[Federal Register Volume 78, Number 190 (Tuesday, October 1, 2013)]
[Rules and Regulations]
[Pages 60218-60220]
[FR Doc No: 2013-23859]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 165

[Docket No. USCG-2013-0196]
RIN 1625-AA00

Safety Zone; Old Mormon Slough, Stockton, CA

AGENCY: Coast Guard, DHS.

ACTION: Final rule.

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SUMMARY: The Coast Guard is establishing a safety zone at: McCormick &
Baxter superfund site, Old Mormon Slough, Stockton, CA. This safety
zone supports ongoing efforts by the Environmental Protection Agency
(EPA) to decontaminate soil, groundwater, and sediment in Old Mormon
Slough and the surrounding basin. This safety zone restricts vessels
from entering Old Mormon Slough and disturbing the existing sediment
cap needed for site decontamination. This safety zone reduces human
health and environmental risks associated with clean up efforts at
McCormick & Baxter superfund site.

DATES: This rule is effective October 31, 2013.

ADDRESSES: Documents mentioned in this preamble are part of docket
[USCG-2013-0196]. To view documents mentioned in this preamble as being
available in the docket, go to http://www.regulations.gov, type the
docket number in the ``SEARCH'' box and click ``SEARCH.'' Click on Open
Docket Folder on the line associated with this rulemaking. You may also
visit the Docket Management Facility in Room W12-140 on the ground
floor of the Department of Transportation West Building, 1200 New
Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: If you have questions on this rule,
call or email Lieutenant Junior Grade Blake Morris, Waterways
Management Division, U.S. Coast Guard; telephone<PHONE_NUMBER>, email
<EMAIL_ADDRESS>If you have questions on viewing or submitting
material to the docket, call Barbara Hairston, Program Manager, Docket
Operations, telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

A. Regulatory History and Information

    On July 17, 2013, we published a Notice of Proposed Rulemaking
(NPRM) entitled Safety Zones: Old Mormon Slough, Stockton, CA, in the
Federal Register (76 FR 17102). We received no comments on the NPRM, or
a request for public meeting. A public meeting was not held.

B. Basis and Purpose

    The Coast Guard is conducting this rulemaking under the authority
of 33 U.S.C. 1231.
    The purpose of this rule is to establish a safety zone in Old
Mormon Slough to further the efforts of the EPA to rehabilitate soil,
sediment, and ground water from contaminates of the McCormick & Baxter
Creosoting Company. The McCormick & Baxter Creosoting Co. site is a 29-
acre former wood-preserving facility located in an industrial area near
the Port of Stockton. Old Mormon Slough, which is connected to the
Stockton Deepwater Channel, borders the site on the north. Except for
an 8-acre portion of the site owned by Southern Pacific Railroad
Company, McCormick & Baxter owns the entire property. From 1942 to
1990, McCormick & Baxter treated utility poles and railroad ties with
creosote, pentachlorophenol (PCP), and compounds of arsenic, chromium
and copper. Wood treating chemicals were stored in tanks, and oily
waste generated by the wood-treatment process was stored in unlined
ponds and concrete tanks on the site. The site came to the attention of
state agencies in 1977 when a fish kill in New Mormon Slough and the
Stockton Deepwater Channel was attributed to a release of PCP-
contaminated storm water runoff from the McCormick & Baxter facility.
In 1978, McCormick & Baxter constructed a perimeter dike to prevent
storm water runoff from the site and installed two storm water
collection ponds. The unlined oily waste ponds were closed in 1981.
Sampling has shown that soils throughout the site and groundwater in
the shallow aquifer beneath the site are contaminated with PCP, various
constituents of creosote, dioxin (a contaminant in industrial-grade
PCP) and metals. Soil contamination extends to greater than 40 feet
below ground surface (BGS) in the central processing area of the site.
Site investigations indicate that the shallow aquifer (0-200 ft BGS) is
connected with the deeper aquifer, which is a drinking water source.
However, no drinking water supplies are currently threatened by site-
related contamination. Approximately 105,000 people live and work
within 4 miles of the site. Sediment in Old Mormon Slough adjacent to
the site is also contaminated, primarily with polycyclic aromatic
hydrocarbons (PAHs) and dioxin. Site-related contaminants have been
detected in fish caught in the vicinity of the site. People fish in the
Stockton Channel and in Old Mormon Slough, although the McCormick &
Baxter site is fenced and posted with warning signs.
    Previous testing conducted by the EPA found soils and groundwater
were contaminated with PCP, dioxin, PAHs, which are constituents of
creosote, arsenic, chromium, and copper. In addition, non-aqueous phase
liquids (NAPLs) are widespread beneath the site. Sediment in Old Mormon
Slough adjacent to the site is also contaminated, primarily with PAHs
and dioxin. Individuals who accidentally ingest or

come in direct contact with contaminated soil, sediment or groundwater
could be at risk. Drinking water from the deep aquifer has not been
affected by any contaminants from the McCormick & Baxter site. Oily
seeps from the former oily waste ponds into Old Mormon Slough occurred
in the past, although the seeps are now controlled. Site-related
contaminants have been found in locally-caught fish, which may be
consumed by nearby fishermen and their families. Sediment contamination
also poses an environmental threat to aquatic organisms in the vicinity
of the site.
    The EPA is actively making efforts to control human exposure to
contaminates via direct contact or ingestion in Old Mormon Slough as
well as protect the decontamination process. The installation of storm
water collection ponds and perimeter dike, site security improvements,
chemical and sludge disposal, demolition and disposal of processing
equipment and site structures, construction of a sheet piling wall
along Old Mormon Slough, excavation and backfilling at the oily waste
pond area, installation of a cap over the most heavily contaminated
central portion of the site, and installation of a sand cap in Old
Mormon Slough have reduced threats to public health and the environment
from these areas of the site.

C. Discussion of Comments, Changes and the Final Rule

    The Coast Guard received no comments or request for a public
meeting after publishing the NPRM for this rule. Therefore, no changes
have been made to the regulatory text of this rule.
    The Coast Guard is amending 33 CFR part 165 to establish a safety
zone in Old Mormon Slough to help effect the rehabilitation process at
the McCormick & Baxter superfund site. This amendment is necessary to
prevent pleasure craft from disturbing the sediment cap in Old Mormon
Slough. The EPA had previously established a log boom at the waterway
entrance. However, tidal influences and heavy weather, at times, caused
the log boom to shift and allow vessels unrestricted access. It is
imperative for proper rehabilitation that control measures beyond
physical are implemented to restrict waterside interaction and allow
contaminates to dissipate.

D. Regulatory Analyses

    We developed this rule after considering numerous statutes and
executive orders related to rulemaking. Below we summarize our analyses
based on these statutes and executive orders.

1. Regulatory Planning and Review

    This rule is not a significant regulatory action under section 3(f)
of Executive Order 12866, Regulatory Planning and Review, as
supplemented by Executive Order 13563, Improving Regulation and
Regulatory Review, and does not require an assessment of potential
costs and benefits under section 6(a)(3) of Executive Order 12866 or
under section 1 of Executive Order 13563. The Office of Management and
Budget has not reviewed it under those Orders. We expect the economic
impact of this rule does not rise to the level of necessitating a full
Regulatory Evaluation.

2. Impact on Small Entities

    The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as
amended, requires federal agencies to consider the potential impact of
regulations on small entities during rulemaking. The term ``small
entities'' comprises small businesses, not-for-profit organizations
that are independently owned and operated and are not dominant in their
fields, and governmental jurisdictions with populations of less than
50,000. The Coast Guard received no comments either from the public or
the Small Business Administration on this rule. The Coast Guard
certifies under 5 U.S.C. 605(b) that this rule will not have a
significant economic impact on a substantial number of small entities.
    (1) This rule would affect the following entities, some of which
may be small entities: The owners or operators of vessels engaged in
recreational activities intending to transit, anchor or fish in the Old
Mormon Slough.
    (2) This safety zone would not have a significant economic impact
on a substantial number of small entities because it is limited to a
narrowly tailored geographic area. There has been no indication that
small entities currently have a significant interest in this site.

3. Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121), we want to assist small
entities in understanding this rule. If the rule would affect your
small business, organization, or governmental jurisdiction and you have
questions concerning its provisions or options for compliance, please
contact the person listed in the FOR FURTHER INFORMATION CONTACT,
above.
    Small businesses may send comments on the actions of Federal
employees who enforce, or otherwise determine compliance with, Federal
regulations to the Small Business and Agriculture Regulatory
Enforcement Ombudsman and the Regional Small Business Regulatory
Fairness Boards. The Ombudsman evaluates these actions annually and
rates each agency's responsiveness to small business. If you wish to
comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR
(1-888-734-3247). The Coast Guard will not retaliate against small
entities that question or complain about this rule or any policy or
action of the Coast Guard.

4. Collection of Information

    This rule calls for no new collection of information under the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

5. Federalism

    A rule has implications for federalism under Executive Order 13132,
Federalism, if it has a substantial direct effect on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government. We have analyzed this rule under that Order and have
determined that this rule does not have implications for federalism.

6. Protest Activities

    The Coast Guard respects the First Amendment rights of protesters.
Protesters are asked to contact the person listed in the FOR FURTHER
INFORMATION CONTACT section to coordinate protest activities so that
your message can be received without jeopardizing the safety or
security of people, places or vessels.

7. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
requires Federal agencies to assess the effects of their discretionary
regulatory actions. In particular, the Act addresses actions that may
result in the expenditure by a State, local, or tribal government, in
the aggregate, or by the private sector of $100,000,000 (adjusted for
inflation) or more in any one year. Though this rule will not result in
such expenditure, we do discuss the effects of this rule elsewhere in
this preamble.

8. Taking of Private Property

    This rule will not cause a taking of private property or otherwise
have taking implications under Executive Order 12630, Governmental
Actions and

Interference with Constitutionally Protected Property Rights.

9. Civil Justice Reform

    This rule meets applicable standards in sections 3(a) and 3(b)(2)
of Executive Order 12988, Civil Justice Reform, to minimize litigation,
eliminate ambiguity, and reduce burden.

10. Protection of Children

    We have analyzed this rule under Executive Order 13045, Protection
of Children from Environmental Health Risks and Safety Risks. This rule
is not an economically significant rule and does not create an
environmental risk to health or risk to safety that may
disproportionately affect children.

11. Indian Tribal Governments

    This rule does not have tribal implications under Executive Order
13175, Consultation and Coordination with Indian Tribal Governments,
because it does not have a substantial direct effect on one or more
Indian tribes, on the relationship between the Federal Government and
Indian tribes, or on the distribution of power and responsibilities
between the Federal Government and Indian tribes.

12. Energy Effects

    This action is not a ``significant energy action'' under Executive
Order 13211, Actions Concerning Regulations That Significantly Affect
Energy Supply, Distribution, or Use.

13. Technical Standards

    This rule does not use technical standards. Therefore, we did not
consider the use of voluntary consensus standards.

14. Environment

    We have analyzed this rule under Department of Homeland Security
Management Directive 023-01 and Commandant Instruction M16475.lD, which
guide the Coast Guard in complying with the National Environmental
Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded
that this action is one of a category of actions that do not
individually or cumulatively have a significant effect on the human
environment. This rule involves the protection of the sediment cap and
ongoing efforts by the EPA to reduce human health risks. This rule is
categorically excluded under section 2.B.2, figure 2-1, paragraph
(34)(g) of Figure 2-1 of the Commandant Instruction. An environmental
analysis checklist supporting this determination and a Categorical
Exclusion Determination are available in the docket where indicated
under ADDRESSES. We seek any comments or information that may lead to
the discovery of a significant environmental impact from this rule.

List of Subjects in 33 CFR Part 165

    Navigation (water) and Waterways.

    For the reasons discussed in the preamble, the Coast Guard amends
33 CFR part 165 as follows:

PART 165--SAFETY ZONES

0
1. The authority citation for part 165 continues to read as follows:

    Authority:  33 U.S.C. 1231; 46 U.S.C. Chapter 701, 3306, 3703;
50 U.S.C. 191, 195; 33 CFR 1.05-1, 6.04-1, 6.04-6, 160.5; Pub. L.
107-295, 116 Stat. 2064; Department of Homeland Security Delegation
No. 0170.1.

0
2. Add Sec.  165.1201 to read as follows:

Sec.  165.1201  Safety Zone; Old Mormon Slough, Stockton California.

    (a) General. This safety zone is established to protect
environmental rehabilitation efforts and prevent vessels from
disturbing the sediment cap at Old Mormon Slough.
    (b) Regulation. All vessels and personnel not associated with the
EPA are prohibited from entering into and transiting Old Mormon Slough.
Old Mormon Slough is defined as all waters Eastward from the connection
of coordinates 37[deg]57'02.13'' North, 121[deg]18'49.55'' West and
37[deg]57'01.11'' North, 121[deg]18'46.75'' West (NAD 83).
    (c) Each person in a safety zone who has notice of a lawful order
or direction shall obey the order or direction of the Captain of the
Port (COTP) or District Commander issued to carry out the purposes of
this subpart.
    (d) The Coast Guard may be assisted in enforcing this rule by other
Federal, state, or local agencies.

    Dated: September 10, 2013.
K.L. Schultz,
Rear Admiral, U.S. Coast Guard, Commander, Eleventh Coast Guard
District.
[FR Doc. 2013-23859 Filed 9-30-13; 8:45 am]
BILLING CODE 9110-04-P


March 6, 2007

SUPPORTING STATEMENT

FOR AN INFORMATION COLLECTION REQUEST (ICR)

1. IDENTIFICATION OF THE INFORMATION COLLECTION

1(a) Title of the Information Collection: Plant-Incorporated
Protectants; CBI Substantiation and Adverse Effects Reporting

OMB No.: 2070-0142              EPA ICR No.: 1693.05

1(b) Short Characterization/Abstract

The Environmental Protection Agency (EPA) is responsible for the
regulation of pesticides as authorized by the Federal Insecticide,
Fungicide, and Rodenticide Act (FIFRA). Prior to EPA granting a
registration, the manufacturer of the pesticide must demonstrate to the
Agency that the use of the pesticide product will not result in any
unreasonable adverse effects to humans or the environment. EPA is also
responsible under the Federal Food, Drug, and

Cosmetic Act (FFDCA) for establishing a tolerance or exemption from the
requirement of a tolerance for pesticide residues on food or feed.

On January 16, 2001, the Agency promulgated a final rule that addresses
the regulatory status of pesticidal substances that are produced by
plants (plant-incorporated protectants). The final rule (Attachment A)
clarifies regulatory responsibilities at different stages of field
testing through registration, and ultimate sale and distribution,
regardless of whether the pesticidal capabilities evolved in the plants,
were introduced by plant breeding or through the techniques of modern
biotechnology. It is now possible to introduce into plants, e.g.,
through genetic engineering, mechanisms of pest and disease control
strategies. Therefore, pesticidal substances that are produced by plants
can be diverse and can potentially originate from any taxonomic

kingdom. A plant-incorporated protectant is defined in the final rule as
"the pesticidal substance that is intended to be produced and used in a
living plant and the genetic material necessary for the production of
such a substance."

The final rule accomplishes two things: it exempts a wide range of
plant-incorporated protectants from registration requirements under
FIFRA, and it imposes two new requirements on manufacturers of some
plant-incorporated protectants.

This Information Collection Request (ICR) covers the two information
collection related provisions contained in the final rule, i.e., the
provision that requires registrants that make Confidential Business
Information (CBI) claims to substantiate such claims when they are made,
and the provision that requires manufacturers of plant-incorporated
protectants exempted from

requirements of registration under the final rule to report adverse
effects to the Agency. It is important to note that current CBI
regulations at 40 CFR part 2 require that claimants substantiate their
CBI claims for their own records when the claim is made, and
subsequently provide the substantiation to EPA only if requested. The
substantiation, however, is not required to be included with the
submission to EPA in which the CBI claims are made. The burden
associated with the existing requirement is already approved by OMB.
Although the final rule now requires the claimant to include the CBI
substantiation in the plant-incorporated protectant related submissions
to EPA, it is difficult to identify any additional burden that such a
requirement might actually impose. Nevertheless, the Agency has chosen
the conservative approach of including potential burden and costs for
preparing and submitting the CBI substantiation at the time of
submission of the information containing the CBI claim as required by
the final rule.

The clarifications contained in the final rule that are related to
information collection activities that are part of registration
activities, e.g., data requirements for pesticide registrations, are
already approved by OMB under the PRA, and that approval is not impacted
by the clarification provided in the final rule. Information collection
activities related to pesticide

registration are approved under OMB Control Nos. 2070-0060 (Application
for New or Amended Pesticide Registration), 2070-0024 (Tolerance
Petitions for Pesticides on Food/Feed Crops and New Inert Ingredients),
and 2070-0040 (Application for Experimental Use Permit (EUP) to Ship and
Use a Pesticide for Experimental Purposes Only).

This ICR, therefore, discusses the paperwork burdens associated with the
requirement for registrants to substantiate CBI claims when they are
made, and the requirement for manufacturers of plant-incorporated
protectants exempted from registration requirements under the final rule
to report adverse effects to the Agency within 30 days.

2. 	NEED FOR AND USE OF THE COLLECTION

2(a) Need/Authority for the Collection

Although FIFRA requires the registration of most pesticides, it also
authorizes the Agency’s regulation of unregistered pesticides. FIFRA
section 3(a) provides that, to the extent necessary to prevent
unreasonable adverse effects on the environment, the Administrator may
limit the distribution, sale, or use of any pesticide that is not
registered under section 3 of FIFRA, or subject to an experimental use
permit under section 5 of FIFRA, or subject to an emergency exemption
under section 18 of FIFRA. Pesticides that are "not registered" include
pesticides that are exempt from FIFRA requirements under section 25(b)
(Attachment B).

FIFRA section 2(bb) defines the term "unreasonable adverse effects on
the environment" to mean: “(1) any unreasonable risk to man or the
environment, taking into account the economic, social, and environmental
costs and benefits of the use of any pesticide, or (2) a human dietary
risk from residues that result from a use of a pesticide in or on any
food inconsistent with the standard under section 408 of the Federal
Food, Drug, and Cosmetic Act” (7 U.S.C. 136(bb)).

Section 25(b)(2) of FIFRA allows EPA to exempt, by regulation, any
pesticide from some or all of the requirements of FIFRA, if the
pesticide is of a character which is unnecessary to be subject to FIFRA
in order to carry out the purposes of that Act (7 U.S.C. 136w(b)(2)).
EPA interprets FIFRA section 25(b)(2) to authorize EPA to exempt a
pesticide or category of pesticides that EPA determines poses a low
probability of risk to the environment, and that is not likely to cause
unreasonable adverse effects to the environment even in the absence of
regulatory oversight under FIFRA.

To determine whether a pesticide qualifies for an exemption under
section 25(b)(2), EPA evaluates both the potential risks and benefits of
the use of the pesticide. In evaluating a pesticide under the first
exemption criterion, whether use of the pesticide poses a low
probability of risk to the environment, EPA considers the extent of the
potential risks caused by use of the pesticide to the environment,
including humans and other animals, plants, water, air and land.
Potential risks to humans include dietary risks as well as non-dietary
risks such as those resulting from occupational or residential exposure
to the pesticide. EPA uses the FFDCA section 408 standard in evaluating
dietary risks. EPA will not exempt pesticides under section 25(b)(2)
that fail the low probability of risk criterion.

In evaluating a pesticide under the second exemption criterion, whether
the use of the pesticide is likely to cause unreasonable adverse effects
on the environment even in the absence of regulatory oversight under
FIFRA, EPA balances all the potential risks to human health, including
any dietary risks, and risks to the remainder of the environment from
use of the pesticide against the potential benefits associated with its
use. In balancing risks and benefits,

EPA considers the economic, social, and environmental costs and benefits
of the use of the pesticide. If the pesticide meets both exemption
criteria, EPA may exempt the pesticide from regulation under FIFRA
section 25(b)(2).

Under FFDCA section 408(a) (Attachment C), a pesticide chemical residue
in or on food is not safe unless EPA has issued either: a tolerance for
the residue and the residue is within the tolerance limits, or an
exemption from the requirement of a tolerance for the residue (21 U.S.C.
346a(a)(1)). FFDCA section 408 authorizes EPA to determine a residue is
safe and exempt from the requirement of a tolerance if the Administrator
“. . . has determined 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” (21 U.S.C.
346a(c)(2)(A)). Section 408 of the FFDCA also directs EPA to
specifically consider harm that may result to infants and children as a
result of pesticide chemical residues.

 	A determination that a pesticide chemical meets the safety standard of
section 408(a) of the FFDCA may also be relevant to whether a pesticide
qualifies for a FIFRA section 25(b)(2) exemption with respect to human
health risks arising from other routes of exposure. However, FIFRA does
not provide for exemption of a pesticide in food based solely upon
consistency with the FFDCA section 408 exemption standard. At a minimum,
EPA also must evaluate risks arising from occupational exposure to
humans and determine that such risks meet both exemption criteria. In
addition, EPA must evaluate the risks to the environment from the
pesticide and determine both that the pesticide poses only a low
probability of environmental risks, and that use of the pesticide is not
likely to cause any unreasonable adverse effects on the remainder of the
environment in the absence of regulation under FIFRA.

2(b) Practical Utility/Users of the Data

EPA believes that requiring the substantiation of CBI claims for
plant-incorporated protectants at the time of submission to the Agency
will help ensure a timely EPA response to submissions for
plant-incorporated protectants, protect the public’s right to access
information consistent with FIFRA, and ensure that information
qualifying as CBI is properly protected from unauthorized disclosures.
Since registrants are already required to ensure that CBI claims are
proper prior to asserting the CBI protection for information submitted
to EPA, this requirement simply affects the time at which the
substantiation is submitted to the Agency, i.e., it requires the
inclusion of this substantiation with the submission.

While the Agency’s analysis of the potential risks and benefits of
plant-incorporated protectants has led it to conclude that the
categories of plant-incorporated protectants described in 40 CFR part
174, subpart B warrant exemption, it is possible that there may be
unforeseeable adverse effects to human health or the environment from
the testing and use of otherwise

exempted plant-incorporated protectants, as the exemptions at subpart B
are broad and cover literally thousands of potential substances, some of
which under certain use conditions have the potential to be toxic. The
Agency thus includes as a condition of exemption, a requirement to
report to EPA within 30 days any factual adverse effects associated with
these otherwise exempt plant-incorporated protectants. These reporting
requirements are similar to reporting

requirements imposed on registrants under FIFRA section 6(a)(2) for
registered pesticides. However, since the 6(a)(2) reporting requirement
applies to registered pesticides and many plant-incorporated protectants
are exempted from registration by the final FIFRA rule, the Agency
imposed, under FIFRA section 3 and 25(b) authorities, a separate
reporting requirement to obtain any information on unforeseen adverse
effects from the exempted plant-incorporated protectants.

The information supplied to substantiate claims of confidentiality will
be used by the Agency to determine whether CBI claims comply with the
confidentiality provisions of FIFRA. Early substantiation of CBI claims
will enable the Agency to promptly release information supporting
plant-incorporated protectants registration decisions, without delaying
registrations in order to obtain CBI substantiation once a decision has
been made to register a plant-incorporated protectant, while still
protecting legitimate CBI.

The adverse effects reports on exempted plant-incorporated protectants
will be utilized by the Agency to evaluate adverse effects to determine
if any additional regulatory actions are warranted. These reports will
also enable the Agency to report to appropriate oversight bodies and the
public its evaluation of such adverse effects and will help support any
additional decision on regulatory oversight.

3. NON DUPLICATION, CONSULTATIONS, AND OTHER COLLECTION

   CRITERIA

   3(a) Non duplication

In fulfilling its mission as the Federal agency primarily responsible
for the regulation of pesticides, EPA works closely with the U.S.
Department of Agriculture (USDA) which has responsibilities under the
Federal Plant Protection Act (FPPA), and the U.S. Food and Drug
Administration (FDA) which has responsibilities under the FFDCA. EPA,
USDA and FDA consult and exchange information when such consultation is
helpful in resolving safety questions. The three agencies also strive
for consistency between program, adopting consistent approaches, to the
extent permitted by the respective statutory authorities. A consistent
approach between agencies is easier for the regulated community to
understand. It is also more likely to conserve resources, as submitters
would more likely be able to use data developed for one agency to meet
requirements posed by another agency for the same or similar products.

Generally, respondents are not required to submit applications or any
other related data or information regarding testing to any other federal
agency or to any other EPA program office. However, there may be
requirements under the FPPA for plants that produce plant-incorporated
protectants. Under the FPPA, the USDA's Animal and Plant Health
Inspection Service (APHIS) regulates field testing of genetically
altered plants, while EPA will have regulatory oversight of the
pesticide substances produced by those plants. In instances where review
under the FPPA may be triggered, the respondent will need to contact
APHIS for a determination of whether the plant containing a
plant-incorporated protectant is a plant pest that will need a permit.

In any case, there is no known duplication related to the requirements
covered in this ICR, i.e., the up-front CBI substantiation or the
submission of adverse effects reports for exempted plant-incorporated
protectants. Each respondent must submit information unique to his/her
product application, or allegation received, and will do so only once on
occasion.

3(b) Public Notice Required Prior to ICR Submission to OMB

 	Pursuant to 5 CFR 1320.8(d), EPA is publishing a Federal Register (FR)
notice soliciting comment on this information collection activity and
the Agency’s intent to renew the OMB approval of this ICR.  The FR
notice and the proposed renewal ICR as well as any public comments are
located in the docket for this action, which can be accessed at
HYPERLINK "http://www.regulations.gov"  http://www.regulations.gov
using the docket indentifier EPA-HQ-OPP-2006-0860.

3(c) Consultations

In developing its approach to plant-incorporated protectants, EPA
requested advice from two scientific advisory groups at three meetings.
In 1992, a subpanel of the FIFRA Scientific Advisory Panel (SAP)
reviewed a draft proposed policy statement and answered a series of
scientific questions concerned primarily with EPA’s proposed
exemptions under FIFRA. The following year, a Subcommittee of the EPA
Biotechnology Science Advisory Committee (BSAC) met to address a series
of scientific questions concerned primarily with EPA’s proposed
exemptions under the FFDCA. In 1994, a joint meeting of these two groups
met to address a series of scientific questions on approaches to
plant-incorporated protectants under both FIFRA and FFDCA. Advice from
these scientific advisory groups was considered in finalizing this rule.

In addition to the public consultation described above, consultation
and/or dialogue between industry and Managers in the Biopesticides and
Pollution Prevention Division (BPPD) of the Office of Pesticide Programs
(OPP) occurs on an informal, on-going, as-needed basis, during the
submission and review of an application for EUP or registration.
Experience has shown that if any sort of problem arises, be it
technical, administrative, or otherwise, or, if there are suggestions
for improvements in the program, the applicants will not hesitate to
inform BPPD. Any questions or consultations connected with a particular
submission are addressed in a meeting or telephone conversation with the
applicant, and do not necessarily occur at specified intervals.

During the preparation of this ICR renewal, EPA staff contacted the
following representatives of pesticide registrants by e-mail and asked
them for their assessment of the burden estimates in the ICR (see
Attachment D):

• Myrna Q. Sevilla, BHN Research, email:    HYPERLINK
<EMAIL_ADDRESS><EMAIL_ADDRESS>
• Penny Hunst, Dow Agrosciences, email:   HYPERLINK
<EMAIL_ADDRESS><EMAIL_ADDRESS>
• Russell Schneider, Monsanto Co.,<PHONE_NUMBER>, e-mail:   HYPERLINK
<EMAIL_ADDRESS><EMAIL_ADDRESS>
The registrants were asked only about up-front substantiation of
confidential business information claims. There have been no adverse
effects reporting for exempted PIPs.

The registrants were asked the following questions:

Are the data EPA asks for available from another source? -

Are the instructions for submission clear? -

Would you be interested in electronic reporting of data? -

Do you find the burden and cost estimates in the ICR realistic? -

3(d) Effects of Less Frequent Collection

Not applicable. The information is submitted either in conjunction with
the application or when an adverse effect occurs for an exempted
plant-incorporated protectant. This activity is conducted only once per
"event," and therefore, there are no set means by which the Agency can
reduce the frequency.

3(e) General Guidelines

The collection activities covered by this ICR comply with the PRA
guidelines established by OMB.

3(f) Confidentiality

Although the EPA urges submitters to minimize the amount of information
that is claimed as CBI, any data and/or information submitted to the
Agency may be claimed as trade secret, or commercial or financial
information and will be protected from disclosure by the EPA under FIFRA
section 10 and the associated regulations as contained in 40 CFR Part 2,
Subpart B. When information that is claimed as trade secret or CBI is
provided to the Agency, such information is subject to the protections
and procedures set forth in FIFRA Section 10. Nothing

in this rule affects those protections.

Even if a registrant fails to include the required substantiation for
any CBI claims made in the plant-incorporated protection application
when that application is submitted to EPA, the Agency intends to still
handle such claims in accordance with the FIFRA Confidential Business
Information Security Manual. This manual contains instructions relative
to all contact with confidential documents, including responsibility of
EPA employees, physical security measures, CBI materials within EPA, CBI
typing procedures (documents typed internally or by contract), and
interdivisional routing procedures. The manual dictates all CBI must be
marked or flagged as such, that it must be kept in secure, i.e.,
double-locked areas, and that all CBI to be destroyed must be cleared by
a document control officer and placed in EPA's paper shredder.

3(g) Sensitive Questions

Not applicable. No information of a sensitive or private nature is
requested in conjunction with this collection activity. Further, this
information collection activity complies with the provisions of the
Privacy Act of 1974 and OMB circular A-108.

4. THE RESPONDENTS AND THE INFORMATION REQUESTED

4(a) Respondents/NAICS Codes

The respondents for the information collection activities contained in
this ICR include producers and importers of plant-incorporated
protectants. These entities may be classified under the following North
American Industrial Classification System (NAICS) codes:

32532	Pesticides and Other Agricultural Chemical Manufacturing

54171	Research and Development in the Physical, Engineering, and Life

Sciences

325414	Biological Products (except Diagnostic) Manufacturing

611310	Colleges, Universities, and Professional Schools

422910	Farm Supplies Wholesalers

422930	Flower, Nursery Stock, and Florists’ Supplies (Wholesalers)

4(b) Information Requested

Data items, including record keeping requirements

Registrants must continue to review the regulations regarding CBI,
review the materials in their submission for which claims are being
made; and ensure that CBI claims are properly made. Pursuant to the
final rule, registrants must submit a substantiation for any CBI claim
made for information for plant-incorporated protectants submitted to
EPA. The Agency is not imposing any new requirements regarding the basis
for making a CBI claim, or the points that

must be addressed to substantiate any CBI claim that is made. These
requirements already exist in 40 CFR part 2. In addition, EPA is not
imposing any specific form or format for these substantiations. (See 40
CFR 174.9)

Manufacturers of plant-incorporated protectants exempted from
registration requirements (i.e., those exempted under FIFRA section
25(b) in the final rule), must submit to EPA any information they
subsequently obtain regarding adverse effects on human health or the
environment alleged to have been caused by the exempted
plant-incorporated protectant. The Agency anticipates that the entities
will obtain adverse effects information during the normal course of
business, and then will make a report to the Agency with adequate
background information for the Agency to be able to make a decision to
either ask for additional information or to act on the information
presented. The Agency does not foresee any extra data collection effort
to find adverse effects beyond the normal course of business but rather
envisions these effects being discovered from ongoing studies of various
plant-incorporated protectants or customer complaints. Although EPA
specifies the content of any adverse effects report

submitted to EPA, EPA is not imposing any specific form or format for
these reports. (See 40 CFR 174.71)

In addition, entities may also be asked to respond to Agency questions
that arise based on the submission, whether it be the CBI
substantiation, or the adverse effects report. Such follow-up activities
are assumed as part of the initial burden estimates. Should further
information be necessary, e.g., should the adverse effect information
reported to EPA indicate the need for a study or other additional
information, any additional Agency requirement would come in the form of
either a data call in covered under existing regulations or new
regulations. This ICR is not intended to address such activities.

(ii) Respondent Activities

The requirements for up-front CBI substantiation and adverse effects
reporting are separate requirements that only occur on occasion. The CBI
substantiation occurs when an entity is submitting plant-incorporated
protectant related information to EPA that contains CBI claims pursuant
to 40 CFR part 2. The adverse effects reporting occurs when an entity
obtains information regarding adverse effects on human health or the
environment alleged to have been caused by the exempted
plant-incorporated protectant.

Although each activity is distinct, a typical respondent for each
activity is expected to engage in the following activities:

Read Regulations	The respondent needs to become familiar with the
regulations governing CBI substantiation and adverse effects reporting
as they pertain to plant-incorporated protectants.

Plan Activities	The respondent must develop/amend and implement a plan
to ensure compliance with these requirements. The registrant is also
encouraged to consult with the Agency.

Gather Information	The information necessary to provide the required
substantiation and any information obtained on adverse effects must be
assembled.

Review Information	The respondent must check the CBI substantiation for
accuracy and completeness, and verify that the adverse effects report
accurately reflects the information they have obtained.

Complete Paperwork	The information must be compiled into a document(s)
or report(s) and prepared for submission to EPA.

Submit Information	The respondent must submit the information to the
Office of Pesticide Programs as required.

Store, Maintain, and File Information	The final rule does not contain
any new recordkeeping requirements. Please note however that FIFRA
section 8, and the related regulations in 40 CFR part 169, require
registrants to store and maintain certain information related to their
pesticide products. Since no new recordkeeping requirements are being
imposed by this rule, EPA did not include any related burden in this
ICR.

5. 	THE INFORMATION COLLECTED – AGENCY ACTIVITIES, COLLECTION

METHODOLOGIES, AND INFORMATION MANAGEMENT

5(a) Agency Activities

The Agency must evaluate the CBI substantiations when submitted, and
process any adverse effect reports for exempted plant-incorporated
protectants when received. Although these activities are distinct and
separate, the Agency is expected to engage in the following activities:

Consult with the registrant	The Agency will respond to any questions
either in writing, or verbally via meetings or by telephone, and provide
any other assistance or guidance requested.

Record submissions	Whether the submission involves an application
package for the registration of a plant-incorporated protectant, or an
adverse effects report for allegations related to an exempted
plant-incorporated protectant, the submission is recorded or logged in
by the Agency to document its receipt. The Agency will enter the
necessary information into the computer for routing and tracking
purposes.

Review submissions	The Agency will review the incoming materials with
CBI claims to evaluate the CBI substantiations for completeness and
appropriateness, and will review the incoming adverse effects reports to
determine what, if any, substantive review or action might be necessary
as follow-up to the alleged adverse effects.

Store the information	The Agency will maintain the information contained
in the submitted application package, including the CBI substantiation
that was submitted, and will maintain any adverse effects report(s)
submitted.

5(b) Collection Methodology and Management

All information received by the Agency pertaining to CBI substantiation
or adverse effects for exempted plant-incorporated protectants will be
routed to the Biopesticides and Pollution Prevention Division (BPPD) of
the Office of Pesticide Programs (OPP). It will be pin-punched by date,
screened, and entered into the Office of Pesticide Programs Information
Network (OPPIN).

For registration packages involving plant-incorporated protectants, a
file will be created and the application package will be forwarded to
the appropriate Manager within BPPD. The Manager assures that the
initial OPPIN entry is correct, reviews the information, and if
necessary, routes the submitted data through scientific and/or
administrative review. If the scientific information indicates that the
submission is deficient in any manner, the submitter has the option of
attempting to correct the deficiency. If the submission indicates that
information claimed as CBI warrants said claim, the applicant is
notified and the information is marked as such. The Agency will continue
current practice of treating information claimed as CBI as such, until a
CBI determination is made. If a determination is made that a CBI claim
is not warranted or the claim

is not substantiated, the registrant will be notified that the
information claimed as CBI, does not qualify as CBI because it does not
meet the regulatory requirements. They will be given an opportunity to
respond as provided in the existing regulations. The package will then
be processed accordingly.

For adverse effects reports related to exempted plant-incorporated
protectants, a file will be created and the report will be forwarded to
the appropriate product Manager within BPPD. The Manager assures that
the initial OPPIN entry is correct, reviews the information, and
determines the appropriate review and next steps based on the contents
of the report, routing the report through scientific and/or
administrative review, as appropriate. If an adverse effect report
indicates that additional action is warranted or necessary, the Agency
will take appropriate action.

5(c) Small Entity Flexibility

In promulgating the final rule, the Agency considered potential small
entity impacts, and has taken steps to minimize potential impacts to the
extent permitted. EPA believes that the CBI substantiation is fairly
easy to provide for information which warrants CBI claims. The entity,
regardless of size, is already required to make the CBI determination
prior to submitting its registration application to EPA. The final rule
simply requires that this determination be provided with the submission
to substantiate the CBI claim. This is reflected in the relatively low
cost estimate for CBI substantiation for a plant-incorporated protectant
submission. This relatively small cost represents a reasonable step to
ensure the public has access to all non-confidential information on
plant-incorporated protectants once they are registered.

In addition, the Agency has taken steps to ensure that only the person
who produces the exempted plant-incorporated protectant for sale and
distribution is responsible for adverse effects reporting, and only if
they obtain the adverse effects information. The Agency has designed
such reporting to be minimal and has placed the burden on the Agency to
take additional action beyond the entity making the report.

5(d) Collection Schedule

The CBI substantiation occurs only upon submission of claims of
confidentiality and the adverse effects reporting only occur on
occasion. There is no collection schedule per se associated with these
collection activities. These activities are conducted once per
submission.

6. ESTIMATING THE BURDEN AND COST OF THE COLLECTION

6(a) Estimating Respondent Burden

Burdens for this analysis consist primarily of the administrative burden
associated with the drafting and submission of the CBI substantiation
and the adverse effects reports. The burden estimates are based on the
Agency’s experience regarding existing burden estimates related to CBI
substantiation and adverse effects reporting for conventional
pesticides, and provide reasonable estimates for the average time
necessary to perform each activity for each

submission.

For purposes of this ICR, EPA is assuming that no more than 42
PIP-related registration applications with associated CBI
substantiations will be submitted over the 3 year approval period for
this ICR, or 14 per year. The Agency has not received the numbers of
submissions projected during the period since this rule was promulgated.
This is due to the longer than expected time to develop new
plant-incorporated protectants and the continued lack of acceptance in a
number of foreign countries. The Agency is continuing to assume 14
applications, and therefore 14 associated CBI substantiations, per year
based on the fact that number of PIPs-related registration applications
has been increasing.

Table 1 – Average Burden and Cost Estimates per Submission for
Substantiation of CBI Claims Made in a Plant-Incorporated Protectant
Registration Application

	Burden and Cost Estimates	Totals

Activities	Mgmt.

($100.86/hr)	Tech.

($64.80/hr)

	Clerical

($33.05/hr)

	Burden

(hrs)

	Costs

($)

Read Regulations	1($100.86)	2($129.60)	0	3	$230.46

Plan Activities	2 ($201.72)	4($259.20)	0	6	$460.92

Gather Information	0	4($259.20)	0	4	$259.20

Review Information	2 ($201.72)	1($64.80)	1($33.05)	4	$299.57

Complete Paperwork	0	1($64.80)	2($66.10)	3	$130.90

Submit Information	0.5($50.43)	0.5($32.40)	0.5($16.53)	1.5	$99.36

Totals	5.5($554.73)	12.5($810)	3.5($115.68)	21.5	$1,480.41

Estimated Total Annual Burden Hours: 14 events x 21.5 hours = 301 hrs.

Estimated Total Annual Burden Costs: 14 events x $1,480.41 = $20,725.74

Although the Agency does not anticipate any adverse effect reports to be
submitted for exempted plant-incorporated protectants, this ICR includes
an estimate of one such report being submitted over the three year
approval period for this ICR. The per submission estimate is therefore
divided by 3 to provide an average annual burden and cost to include in
the total estimates for this ICR. The total annual average burden and
costs for the adverse effects report is calculated as follows:

Table 2 - Average Burden and Cost Estimates per Submission for
Submitting an Adverse Effects Report for an Exempt Plant-Incorporated
Protectant

	Burden and Cost Estimates	Totals

Activities	Mgmt.

($100.86/hr)

	Tech.

($64.80/hr)

	Clerical

($33.05/hr)

	Burden (hrs)	Costs ($)

Read Regulations	0.5 ($50.43)	1 ($64.80)	0	1.5	$115.23

Plan

Activities 	0.5 ($50.43)	0.5 ($32.40)	0	1

	$82.83

Gather

Information	0

	1 ($64.80)	0	1	$64.80

Review

Information	0.5 ($50.43)	0.5 ($32.40)	0	1	$82.83

Complete

Paperwork	0	0.5 ($32.40)	1 ($33.05)	1.5	$65.45

Submit

Information 	0	0.5 ($32.40)	0.5 ($16.53)	1.0	$48.93

Cost for

Mailing 	0	0	0	0	$0.39

Totals	1.5 ($151.29)	4 ($259.20)	1.5 ($49.58)	7	$460.46

Assuming a single adverse effects report submitted over three year
period:

Estimated Total Annual Burden Hours: (1 event x 7 hours) ÷ 3 = 2.3
hours

Estimated Total Annual Burden Costs: (1 event x $460.46) ÷ 3 = $153.49

6(b) Estimating Respondent Costs

For a period of some years, when estimating labor rates for most OPP
program ICR renewals, the Agency adjusted the ICR renewal labor rates by
using methods such as the NASA Gross Domestic Product (GDP) Deflator
Inflation Calculator to index the labor cost for a particular year.
However, in July 2006, Agency economists completely re-estimated wages,
benefits, and overhead for all labor categories for the pesticide
industry, state government and Agency employees.  The Agency analysis
uses currently available information on labor rates and other benefits
from publicly available websites.  A copy of the methodology used to
re-estimate the labor rates and formulas used to derive the fully loaded
rates and overhead costs is in Attachment E.

To derive the labor rates for this ICR, Agency economists estimated the
wages for the management, technical, and clerical labor categories using
the methodology cited above.  The respondent costs for this renewal for
managerial, technical and clerical rates are estimated at $100.86,
$64.80, and $33.05 per hour, respectively.  These labor rates are fully
loaded and include benefits and overhead costs.

Since CBI substantiations are simply added to the registration
application package and are not submitted separately, there are no
additional costs related to the transmittal of this information to the
Agency. The costs for submitting the registration application package
are already included under the existing ICRs.

These respondent burden and cost estimates may also represent an upper
bound because the analysis assumes that all plant-incorporated
protectant related registration applications will include information
that the registrants will claim as CBI which will need to substantiated.
It is likely that registrants will recognize, over time, that it is in
their interest to make all information on plant-incorporated protectants
publicly available to reduce, if not eliminate, the negative impressions
of genetically modified foods.

6(c). Estimating Agency Burden and Costs

The Agency will incur burden and costs while performing the various
activities necessary to review CBI substantiation submissions and any
adverse effects reports submitted for exempted plant-incorporated
protectants. These activities are described in Section 5 of this ICR and
may include the tracking and review of submissions, requests for
additional information, or consultations with applicants.

Tables 3 and 4 provide the average EPA burden and cost estimates for
performing these activities.

Table 3 - Average Burden and Cost Estimates per Submission for EPA
Activities related to  CBI Substantiation

	Burden and Cost Estimates 	Totals

Activities	Mgmt.

($93.07/hr)

	Tech.

($66.34/hr)

	Clerical

($47.17/hr)

	Burden (hrs)

	Costs

($)

Consult With the

Registrant

	1 ($93.07) 	 3($199.02)	0.5($23.59)	4.5	$315.68

Record Submissions	0

	0.5($33.17) 	1($47.17) 	1.5	$80.34

Review Submissions	1($93.07) 	2($132.68)	 0 	3 	$225.75

Store the Information	0 	0.5($33.17)	1 ($47.17)	1.5 	$80.34

Totals	2($186.14)

	6($398.04) 	2.5($117.93) 	10.5 	$702.11

Assuming that each of the 14 registration applications expected annually
over the next 3 years involves CBI claims for which substantiation must
be reviewed by EPA, the total annual average burden and costs for the
Agency to process the CBI substantiations under this ICR is as follows:

Estimated Total Annual Burden Hours: 14 events x 10.5 hours = 147 hrs.

Estimated Total Annual Burden Costs: 14 events x $702.11 = $9,829.54

Table 4 - Average Burden and Cost Estimates per Submission for EPA
Activities related to an Adverse Effects Report Submitted for an Exempt
Plant-Incorporated Protectant

	Burden and Cost Estimates 	Totals

Activities	Mgmt.

($93.07/hr)

	Tech.

($66.34/hr)

	Clerical

($47.17/hr)

	Burden (hrs)	Costs

($)

Consult With the

Registrant 	0.5($46.54)  	 1 ($66.34)	0.5($23.59)	2	$136.46

Record Submissions	0

	0.5($33.17)	1 ($47.17)	1.5	$80.34

Review Submissions	1 ($93.07) 	1 ($66.34)	0	2	$159.41

Store the Information	0 	0.5($33.17)	0.5($23.59)	1 	$56.76

Totals	1.5($139.61) 	3 ($199.02)	2 ($94.34)	6.5	$432.97

 	Assuming a single adverse effects report might be submitted over the 3
year approval period for the ICR, the total annual average burden and
costs for EPA activities related to the adverse effects report is
calculated as follows:

Estimated Total Annual Burden Hours: (1 event x 6.5 hours) ÷ 3 = 2.2
hours

Estimated Total Annual Burden Costs: (1 event x $432.97) ÷ 3 = $144.32

In addition, the Agency may determine that additional follow-up action
is necessary for either type of submission and will be providing
necessary guidance for these requirements.

6(d) Bottom Line Burden and Cost Table

The following table presents the total estimated annual burden and costs
for this ICR:

Table 5 – Total Annual Burden and Cost Estimates

	Respondent	Agency	Totals

Activities	Burden

(hrs) 	Costs

($)	Burden

(hrs)

	Costs

($)

	Burden

(hrs)

	Costs

($)

CBI Substantiations	301	20,725.74	147	9,829.54	448	30,555.28

Adverse Effects Reports	2.3	153.49	2.2	144.32	4.5	297.81

Totals	303	20,879.23	149	9,973.86	452.5	30,853.09

Columns and Rows may not add due to rounding

6(e) Reasons for Change in Burden

The Agency does not anticipate a change in the burden.  The number of
actual submissions is not expected to change and the Agency finds no
basis to change the burden estimates per submission.  Therefore, the
burden hour breakdown remains unchanged from the last renewal period.

In previous renewal cycles, the Agency only adjusted the labor rates to
account for inflation.  However, for this renewal, Agency economists
have completely re-estimated labor rates, benefits and overhead costs
for both respondents and Agency personnel.  This Agency analysis was
completed in July 2006 (see Attachment E), resulting in a decrease in
estimated labor rates for industry.  The new analysis also resulted in
Management and Technical labor rates decreasing and clerical rates
increasing.  For this ICR these changes resulted in a small net increase
in Agency labor costs.  The Agency believes this is a more realistic
estimate of the average respondent and Agency costs.  Therefore,
estimated total annual respondent costs have decreased by $6,693, from
$27,572 to $20,879, and annual Agency labor costs have increased by
$111, from $9,863 to $9,974.  This change is an adjustment.

6(f) Burden Statement

The total annual respondent burden for the collection of information
contained in this ICR is estimated to be 303 hours. The annual
respondent burden for the collection of information associated with the
substantiation at the time of submission for CBI claims related to a
plant-incorporated protectant registration application is estimated to
average 21.5 hours per submission, and the annual respondent burden for
the collection of information associated with

the reporting of adverse effects for exempted plant-incorporated
protectants is estimated to average 7 hours per submission.

As defined by the PRA and 5 CFR 1320.3(b), “burden” means the total
time, effort, or financial resources expended by persons to generate,
maintain, retain, or disclose or provide information to or for a Federal
agency. This includes the time needed to review instructions; develop,
acquire, install, and utilize technology and systems for the purpose of
collecting, validating, and verifying information, processing and
maintaining information, and disclosing

and providing information; adjust the existing ways to comply with any
previously applicable instructions and requirements; train personnel to
be able to respond to a collection of information; search data sources;
complete and review the collection of information; and transmit or
otherwise disclose the information.

An Agency may not conduct or sponsor, and a person is not required to
respond to, a collection of information unless it displays a currently
valid OMB control number. The OMB control numbers for EPA’s
regulations in title 40 of the CFR, after appearing in the Federal
Register, are listed in 40 CFR part 9, and included on the related
collection instrument or form, if applicable.

To facilitate public comment on the Agency's need for this information,
the accuracy of the provided burden estimates, and any suggested methods
for minimizing respondent burden, including the use of automated
collection techniques, EPA has established a public docket for this ICR
under Docket ID No. EPA-HQ-OPP-2006-0860.  All documents in the docket
are listed in the docket index. Although listed in the index, some
information may not be publicly available, e.g., CBI or other
information whose disclosure is restricted by statute.  Certain other
material, such as copyrighted material, is not placed on the Internet
and will be publicly available only in hard copy form.  Publicly
available docket materials are available either in the electronic docket
at   HYPERLINK "http://www.regulations.gov"  http://www.regulations.gov
, or, if only available in hard copy, at the OPP Regulatory Public
Docket in Rm. S-4400, One Potomac Yard (South Building), 2777 S. Crystal
Drive, Arlington, VA. The hours of operation of this Docket Facility are
from 8:30 a.m. to 4 p.m., Monday through Friday, excluding legal
holidays. The Docket telephone number is<PHONE_NUMBER>.

Also, you can send comments to the Office of Information and Regulatory
Affairs, Office of Management and Budget, 725 17th Street, NW,
Washington, DC 20503, Attention: Desk Officer for EPA.  Please include
the EPA Docket ID No. EPA-HQ-OPP-2006-0860 and OMB Control No. 2070-0142
in any correspondence.

ATTACHMENTS TO THE SUPPORTING STATEMENT

ATTACHMENT A:  Regulations Under the Federal Insecticide, Fungicide, and
Rodenticide Act for Plant-Incorporated Protectants (Formerly
Plant-Pesticides); Final Rule (66 FR 37771)  is available at   HYPERLINK
"http://www.epa.gov/fedrgstr/EPA-PEST/2001/July/Day-19/p17981.htm"
http://www.epa.gov/fedrgstr/EPA-PEST/2001/July/Day-19/p17981.htm  or as
part of the docket EPA-HQ-2006-0860

ATTACHMENT B:  FIFRA Section 25(b) is available at    HYPERLINK
"http://www4.law.cornell.edu/uscode/7/ch6.html"
http://www4.law.cornell.edu/uscode/7/ch6.html  or as part of the docket
EPA-HQ-2006-0860

ATTACHMENT C:  FFDCA Section 408(a) is available at   HYPERLINK
"http://www4.law.cornell.edu/uscode/21/ch9.html"
http://www4.law.cornell.edu/uscode/21/ch9.html  or as part of the docket
EPA-HQ-2006-0860

ATTACHMENT D:  Record of Consultations Between the U.S. Environmental
Protection Agency and Respondents to the Information Collection Request
is only available as part of the docket EPA-HQ-2006-0860

ATTACHMENT E:  Methodology for Estimating OPP ICR Wage Rates for
Industry, State and EPA Labor Costs; Memo From Richard Keigwin, Director
Biological and Economic Analysis Division, to Bill Diamond, Arnold
Layne, Lois Rossi and Elizabeth Leovey July 25, 2006.   This document is
only available as part of the docket EPA-HQ-2006-0860

ATTACHMENT F:  Display Related to OMB Control #2070-0142 -Listings of
Related Regulations in 40 CFR 9.1 is available as part of the docket
EPA-HQ-2006-0860

 PAGE

 PAGE   1


[Federal Register Volume 84, Number 50 (Thursday, March 14, 2019)]
[Notices]
[Pages 9395-9397]
[FR Doc No: 2019-04705]

=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85278; File No. SR-CboeBZX-2018-044]

Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Order
Disapproving a Proposed Rule Change, as Modified by Amendment No. 1, To
Amend BZX Rule 14.11(c) (Index Fund Shares)

March 8, 2019.

I. Introduction

    On June 21, 2018, Cboe BZX Exchange, Inc. (``Exchange'' or ``BZX'')
filed with the Securities and Exchange Commission (``Commission''),
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'' or ``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to amend BZX Rule 14.11(c) to permit either the
portfolio holdings of a series of Index Fund Shares or the index
underlying a series of Index Fund Shares to satisfy the listing
standards under BZX Rules 14.11(c)(3), (4), and (5). The proposed rule
change was published for comment in the Federal Register on July 11,
2018.\3\ On August 23, 2018, pursuant to Section 19(b)(2) of the
Act,\4\ the Commission designated a longer period within which to
approve the proposed rule change, disapprove the proposed rule change,
or institute proceedings to determine whether to approve or disapprove
the proposed rule change.\5\ On September 28, 2018, the Exchange filed
Amendment No. 1 to the proposed rule change, which amended and replaced
the proposed rule change as originally filed.\6\ On October 5, 2018,
the Commission published notice of Amendment No. 1 and instituted
proceedings pursuant to Section 19(b)(2)(B) of the Act \7\ to determine
whether to approve or disapprove the proposed rule change, as modified
by Amendment No. 1.\8\ On December 21, 2018, pursuant to Section
19(b)(2) of the Act,\9\ the Commission designated a longer period
within which to issue an order approving or disapproving the proposed
rule change, as modified by Amendment No. 1.\10\ The Commission has
received one comment letter on the proposed rule change from the
Exchange.\11\ This order disapproves the proposed rule change, as
modified by Amendment No. 1.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 83594 (July 5,
2018), 83 FR 32158.
    \4\ 15 U.S.C. 78s(b)(2).
    \5\ See Securities Exchange Act Release No. 83919, 83 FR 44083
(August 29, 2018).
    \6\ Amendment No. 1 is available at: https://www.sec.gov/comments/sr-cboebzx-2018-044/srcboebzx2018044-4468884-175849.pdf.
    \7\ 15 U.S.C. 78s(b)(2)(B).
    \8\ See Securities Exchange Act Release No. 84378, 83 FR 51745
(October 12, 2018) (``Order Instituting Proceedings'').
    \9\ 15 U.S.C. 78s(b)(2).
    \10\ See Securities Exchange Act Release No. 84948, 83 FR 67785
(December 31, 2018).
    \11\ See letter from Kyle Murray, Assistant General Counsel,
Cboe Global Markets, Inc. to Brent J. Fields, Secretary, Commission,
dated November 16, 2018 (``Exchange Letter'').
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II. Description of the Proposed Rule Change, as Modified by Amendment
No. 1 12
---------------------------------------------------------------------------

    \12\ For a full description of the proposal, see Amendment No.
1, supra note 6.
---------------------------------------------------------------------------

    BZX Rule 14.11(c) sets forth the listing standards for Index Fund
Shares. Currently, the Exchange determines whether a series of Index
Fund Shares meets the initial and continued listing standards under BZX
Rules 14.11(c)(3), (4), and (5) by assessing the underlying index. The
Exchange now proposes to permit either the portfolio holdings of a
series of Index Fund Shares or the index underlying a series of Index
Fund Shares to satisfy the initial and continued listing standards
under BZX Rules 14.11(c)(3), (4), and (5). As a result, the proposal
would allow the Exchange to generically list a series of Index Fund
Shares where the generic listing standards are satisfied by either its
portfolio holdings or its underlying index.
    The Exchange also proposes to amend BZX Rules 14.11(c)(1)(C),\13\
14.11(c)(8),\14\ and 14.11(c)(9)(B)(i)(b) \15\ to eliminate certain
references to the term portfolio such that the amended provisions would
refer only to the underlying index.\16\ As proposed, all other
references to ``index or portfolio'' or ``portfolio or index'' in BZX
Rule 14.11(c) would mean the index underlying a series of Index Fund
Shares or the portfolio holdings of a series of Index Fund Shares.
---------------------------------------------------------------------------

    \13\ BZX Rule 14.11(c)(1)(C) currently defines the term
``Reporting Authority'' to mean, in part, the official source for
calculating and reporting information relating to a series of Index
Fund Shares, including, but not limited to, any current index ``or
portfolio'' value. The Exchange proposes to delete the term ``or
portfolio'' from this provision.
    \14\ BZX Rule 14.11(c)(8) currently provides, in part, that the
Exchange may list and trade Index Fund Shares based on one or more
foreign or domestic indexes ``or portfolios'' and that each issue of
Index Fund Shares based on each particular index ``or portfolio, or
combination thereof,'' shall be designated as a separate series and
shall be identified by a unique symbol. The Exchange proposes to
delete the terms ``or portfolios'' and ``or portfolio, or
combination thereof,'' from this provision.
    \15\ BZX Rule 14.11(c)(9)(B)(i)(b) currently provides, in part,
that the Exchange will consider the suspension of trading in and
will initiate delisting proceedings for a series of Index Fund
Shares if the value of the index ``or portfolio'' of securities on
which the series of Index Fund Shares is based is no longer
calculated or available, or an interruption to the dissemination of
the value of the index ``or portfolio'' of securities persists past
the trading day in which it occurred, or the index ``or portfolio''
on which a series of Index Fund Shares is based is replaced with a
new index ``or portfolio'' unless certain conditions are met. The
Exchange proposes to delete the terms ``or portfolio'' from this
provision.
    \16\ According to the Exchange, in these provisions, the term
``index or portfolio'' currently refers to the index underlying a
series of Index Fund Shares and is not intended to refer to the
portfolio holdings of a series of Index Fund Shares. See Amendment
No. 1, supra note 6, at 11 and Exchange Letter, supra note 11, at 6.
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    The Exchange represents that it has in place surveillance
procedures that are adequate to properly monitor trading in Index Fund
Shares in all trading sessions and to deter and detect violations of
Exchange rules and applicable federal securities laws.\17\ In addition,
the Exchange states that it does not believe that the proposal will
result in any meaningful additional costs associated with regulatory
review, but to the extent that it does, the Exchange either already has
or will dedicate sufficient additional resources to perform such
reviews.\18\
---------------------------------------------------------------------------

    \17\ See Amendment No. 1, supra note 6, at 12.
    \18\ See Amendment No. 1, supra note 6, at 10 and Exchange
Letter, supra note 11, at 6.
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III. Discussion

    Under Section 19(b)(2)(C) of the Act, the Commission shall approve
a proposed rule change of a self-regulatory organization if the
Commission finds that such proposed rule change is consistent with the
requirements of the Act and the rules and regulations thereunder that
are applicable to such organization.\19\ The Commission shall
disapprove a proposed rule change if it does not make such a
finding.\20\ Under the Commission's Rules of Practice, the ``burden to
demonstrate that a proposed rule change is consistent with the Exchange
Act and the rules and regulations issued thereunder . . . is on the
self-regulatory organization that proposed the rule change.'' \21\
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    \19\ 15 U.S.C. 78s(b)(2)(C)(i).
    \20\ 15 U.S.C. 78s(b)(2)(C)(ii).
    \21\ 17 CFR 201.700(b)(3).

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    The description of a proposed rule change, its purpose and
operation, its effect, and a legal analysis of its consistency with
applicable requirements must all be sufficiently detailed and specific
to support an affirmative Commission finding, and any failure of a
self-regulatory organization to provide this information may result in
the Commission not having a sufficient basis to make an affirmative
finding that a proposed rule change is consistent with the Act and the
applicable rules and regulations.\22\
---------------------------------------------------------------------------

    \22\ See id.
---------------------------------------------------------------------------

    For the reasons discussed below, the Commission is disapproving the
proposed rule change, as modified by Amendment No. 1, because the
information before the Commission is insufficient to support a finding
that the proposed rule change is consistent with the requirements of
the Act and the rules and regulations thereunder applicable to a
national securities exchange. Specifically, the Commission concludes
that it does not have sufficient information to determine that the
proposed rule change is consistent with the requirements of Section
6(b)(5) of the Act, in particular the requirement that a national
securities exchange's rules be designed to prevent fraudulent and
manipulative acts and practices.\23\
---------------------------------------------------------------------------

    \23\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    As discussed above, the Exchange currently determines whether a
series of Index Fund Shares meets the generic listing standards in BZX
Rules 14.11(c)(3), (4), and (5) by assessing the underlying index.\24\
The proposal would allow the Exchange to assess either the underlying
index or the portfolio holdings in determining whether a series of
Index Fund Shares meets the generic listing standards.\25\
---------------------------------------------------------------------------

    \24\ See supra Section II.
    \25\ See id. The generic listing standards for Index Fund Shares
impose quantitative requirements on the components of the underlying
index (including, for example, market value requirements, trading
volume requirements, and concentration limitations) that are
designed to help ensure that the underlying index is not susceptible
to manipulation.
---------------------------------------------------------------------------

    The Exchange makes several arguments in support of its proposal.
First, the Exchange asserts that its proposal would accomplish the
policy goals underlying the listing standards for Index Fund
Shares.\26\ The Exchange asserts that, after a series of Index Fund
Shares is listed on the Exchange, both the index constituents and the
portfolio holdings are equally viable for evaluating whether the shares
are susceptible to manipulation.\27\ According to the Exchange, the
portfolio holdings are arguably a better means for making this
determination than the underlying index because the portfolio holdings
reflect the actual assets held by a series of Index Fund Shares,
whereas the index constituents are just the assets that the series is
designed to track.\28\
---------------------------------------------------------------------------

    \26\ See Amendment No. 1, supra note 6, at 6 and Exchange
Letter, supra note 11, at 4.
    \27\ See Amendment No. 1, supra note 6, at 5 and Exchange
Letter, supra note 11, at 2. The Exchange states that its generic
listing standards began applying on both an initial and continuous
basis in January 2018. See Amendment No. 1, supra note 6, at 5. The
proposal would provide the Exchange with the flexibility to choose
to apply the generic listing standards to either the portfolio
holdings or the underlying index (both at the time of initial
listing and at any time thereafter), even though the Exchange
acknowledges that for initial listing, the underlying index
constitutes a better means for determining whether a series of Index
Fund Shares would be susceptible to manipulation, because the
underlying index constituents are much more fully developed and less
theoretical than the portfolio of a yet to be launched fund or a
sample portfolio, respectively. See Amendment No. 1, supra note 6,
at 5 and Exchange Letter, supra note 11, at 2.
    \28\ See Amendment No. 1, supra note 6, at 6 and Exchange
Letter, supra note 11, at 4.
---------------------------------------------------------------------------

    Under the proposal, if the index underlying a series of Index Fund
Shares fails to meet the generic listing standards, the Exchange could
still generically list and trade this product as long as the portfolio
is constructed to comply with the generic listing standards. The
Exchange acknowledges that allowing the portfolio holdings to satisfy
the generic listing standards could raise concerns that a series of
Index Fund Shares may potentially be based on an index that does not
meet the generic listing standards and therefore may be susceptible to
manipulation.\29\
---------------------------------------------------------------------------

    \29\ See Amendment No. 1, supra note 6, at 9 and Exchange
Letter, supra note 11, at 3.
---------------------------------------------------------------------------

    The Exchange has not demonstrated how it would be consistent with
the Act for the Exchange to generically list and trade a series of
Index Fund Shares that tracks an index that may be susceptible to
manipulation. Index Fund Shares are designed to track the performance
of an index.\30\ If the portfolio meets the generic listing standards
but the index does not (i.e., a scenario that is not currently
permissible, but would be permissible under the proposal), and the
performance of the portfolio tracks the performance of the manipulated
index, the Exchange did not discuss whether the effects of the index
manipulation might be reflected in the price of the Index Fund Shares.
The Exchange also did not explain why the potential (if any) for the
effects of the index manipulation to be reflected in the price of the
Index Fund Shares should not be a concern under Section 6(b)(5) of the
Act, which requires that the rules of the Exchange be designed to
prevent fraudulent and manipulative acts and practices. As a result,
based on the information before the Commission, the Commission is
unable to determine that the proposal is consistent with Section
6(b)(5) of the Act.
---------------------------------------------------------------------------

    \30\ See Amendment No. 1, supra note 6, at 8 and Exchange
Letter, supra note 11, at 5.
---------------------------------------------------------------------------

    While the Exchange acknowledges that allowing the portfolio
holdings to satisfy the generic listing standards could raise concerns
that a series of Index Fund Shares may potentially be based on an index
that does not meet the generic listing standards and therefore may be
susceptible to manipulation, the Exchange argues that, currently, a
series of Index Fund Shares overlying an index that meets the generic
listing standards may have portfolio holdings that could theoretically
be susceptible to manipulation because the portfolio holdings do not
meet the generic listing standards.\31\ According to the Exchange, if
the current rule is consistent with the Act, then the inverse (i.e.,
the proposal) would also be consistent with the Act.\32\
---------------------------------------------------------------------------

    \31\ See Amendment No. 1, supra note 6, at 9 and Exchange
Letter, supra note 11, at 3.
    \32\ See Amendment No. 1, supra note 6, at 9 and Exchange
Letter, supra note 11, at 3.
---------------------------------------------------------------------------

    The Exchange did not discuss the possible effects of index
manipulation or portfolio manipulation on the price of Index Fund
Shares, and correspondingly did not demonstrate that the possible
consequences of an index manipulation would be the same as, or no worse
than, the possible consequences of a portfolio manipulation. The
Commission cannot determine whether the proposal is designed to prevent
fraudulent and manipulative acts and practices simply based on the
Exchange's assertion that the current rule is consistent with the Act.
    To support its proposal, the Exchange also compares Index Fund
Shares to Managed Fund Shares, and notes that the generic listing
standards for Managed Fund Shares only apply to the portfolio
holdings.\33\ The Exchange acknowledges the distinction between Index
Fund Shares and Managed Fund Shares, which is that Index Fund Shares
are designed to track the performance of an index whereas Managed Fund
Shares are not.\34\ However, in comparing Index Fund Shares to Managed
Fund Shares, the Exchange did not address the potential consequences of
an index manipulation (as discussed above) that

is associated with Index Fund Shares but not Managed Fund Shares.
Therefore, based on the information before the Commission, the
Commission is unable to determine that the proposal is consistent with
Section 6(b)(5) of the Act.
---------------------------------------------------------------------------

    \33\ See Amendment No. 1, supra note 6, at 8 and Exchange
Letter, supra note 11, at 5-6.
    \34\ See Amendment No. 1, supra note 6, at 8 and Exchange
Letter, supra note 11, at 5.
---------------------------------------------------------------------------

    In support of its proposal, the Exchange also argues that any
series of Index Fund Shares listed on the Exchange must meet all
requirements applicable under the Investment Company Act of 1940,
including Rule 35d-1,\35\ which according to the Exchange provides
assurance that there is significant overlap between the portfolio
holdings and the underlying index.\36\
---------------------------------------------------------------------------

    \35\ 17 CFR 270.35d-1.
    \36\ See Amendment No. 1, supra note 6, at 9-10 and Exchange
Letter, supra note 11, at 3-4.
---------------------------------------------------------------------------

    The Exchange did not explain the extent to which generically listed
Index Fund Shares would have names that are governed by Rule 35d-1 or
why the Exchange believes any overlap that would result from compliance
with that rule would be sufficient to satisfy the relevant standard
under the Exchange Act.
    The Exchange also did not discuss any other specific requirements
that would assure a significant overlap between the portfolio holdings
and the underlying index for all current and future generically listed
Index Fund Shares. Therefore, based on the information before the
Commission, the Commission is unable to determine whether the portfolio
composition for all of the Exchange's generically listed Index Fund
Shares would necessarily have a significant overlap with the index
composition, such that application of the generic listing standards to
the portfolio holdings would assure that the index also meets or only
narrowly misses the generic listing standards.
    Finally, in support of its proposal, the Exchange asserts that the
index methodology for an index underlying a series of Index Fund Shares
is out of the control of the issuers of the products, and that it is
problematic to require an issuer to ensure that the underlying index
meets listing standards on an ongoing basis.\37\ According to the
Exchange, the proposal would provide issuers of Index Fund Shares with
a greater degree of control over whether their products meet their
ongoing listing obligations.\38\
---------------------------------------------------------------------------

    \37\ See Amendment No. 1, supra note 6, at 7 and Exchange
Letter, supra note 11, at 4-5.
    \38\ See Amendment No. 1, supra note 6, at 7 and Exchange
Letter, supra note 11, at 5. In disapproving the proposal, the
Commission has considered the proposal's impact on efficiency,
competition, and capital formation, see 15 U.S.C. 78c(f), and the
Exchange's assertion that its proposal would enhance competition
among market participants and create greater investor confidence in
exchange-traded products generally because there will be a greater
degree of certainty that Index Fund Shares will not be subject to
regulatory action or delisting. See Amendment No. 1, supra note 6,
at 10-11 and Exchange Letter, supra note 11, at 6. The Exchange did
not provide any information to support its assertion that the
proposal would enhance competition and did not provide any
information to support its assertion that the proposal would create
greater investor confidence other than the proposal would provide a
greater degree of certainty that Index Fund Shares would not be
subject to regulatory action or delisting. But even if this proposal
has the potential to enhance competition and create greater investor
confidence, for the reasons discussed throughout, the Commission
must disapprove the proposed rule change in light of its inability,
on the current record, to find that it is consistent with the Act.
---------------------------------------------------------------------------

    The Commission believes that the Exchange has not demonstrated why
issuers' control over a fund's portfolio composition would be
responsive to the potential index manipulation issue discussed above.
In particular, if the portfolio meets the generic listing standards
(because the issuer has control over the portfolio composition and can
construct the portfolio to meet the generic listing standards) but the
index does not, and the performance of the portfolio tracks the
performance of the manipulated index, the Exchange did not discuss
whether the effects of the index manipulation might be reflected in the
price of the Index Fund Shares, and why the potential (if any) for the
effects of the index manipulation to be reflected in the price of the
Index Fund Shares should not be a concern under Section 6(b)(5) of the
Act.
    For the reasons discussed above, the Commission concludes that the
record before it does not provide a basis to conclude that the Exchange
has met its burden under the Act and the Commission's Rules of Practice
to demonstrate that its proposed rule change is consistent with Section
6(b)(5) of the Act.\39\
---------------------------------------------------------------------------

    \39\ The Order Instituting Proceedings sought comment on several
specific issues, including the issue of manipulation of the
underlying index. For the reasons discussed above, the Commission
does not find that the proposed rule change, as modified by
Amendment No. 1, is consistent with the requirements of the Act and
the rules and regulations thereunder applicable to a national
securities exchange, and therefore the Commission does not believe
it is necessary to address the other issues raised in the Order
Instituting Proceedings.
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IV. Conclusion

    For the reasons set forth above, the Commission does not find,
pursuant to Section 19(b)(2) of the Act,\40\ that the proposed rule
change, as modified by Amendment No. 1, is consistent with the
requirements of the Act and the rules and regulations thereunder
applicable to a national securities exchange, and in particular, with
Section 6(b)(5) of the Act.\41\
---------------------------------------------------------------------------

    \40\ 15 U.S.C. 78s(b)(2).
    \41\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\42\ that the proposed rule change, as modified by Amendment No. 1
(SR-CboeBZX-2018-044), is disapproved.
---------------------------------------------------------------------------

    \42\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\43\
---------------------------------------------------------------------------

    \43\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-04705 Filed 3-13-19; 8:45 am]
BILLING CODE 8011-01-P