees and Rebates.'' to more
specifically describe the Rule. The Exchange also proposes to correct a
cross-reference to the NASDAQ OMX PHLX LLC (``Phlx'') ``Fee Schedule.''
The Exchange proposes to update the title of the ``Fee Schedule'' to
the ``Pricing Schedule'' in accordance with a recent amendment filed by
Phlx.\7\
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    \7\ See SR-Phlx-2012-35.
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2. Statutory Basis
    NASDAQ believes that the proposed rule changes are consistent with
the provisions of Section 6 of the Act,\8\ in general, and with Section
6(b)(4) of the Act,\9\ in particular, in that it provides for the
equitable allocation of reasonable dues, fees and other charges among
members and issuers and other persons using any facility or system
which NASDAQ operates or controls.
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    \8\ 15 U.S.C. 78f.
    \9\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that the proposed new pricing tiers are
reasonable, equitable and not unfairly discriminatory because they
continue an existing program \10\ to encourage broker-dealers acting as
agent for Customer orders to select the Exchange as a venue to post
Customer orders. The Exchange believes that its success at attracting
Customer order flow benefits all market participants by improving the
quality of order interaction and executions at the Exchange. The
Exchange believes the existing monthly volume thresholds have
incentivized firms that route Customer orders to the Exchange to
increase Customer order flow to the Exchange. The Exchange desires to
continue to encourage firms that route Customer orders to increase
Customer order flow to the Exchange by offering greater Customer
rebates for greater liquidity added to the Exchange.
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    \10\ The Exchange adopted these monthly volume achievement tiers
in September 2011. See Securities Exchange Act Release Nos. 65317
(September 12, 2011), 76 FR 57778 (September 16, 2011) (SR-NASDAQ-
2011-124), 65317 (September 12, 2011), 76 FR 61129 (October 3, 2011)
(SR-NASDAQ-2011-127), 66126 (January 10, 2012), 77 FR 2335 (January
17, 2012) (SR-NASDAQ-2012-003) and 66360 (February 8, 2012), 77 FR
8312 (February 14, 2012) (SR-NASDAQ-2012-022).
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    Specifically, the Exchange believes that the increased Customer
rebates in Penny Options would further incentivize firms to continue to
send more Customer volume to the Exchange. By increasing the Customer
rebates in Tiers 3, 4 and 5 by $0.01 per contract each, the Exchange
would further encourage NOM Participants to transact a greater number
of Customer rebates in Penny Options. With respect to Tier 3, NOM
Participants that qualify for these Customer rebates today should
qualify

for the increased rebate which continues to require at least 50,000
contracts per day in a month of Customer liquidity, but also amends the
criteria to between 50,000 and 74,999 contracts of Customer liquidity
in Penny Options to qualify for the increased rebate of $0.43 per
contract. NOM Participants who currently transact greater than 74,999
contracts per day in a month today would be entitled to an even greater
rebate because they would qualify for the increased Tier 4 rebate of
$0.44 per contract. The Exchange is amending Tier 4 to lower the first
criteria from 100,000 or more contracts of Customer liquidity to 75,000
or more contracts of Customer liquidity in Penny Options and remove the
second criteria to qualify for the Customer rebate.\11\ Therefore NOM
Participants would only be required to add 75,000 or more contracts per
day in a month of Customer liquidity in Penny Options to receive the
increased Customer rebate of $0.44 per contract. The lower criteria in
Tier 4 would allow NOM Participants that currently qualify for Tier 3,
because they add greater than 75,000 contracts per day in a month of
Customer liquidity in Penny Options, to qualify for the $0.44 per
contract rebate and also encourage other NOM Participants to add more
Customer liquidity to qualify for an even greater rebate than that
offered for Tier 3.
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    \11\ As previously mentioned, the Exchange would no longer
require 40,000 or more contracts per day in a month of NOM Market
Maker liquidity.
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    The Exchange's proposal to increase the rebates in Tiers 3, 4 and 5
and amend the Tier 3 and 4 criteria as described herein is reasonable
because it should further encourage NOM Participants to qualify for
Customer rebates in Penny Options by transacting a greater number of
Customer contracts in Penny Options and increase liquidity on NOM.
Increased liquidity benefits all market participants on the Exchange.
In addition, the increased Tier 5 Customer rebate should further
encourage increased activity in both the NASDAQ Options Market and in
the ISP of the NASDAQ equity market. The Exchange's proposal to
increase the rebates in Tiers 3, 4 and 5 as well as amend the criteria
for Tiers 3 and 4 is equitable and not unfairly discriminatory because
all NOM Participants that transact Customer orders in Penny Options are
eligible for the Customer rebates.\12\ In addition, the proposals to
amend the Tier 3 criteria to between 50,000 and 74,999 contracts of
Customer liquidity in Penny Options and lower the Tier 4 criteria to
75,000 or more contracts of Customer liquidity in Penny Options and
eliminate the second criteria are equitable and not unfairly
discriminatory because they should encourage NOM Participants that
currently qualify for Tier 3 today to obtain the increased Tier 4
rebate and encourage other NOM Participants to transact additional
Customer orders in Penny Options to obtain the increased rebates.
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    \12\ Tier 1 pays a rebate for NOM Participants that add Customer
liquidity of up to 14,999 contracts per day in a month of Penny
Options. There is no required minimum volume of Customer orders to
qualify for a Customer Rebate to Add Liquidity.
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    The Exchange's proposal to increase the Customer Fee for Removing
Liquidity in Penny Options is reasonable because the Exchange is
seeking to recoup costs associated with offering Customer rebates in
Penny Options to attract greater liquidity to the Exchange. The
increased liquidity benefits all market participants. The Exchange's
proposal to increase the Customer Fee for Removing Liquidity in Penny
Options is equitable and not unfairly discriminatory because all market
participants would uniformly be assessed a $0.45 per contract Customer
Fee for Removing Liquidity in Penny Options. Currently, Professionals,
Firms, Non-NOM Market Makers and NOM Market Makers are assessed a $0.45
per contract Fee for Removing Liquidity in Penny Options. The Exchange
believes that increasing the Customer Fee for Removing Liquidity by
$0.01 per contract ($0.44 per contract to $0.45 per contract) allows
the Exchange to recoup costs and offer even greater Customer rebates,
thereby benefitting all market participants by attracting Customer
order flow to NOM.
    The Exchange's proposals to amend the title of Section 2 to reflect
the rebates offered and also update a cross-reference to the Phlx fees
are reasonable, equitable and not unfairly discriminatory because these
amendments provide greater clarity and accuracy to the Rule text.
    The Exchange operates in a highly competitive market comprised of
nine U.S. options exchanges in which sophisticated and knowledgeable
market participants can and do send order flow to competing exchanges
if they deem fee levels at a particular exchange to be excessive or
rebate opportunities to be inadequate. The Exchange believes that the
proposed fee and rebate scheme are competitive and similar to other
fees, rebates and tier opportunities in place on other exchanges. The
Exchange believes that this competitive marketplace materially impacts
the fees and rebates present on the Exchange today and substantially
influences the proposal set forth above.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act.

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

    No written comments were either solicited or received.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\13\ At any time within 60 days of the
filing of the proposed rule change, the Commission summarily may
temporarily suspend such rule change if it appears to the Commission
that such action is necessary or appropriate in the public interest,
for the protection of investors, or otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved.
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    \13\ 15 U.S.C. 78s(b)(3)(A)(ii).
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IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NASDAQ-2012-048 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2012-048. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's

Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the
submission, all subsequent amendments, all written statements with
respect to the proposed rule change that are filed with the Commission,
and all written communications relating to the proposed rule change
between the Commission and any person, other than those that may be
withheld from the public in accordance with the provisions of 5 U.S.C.
552, will be available for Web site viewing and printing in the
Commission's Public Reference Room, 100 F Street NE., Washington, DC
20549, on official business days between the hours of 10 a.m. and 3
p.m. Copies of the filing also will be available for inspection and
copying at the principal office of the Exchange. All comments received
will be posted without change; the Commission does not edit personal
identifying information from submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NASDAQ-2012-048 and should be submitted
on or before May 3, 2012.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-8838 Filed 4-11-12; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 77, Number 222 (Friday, November 16, 2012)]
[Rules and Regulations]
[Pages 68686-68692]
[FR Doc No: 2012-27406]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 180

[EPA-HQ-OPP-2011-0951; FRL-9361-3]

Xylenesulfonic Acid, Sodium Salt; Exemption From the Requirement
of a Tolerance

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: This regulation establishes an exemption from the requirement
of a tolerance for residues of xylenesulfonic acid, sodium salt (also
known as sodium xylene sulfonate) (CAS Reg. No. 1300-72-7) when used as
an inert ingredient in antimicrobial pesticide formulations applied to
food-contact surfaces in public eating places, diary processing
equipment, and food processing equipment and utensils at 500 parts per
million (ppm) utensils. The firm Exponent on behalf of Ecolab Inc.
submitted a petition to EPA under the Federal Food, Drug, and Cosmetic
Act (FFDCA), requesting establishment of an exemption from the
requirement of a tolerance. This regulation eliminates the need to
establish a maximum permissible level for residues of sodium xylene
sulfonate.

DATES: This regulation is effective November 16, 2012. Objections and
requests for hearings must be received on or before January 15, 2013,
and must be filed in accordance with the instructions provided in 40
CFR part 178 (see also Unit I.C. of the SUPPLEMENTARY INFORMATION).

ADDRESSES: The docket for this action, identified by docket
identification (ID) number EPA-HQ-OPP-2011-0951, is available at http://www.regulations.gov or at the Office of Pesticide Programs Regulatory
Public Docket (OPP Docket) in the Environmental Protection Agency
Docket Center (EPA/DC), EPA West Bldg., Rm. 3334, 1301 Constitution
Ave. NW., Washington, DC 20460-0001. The Public Reading Room is open
from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal
holidays. The telephone number for the Public Reading Room is (202)
566-1744, and the telephone number for the OPP Docket is (703) 305-
5805. Please review the visitor instructions and additional information
about the docket available at http://www.epa.gov/dockets.

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

I. General Information

A. Does this action apply to me?

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

B. How can I get electronic access to other related information?

    You may access a frequently updated electronic version of 40 CFR
part 180 through the Government Printing Office's e-CFR site at http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?&c=ecfr&tpl=/ecfrbrowse/Title40/40tab_02.tpl. To access the OCSPP test guidelines referenced in this
document electronically, please go to http://www.epa.gov/ocspp and
select ``Test Methods and Guidelines.''

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

    Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an
objection to any aspect of this regulation and may also request a
hearing on those objections. You must file your objection or request a
hearing on this regulation in accordance with the instructions provided
in 40 CFR part 178. To ensure proper receipt by EPA, you must identify
docket ID number EPA-HQ-OPP-2011-0951 in the subject line on the first
page of your submission. All objections and requests for a hearing must
be in writing, and must be received by the Hearing Clerk on or before
January 15, 2013. Addresses for mail and hand delivery of objections
and hearing requests are provided in 40 CFR 178.25(b).
    In addition to filing an objection or hearing request with the
Hearing Clerk as described in 40 CFR part 178, please submit a copy of
the filing that does not contain any CBI for inclusion in the public
docket. Information not marked confidential pursuant to 40 CFR part 2
may be disclosed publicly by EPA without prior notice. Submit a copy of
your non-CBI objection or hearing request, identified by docket ID
number EPA-HQ-OPP-2011-0951, by one of the following methods:

     Federal eRulemaking Portal: http://www.regulations.gov.
Follow the online instructions for submitting comments.
     Mail: OPP Docket, Environmental Protection Agency Docket
Center (EPA/DC), (28221T), 1200 Pennsylvania Ave. NW., Washington, DC
20460-0001.
     Hand Delivery: To make special arrangements for hand
delivery or delivery of boxed information, please follow the
instructions at http://www.epa.gov/dockets/contacts.htm.

Additional instructions on commenting or visiting the docket, along
with more information about dockets generally, is available at http://www.epa.gov/dockets.

II. Petition for Exemption

    In the Federal Register of March 14, 2012 (77 FR 15012) (FRL-9335-
9), EPA issued a notice pursuant to FFDCA section 408, 21 U.S.C. 346a,
announcing the filing of a pesticide petition (PP 1E7936) by Exponent
on behalf of Ecolab Inc. (370 N. Wabasha Street, St. Paul, MN 55102).
The petition requested that 40 CFR 180.940(a) be amended by an
exemption from the requirement of a tolerance for residues of xylene
sulfonic acid, sodium salt (also known as sodium xylene sulfonate; CAS
no. 1300-72-7) when used as an inert ingredient as an antimicrobial
agent in pesticide formulations applied to ``food contact surfaces in
public eating places, dairy processing equipment, and food processing
equipment and utensils'' at a maximum of 500 ppm. That notice
referenced a summary of the petition prepared by Exponent on behalf of
Ecolab Inc. (370 N. Wabasha Street, St. Paul, MN 55102), the
petitioner, which is available in the docket, http://www.regulations.gov. Sodium xylene sulfonate is currently approved for
use in pesticide formulations applied to growing crops and animals
under the existing exemptions from the requirement of a tolerance given
at 40 CFR 180.920 and 40 CFR 180.930. Sodium xylene sulfonate is
currently approved as an inert ingredient under 40 CFR 180.940(c) for
use in food contact surface sanitizing solutions applied to food
processing equipment and utensils at an end-use concentration not to
exceed 62 ppm. The current petition seeks to expand the existing use of
sodium xylene sulfonate to include use on food contact surfaces in
public eating places, dairy processing equipment, and food processing
equipment and utensils. Hence, the petition requests the establishment
of an exemption covering this new use in 40 CFR 180.940(a). There were
no comments received in response to the notice of filing.

III. Inert Ingredient Definition

    Inert ingredients are all ingredients that are not active
ingredients as defined in 40 CFR 153.125 and include, but are not
limited to, the following types of ingredients (except when they have a
pesticidal efficacy of their own): Solvents such as alcohols and
hydrocarbons; surfactants such as polyoxyethylene polymers and fatty
acids; carriers such as clay and diatomaceous earth; thickeners such as
carrageenan and modified cellulose; wetting, spreading, and dispersing
agents; propellants in aerosol dispensers; microencapsulating agents;
and emulsifiers. The term ``inert'' is not intended to imply
nontoxicity; the ingredient may or may not be chemically active.
Generally, EPA has exempted inert ingredients from the requirement of a
tolerance based on the low toxicity of the individual inert
ingredients.

IV. Aggregate Risk Assessment and Determination of Safety

    Section 408(c)(2)(A)(i) of FFDCA allows EPA to establish an
exemption from the requirement for a tolerance (the legal limit for a
pesticide chemical residue in or on a food) only if EPA determines that
the tolerance is ``safe.'' Section 408(b)(2)(A)(ii) of FFDCA defines
``safe'' to mean that ``there is a reasonable certainty that no harm
will result from aggregate exposure to the pesticide chemical residue,
including all anticipated dietary exposures and all other exposures for
which there is reliable information.'' This includes exposure through
drinking water and in residential settings, but does not include
occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to
give special consideration to exposure of infants and children to the
pesticide chemical residue in establishing a tolerance and to ``ensure
that there is a reasonable certainty that no harm will result to
infants and children from aggregate exposure to the pesticide chemical
residue * * *.''
    EPA establishes exemptions from the requirement of a tolerance only
in those cases where it can be clearly demonstrated that the risks from
aggregate exposure to pesticide chemical residues under reasonably
foreseeable circumstances will pose no appreciable risks to human
health. In order to determine the risks from aggregate exposure to
pesticide inert ingredients, the Agency considers the toxicity of the
inert in conjunction with possible exposure to residues of the inert
ingredient through food, drinking water, and through other exposures
that occur as a result of pesticide use in residential settings. If EPA
is able to determine that a finite tolerance is not necessary to ensure
that there is a reasonable certainty that no harm will result from
aggregate exposure to the inert ingredient, an exemption from the
requirement of a tolerance may be established.
    Consistent with FFDCA section 408(c)(2)(A), and the factors
specified in FFDCA section 408(c)(2)(B), EPA has reviewed the available
scientific data and other relevant information in support of this
action. EPA has sufficient data to assess the hazards of and to make a
determination on aggregate exposure for sodium xylene sulfonate
including exposure resulting from the exemption established by this
action. EPA's assessment of exposures and risks associated with sodium
xylene sulfonate follows.

A. Toxicological Profile

    EPA has evaluated the available toxicity data and considered their
validity, completeness, and reliability as well as the relationship of
the results of the studies to human risk. EPA has also considered
available information concerning the variability of the sensitivities
of major identifiable subgroups of consumers, including infants and
children. Specific information on the studies received and the nature
of the adverse effects caused by sodium xylene sulfonate as well as the
no-observed-adverse-effect-level (NOAEL) and the lowest-observed-
adverse-effect-level (LOAEL) from the toxicity studies are discussed in
this unit.
    Sodium xylene sulfonate has low acute toxicity by the oral, dermal
and inhalation route of exposure. Sodium xylene sulfonate is a slight
skin and mild eye irritant. Based upon information regarding sodium
toluene sulfonate, sodium xylene sulfonate is negative for dermal
sensitization. Several subchronic studies via the oral route of
exposure are available in the database. In two 14-day toxicity studies
in mice and rats, no significant treatment related toxicity was
observed at doses up to 4% in the diet (approximately 4,000 milligrams/
kilogram/day (mg/kg/day)) in mice. In rats, there were some mortalities
which were not observed in a dose-related manner and losses of body
weight that were probably due to palatability of the test article. In a
repeat toxicity study in rats, mortality was not observed at doses up
to 4% in the diet. A 90-day subchronic toxicity study was conducted in
Wistar rats with doses of sodium xylene sulfonate up to 5% in

the diet. A decreased in relative spleen weight of females, along with
some clinical chemistry and hematology changes were observed at the
highest dose (3,454 mg/kg/day). In a separate 90-day toxicity study in
rats and mice, no treatment related effects were observed in mice and
rats given sodium xylene sulfonate in the diet at 2% (approximately
2,439 and 2,467 mg/kg/day in mice and rats, respectively). Dermal
toxicity studies for 17 days and 90 days duration were conducted in
mice and rats. No systemic toxicity was observed in mice and rats
exposed dermally to sodium xylene sulfonate at doses up to 1,620 and
500 mg/kg/day in mice and rats, respectively. The results of a 2-year
dermal toxicity study showed no evidence of skin neoplasms or any other
neoplasms at doses up to 727 and 240 mg/kg/day in mice and rats,
respectively. Additionally, the Agency used a qualitative structure
activity relationship (SAR) database, DEREK11, to determine if there
were structural alerts suggestive of carcinogenicity. No structural
alerts for carcinogenicity were identified.
    Sodium xylene sulfonate was tested for its mutagenic potential in
various in vivo and in vitro genotoxicity assays. It gave a negative
response in a mouse lymphoma assay, the Ames assay, Sister Chromatid
Exchange assay, (positive at cytotoxic concentrations only), a
Chromosome Aberration Test and three mouse micronucleus assays.
Therefore, sodium xylene sulfonate is not likely to be mutagenic.
    There are no reproductive toxicity studies for sodium xylene
sulfonate. However, the Organisation for Economic Co-operation and
Development (OECD) Screening Information Dataset (SIDS) Assessment
included reviews of a 91-day oral rat feeding study with sodium cumene
sulfonate, a 90-day feeding study with sodium xylene sulfonate (mice
and rats), and the 2-year dermal studies with sodium xylene sulfonate
(mice and rats) which included examination of the reproductive organs
of both sexes. There was no evidence from these studies to suggest that
sodium xylene sulfonate would have an adverse effect on reproductive
organs by either the oral or dermal route. No developmental toxicity
studies in rats and rabbits are available in the sodium xylene
sulfonate database. However, a developmental study with the rat is
available for a surrogate chemical, calcium xylene sulfonate. In this
study the NOAEL for maternal and fetal toxicity was the highest dose
tested; 3,000 mg/kg/day which correspond to 936 mg/kg bw/day. Based on
the calcium xylene sulfonate OECD Guideline study, there is no evidence
to consider these materials as being developmental toxicants. There is
no evidence in the sodium xylene sulfonate database that sodium xylene
sulfonate is an immunotoxin.

B. Toxicological Points of Departure/Levels of Concern

    Once a pesticide's toxicological profile is determined, EPA
identifies toxicological points of departure (POD) and levels of
concern to use in evaluating the risk posed by human exposure to the
pesticide. For hazards that have a threshold below which there is no
appreciable risk, the toxicological POD is used as the basis for
derivation of reference values for risk assessment. PODs are developed
based on a careful analysis of the doses in each toxicological study to
determine the dose at which no adverse effects are observed (the NOAEL)
and the lowest dose at which adverse effects of concern are identified
(the LOAEL). Uncertainty/safety factors are used in conjunction with
the POD to calculate a safe exposure level--generally referred to as a
population-adjusted dose (PAD) or a reference dose (RfD)--and a safe
margin of exposure (MOE). For non-threshold risks, the Agency assumes
that any amount of exposure will lead to some degree of risk. Thus, the
Agency estimates risk in terms of the probability of an occurrence of
the adverse effect expected in a lifetime. For more information on the
general principles EPA uses in risk characterization and a complete
description of the risk assessment process, see http://www.epa.gov/pesticides/factsheets/riskassess.htm.
    No endpoint of concern following a single dose was identified in
the available database. The Agency identified a NOAEL of 763 mg/kg bw/
day for systemic toxicity, which was selected from an oral subchronic
study. Effects observed in this study were a decrease in spleen weight
in females along with some clinical chemistry and hematology changes at
the LOAEL of 3,454 mg/kg bw/day. No adverse effects were reported in
males. This study was used for chronic dietary exposure assessment. An
uncertainty factor of 100X is applied (10X for interspecies
extrapolation and 10X for intraspecies variability). Based on the
physicochemical data and lack of systemic toxicity in the available
dermal toxicity studies, EPA concluded that there is no need to conduct
quantitative dermal risk exposure assessment. For several reasons, no
additional uncertainty factor is necessary for the use of subchronic
study data for chronic exposure assessment. First there was a wide dose
spread between the toxic effects seen at the LOAEL of 3,454 mg/kg/day
and the NOAEL of 763 mg/kg/day. Second, the changes observed in
clinical chemistry and hematological parameters were small in magnitude
and no effects on organs were observed in the study. Therefore, the
changes observed were not considered toxicologically significant.
Finally, the NOAEL in a separate 90-day study in rats was 2,467 mg/kg/
day indicating the lower NOAEL value in the selected study is an
artifact of dose selection. Therefore, EPA concluded that there is no
need to add an additional uncertainty factor for use of short-term
study for long-term exposure assessment.

C. Exposure Assessment

    1. Dietary exposure from food and feed uses. In evaluating dietary
exposure to sodium xylene sulfonate, EPA considered exposure under the
proposed exemption from the requirement of a tolerance (40 CFR
180.940(a)) and as an inert ingredient used in pesticide formulations
applied to growing crops and animals under the existing exemptions from
the requirement of a tolerance given at 40 CFR 180.920 and 40 CFR
180.930. EPA assessed dietary exposures from sodium xylene sulfonate in
food as follows:
    In the absence of actual dietary exposure data resulting from this
proposed use the EPA has utilized a conservative, health-protective
method of estimating dietary intake that is based upon conservative
assumptions related to the amount of residues that can be transferred
to foods as a result of the proposed use of sodium xylene sulfonates in
food contact sanitizing pesticide products. This same methodology has
been utilized by EPA in estimating dietary exposures to antimicrobial
pesticides used in food-handling settings. The Agency believes the
assumptions used to estimate chronic dietary exposures lead to an
extremely conservative assessment of chronic dietary risk due to a
series of compounded conservatisms as described in the unit. First,
when a surface is treated with a disinfectant, a quantity of the
disinfectant remains on the surface (Residual Solution). In the absence
of any other data, EPA has used an estimated worst-case concentration
of 1 mg of solution per square centimeter (cm\2\) of treated surface
area for this quantity. Second, the conservatism of this methodology is
compounded by EPA's decision to assume a worst case scenario that all
food that an individual consumes will

come into contact with 4,000 cm \2\ of sanitized non-porous food-
contact surfaces. This contact area represents all the surface area
from silverware, china, and glass used by a person who regularly eats
three meals per day at an institutional or public facility. The surface
area of counter tops that comes in contact with food is expected to be
smaller than the surface area for food utensils. As a conservative
estimate, EPA assumed that 2,000 cm \2\ of treated counter top surface
area, comes into contact with an individual's food per day. Third, EPA
assumes that 100% of the material present on food contact surfaces will
migrate to food. A complete description of the approach used to assess
dietary exposures resulting from food contact sanitizing solution uses
of sodium xylene sulfonates can be found at http://www.regulations.gov
in document Decision Document for Petition Number 1E7936, pp. 16 of 30
in docket ID number EPA-HQ-OPP-2011-0951.
    In conducting the acute and chronic dietary exposure assessments
for sodium xylene sulfonate, EPA used food consumption information from
the United States Department of Agriculture (USDA) 1994-1996 and 1998
Nationwide Continuing Surveys of Food Intake by Individuals (CSFII). As
to residue levels in food, no residue data are available for sodium
xylene sulfonate. In the absence of specific residue data, EPA has
developed an approach which uses surrogate information to derive upper
bound exposure estimates for the subject inert ingredient. Upper bound
exposure tolerance for a given commodity from a list of high-use
insecticides, herbicides, and fungicides. A complete description of the
general approach taken to assess inert ingredient risks in the absence
of residue data is contained in the memorandum entitled ``Alkyl Amines
Polyalkoxylates (Cluster 4): Acute and Chronic Aggregate (Food and
Drinking Water) Dietary Exposure and Risk Assessments for the Inerts.''
(D361707, S. Piper, 2/25/09) and can be found at http://www.regulations.gov in docket ID number EPA-HQ-OPP-2008-0738.
    In the dietary exposure assessment, the Agency assumed that the
residue level of the inert ingredient would be no higher than the
highest tolerance for a given commodity. Implicit in this assumption is
that there would be similar rates of degradation (if any) between the
active and inert ingredient and that the concentration of inert
ingredient in the scenarios leading to these highest of tolerances
would be no higher than the concentration of the active ingredient.
    The Agency believes the assumptions used to estimate dietary
exposures lead to an extremely conservative assessment of dietary risk
due to a series of compounded conservatisms.
    First, assuming that the level of residue for an inert ingredient
is equal to the level of residue for the active ingredient will
overstate exposure. The concentration of active ingredient in
agricultural products is generally at least 50% of the product and
often can be much higher. Further, pesticide products rarely have a
single inert ingredient; rather there is generally a combination of
different inert ingredients used which additionally reduces the
concentration of any single inert ingredient in the pesticide product
in relation to that of the active ingredient.
    Second, the conservatism of this methodology is compounded by EPA's
decision to assume that, for each commodity, the active ingredient
which will serve as a guide to the potential level of inert ingredient
residues is the active ingredient with the highest tolerance level.
This assumption overstates residue values because it would be highly
unlikely, given the high number of inert ingredients, that a single
inert ingredient or class of ingredients would be present at the level
of the active ingredient in the highest tolerance for every commodity.
    Finally, a third compounding conservatism is EPA's assumption that
all foods contain the inert ingredient at the highest tolerance level.
In other words, EPA assumed 100% of all foods are treated with the
inert ingredient at the rate and manner necessary to produce the
highest residue legally possible for an active ingredient.
    In summary, EPA chose a very conservative method for estimating
what level of inert residue could be on food, then used this
methodology to choose the highest possible residue that could be found
on food and assumed that all food contained this residue. No
consideration was given to potential degradation between harvest and
consumption even though monitoring data shows that tolerance level
residues are typically one to two orders of magnitude higher than
actual residues of magnitude higher than actual residues in food when
distributed in commerce. Accordingly, although sufficient information
to quantify actual residue levels in food is not available, the
compounding of these conservative assumptions will lead to a
significant exaggeration of actual exposures.
    2. Dietary exposure from drinking water. For the purpose of the
screening level dietary risk assessment to support this request for an
exemption from the requirement of a tolerance for sodium xylene
sulfonate, a conservative drinking water concentration value of 100
parts per billion (ppb) based on screening level modeling was used to
assess the contribution to drinking water for the chronic dietary risk
assessments for sodium xylene sulfonate. These values were directly
entered into the dietary exposure model. Further details of this
drinking water analysis can be found at http://www.regulations.gov in
document ``Decision Document for Petition Number 1E7936'', pp. 16 of 30
in docket ID number EPA-HQ-OPP-2011-0951.
    The proposed use of sodium xylene sulfonate will not result in its
presence in surface water or ground water and therefore not contribute
to dietary exposure.
    3. From non-dietary exposure. The term ``residential exposure'' is
used in this document to refer to non-occupational, non-dietary
exposure (e.g., textiles (clothing and diapers), carpets, swimming
pools, and hard surface disinfection on walls, floors, tables).
    Sodium xylene sulfonate is not used as an inert ingredient in
pesticide products that are registered for specific uses that may
result in either indoor and outdoor residential exposures. However,
sodium xylene sulfonate is used as a component of personal care
products. The OECD SIDS Assessment estimated highest human exposures
resulting from personal care product use. The exposure estimates ranged
from 0.02-0.14 mg/kg/day for shampoos and hair conditioners to 0.11-
0.17 mg/kg/day for liquid face and hand soaps. Exposure estimates for
cleaning product use and residuals on clothing range from 0.01-0.08 mg/
kg/day. All exposure evaluations included conservative (protective)
input assumptions (e.g., all modeled human exposures are conservative
due to the use of a default assumption of 100% absorption). However,
the physicochemical data and available toxicological data suggest that
dermal absorption is likely to be minimal. Based on the lack of concern
for dermal toxicity and the low estimates of residential exposure, a
quantitative residential risk assessment was not performed.
    4. Cumulative effects from substances with a common mechanism of
toxicity. Section 408(b)(2)(D)(v) of FFDCA requires that, when
considering whether to establish, modify, or revoke a tolerance, the
Agency consider ``available information'' concerning the cumulative
effects of a particular pesticide's residues and ``other

substances that have a common mechanism of toxicity.''
    EPA has not found sodium xylene sulfonate to share a common
mechanism of toxicity with any other substances, and sodium xylene
sulfonate does not appear to produce a toxic metabolite produced by
other substances. However, there are other chemicals belonging to the
xylene sulfonate class of chemicals that may have a similar toxicity
profile but these chemicals will be used as an alternative to sodium
xylene sulfonate. Therefore, a cumulative risk assessment was not
performed. Furthermore, the cPAD for pesticidal uses occupies only 7%
of the cPAD for the general population and any potential increase in
exposure to this class of chemicals will still be below any levels of
concern. For the purposes of this tolerance action, therefore, EPA has
assumed that sodium xylene sulfonate does not have a common mechanism
of toxicity with other substances. For information regarding EPA's
efforts to determine which chemicals have a common mechanism of
toxicity and to evaluate the cumulative effects of such chemicals, see
EPA's Web site at http://www.epa.gov/pesticides/cumulative.

 D. Safety Factor for Infants and Children

    1. In general. Section 408(b)(2)(C) of FFDCA provides that EPA
shall apply an additional tenfold (10X) margin of safety for infants
and children in the case of threshold effects to account for prenatal
and postnatal toxicity and the completeness of the database on toxicity
and exposure unless EPA determines based on reliable data that a
different margin of safety will be safe for infants and children. This
additional margin of safety is commonly referred to as the FQPA Safety
Factor (SF). In applying this provision, EPA either retains the default
value of 10X, or uses a different additional safety factor when
reliable data available to EPA support the choice of a different
factor.
    2. Prenatal and postnatal sensitivity. There are no reproductive
toxicity studies reported for sodium xylene sulfonate. However, no
effects on reproductive organs were observed at very high doses in
number of studies such as a 91-day oral rat feeding study with sodium
cumene sulfonate, the 90-day feeding study with sodium xylene
sulfonate, and the 2-year dermal studies with sodium xylene sulfonate.
Based on the above evidence, EPA concluded that sodium xylene sulfonate
is not likely to be reproductive toxicant. This conclusion is in
agreement with the OECD conclusion that there is no evidence to suggest
that sodium xylene sulfonate would have an adverse effect on
reproductive organs.
    In a developmental toxicity study in rats with calcium xylene
sulfonate, no maternal or developmental effects were observed at doses
of 3,000 mg/kg/day (equal to 936 mg/kg/day corrected for purity of test
material).
    There is no evidence of prenatal or postnatal sensitivity as a
result of exposure to sodium xylene sulfonate.
    3. Conclusion. EPA has determined that reliable data show the
safety of infants and children would be adequately protected if the
FQPA SF were reduced to [1X]. That decision is based on the following
findings:
    i. Available studies included several 90-day toxicity studies via
oral and dermal routes, chronic studies, mutagenicity battery, a
developmental study in rats and metabolism studies. These studies
provide an adequate characterization of sodium xylene sulfonate
toxicity.
    ii. There is no indication that sodium xylene sulfonate is a
neurotoxic chemical and there is no need for a developmental
neurotoxicity study or additional UFs to account for neurotoxicity.
    iii. No reproductive toxicity study or developmental toxicity study
are available for sodium xylene sulfonate. However, the concern for
increased susceptibility of infants and children exposure to sodium
xylene sulfonate are low because no effects on reproductive parameters
were observed in various oral toxicity studies and the developmental
toxicity in rats for a surrogate chemical show lack of systemic
toxicity at doses up to 936 mg/kg/day (mentioned under pre and post
natal susceptibility).
    iv. No evidence of immunotoxicity was observed in the database
except slightly decreased in spleen weight was observed at the LOAEL of
3,454 mg/kg bw/day. There are no concerns for immunotoxicity and an
immunotoxicity study is not required because the slight decreased in
spleen weights were observed at high doses without any evidence of
histopathological findings.
    v. No additional uncertainty factor is needed for the use of
subchronic study data for chronic exposure assessment. The rational for
this decision is provided in Unit IV.B.
    vi. There are no residual uncertainties identified in the exposure
databases. The dietary food exposure assessments were performed based
on 100% CT and tolerance-level residues. EPA made conservative
(protective) assumptions in the ground water and surface water modeling
used to assess exposure to sodium xylene sulfonate in drinking water.
EPA used similarly conservative assumptions to assess post-application
exposure of children as well as incidental oral exposure of toddlers.
These assessments will not underestimate the exposure and risks posed
by sodium xylene sulfonate.

E. Aggregate Risks and Determination of Safety

    Determination of safety section. EPA determines whether acute and
chronic dietary pesticide exposures are safe by comparing aggregate
exposure estimates to the acute PAD (aPAD) and chronic PAD (cPAD). For
linear cancer risks, EPA calculates the lifetime probability of
acquiring cancer given the estimated aggregate exposure. Short-,
intermediate-, and chronic-term risks are evaluated by comparing the
estimated aggregate food, water, and residential exposure to the
appropriate PODs to ensure that an adequate MOE exists.
    1. Acute risk. An acute aggregate risk assessment takes into
account acute exposure estimates from dietary consumption of food and
drinking water. No adverse effect resulting from a single oral exposure
was identified and no acute dietary endpoint was selected. Therefore,
sodium xylene sulfonate is not expected to pose an acute risk.
    2. Chronic risk. Using the exposure assumptions described in this
unit for chronic exposure, EPA has concluded that chronic exposure to
sodium xylene sulfonate from food and water including those uses for
which tolerance exemptions under 40 CFR (180. 910, and 40 CFR 180.930
exist) will utilize 7% of the cPAD for the U.S. population and 26% of
the cPAD for children 1-2 years old, the population subgroup receiving
the greatest exposure. There are no residential uses for sodium xylene
sulfonate.
    3. Short-term risk. Short-term aggregate exposure takes into
account short-term residential exposure plus chronic exposure to food
and water (considered to be a background exposure level). A short-term
adverse effect was identified; however, sodium xylene sulfonate is not
currently used as an inert ingredient in pesticide products that are
registered for any use patterns that would result in short-term
residential exposure. Short-term risk is assessed based on short-term
residential exposure plus chronic dietary exposure. Because there is no
short-term residential exposure and chronic dietary exposure has
already been assessed under the appropriately protective

cPAD (which is at least as protective as the POD used to assess short-
term risk), no further assessment of short-term risk is necessary, and
EPA relies on the chronic dietary risk assessment for evaluating short-
term risk for sodium xylene sulfonate.
    4. Intermediate-term risk. Intermediate-term aggregate exposure
takes into account intermediate-term residential exposure plus chronic
exposure to food and water (considered to be a background exposure
level). An intermediate-term adverse effect was identified; however,
sodium xylene sulfonate is not currently used as an inert ingredient in
pesticide products that are registered for any use patterns that would
result in intermediate-term residential exposure. Intermediate-term
risk is assessed based on intermediate-term residential exposure plus
chronic dietary exposure. Because there is no intermediate-term
residential exposure and chronic dietary exposure has already been
assessed under the appropriately protective cPAD (which is at least as
protective as the POD used to assess intermediate-term risk), no
further assessment of intermediate-term risk is necessary, and EPA
relies on the chronic dietary risk assessment for evaluating
intermediate-term risk for sodium xylene sulfonate.
    5. Aggregate cancer risk for U.S. population. Based upon no
evidence of carcinogenicity in two adequate rodent carcinogenicity
studies via the dermal route of exposure, negative response for
mutagenicity in a battery of genotoxicity tests, and lack of any
structural alerts for carcinogenicity, sodium xylene sulfonate is not
expected to pose a cancer risk to humans.
    6. Determination of safety. Based on these risk assessments, EPA
concludes that there is a reasonable certainty that no harm will result
to the general population, or to infants and children from aggregate
exposure to sodium xylene sulfonate residues.

V. Other Considerations

A. Analytical Enforcement Methodology

    An analytical method is not required for enforcement purposes since
the Agency is not establishing a numerical tolerance for residues of
xylene sulfonic acid, sodium salt in or on any food commodities. EPA is
establishing a limitation on the amount of xylene sulfonic acid, sodium
salt that may be used in pesticide formulations. That limitation will
be enforced through the pesticide registration process under the
Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), 7 U.S.C.
136 et seq. EPA will not register any pesticide for sale or
distribution for which the final end use concentration of xylene
sulfonic acid, sodium salt in antimicrobial, food contact surface
sanitizing solutions would exceed 500 ppm.

B. International Residue Limits

    In making its tolerance decisions, EPA seeks to harmonize U.S.
tolerances with international standards whenever possible, consistent
with U.S. food safety standards and agricultural practices. EPA
considers the international maximum residue limits (MRLs) established
by the Codex Alimentarius Commission (Codex), as required by FFDCA
section 408(b)(4). The Codex Alimentarius is a joint United Nation Food
and Agriculture Organization/World Health Organization food standards
program, and it is recognized as an international food safety
standards-setting organization in trade agreements to which the United
States is a party. EPA may establish a tolerance that is different from
a Codex MRL; however, FFDCA section 408(b)(4) requires that EPA explain
the reasons for departing from the Codex level.
    The Codex has not established a MRL for sodium xylene sulfonate.

VI. Conclusions

    Therefore, an exemption from the requirement of a tolerance is
established under 40 CFR 180.940(a) for xylenesulfonic acid, sodium
salt (CAS Reg. No. 1300-72-7) when used as an inert ingredient in
antimicrobial formulations in pesticide formulations applied to food
contact surfaces in public eating places, dairy processing equipment,
and food processing equipment and utensils at a maximum of 500 parts
per million of final solution. Additionally the exemption from the
requirement of a tolerance for xylenesulfonic acid under 40 CFR
180.940(c), can be removed as the establishment of a broader exemption
from the requirement of a tolerance for xylenesulfonic acid under
180.940(a) obviates the need for 40 CFR 180.940(c) tolerance exemption.

VII. Statutory and Executive Order Reviews

    This final rule establishes a tolerance under FFDCA section 408(d)
in response to a petition submitted to the Agency. The Office of
Management and Budget (OMB) has exempted these types of actions from
review under Executive Order 12866, entitled ``Regulatory Planning and
Review'' (58 FR 51735, October 4, 1993). Because this final rule has
been exempted from review under Executive Order 12866, this final rule
is not subject to Executive Order 13211, entitled ``Actions Concerning
Regulations That Significantly Affect Energy Supply, Distribution, or
Use'' (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled
``Protection of Children from Environmental Health Risks and Safety
Risks'' (62 FR 19885, April 23, 1997). This final rule does not contain
any information collections subject to OMB approval under the Paperwork
Reduction Act (PRA), 44 U.S.C. 3501 et seq., nor does it require any
special considerations under Executive Order 12898, entitled ``Federal
Actions to Address Environmental Justice in Minority Populations and
Low-Income Populations'' (59 FR 7629, February 16, 1994).
    Since tolerances and exemptions that are established on the basis
of a petition under FFDCA section 408(d), such as the tolerance in this
final rule, do not require the issuance of a proposed rule, the
requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et
seq.) do not apply.
    This final rule directly regulates growers, food processors, food
handlers, and food retailers, not States or tribes, nor does this
action alter the relationships or distribution of power and
responsibilities established by Congress in the preemption provisions
of FFDCA section 408(n)(4). As such, the Agency has determined that
this action will not have a substantial direct effect on States or
tribal governments, on the relationship between the national government
and the States or tribal governments, or on the distribution of power
and responsibilities among the various levels of government or between
the Federal Government and Indian tribes. Thus, the Agency has
determined that Executive Order 13132, entitled ``Federalism'' (64 FR
43255, August 10, 1999) and Executive Order 13175, entitled
``Consultation and Coordination with Indian Tribal Governments'' (65 FR
67249, November 9, 2000) do not apply to this final rule. In addition,
this final rule does not impose any enforceable duty or contain any
unfunded mandate as described under Title II of the Unfunded Mandates
Reform Act of 1995 (UMRA) (Pub. L. 104-4).
    This action does not involve any technical standards that would
require Agency consideration of voluntary consensus standards pursuant
to section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272
note).

VIII. Congressional Review Act

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

List of Subjects in 40 CFR Part 180

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

    Dated: November 1, 2012.
Lois Rossi,
Director, Registration Division, Office of Pesticide Programs.

    Therefore, 40 CFR chapter I is amended as follows:

PART 180--[AMENDED]

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

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

0
2. Section 180.940 is amended by adding the entry ``Xylenesulfonic
acid, sodium salt'' to the table in paragraph (a) and removing the
entry for ``Xylenesulfonic acid'' in the table in paragraph (c) to read
as follows:

Sec.  180.940  Tolerance exemptions for active and inert ingredients
for use in antimicrobial formulations (Food-contact surface sanitizing
solutions).

    (a) * * *

----------------------------------------------------------------------------------------------------------------
            Pesticide chemical                   CAS Reg. No.                           Limits
----------------------------------------------------------------------------------------------------------------

                                                  * * * * * * *
Xylenesulfonic acid, sodium salt.........                1300-72-7   When ready for use, the end-use
                                                                      concentration is not to exceed 500 ppm.
----------------------------------------------------------------------------------------------------------------

* * * * *
[FR Doc. 2012-27406 Filed 11-15-12; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register: September 4, 2008 (Volume 73, Number 172)]
[Proposed Rules]
[Page 51606-51610]
[DOCID:fr04se08-14]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R04-OAR-2006-0649-200750; FRL-8711-1]

Approval and Promulgation of Implementation Plans; Georgia;
Prevention of Significant Deterioration and Nonattainment New Source
Review Rules

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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

SUMMARY: EPA is proposing to partially approve and disapprove portions
of revisions to the Georgia State Implementation Plan (SIP) submitted
by the State of Georgia in three submittals dated October 31, 2006,
March 5, 2007, and August 22, 2007. The proposed revisions modify
Georgia's Prevention of Significant Deterioration (PSD) and
Nonattainment New Source Review (NNSR) permitting rules in the SIP to
address changes to the federal New Source Review (NSR) regulations,
which were promulgated by EPA on December 31, 2002, and reconsidered
with minor changes on November 7, 2003 (collectively, these two final
actions are referred to as the ``2002 NSR Reform Rules''). The proposed
revisions include provisions for baseline emissions calculations, an
actual-to-projected-actual methodology for calculating emissions
changes, options for plantwide applicability limits, and recordkeeping
and reporting requirements. EPA is proposing to approve Georgia's NSR
rule revisions, with the exception of one NNSR provision. EPA is
proposing to disapprove the State's incorporation of ``baseline
emissions calculations'' into the Georgia NNSR provisions for the
generation of Emissions Reductions' Credits to be used as offsets.

DATES: Comments must be received on or before October 6, 2008.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R04-
OAR-2006-0649, by one of the following methods:
    1. http://www.regulations.gov: Follow the on-line instructions for
submitting comments.
    2. E-mail<EMAIL_ADDRESS>    3. Fax:<PHONE_NUMBER>.
    4. Mail: (Docket ID No. EPA-R04-OAR-2006-0649), Air Planning
Branch, Air, Pesticides and Toxics Management Division, U.S.
Environmental Protection Agency, Region 4, 61 Forsyth Street, SW.,
Atlanta, Georgia 30303-8960.
    5. Hand Delivery or Courier: Ms. Kelly Fortin, Air Planning Branch,
Air, Pesticides and Toxics Management Division, U.S. Environmental
Protection Agency Region 4, 61 Forsyth Street, SW., Atlanta, Georgia
30303-8960. Such deliveries are only accepted during the Regional
Office's normal hours of operation. The Regional Office's official
hours of business are Monday through Friday, 8:30 to 4:30, excluding
federal holidays.
    Instructions: Direct your comments to Docket ID No. EPA-R04-OAR-
2006-0649. EPA's policy is that all comments received will be included
in the public docket without change and may be made available online 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 http://
www.regulations.gov or e-mail. The http://www.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 http://www.regulations.gov, your e-mail
address will be automatically captured and included as part of the
comment that is placed in the public 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. For additional
information about EPA's public docket, visit the EPA Docket Center
homepage at http://www.epa.gov.epahome/dockets.htm.
    Docket: All documents in the docket are listed in the http://
www.regulations.gov index. 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, will be publicly available only in hard copy.
Publicly available docket materials are available either electronically
at http://www.regulations.gov or in hard copy at the Regulatory
Development Section, Air Planning Branch, Air, Pesticides and Toxics
Management Division, U.S. Environmental Protection Agency, Region 4, 61
Forsyth Street, SW., Atlanta, Georgia 30303-8960. EPA requests that if
at all possible, you contact the person listed in the FOR FURTHER
INFORMATION CONTACT section to schedule your inspection. The Regional
Office's official business hours are Monday through Friday, 8:30 to
4:30, excluding federal holidays.

FOR FURTHER INFORMATION CONTACT: For information regarding the Georgia
State Implementation Plan, contact Ms. Stacy Harder, Regulatory
Development Section, Air Planning Branch, Air, Pesticides and Toxics
Management Division, U.S. Environmental Protection Agency Region 4, 61
Forsyth Street, SW., Atlanta, Georgia 30303-8960. Telephone number:
(404) 562-9042; e-mail address<EMAIL_ADDRESS>For information
regarding New Source Review, contact Ms. Kelly Fortin, Air Permits
Section, at the same address above. Telephone number:<PHONE_NUMBER>;
e-mail address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Throughout this document, references to
``EPA,'' ``we,'' ``us,'' or ``our,'' are intended to mean the U.S.
Environmental Protection Agency. The supplementary information is
arranged as follows:

I. What Action Is EPA Proposing?
II. What Is the Background of EPA's Proposed Action?
III. What Is EPA's Analysis of Georgia's NSR Rule Revisions?
    A. Prevention of Significant Deterioration
    B. Nonattainment New Source Review
IV. Proposed Action
V. Statutory and Executive Order Reviews

I. What Action Is EPA Proposing?

    On October 31, 2006, March 5, 2007, and August 22, 2007, the State
of Georgia, through the Georgia Environmental Protection Division
(EPD), submitted revisions to the Georgia SIP. The SIP submittals
consist of changes to the Georgia Rules for Air Quality Control,
Chapter 391-3-1. Specifically, the October 31, 2006, proposed SIP
revision includes changes to Rules 391-3-1-.02(7) ``Prevention of
Significant Deterioration of Air Quality'' and 391-3-1-.03(8)(c)
``Permit Requirements'' related to nonattainment new source review. The
March 5, 2007, submittal includes changes to Rules 391-3-1-.02(7)
``Prevention of Significant Deterioration of Air Quality,'' and 391-3-
1-.03(13)(c) ``Emission Reduction Credits.'' Finally, the August 22,
2007, submittal includes changes to Rules 391-3-1-.02(7) ``Prevention
of Significant Deterioration of Air Quality,'' and 391-3-1-.03(8)
``Permit Requirements.'' Georgia EPD submitted these revisions in
response to EPA's December 31, 2002, changes to the federal NSR
program. Consistent with section 110(k)(3) of the Clean Air Act (CAA),
EPA is now proposing to partially approve NSR Reform related rules
included in the above-summarized SIP revisions, with the exception of
the revision to subparagraph 391-3-1-.03(13)(c), related to ``Emissions
Reduction Credits,'' which EPA is proposing to disapprove. EPA is not
acting on the non-NSR Reform portions of the submittals (Rules 391-3-
1-.01(llll), 391-3-1-.02(2)(jjj), 391-3-1-.02(2)(ooo), 391-3-
1-.02(6)(a)4, 391-3-1-.02(12), and 391-3-1-.03(6)(b)) in this action.
Additionally, EPA is not acting on revisions to rules 391-3-1-.02(8)b,
and 391-3-1-.03(9), because these rules are not part of the federally
approved SIP.

II. What Is the Background of EPA's Proposed Action?

    On December 31, 2002 (67 FR 80186), EPA published final rule
changes to 40 Code of Federal Regulations (CFR) parts 51 and 52,
regarding the CAA's PSD and NNSR programs. On November 7, 2003 (68 FR
63021), EPA published a notice of final action on the reconsideration
of the December 31, 2002, final rule changes. The December 31, 2002,
and the November 7, 2003, final actions are collectively referred to as
the ``2002 NSR Reform Rules.'' The purpose of this action is to propose
to approve the SIP submittals from the State of Georgia that include
State rule changes made as a result of EPA's 2002 NSR Reform Rules.
    The 2002 NSR Reform Rules are part of EPA's implementation of parts
C and D of title I of the CAA, 42 U.S.C. 7470-7515. Part C of title I
of the CAA, 42 U.S.C. 7470-7492, is the PSD program, which applies in
areas that meet the National Ambient Air Quality Standards (NAAQS)--
``attainment'' areas--as well as in areas for which there is
insufficient information to determine whether the area meets the
NAAQS--``unclassifiable'' areas. Part D of title I of the CAA, 42
U.S.C. 7501-7515, is the NNSR program, which applies in areas that are
not in attainment of the NAAQS--``nonattainment'' areas. Collectively,
the PSD and NNSR programs are referred to as the ``New Source Review''
or NSR programs. EPA regulations implementing these programs are
contained in 40 CFR 51.165, 51.166, 52.21, 52.24, and part 51, appendix
S.
    The CAA's NSR programs are preconstruction review and permitting
programs applicable to new and modified stationary sources of air
pollutants regulated under the CAA. The NSR programs of the CAA include
a combination of air quality planning and air pollution control
technology program requirements. Briefly, section 109 of the CAA, 42
U.S.C. 7409, requires EPA to promulgate primary NAAQS to protect public
health and secondary NAAQS to protect public welfare. Once EPA sets
those standards, states must develop, adopt, and submit to EPA for
approval a SIP that contains emissions limitations and other control
measures to attain and maintain the NAAQS. Each SIP is required to
contain a preconstruction review program for the construction and
modification of any stationary source of air pollution to assure that
the NAAQS are achieved and maintained; to protect areas of clean air;
to protect air quality related values (such as visibility) in national
parks and other areas; to assure that appropriate emissions controls
are applied; to maximize opportunities for economic development
consistent with the preservation of clean air resources; and to ensure
that any decision to increase air pollution is made only after full

public consideration of the consequences of the decision.
    The 2002 NSR Reform Rules made changes to five areas of the NSR
programs. In summary, the 2002 Rules: (1) Provide a new method for
determining baseline actual emissions; (2) adopt an actual-to-
projected-actual methodology for determining whether a major
modification has occurred; (3) allow major stationary sources to comply
with PALs to avoid having a significant emissions increase that
triggers the requirements of the major NSR program; (4) provided a new
applicability provision for emissions units that are designated clean
units; and (5) excluded pollution control projects (PCPs) from the
definition of ``physical change or change in the method of operation.''
On November 7, 2003 (68 FR 63021), EPA published a notice of final
action on its reconsideration of the 2002 NSR Reform Rules, which added
a definition for ``replacement unit'' and clarified an issue regarding
PALs. For additional information on the 2002 NSR Reform Rules, see, 67
FR 80186 (December 31, 2002), and http://www.epa.gov/nsr.
    After the 2002 NSR Reform Rules were finalized and effective (March
3, 2003), industry, state, and environmental petitioners challenged
numerous aspects of the 2002 NSR Reform Rules, along with portions of
EPA's 1980 NSR Rules (45 FR 52676, August 7, 1980). On June 24, 2005,
the United States Court of Appeals for the District of Columbia (D.C.
Circuit Court) issued a decision on the challenges to the 2002 NSR
Reform Rules. New York v. United States, 413 F.3d 3 (D.C. Cir. 2005).
In summary, the D.C. Circuit Court vacated portions of the rules
pertaining to clean units and PCPs, remanded a portion of the rules
regarding recordkeeping and the term ``reasonable possibility'' found
in 40 CFR 52.21(r)(6) and 40 CFR 51.166(r)(6), and either upheld or did
not comment on the other provisions included as part of the 2002 NSR
Reform Rules. On June 13, 2007 (72 FR 32526), EPA took final action to
revise the 2002 NSR Reform Rules to remove from federal law all
provisions pertaining to clean units and the PCP exemption that were
vacated by the D.C. Circuit Court.
    With regard to the remanded portions of the 2002 NSR Reform Rules
related to recordkeeping, on December 21, 2007, EPA took final action
to establish that a ``reasonable possibility'' applies where source
emissions equal or exceed 50 percent of the CAA NSR significance levels
for any pollutant (72 FR 72607). The ``reasonable possibility''
provision identifies for sources and reviewing authorities the
circumstances under which a major stationary source undergoing a
modification that does not trigger major NSR must keep records.
    The 2002 NSR Reform Rules require that state agencies adopt and
submit revisions to their SIP permitting programs implementing the
minimum program elements of the 2002 NSR Reform Rules no later than
January 2, 2006. (Consistent with changes to 40 CFR 51.166(a)(6)(i),
state agencies are now required to adopt and submit SIP revisions
within three years after new amendments are published in the Federal
Register.) State agencies may meet the requirements of 40 CFR part 51
and the 2002 NSR Reform Rules with different but equivalent
regulations.
    On October 31, 2006, March 5, 2007, and August 22, 2007, Georgia
EPD submitted revisions to EPA for the purpose of including the revised
State NSR permitting rules in the SIP. EPA is now proposing to
partially approve and disapprove certain portions of these submittals
consistent with section 110(k)(3) of the CAA.

III. What Is EPA's Analysis of Georgia's NSR Rule Revisions?

    Georgia currently has a SIP-approved NSR program for new and
modified stationary sources. EPA is now proposing to approve revisions
to Georgia's existing NSR program (with the exception of one NNSR
provision). Georgia's SIP submittals consist of a compilation of
amendments that became State-effective between April 19, 2006, and July
25, 2007. Copies of Georgia's revised NSR rules, as well as the State's
Technical Support Document, can be obtained from the Docket, as
discussed in the ADDRESSES section above. Below is a discussion of the
specific changes to Georgia's rules now proposed for inclusion into the
SIP.

A. Prevention of Significant Deterioration

    Georgia Rule for Air Quality Control chapter 391-3-1-.02, paragraph
7, ``Prevention of Significant Deterioration of Air Quality,'' contains
the preconstruction review program that provides for the prevention of
significant deterioration of ambient air quality as required under Part
C of title I of the CAA (the PSD program). The PSD program applies to
sources that are major stationary sources or undergoing major
modifications in areas that are designated as attainment or
unclassifiable with regard to any NAAQS. Georgia's PSD program was
originally approved into the SIP by EPA on February 10, 1982 (47 FR
6017), and has been revised several times since then in order to remain
consistent with federal rule changes.
    The changes to Georgia's PSD rules, which EPA is now proposing to
approve into the Georgia SIP, were made to update the existing Georgia
rules to meet the requirements of the 2002 NSR Reform Rules. The SIP
revisions including these rule updates address baseline actual
emissions, actual-to-projected-actual applicability tests, and PALs.
Georgia's PSD rules incorporate by reference (IBR) the federal PSD
rules at 40 CFR 52.21, as amended by January 29, 2006. The version of
40 CFR 52.21 that is incorporated by reference into the Georgia rules
is the version that existed as of the date of publication of the
State's public notice, which was January 29, 2006. The proposed
revisions explicitly exclude the PCP and clean unit portions of the
2002 NSR Reform Rules that were vacated as part of the D.C. Circuit
Court's June 2005 decision.
    With regard to the remanded portions of the 2002 NSR Reform Rules
related to recordkeeping and EPA's December 21, 2007, clarifications of
the term ``reasonable possibility'' (72 FR 72607), Georgia did not
incorporate by reference or adopt the federal ``reasonable
possibility'' provisions at 40 CFR 52.21(r)(6). In lieu of the federal
provisions, Georgia adopted detailed recordkeeping and reporting
requirements that apply to all modifications that use the actual-to-
projected-actual methodology and are required to obtain a permit under
Georgia's general permitting requirements (i.e. minor source
construction program). Thus, the Georgia recordkeeping and reporting
provisions are more comprehensive than the federal requirements. EPA's
December 21, 2007, final action on the recordkeeping and reporting
provisions of the federal rules explains state obligations with regard
to the reasonable possibility related rule changes. See, 72 FR 72613-
72614. Georgia has 3 years from the December 2007 rulemaking to submit
revisions to incorporate the reasonable possibility provisions or to
submit notice to EPA that their regulations fulfill these requirements.
    In addition to incorporating the federal rule by reference,
Georgia's rules include several additional provisions, such as the
correction of reference errors in the federal rule, clarification of
procedures for implementing the rules, and additional recordkeeping and
reporting requirements. Each of these provisions is specifically
addressed in Georgia's Technical Support Document. As part of the
evaluation of the Georgia SIP submittals, EPA performed a line-

by-line comparison of Georgia's proposed revisions and the federal
requirements. As a general matter, state agencies may meet the
requirements of 40 CFR part 51 and the 2002 NSR Reform Rules, with
different but equivalent regulations. In addition, as part of its SIP
submittal, Georgia EPD provided EPA with an ``equivalency
demonstration'' comparing the differences in the State rule with the
corresponding sections of the federal rules.
    One notable difference from the federal rules is that the Georgia
rules contain an optional provision for the permittee to omit
``malfunction'' emissions from the calculation of ``baseline actual
emissions'' and ``projected actual emissions'' (Georgia Rules 391-3-
1-.02(7)(a)2.(ii)(II)II). In the equivalency demonstration, EPD notes
the difficulty of quantifying past malfunction emissions and estimating
future malfunction emissions as part of the projected actual emissions.
Georgia's rule specifies that if malfunction emissions are omitted from
projected actual emissions, they must also be omitted from baseline
actual emissions and vice-versa, so as to provide a comparable
estimation of the emissions increases associated with a project. The
intent behind this optional calculation methodology is that it may
result in a more accurate estimate of emission increases. The federal
rules allow for some flexibility, and EPA supports EPD's analysis that
the Georgia rule is at least as stringent as the federal rule.
    After evaluating the submittals and supporting documentation for
changes to Georgia's PSD rules, EPA has determined that the proposed
SIP revisions are consistent with the federal program requirements for
the preparation, adoption and submittal of implementation plans for the
Prevention of Significant Deterioration of Air Quality, set forth at 40
CFR 51.166.

B. Nonattainment New Source Review

    Georgia's NNSR program applies to the construction and modification
of any major stationary source of air pollution in a nonattainment
area, as required by Part D of title I of the CAA. The provisions in
the Georgia NNSR Rules 391-3-1-.03(8) were established to meet the
current federal nonattainment rule, including the 2002 NSR Reform
Rules, which are found at 40 CFR 51.160-165 and part 51, Appendix S.
    The Georgia NNSR Rules incorporate applicable provisions from the
state's PSD rules (391-3-1-.02(7)) and include additional provisions
unique to nonattainment areas. Many of the changes that Georgia made to
its PSD program to incorporate the federal NSR Reform Rules are also
applicable to sources subject to NNSR permitting requirements. These
include the above-mentioned requirements for baseline emissions
calculations, an actual-to-projected-actual methodology for calculating
emissions changes, options for plantwide applicability limits, and
recordkeeping and reporting requirements. Likewise, the differences
from the federal rule that were discussed in reference to the PSD
program are also applicable to the Georgia nonattainment program.
    As was discussed above, Georgia provided EPA with an equivalency
demonstration to show that the State program is at least as stringent
as the federal program. For Georgia's NNSR program, the differences
from the federal rules for which the State demonstrated equivalency are
the same as those identified in the State's PSD program. These
deviations from the federal rule are acceptable, and may be retained in
Georgia's NNSR program now being proposed for approval into the SIP.
    The October 31, 2006, submittal also contains additional
requirements related to offsets. These new provisions (subparagraphs
391-3-1-.03(8)(c) 12 (iv) through (vi)) require permittees that are
required to obtain offsets for new and modified stationary sources to
provide documentation to EPD that they have obtained sufficient offsets
prior to start-up of the new or modified stationary source. EPA has
determined that these proposed SIP revisions are consistent with the
Federal program requirements for the preparation, adoption and
submittal of implementation plans for the Review of New Sources and
Modifications set forth at 40 CFR 51.160-165, and part 51, Appendix S.
    The August 22, 2007, submittal also contains clarifications to
specify, in Rule 391-3-1-.03(8)(e), the additional seven counties
included in the Atlanta 8-hour ozone nonattainment area (as revised
from the thirteen county 1-hour ozone nonattainment area). These
counties are subject to nonattainment area permitting requirements,
including the revised NSR reform provisions.
    The March 5, 2007, submittal includes a revision to Georgia Rule
391-3-1-.03 subparagraph (13)(c), ``Quantification of Emission
Reduction Credits.'' The proposed SIP revision changes the methodology
for the calculation of emission reduction credits to incorporate the
new Federal definition of ``baseline actual emissions.'' The State's
purpose was to make the method for determining actual emissions, prior
to a reduction, consistent with the calculation of baseline emissions
reductions used elsewhere in the Federal and State NSR requirements.
The emission reduction credits are certified under the Georgia rule to
be used as offsets for NSR purposes. However, the federal requirements
at 40 CFR 51.165 (a)(3)(i) indicate that the offset baseline shall be
the ``actual emissions'' of the source from which offset credit is
obtained. For additional discussion on this topic, see EPA's final
action on the NSR Reform Rules (67 FR 80196), under the heading ``Am I
able to Apply Today's Changes for Calculating the Baseline Actual
Emissions to Other Major NSR Requirements?'' The Georgia SIP currently
contains an approved calculation methodology for emission reduction
credits, which is based upon the federal definition of ``actual
emissions'' rather than ``baseline actual emissions.'' EPA is now
proposing to disapprove the State's March 5, 2007, change to Georgia
Rule 391-3-1-.03 subparagraph (13)(c) because it is not consistent with
EPA's NSR Reform Rules. This provision is severable from the other
portions of the Georgia submittals subject to this action. No further
changes are necessary in response to EPA's proposed disapproval because
Georgia's rules already contain a SIP-approved methodology for
calculating emission reduction credits that is consistent with EPA's
NSR Reform Rules.

IV. What Action Is EPA Proposing To Take?

    EPA is proposing to partially approve and disapprove revisions to
the Georgia SIP submitted on October 31, 2006, March 5, 2007, and
August 22, 2007, that address changes to Georgia's PSD and NNSR
programs. The disapproval involves subparagraph 391-3-1-.03(13)(c) of
the March 5, 2007, submittal related to ``Emissions Reduction
Credits.'' EPA's proposal to partially approve and disapprove the NSR
permitting portions of the SIP submittals is consistent with section
110(k)(3) of the CAA.

V. Statutory and Executive Order Reviews

    Under the CAA, the Administrator is required to approve a SIP
submission that complies with the provisions of the Act and applicable
Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in
reviewing SIP submissions, EPA's role is to approve State choices,
provided that they meet the criteria of the CAA. Accordingly, this
proposed

action merely approves State law as meeting Federal requirements and
does not impose additional requirements beyond those imposed by State
law. For that reason, this proposed action:
     Is not a ``significant regulatory action'' subject to
review by the Office of Management and Budget under Executive Order
12866 (58 FR 51735, October 4, 1993);
     Does not impose an information collection burden under the
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact
on a substantial number of small entities under the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or
uniquely affect small governments, as described in the Unfunded
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Does not have Federalism implications as specified in
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based
on health or safety risks subject to Executive Order 13045 (62 FR
19885, April 23, 1997);
     Is not a significant regulatory action subject to
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of Section 12(d) of the
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272
note) because application of those requirements would be inconsistent
with the CAA; and
     Does not provide EPA with the discretionary authority to
address, as appropriate, disproportionate human health or environmental
effects, using practicable and legally permissible methods, under
Executive Order 12898 (59 FR 7629, February 16, 1994).
    In addition, this rule does not have tribal implications as
specified by Executive Order 13175 (65 FR 67249, November 9, 2000),
because the SIP is not approved to apply in Indian country located in
the state, and EPA notes that it will not impose substantial direct
costs on tribal governments or preempt tribal law.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Carbon monoxide,
Intergovernmental relations, Lead, Nitrogen dioxide, Ozone, Particulate
matter, Reporting and recordkeeping requirements, Sulfur oxides,
Volatile organic compounds.

    Authority: 42 U.S.C. 7401 et seq.

    Dated: August 25, 2008.
Russell L. Wright Jr.,
Acting Regional Administrator, Region 4.
 [FR Doc. E8-20388 Filed 9-3-08; 8:45 am]

BILLING CODE 6560-50-P