[Federal Register Volume 82, Number 163 (Thursday, August 24, 2017)]
[Notices]
[Pages 40183-40187]
[FR Doc No: 2017-17922]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81440; File No. SR-NYSE-2017-30]

Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing of Amendment No. 2 to Proposed Rule Change To Amend
Section 102.01B of the NYSE Listed Company Manual To Provide for the
Listing of Companies That List Without a Prior Exchange Act
Registration and That Are Not Listing in Connection With an
Underwritten Initial Public Offering and Related Changes to Rules 15,
104, and 123D

August 18, 2017.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on June 13, 2017, New York Stock Exchange LLC (``NYSE'' or
the ``Exchange'') filed with the Securities and Exchange Commission
(the ``Commission'') the proposed rule change as described in Items I
and II below, which Items have been prepared by the self-regulatory
organization. The proposed rule change was published for comment in the
Federal Register on June 20, 2017.\4\ The Commission received one
comment on the proposed rule change.\5\ On August 3, 2017, the
Commission extended the time 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 to September 18, 2017.\6\
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
    \4\ See Securities Exchange Act Release No. 809333 (June 15,
2017), 82 FR 28200 (June 20, 2017)(``Notice'').
    \5\ See letter from James J. Angel, Associate Professor of
Finance, Georgetown University, dated July 28, 2017.
    \6\ See Securities Exchange Act Release No. 81309 (August 3,
2017), 82 FR 37244 (August 9, 2017).
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    The Exchange filed Amendment No. 2 to the proposed rule change on
August 16, 2017, which amended and replaced the proposed rule
change.\7\ The Commission is publishing this notice to solicit comments
on the proposed rule change, as modified by Amendment No. 2, from
interested persons.\8\
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    \7\ The Exchange filed Amendment No. 1 to the proposed rule
change on July 28, 2017 and withdrew Amendment No. 1 on August 16,
2017.
    \8\ In Amendment No. 2, the Exchange, among other things,
provides that a Designated Market Maker (``DMM'') can only use a
trading price in a private placement market as a reference price and
to facilitate a fair and orderly opening on the first day of trading
in a security being listed under proposed Footnote (E) to Section
102.01(B) of the NYSE's Listed Company Manual (``non-IPO new
listing'') if the private placement market has had recent sustained
history of trading prior to listing. If there is no recent sustained
history of trading prior to listing in the private placement market,
the proposal states that the DMM will consult with a financial
advisor to the issuer of the security to establish a reference price
pursuant to Exchange Rule 15 and facilitate a fair and orderly
opening pursuant to Exchange Rule 104. Amendment No. 2, also amended
the proposal to delete the proposed regulatory halt provision for an
initial public offering so that the proposed new regulatory halt
authority is only applicable to a security that is the subject of a
non-IPO new listing. Amendment No 2 also adds language to make clear
that the regulatory halt authority for a non-IPO new listing will be
terminated when the DMM opens the security for trading. The proposed
new regulatory halt will, therefore, only apply during the pre-
opening period on the first day of trading on the Exchange in a non-
IPO new listing.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend: (i) Footnote (E) to Section 102.01B
of the NYSE Listed Company Manual (the ``Manual'') to modify the
provisions relating to the qualification of companies listing without a
prior Exchange Act registration; (ii) Rule 15 to add a Reference Price
for when a security is listed under Footnote (E) to Section 102.01B;
(iii) Rule 104 to specify DMM requirements when a security is listed
under Footnote (E) to Section 102.01B and there has been no trading in
the private market for such security; and (iv) Rule 123D to specify
that the Exchange may declare a regulatory halt in a security that is
the subject of an initial listing on the Exchange. The proposed rule
change is available on the Exchange's Web site at www.nyse.com, at the
principal office of the Exchange, and at the Commission's Public
Reference Room.

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

    In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.

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

1. Purpose
    The Exchange proposes to amend: (i) Footnote (E) to Section 102.01B
of the Manual to modify the provisions relating to the qualification of
companies listing without a prior Exchange Act registration; (ii) Rule
15 to add a Reference Price for when a security is listed under
Footnote (E) to Section 102.01B; (iii) Rule 104 to specify DMM
requirements when a security is listed under Footnote (E) to Section
102.10B and there has been no trading in the private market for such
security; and (iv) Rule 123D to specify that the Exchange may declare a
regulatory halt in a security that is the subject of an initial listing
on the Exchange.\9\
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    \9\ The Exchange has previously filed this proposal as SR-NYSE-
2017-30. See Securities Exchange Act Release No. 80933 (June 15,
2017), 82 FR 28200 (June 20, 2017) (SR-NYSE-2017-30). This Amendment
No. 2 replaces and supersedes the original filing of SR-NYSE-2017-30
in its entirety.
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Amendments to Footnote (E) to Section 102.01B
    Generally, the Exchange expects to list companies in connection
with a firm commitment underwritten initial public offering (``IPO''),
upon transfer from another market, or pursuant to a spin-off. Companies
listing in connection with an IPO must demonstrate that they have $40
million in market value of

publicly-held shares,\10\ while companies that are listing upon
transfer from another exchange or the over-the counter market or
pursuant to a spin-off must demonstrate that they have $100 million in
market value of publicly-held shares.
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    \10\ Shares held by directors, officers, or their immediate
families and other concentrated holdings of 10 percent or more are
excluded in calculating the number of publicly-held shares.
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    Section 102.01B currently contains a provision under which the
Exchange recognizes that some companies that have not previously had
their common equity securities registered under the Exchange Act, but
which have sold common equity securities in a private placement, may
wish to list their common equity securities on the Exchange at the time
of effectiveness of a registration statement filed solely for the
purpose of allowing existing shareholders to sell their shares.
Footnote (E) to Section 102.01B provides that the Exchange will, on a
case by case basis, exercise discretion to list such companies. In
exercising this discretion, Footnote (E) provides that the Exchange
will determine that such company has met the $100 million aggregate
market value of publicly-held shares requirement based on a combination
of both (i) an independent third-party valuation (a ``Valuation'') of
the company and (ii) the most recent trading price for the company's
common stock in a trading system for unregistered securities operated
by a national securities exchange or a registered broker-dealer (a
``Private Placement Market''). The Exchange will attribute a market
value of publicly-held shares to the company equal to the lesser of (i)
the value calculable based on the Valuation and (ii) the value
calculable based on the most recent trading price in a Private
Placement Market.
    Any Valuation used for purposes of Footnote (E) must be provided by
an entity that has significant experience and demonstrable competence
in the provision of such valuations. The Valuation must be of a recent
date as of the time of the approval of the company for listing and the
evaluator must have considered, among other factors, the annual
financial statements required to be included in the registration
statement, along with financial statements for any completed fiscal
quarters subsequent to the end of the last year of audited financials
included in the registration statement. The Exchange will consider any
market factors or factors particular to the listing applicant that
would cause concern that the value of the company had diminished since
the date of the Valuation and will continue to monitor the company and
the appropriateness of relying on the Valuation up to the time of
listing. In particular, the Exchange will examine the trading price
trends for the stock in the Private Placement Market over a period of
several months prior to listing and will only rely on a Private
Placement Market price if it is consistent with a sustained history
over that several month period evidencing a market value in excess of
the Exchange's market value requirement. The Exchange may withdraw its
approval of the listing at any time prior to the listing date if it
believes that the Valuation no longer accurately reflects the company's
likely market value.
    While Footnote (E) to Section 102.01B provides for a company
listing upon effectiveness of a selling shareholder registration
statement, it does not make any provision for a company listing in
connection with the effectiveness of an Exchange Act registration
statement in the absence of an IPO or other Securities Act
registration. A company is able to become an Exchange Act registrant
without a concurrent public offering by filing a Form 10 (or, in the
case of a foreign private issuer, a Form 20-F) with the SEC. The
Exchange believes that it is appropriate to list companies that wish to
list immediately upon effectiveness of an Exchange Act registration
statement without a concurrent Securities Act registration provided the
applicable company meets all other listing requirements. Consequently,
the Exchange proposes to amend Footnote (E) to Section 102.01B to
explicitly provide that it applies to companies listing upon
effectiveness of an Exchange Act registration statement without a
concurrent Securities Act registration as well as to companies listing
upon effectiveness of a selling shareholder registration statement.
    The Exchange notes that the requirement of Footnote (E) that the
Exchange should rely on recent Private Placement Market trading in
addition to a Valuation may cause difficulties for certain companies
that are otherwise clearly qualified for listing. Some companies that
are clearly large enough to be suitable for listing on the Exchange do
not have their securities traded at all on a Private Placement Market
prior to going public. In other cases, the Private Placement Market
trading is too limited to provide a reasonable basis for reaching
conclusions about a company's qualification. Consequently, the Exchange
proposes to amend Footnote (E) to provide an exception to the Private
Placement Market trading requirement for companies with respect to
which there is a recent Valuation available indicating at least $250
million in market value of publicly-held shares. Adopting a requirement
that the Valuation must be at least two-and-a-half times the $100
million requirement will give a significant degree of comfort that the
market value of the company's shares will meet the standard upon
commencement of trading on the Exchange. The Exchange notes that it is
unlikely that any Valuation would reach a conclusion that was incorrect
to the degree necessary for a company using this provision to fail to
meet the $100 million requirement upon listing, in particular because
any Valuation used for this purpose must be provided by an entity that
has significant experience and demonstrable competence in the provision
of such valuations.
    The Exchange proposes to further amend Footnote (E) by providing
that a valuation agent will not be deemed to be independent if:
     At the time it provides such valuation, the valuation
agent or any affiliated person or persons beneficially own in the
aggregate as of the date of the valuation, more than 5% of the class of
securities to be listed, including any right to receive any such
securities exercisable within 60 days.
     The valuation agent or any affiliated entity has provided
any investment banking services to the listing applicant within the 12
months preceding the date of the valuation. For purposes of this
provision, ``investment banking services'' includes, without
limitation, acting as an underwriter in an offering for the issuer;
acting as a financial adviser in a merger or acquisition; providing
venture capital, equity lines of credit, PIPEs (private investment,
public equity transactions), or similar investments; serving as
placement agent for the issuer; or acting as a member of a selling
group in a securities underwriting.
     The valuation agent or any affiliated entity has been
engaged to provide investment banking services to the listing applicant
in connection with the proposed listing or any related financings or
other related transactions.
    The Exchange believes that this proposed new requirement will
provide a significant additional guarantee of the independence of any
entity providing a Valuation for purposes of Footnote (E).
    The proposed amendments would enable the Exchange to compete for
listings of companies that the Exchange believes would be able to list
on the Nasdaq Stock Market (``Nasdaq'') but would not be able to list
on the NYSE under its current rules. Nasdaq's initial

listing rules do not explicitly address how Nasdaq determines
compliance with its initial listing market capitalization requirements
by private companies seeking to list upon effectiveness of a selling
shareholder registration statement or Exchange Act registration without
a concurrent underwritten public offering. However, over an extended
period of time Nasdaq has listed a number of previously private
companies in conjunction with the effectiveness of a selling
shareholder registration statement without an underwritten offering. In
light of this precedent and the absence of any Nasdaq rule provision
explicitly limiting the ability of a company to qualify for listing
without a public offering or prior public market price, the Exchange
believes that Nasdaq would take the position that it could also list a
previously private company upon effectiveness of an Exchange Act
registration statement without a concurrent public offering. Therefore,
the Exchange believes that its proposed amendment would permit it to
compete on equal terms with Nasdaq for the listing of companies seeking
to list in either of these circumstances.
    The Exchange believes that it is important to have a transparent
and consistent approach to determining compliance with applicable
market capitalization requirements by previously private companies
seeking to list without a public offering and that Footnote (E) to
Section 102.01B as amended would provide such a mechanism. In the
absence of the proposed amendments, companies listing upon
effectiveness of an Exchange Act registration statement would have no
means of listing on the NYSE, while the Exchange believes that Nasdaq
would interpret its own rules as enabling it to list a company under
those circumstances. As such, the proposed amendment would address a
significant competitive disadvantage faced by the NYSE, while also
providing certain companies with an alternative listing venue where
none currently exists.
Proposed Amendments to NYSE Rules
    The Exchange proposes to amend its rules governing the opening of
trading to specify procedures for the opening trade on the day of
initial listing of a company that lists under the amended provisions of
Footnote (E) to Section 102.01B of the Manual and that did not have
recent sustained history of trading in a Private Placement Market
before listing on the Exchange. The Exchange proposes that the issuer
must retain a financial advisor to provide specified functions, as
described below.
Rule 15
    Rule 15(b) provides that a designated market maker (``DMM'') will
publish a pre-opening indication either (i) before a security opens if
the opening transaction on the Exchange is anticipated to be at a price
that represents a change of more than the ``Applicable Price Range,''
as specified in Rule 15(d), from a specified ``Reference Price,'' as
specified in Rule 15(c), or (ii) if a security has not opened by 10:00
a.m. Eastern Time. Rule 15(c)(1) specifies the Reference Price for a
security other than an American Depository Receipt, which would be
either (A) the security's last reported sale price on the Exchange; (B)
the security's offering price in the case of an IPO; or (C) the
security's last reported sale price on the securities market from which
the security is being transferred to the Exchange, on the security's
first day of trading on the Exchange.
    The Exchange proposes to amend Rule 15(c)(1) to add new sub-
paragraph (D) to specify the Reference Price for a security that is
listed under Footnote (E) to Section 102.01B of the Manual. As
proposed, if such security has had recent sustained trading in a
Private Placement Market prior to listing, the Reference Price in such
scenario would be the most recent transaction price in that market or,
if none, a price determined by the Exchange in consultation with a
financial advisor to the issuer of such security.
Rule 104
    Rule 104(a)(2) provides that the DMM has a responsibility for
facilitating openings and reopenings for each of the securities in
which the DMM is registered as required under Exchange rules, which
includes supplying liquidity as needed.\11\ The Exchange proposes to
amend Rule 104(a)(2) to specify the role of a financial adviser to an
issuer that is listing under Footnote (E) to Section 102.01B of the
Manual and that has not had recent sustained history of trading in a
Private Placement Market prior to listing.
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    \11\ Rules 15, 115A, and 123D specify the procedures for opening
securities on the Exchange.
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    As described above, an issuer that seeks to list under Footnote (E)
to Section 102.01B and that does not have any recent Private Market
Placement trading would be required to have a financial advisor in
connection with such listing. The Exchange proposes that the DMM would
be required to consult with such financial advisor when facilitating
the open of trading of the first day of trading of such listing. This
requirement is based in part on Nasdaq Rule 4120(c)(9), which requires
that a new listing on Nasdaq that is not an IPO have a financial
advisor willing to perform the functions performed by an underwriter in
connection with pricing an IPO on Nasdaq.\12\
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    \12\ Nasdaq operates an automated IPO opening process, which is
described in Nasdaq Rule 4120(c)(8). In contrast to the NYSE, which
has DMMs to facilitate the opening of trading, for an IPO, Nasdaq
requires that the underwriter of the IPO perform specified
functions, including (i) notifying Nasdaq that the security is ready
to trade; (ii) determining whether an IPO should be postponed; and
(iii) selecting price bands for purposes of applying Nasdaq's
automated price validation test. Nasdaq Rule 4120(c)(9) requires
that if a new listing does not have an underwriter, the issuer must
have a financial advisor willing to perform the above-described
functions. The functions that the underwriter/financial advisor
performs on Nasdaq as described in Rule 4120(c)(8) are not
applicable to the Exchange. The Exchange opening process does not
have a concept of ``price bands'' because, as described in Rule
115A, market orders and limit orders priced better than the opening
price are guaranteed to participate in the IPO opening. In addition,
because the Exchange does not conduct an automated opening process,
the DMM functions as an independent financial expert responsible for
facilitating the opening of trading to ensure a fair and orderly
opening.
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    The Exchange believes that such a financial advisor would have an
understanding of the status of ownership of outstanding shares in the
company and would have been working with the issuer to identify a
market for the securities upon listing. Such financial advisor would be
able to provide input to the DMM regarding expectations of where such a
new listing should be priced, based on pre-listing selling and buying
interest and other factors that would not be available to the DMM
through other sources.
    To effect this change, the Exchange proposes to amend Rule
104(a)(3) to provide that when facilitating the opening on the first
day of trading of a security that is listed under Footnote (E) to
Section 102.01B of the Manual and that has not had recent sustained
history of trading in a Private Placement Market prior to listing, the
DMM would be required to consult with a financial advisor to the issuer
of such security in order to effect a fair and orderly opening of such
security.
    Notwithstanding the proposed obligation to consult with the
financial advisor, the DMM would remain responsible for facilitating
the opening of trading of such security, and the opening of such
security must take into consideration the buy and sell orders available
on the Exchange's book in connection. Accordingly, just as a DMM is not
bound by an offering price in an IPO, and will open such a security at
a

price dictated by the buying and selling interest entered on the
Exchange in that security, a DMM would not be bound by the input he or
she receives from the financial advisor.
Rule 123D
    The Exchange further proposes to amend its rules to provide
authority to declare a regulatory halt for a new listing that is not
the subject of an IPO. As proposed, Rule 123D(d) would provide that the
Exchange may declare a regulatory halt in a security that is the
subject of an initial pricing on the Exchange of a security that has
not been listed on a national securities exchange or traded in the
over-the-counter market pursuant to FINRA Form 211 (``OTC market'')
immediately prior to the initial pricing.\13\ Proposed Rule 123D(d)
would further provide that this regulatory halt would be terminated
when the DMM opens the security.
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    \13\ The Exchange proposes to re-number current Rule 123D(d) as
Rule 123D(e).
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    Proposed Rule 123D(d) is based in part on Nasdaq Rule 4120(c)(9),
which provides that the process for halting and initial pricing of a
security that is the subject of an IPO on Nasdaq is also available for
the initial pricing of any other security that has not been listed on a
national securities exchange or traded in the OTC market immediately
prior to the initial public offering, provided that a broker-dealer
serving in the role of financial advisor to the issuer of the
securities being listed is willing to perform the functions under Rule
4120(c)(7)(B) that are performed by an underwriter with respect to an
initial public offering.\14\ Proposed Rule 123D(d) is also based in
part on Nasdaq Rule 4120(c)(8)(A), which provides that such halt
condition shall be terminated when the security is released for trading
on Nasdaq.
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    \14\ The Exchange believes that the correct cross reference
should be to Nasdaq Rule 4120(c)(8)(B). Nasdaq Rule 4120(c)(8)
specifies Nasdaq procedures for how it conducts its crossing trade
following a trading halt declared for an IPO on Nasdaq, including
the role of an underwriter in determining when an IPO may be
released for trading.
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    Proposed Rule 123D(d) would provide authority for the Exchange to
declare a regulatory halt for a security that is having its initial
listing on the Exchange, is not an IPO, and has not been listed on a
national securities exchange or traded in the OTC market immediately
prior to the initial pricing (``non-IPO listing''). The Exchange does
not propose to include the last clause of Nasdaq Rule 4120(c)(9) in
proposed Rule 123D(d). Rather, as described above, the Exchange
proposes to address the role of a financial advisor to an issuer in
specified circumstances in Rule 104(a)(3).
    The Exchange believes that it would be consistent with the
protection of investors and the public interest for the Exchange, as a
primary listing exchange, to have the authority to declare a regulatory
halt for a security that is the subject of a non-IPO listing because it
would ensure that a new listing that is not the subject of an IPO could
not be traded before the security opens on the Exchange.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with Section 6(b) \15\ of the Act, in general, and furthers the
objectives of Section 6(b)(5) of the Act,\16\ in particular in that it
is designed to promote just and equitable principles of trade, to
foster cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest
and is not designed to permit unfair discrimination between customers,
issuers, brokers, or dealers. The proposed rule change would foster
cooperation and coordination with persons engaged in clearing and
settling transactions in securities, thereby facilitating such
transactions.
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    \15\ 15 U.S.C. 78f(b).
    \16\ 15 U.S.C. 78f(b)(5).
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    The proposal to permit companies listing upon effectiveness of an
Exchange Act registration statement without a concurrent public
offering or Securities Act registration is designed to protect
investors and the public interest, because such companies will be
required to meet all of the same quantitative requirements met by other
listing applicants. The proposal to amend Footnote (E) to Section
102.01B of the Manual to allow companies to avail themselves of that
provision without any reliance on Private Placement Market trading is
designed to protect investors and the public interest because any
company relying solely on a valuation to demonstrate compliance with
the market value of publicly-held shares requirement will be required
to demonstrate a market value of publicly-held shares of $250 million,
rather than the $100 million that is generally applicable. The proposal
to include a definition of valuation agent independence in Footnote (E)
is consistent with the protection of investors, as it ensures that any
entity providing a Valuation for purposes of Footnote (E) will have a
significant level of independence from the listing applicant.
    The Exchange believes that the proposed amendments to Rules 15 and
104 would remove impediments to and perfect the mechanism of a free and
open market and a national market system because the proposed rule
changes would specify requirements relating to the opening of a trading
of a security that would be listed under the proposed amended text of
Footnote (E) to Section 102.01B of the Manual. The proposed amendments
to Exchange rules are designed to provide DMMs with information to
assist them in meeting their obligations to open a new listing under
the amended provisions of the Manual. Rule 15 would be amended to
specify the Reference Price that the DMM would use for purposes of
determining whether a pre-opening indication is required and Rule 104
would be amended to provide that the DMM will consult with a financial
advisor when facilitating the opening of a security that is listed
under Footnote (E) to Section 102.01B of the Manual and that has not
had recent sustained history of trading in a Private Placement Market
prior to listing.
    The Exchange believes that the proposed amendments to Rule 123D to
provide authority to declare a regulatory halt in a security that is
the subject of a non-IPO listing would remove impediments to and
perfect the mechanism of a free and open market and a national market
system because it would provide the Exchange with authority to halt
trading across all markets for a security that has not previously
listed on the Exchange, but for which a regulatory halt would promote
fair and orderly markets. The proposed rule change would also align
halt rule authority among primary listing exchanges. The Exchange
further believes that having the authority to declare a regulatory halt
for a security that is the subject of a non-IPO listing is consistent
with the protection of investors and the public interest and would
promote fair and orderly markets by helping to protect against
volatility in pricing and initial trading of unseasoned securities.

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

    The Exchange does not believe that the proposed amendment to
Footnote (E) to Section 102.01B of the Manual will impose any burden on
competition that is not necessary or appropriate in furtherance of the
purpose of the

Exchange Act. Rather, the proposed rule change will increase
competition for new listings by enabling companies to list that meet
all quantitative requirements but are currently unable to list because
of the methodology required by the current rules to demonstrate their
compliance.
    As noted above, Nasdaq's listing rules do not include explicit
limitations applicable to the listing of companies in these
circumstances. Additionally, Nasdaq has listed previously private
companies upon effectiveness of a selling shareholder registration
statement without a concurrent underwritten offering on several
occasions in the past. In light of this precedent and the absence of
any Nasdaq rule provision explicitly limiting the ability of a company
to qualify for listing without a public offering or prior public market
price, the Exchange believes that Nasdaq would take the position that
it could also list a previously private company upon effectiveness of
an Exchange Act registration statement without a concurrent public
offering. As such, the proposed amendment to Footnote (E) to Section
102.01B of the Manual would increase competition by enabling the NYSE
to compete with Nasdaq for these listings.
    The Exchange does not believe that the proposed amendments to its
Rule Book will impose any burden on competition that is not necessary
or appropriate in furtherance of the purposes of the Exchange Act.
Specifically, the Exchange believes that the changes are not related to
competition, but rather are designed to promote fair and orderly
markets in a manner that is consistent with the protection of investors
and the public interest. The proposed changes do not impact the ability
of any market participant or trading venue to compete.

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

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

III. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change, as modified by Amendment No. 2, 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-NYSE-2017-30 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSE-2017-30. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSE-2017-30 and should be
submitted on or before September 14, 2017.
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    \17\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2017-17922 Filed 8-23-17; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 76, Number 29 (Friday, February 11, 2011)]
[Rules and Regulations]
[Pages 7703-7707]
[FR Doc No: 2011-3111]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 180

[EPA-HQ-OPP-2010-0838; FRL-8863-9]

1,4-Benzenedicarboxylic Acid, Dimethyl Ester, Polymer With 1,4-
Butanediol, Adipic Acid, and Hexamethylene Diisocyanate; 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 1,4-benzenedicarboxylic acid, dimethyl
ester, polymer with 1,4-butanediol, adipic acid, and hexamethylene
diisocyanate (CAS Reg. No. 55231-08-8), minimum number average
molecular weight (in amu) 30,000, when used as an inert ingredient
(component of controlled release agent) in honeybee hive miticide
formulations under regulations for inert ingredients used pre-harvest
(growing crops only). NOP Apiary Products USA, 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 1,4-benzenedicarboxylic acid,
dimethyl ester, polymer with 1,4-butanediol, adipic acid, and
hexamethylene diisocyanate.

DATES: This regulation is effective February 11, 2011. Objections and
requests for hearings must be received on or before April 12, 2011, and
must be filed in accordance with the instructions provided in 40 CFR
part 178 (see also Unit I.C. of the SUPPLEMENTARY INFORMATION).

ADDRESSES: EPA has established a docket for this action under docket
identification (ID) number EPA-HQ-OPP-2010-0838. All documents in the
docket are listed in the docket index available at http://www.regulations.gov. Although listed in the index, some information is
not publicly available, e.g., Confidential Business Information (CBI)
or other information whose disclosure is restricted by statute. Certain
other material, such as copyrighted material, is not placed on the
Internet and will be publicly available only in hard copy form.
Publicly available docket materials are available in the electronic
docket at http://www.regulations.gov, or, if only available in hard
copy, at the OPP Regulatory Public Docket in Rm. S-4400, One Potomac
Yard (South Bldg.), 2777 S. Crystal Dr., Arlington, VA. The Docket
Facility is open from 8:30 a.m. to 4 p.m., Monday through Friday,
excluding legal holidays. The Docket Facility telephone number is (703)
305-5805.

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

I. General Information

A. Does this action apply to me?

    You may be potentially affected by this action if you 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://www.gpoaccess.gov/ecfr.

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

    Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an
objection to any aspect of this regulation and may also request a
hearing on those objections. You must file your objection or request a
hearing on this regulation in accordance with the instructions provided
in 40 CFR part 178. To ensure proper receipt by EPA, you must identify
docket ID number EPA-HQ-OPP-2010-0838 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
April 12, 2011. Addresses for mail and hand delivery of objections and
hearing requests are provided in 40 CFR 178.25(b).
    In addition to filing an objection or hearing request with the
Hearing Clerk as described in 40 CFR part 178, please submit a copy of
the filing that does not contain any CBI for inclusion in the public
docket. Information not marked confidential pursuant to 40 CFR part 2
may be disclosed publicly by EPA without prior notice. Submit a copy of
your non-CBI objection or hearing request, identified by docket ID
number EPA-HQ-OPP-2010-0838, by one of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov.
Follow the on-line instructions for submitting comments.
     Mail: Office of Pesticide Programs (OPP) Regulatory Public
Docket (7502P), Environmental Protection Agency, 1200 Pennsylvania
Ave., NW., Washington, DC 20460-0001.
     Delivery: OPP Regulatory Public Docket (7502P),
Environmental Protection Agency, Rm. S-4400, One Potomac Yard (South
Bldg.), 2777 S. Crystal Dr., Arlington, VA. Deliveries are only
accepted during the Docket Facility's normal hours of operation (8:30
a.m. to 4 p.m., Monday through Friday, excluding legal holidays).
Special arrangements should be made for deliveries of boxed
information. The Docket Facility telephone number is<PHONE_NUMBER>.

II. Petition for Exemption

    In the Federal Register of October 22, 2010 (75 FR 65321) (FRL-
8851-1), EPA issued a notice pursuant to section 408 of FFDCA, 21
U.S.C. 346a, announcing the filing of a pesticide petition (PP 0E7780)
by NOD Apiary Products USA Inc., 8345 NW. 66th Street 8418,
Miami, FL 33166. The petition requested that 40 CFR 180.920 be amended
by establishing an exemption from the requirement of a tolerance for
residues of 1,4-benzenedicarboxylic acid, dimethyl ester, polymer with
1,4-butanediol, adipic acid, and hexamethylene diisocyanate (CAS Reg.
No. 55231-08-8) when used as an inert ingredient (component of
controlled release agent) in miticide formulations applied to honeybee
hives. That notice referenced a summary of the petition prepared by NOD
Apiary Products USA Inc., the petitioner, which is available in the
docket, http://www.regulations.gov. 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 section 408(c)(2)(A) of FFDCA, 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 1,4-benzenedicarboxylic acid,
dimethyl ester, polymer with 1,4-butanediol, adipic acid, and
hexamethylene diisocyanate including exposure resulting from the
exemption established by this action. EPA's assessment of exposures and
risks associated with 1,4-benzenedicarboxylic acid, dimethyl ester,
polymer with 1,4-butanediol, adipic acid, and hexamethylene
diisocyanate follows.

A. Toxicological Profile

    1,4-Benzenedicarboxylic acid, dimethyl ester, polymer with 1,4-
butanediol, adipic acid, and hexamethylene diisocyanate is a polyester-
type polymer. The Agency has established a set of criteria to identify
categories of polymers expected to present minimal or no risk to human
health or the environment. The definition of a polymer is given in 40
CFR 723.250(b) and the exclusion criteria for identifying these low-
risk polymers are described in 40 CFR 723.250(d). 1,4-
Benzenedicarboxylic acid, dimethyl ester, polymer with 1,4-butanediol,
adipic acid, and hexamethylene diisocyanate conforms to the definition
of a polymer given in 40 CFR 723.250(b) and meets all of the following
criteria, with the exception of the ``polymers which degrade, decompose
or depolymerize'' criterion (specified in 40 CFR 723.250(e) below),

that are used to identify low-risk polymers.
    1. The polymer is not a cationic polymer nor is it reasonably
anticipated to become a cationic polymer in a natural aquatic
environment.
    2. The polymer does contain as an integral part of its composition
the atomic elements carbon, hydrogen, and oxygen.
    3. The polymer does not contain as an integral part of its
composition, except as impurities, any element other than those listed
in 40 CFR 723.250(d)(2)(ii).
    4. The polymer is neither designed nor can it be reasonably
anticipated to substantially degrade, decompose, or depolymerize.
    5. The polymer is manufactured or imported from monomers and/or
reactants that are already included on the TSCA Chemical Substance
Inventory or manufactured under an applicable TSCA section 5 exemption.
    6. The polymer is not a water absorbing polymer with a number
average molecular weight (MW) greater than or equal to 10,000 daltons.
    Additionally, in order to meet the low risk polymer criteria, the
polymer also meets as required the exemption criteria specified in 40
CFR 723.250(e)(3) regarding polyester polymers made solely from
specified reactants. 1,4-Benzenedicarboxylic acid, dimethyl ester,
polymer with 1,4-butanediol, adipic acid, and hexamethylene
diisocyanate does undergo biodegradation in the environment and thus
does not meet criterion number 4. listed in this unit; however, the
Agency believes that this biodegradation in the environment is not a
safety concern for humans because information provided by the
petitioner as well as information contained in the environmental
assessment that was part of the Food and Drug Administration Food
Contact Notification (FDA FCN) indicates that the polymer would
ultimately biodegrade into carbon dioxide and water and not be a
concern to humans or the environment. This determination is further
supported by biodegradation and ecotoxicity testing of a representative
material in which the substance was determined to be readily
biodegradable and nontoxic to earthworms. Due to its large size
(minimum number average molecular weight 30,000 amu) and the general
conformance to the criteria for identifying low risk polymers under 40
CFR 723.250, 1,4-benzenedicarboxylic acid, dimethyl ester, polymer with
1,4-butanediol, adipic acid, and hexamethylene diisocyanate would not
be expected to be absorbed through the intact gastrointestinal tract
nor be anticipated to penetrate intact human skin. Inhalation exposure
is not expected due to the nonvolatility of (component of controlled
release agent) in honeybee hive miticide formulations. Because of its
inability to enter systemic circulation when used as an inert
ingredient in pesticide formulations 1,4-benzenedicarboxylic acid,
dimethyl ester, polymer with 1,4-butanediol, adipic acid, and
hexamethylene diisocyanate is essentially nontoxic. 1,4-
Benzenedicarboxylic acid, dimethyl ester, polymer with 1,4-butanediol,
adipic acid, and hexamethylene diisocyanate has also been accepted by
the FDA as being safe for use as a food contact substance to be used
with all food types as a single-use film or coating under section
409(h)(2) of the FFDCA (Effective Food Contact Notification (FCN) No.
916). Based on the assessment in this unit, the Agency has concluded
that a standard battery of toxicological studies are not necessary.

B. Toxicological Points of Departure/Levels of Concern

    Due to the low potential hazard and lack of an identified hazard
endpoint for 1,4-benzenedicarboxylic acid, dimethyl ester, polymer with
1,4-butanediol, adipic acid, and hexamethylene diisocyanate, the Agency
has determined that a quantitative risk assessment using safety factors
applied to a point of departure protective of an identified hazard
endpoint is not appropriate.

C. Exposure Assessment

    1. Dietary exposure from food and feed uses and drinking water. In
evaluating dietary exposure to 1,4-benzenedicarboxylic acid, dimethyl
ester, polymer with 1,4-butanediol, adipic acid, and hexamethylene
diisocyanate, EPA considered exposure under the proposed exemption from
the requirement of a tolerance. The primary route of dietary exposure
to 1,4-benzenedicarboxylic acid, dimethyl ester, polymer with 1,4-
butanediol, adipic acid, and hexamethylene diisocyanate from its use as
an inert ingredient in pesticide products would be through consumption
of honey. Use of 1,4-benzenedicarboxylic acid, dimethyl ester, polymer
with 1,4-butanediol, adipic acid, and hexamethylene diisocyanate in
miticide products applied to treat honeybee hives may possibly also
result in exposure through drinking water (from runoff). Dietary
exposure to 1,4-benzenedicarboxylic acid, dimethyl ester, polymer with
1,4-butanediol, adipic acid, and hexamethylene diisocyanate may also
result from its use as a food contact substance. Because no hazards
associated with dietary exposure were identified for 1,4-
benzenedicarboxylic acid, dimethyl ester, polymer with 1,4-butanediol,
adipic acid, and hexamethylene diisocyanate, a quantitative dietary
exposure assessment for 1,4-benzenedicarboxylic acid, dimethyl ester,
polymer with 1,4-butanediol, adipic acid, and hexamethylene
diisocyanate was not conducted.
    2. 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). Since
there are no residential uses of pesticide products containing 1,4-
benzenedicarboxylic acid, dimethyl ester, polymer with 1,4-butanediol,
adipic acid, and hexamethylene diisocyanate as an inert ingredient,
residential exposures are not expected and a residential exposure
assessment was not conducted.
    3. 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 1,4-benzenedicarboxylic acid, dimethyl ester,
polymer with 1,4-butanediol, adipic acid, and hexamethylene
diisocyanate to share a common mechanism of toxicity with any other
substances, and 1,4-benzenedicarboxylic acid, dimethyl ester, polymer
with 1,4-butanediol, adipic acid, and hexamethylene diisocyanate does
not appear to produce a toxic metabolite produced by other substances.
For the purposes of this tolerance action, therefore, EPA has assumed
that 1,4-benzenedicarboxylic acid, dimethyl ester, polymer with 1,4-
butanediol, adipic acid, and hexamethylene diisocyanate 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

    Due to the large molecular weight of 1,4-benzenedicarboxylic acid,
dimethyl ester, polymer with 1,4-butanediol, adipic acid, and
hexamethylene diisocyanate it is unlikely that it will enter systemic
circulation from either the gastrointestinal tract or intact human
skin. As a result, it is unlikely to elicit a toxic response in infants
and children when used as an inert ingredient in pesticide products;
therefore EPA did not use a safety factor analysis for assessing risk.
For similar reasons, the additional safety factor for the protection of
infants and children is not necessary.

E. Aggregate Risks and Determination of Safety

    As indicated in this unit, 1,4-benzenedicarboxylic acid, dimethyl
ester, polymer with 1,4-butanediol, adipic acid, and hexamethylene
diisocyanate would be incapable of entering systemic circulation and
therefore, unable to elicit a toxic response in humans. Taking into
consideration all available information on 1,4-benzenedicarboxylic
acid, dimethyl ester, polymer with 1,4-butanediol, adipic acid, and
hexamethylene diisocyanate, EPA has determined that there is a
reasonable certainty that no harm to any population subgroup, including
infants and children, will result from aggregate exposure to 1,4-
benzenedicarboxylic acid, dimethyl ester, polymer with 1,4-butanediol,
adipic acid, and hexamethylene diisocyanate under reasonable
foreseeable circumstances. Therefore, the establishment of an exemption
from tolerance under 40 CFR 180.920 for residues of 1,4-
benzenedicarboxylic acid, dimethyl ester, polymer with 1,4-butanediol,
adipic acid, and hexamethylene diisocyanate, minimum number average
molecular weight (in amu) 30,000 when used as an inert ingredient
(component of controlled release agent) in honeybee hive miticide
formulations is safe under FFDCA section 408.

V. Other Considerations

A. Analytical Enforcement Methodology

    An analytical method is not required for enforcement purposes since
the Agency is establishing an exemption from the requirement of a
tolerance without any numerical limitation.

B. International Residue Limits

    In making its tolerance decisions, EPA seeks to harmonize U.S.
tolerances with international standards whenever possible, consistent
with U.S. food safety standards and agricultural practices. EPA
considers the international maximum residue limits (MRLs) established
by the Codex Alimentarius Commission (Codex), as required by FFDCA
section 408(b)(4). The Codex Alimentarius is a joint U.N. Food and
Agriculture Organization/World Health Organization food standards
program, and it is recognized as an international food safety
standards-setting organization in trade agreements to which the United
States is a party. EPA may establish a tolerance that is different from
a Codex MRL; however, FFDCA section 408(b)(4) requires that EPA explain
the reasons for departing from the Codex level.
    The Codex has not established a MRL for 1,4-benzenedicarboxylic
acid, dimethyl ester, polymer with 1,4-butanediol, adipic acid, and
hexamethylene diisocyanate.

VI. Conclusions

    Therefore, an exemption from the requirement of a tolerance is
established under 40 CFR 180.920 for 1,4-benzenedicarboxylic acid,
dimethyl ester, polymer with 1,4-butanediol, adipic acid, and
hexamethylene diisocyanate (CAS Reg. No. 55231-08-8), minimum number
average molecular weight (in amu) 30,000, when used as an inert
ingredient (component of controlled release agent) in honeybee hive
miticide formulations.

VII. Statutory and Executive Order Reviews

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

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: February 4, 2011.
Lois Rossi,
Director, Registration Division, Office of Pesticide Programs.

    Therefore, 40 CFR chapter I is amended as follows:

PART 180--[AMENDED]

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

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

0
2. In Sec.  180.920, the table is amended by adding alphabetically the
following inert ingredients to read as follows:

Sec.  180.920  Inert ingredients used pre-harvest; exemptions from the
requirement of a tolerance.

* * * * *

----------------------------------------------------------------------------------------------------------------
             Inert ingredients                             Limits                             Uses
----------------------------------------------------------------------------------------------------------------

                                                  * * * * * * *
1,4-Benzenedicarboxylic acid, dimethyl       For use in honeybee hive miticide  Component of controlled release
 ester, polymer with 1,4-butanediol, adipic   formulations.                      agent.
 acid, and hexamethylene diisocyanate,
 minimum number average molecular weight
 (in amu) 30,000 (CAS Reg. No. 55231-08-8).

                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------

[FR Doc. 2011-3111 Filed 2-10-11; 8:45 am]
BILLING CODE 6560-50-P


COMPANY FEDERAL REGISTER DOCUMENT SUBMISSION TEMPLATE

                                                          (8/7/2007)

EPA Registration Division contact: Shaja R. Brothers<PHONE_NUMBER>

TEMPLATE:

Interregional Research Project Number 4 (IR-4)

7E7256

	EPA has received a pesticide petition 7E7256 from Interregional
Research Project Number 4 (IR-4), Technology Center and Rutgers State
University of New Jersey, 500 College Road East Suite 201 W. ,
Princeton, New Jersey 08450 proposing, pursuant to section 408(d) of the
Federal Food, Drug, and Cosmetic Act (FFDCA), 21 U.S.C. 346a(d), to
amend 40 CFR part 180.381 by establishing a tolerance for residues of
fenbuconazole,
(alpha-(2-(4-chlorophenyl)ethyl]-alpha-phenyl-3-(1H-1,2,4-triazole)-1-pr
opanenitrile) and its metabolites cis and
trans-5-(4-chlorophenyl)-dihydro-3-phenyl-3-(1H-1,2,4-triazole-1-ylmethy
l)-2-3H-furanone)  in or on the raw agricultural commodities pepper at
0.40 ppm. EPA has determined that the petition contains data or
information regarding the elements set forth in section 408 (d)(2) of
the FDDCA; however, EPA has not fully evaluated the sufficiency of the
submitted data at this time or whether the data support granting of the
petition.

A. Residue Chemistry

	1. Plant metabolism.   The qualitative nature of fenbuconazole residues
in plants is adequately understood based on acceptable metabolism
studies on wheat, peaches, sugarbeets and peanuts.  The metabolism of
fenbuconazole was qualitatively similar in all crops and proceeded via
three pathways.  Based on these metabolism studies, the residue of
concern for dietary exposure and tolerance setting purposes in bell and
non-bell pepper is the combined residues of the parent compound,
fenbuconazole and its lactone metabolites, RH-9129 and RH-9130 [cis and
trans-5-(4-chlorophenyl)-dihydro-3-phenyl-3-(1H-1,2,4-triazole-1-ylmethy
l)-2-3H-furanone)].  The total residue is expressed as fenbuconazole.

	2. Analytical method. Adequate analytical methods are available to
enforce the tolerances of fenbuconazole residues in plant commodities.
The analytical methods vary depending on the matrices being analyzed.
These methods had undergone successful independent laboratory
validation.

For pepper, samples from the residue trials were analyzed for
fenbuconazole (RH-7592) and its lactone metabolites, RH-9129 and
RH-9130, using Rohm & Haas analytical method Technical Report Number
34-90-47 or Technical Report Number 34-90-47R.  The method had undergone
an independent method validation and was also successfully validated by
EPA with minor modifications suggested by the Agency that included
procedure for the standardization of the silica gel and Florisil column
clean-up elution pattern (TR-34-90-47R).  The limits of quantitation and
detection of the method are 0.01 µg/g and 0.003 µg/g, respectively.

	3. Magnitude of residues.  Magnitude of residue studies were conducted
by USDA’s program IR-4 at field sites located within the major growing
regions in the U.S. as recommended by the EPA’s guidelines.  In total,
nine trials (six bell and three non-bell) were conducted for this study
during the 2000 growing season. Bell peppers were grown in Maryland,
Georgia, Florida, Texas, Ohio, and California.  Non-bell peppers were
grown in Texas, Florida, and California. These studies have been
previously submitted to the Agency.

In each trial, at least four foliar applications of RH-7592 75WP at a
rate of approximately 0.167 lb ai/A each were made for a total of
approximately 0.668 lb ai/A.  In Georgia and Florida, five applications
were made to allow the peppers to mature.  A total of approximately
0.835 lb ai/A was applied in these trials.  A nonionic surfactant at 1
pt/100 gal was added to the spray mixtures.  The applications were made
at 12- to 16-day intervals and timed so that samples could be collected
approximately 7 days after the final application.  In both Florida and
the Texas trials, additional samples were collected following the final
application and 14 days later for decline determination.

The lowest level of method validation (LLMV) in this study was
approximately 0.01 ppm (0.0101 ppm fenbuconazole, 0.00992 ppm RH-9129,
and 0.00988 ppm RH-9130).  Based on recoveries of both sample types
fortified at the LLMV, the estimated limit of detection (LOD) and limit
of quantitation (LOQ) were calculated as 0.003 ppm and 0.0082 ppm,
respectively, for fenbuconazole.  For those fortified with RH-9129, the
LOD and LOQ were calculated as 0.003 ppm and 0.0099 ppm, respectively.
The LOD and LOQ for RH-9130 were calculated as 0.004 ppm and
0.011 ppm, respectively.

Treated samples were analyzed within 8 days of extraction.  Analytical
sets typically consisted of calibration standards, unfortified controls,
fortified controls, and treated samples.

The results from the trials show that the maximum residue in both sample
types following a total application of approximately 0.668 lb ai/A and a
pre-harvest interval (PHI) of 6 to 7 days was 0.20 ppm fenbuconazole
and 0.01 ppm RH-9129.  No RH-9130 residues above the LLMV of 0.01 ppm
were observed.  The maximum fenbuconazole residue in 7-day samples
treated with five applications (approximately 0.835 lb ai/A) was 0.15
ppm in bell peppers and 0.21 ppm in non-bell peppers.  One bell pepper
sample contained 0.01 ppm RH-9130; no RH-9129 or RH-9130 residues above
the LLMV were observed.

In bell peppers treated with four applications, the highest
fenbuconazole residue at 0 days was 0.27 ppm; residues had declined to a
maximum of 0.17 ppm by 14 days.  In samples treated with five
applications, the maximum 0-day residue was 0.24 ppm (bell) and 0.52 ppm
(non-bell).  By 14 days, the maximum residue was 0.08 ppm (bell) and
0.15 ppm (non-bell).

Bell peppers treated with four applications yielded RH-9129 residues of
0.01 ppm at 0 days and 0.01 to 0.02 ppm at 14 days.  No RH-9129 residues
> 0.01 ppm were observed in bell peppers treated with five applications,
but non-bell peppers contained 0.01 ppm at both 0 and 14 days.  RH-9130
residues > 0.01 ppm were observed in 0-day non-bell peppers treated with
five applications (0.09 ppm) and in 14-day bell pepper samples treated
with four applications (0.01 ppm and 0.13 ppm).  Samples yielded
residues < 0.01 ppm upon reanalysis.

B. Toxicological Profile

	1. Acute toxicity.   The toxicological profile and endpoints for
fenbuconazole which supports this petition to establish tolerances were
previously published in the Federal Register of July 20, 2005 (70
FRL-7702-7). For acute dietary risk assessments, EPA has established a
reference dose (acute RfD) of 0.3 mg/kg/day for females 13+ years old,
the population sub-group of concern.  The aRfD is based on the
developmental toxicity study in the rat with a maternal and
developmental NOAEL of 30 mg/kg/day and an uncertainty factor of 100.  A
decrease in maternal body weight, an increase in post-implantation loss
and a significant decrease in the number of live fetuses per dam were
observed at the LOAEL of 75 mg/kg/day.  No appropriate endpoint was
available for analyzing the acute exposure of the overall U. S.
population. Fenbuconazole is practically non-toxic after
administration by the oral and dermal routes, and was not significantly
toxic to rats after a 4 hour inhalation exposure. Fenbuconazole is
classified as not irritating to skin and inconsequentially irritating to
the eyes. It is not a skin sensitizer.

	2. Genotoxicty. Fenbuconazole was negative (non-mutagenic) in an Ames
assay with and without hepatic enzyme activation. Fenbuconazole was
negative in a hypoxanthine guanine phosphoribosyl transferase (HGPRT)
gene mutation assay using Chinese hamster ovary (CHO) cells in culture
when tested with and without hepatic enzyme activation. In isolated rat
hepatocytes, fenbuconazole did not induce unscheduled DNA synthesis
(UDS) or repair. Fenbuconazole did not produce chromosome effects in
rats in vivo. On the basis of the results from this battery of tests, it
is concluded that, fenbuconazole is not mutagenic or genotoxic.

	3. Reproductive and developmental toxicity. i. Developmental toxicity
in the rat. In the developmental study in rats, the maternal (systemic)
no observed adverse effect level (NOAEL) was 30 mg/kg/day based on
decreases in body weight and body weight gain at the lowest observed
adverse effect level (LOAEL) of 75 mg/kg/day. The developmental (fetal)
NOAEL was 30 mg/kg/day based on an increase in post implantation loss
and a significant decrease in the number of live fetuses per dam at the
LOAEL of 75 mg/kg/day.

    ii. Developmental toxicity in the rabbit. In the developmental study
in rabbits, the maternal (systemic) NOAEL was 10 mg/kg/day based on
decreased body weight gain at the LOAEL of 30 mg/kg/day. The
developmental (fetal) NOAEL was 30 mg/kg/day based on increased
resorptions at the LOAEL of 60 mg/kg/day.

    iii. Reproductive toxicity. In the 2-generation reproduction
toxicity study in rats, the maternal (systemic) NOAEL was 4 mg/kg/day
based on decreased body weight and food consumption, increased number of
dams delivering nonviable offspring, and increases in adrenal and
thyroid weights at the LOAEL of 40 mg/kg/day. The reproductive (pup)
NOAEL was 40 mg/kg/day, the highest dose tested.]

	4. Subchronic toxicity. i. Rat 90-day oral study. A Subchronic feeding
study in rats conducted for 13-weeks resulted in a NOAEL of 80 parts per
million (ppm) (5.1 and 6.3 mg/kg/day in males and females,
respectively). The only effect observed at 80 ppm was minimal
centrilobular hypertrophy (seen in one male) and hepatocytic
centrilobular vacuolation (3 males) with no concomitant increase in
liver weight or clinical chemistry correlates and no analogous effects
in females. As such, these observations are not considered to be
adverse. Increased liver weight, hepatic hypertrophy, thyroid
hypertrophy, and decreased body weight were observed at the higher doses
of 400 and 1,600 ppm.

    ii. Dog 90-day oral study. A subchronic feeding study in dogs
conducted for 13-weeks resulted in a NOAEL of 100 ppm (3.3 and 3.5
mg/kg/day in males and females, respectively). At the LOAEL of 400 ppm,
increased liver weight, clinical chemistry parameters, and liver
hypertrophy (males) were observed.

    iii. Rat 4-week dermal study. In a 21-day dermal toxicity in the rat
study, the NOAEL was greater than 1,000 mg/kg/ day, with no effects seen
at this limit dose.

	5. Chronic toxicity. i. Dog. A 1-year feeding study in dogs resulted in
a NOAEL of 15 ppm (0.62 mg/kg/day) for females and 150 ppm (5.2
mg/kg/day) for males. Decreased body weight, increased liver weight,
liver hypertrophy, and pigment in the liver were observed at the LOAEL
of 150 and 1,200 ppm in females and males, respectively.

    ii. Mouse. A 78-week chronic/oncogenicity study was conducted in
male and female mice at 0, 10, 200 (males only), 650, and 1,300 ppm
(females only). The NOAEL was 10 ppm (1.4 mg/kg/day), and the LOAEL was
200 ppm (26.3 mg/kg/day) for males and 650 ppm (104.6 mg/kg/day) for
females based on increased liver weight and histopathological effects on
the liver, which were consistent with chronic enzyme induction.  There
was no statistically significant increase of any tumor type in males.
However, there was a statistically significant increase in combined
liver adenomas and carcinomas in females at the high dose only (1,300
ppm; 208.8 mg/kg/day). There were no liver tumors in the control
females, and liver tumor incidences in the high-dose females just
exceeded the historical control range. In ancillary mode-of-action
studies in female mice, the increased tumor incidence was associated
with changes in several parameters in mouse liver following high doses
of fenbuconazole, including an increase in P450 enzymes (predominately
of the CYP 2B type), an increase in cell proliferation, an increase in
hepatocyte hypertrophy, and an increase in liver weight. Changes in
these liver parameters, as well as the occurrence of the low incidence
of liver tumors, were non-linear with respect to dose (i.e., effects
were observed only at high dietary doses of fenbuconazole). Similar
findings have been shown with several pharmaceuticals, including
phenobarbital, which is not carcinogenic in humans. The non-linear dose
response relationship observed with respect to liver changes (including
the low incidence of tumors) in the mouse indicates that these findings
should be carefully considered in deciding the relevance of high-dose
animal tumors to human dietary exposure.

    iii. Rat. A 24-month chronic/oncogenicity study in male and female
rats was conducted at 0, 8, 80, and 800 ppm fenbuconazole, and a second
24-month chronic/oncogenicity study was conducted in male rats at 0,
800, and 1,600 ppm. The NOAEL was 80 ppm (3 and 4 mg/kg/day in males and
females, respectively), and the LOAEL was 800 ppm (31 and 43 mg/kg/day
in males and females, respectively) based on decreased body weight,
increased liver and thyroid weights, and liver and thyroid hypertrophy.
Fenbuconazole produced a minimal but statistically significant increase
in the incidence of combined thyroid follicular cell benign and
malignant tumors. These findings occurred only in male rats following
life-time ingestion of very high levels (800 and 1,600 ppm in the diet)
of fenbuconazole.

    iv. Carcinogenicity. The Agency has concluded, that the available
data provide limited evidence of the carcinogenicity of fenbuconazole in
both mice and rats and has classified fenbuconazole as a Group C
carcinogen (possible human carcinogen with limited evidence of
carcinogenicity in animals) in accordance with Agency guidelines,
published in the Federal Register (51 FR 33992, September 24, 1986), and
recommended that for the purpose of risk characterization a low-dose
extrapolation model applied to the experimental animal tumor data should
be used for quantification of human risk (Q*). EPA's 26 Feb 1998 Hazard
Identification Assessment Review Committee (HIARC) report concluded that
0.00359 (mg/kg/day)-1 is the appropriate Q* for fenbuconazole; this Q*
is based on the fenbuconazole mouse liver tumor data, along with a power
surface area scaling factor.

	6. Animal metabolism. The absorption, distribution, excretion, and
metabolism of fenbuconazole in rats, goats, and hens were investigated.
Following oral administration, fenbuconazole was completely and rapidly
absorbed, extensively metabolized by oxidation/hydroxylation and
conjugation, and rapidly and essentially completely excreted,
predominately in the feces. Fenbuconazole did not accumulate in tissues.

	7. Metabolite toxicology. There are no toxicological concerns for
fenbuconazole based on differential metabolic pathways in plants and
animals. Triazole fungicides are known to produce three common
metabolites, 1,2,4-triazole, triazolylalanine and triazole acetic acid.
To support the extension of existing parent triazole-derivative
fungicide tolerances, EPA conducted an interim human health assessment
for aggregate exposure to 1,2,4-triazole. This interim assessment was
summarized in the Federal Register notice dated August 4, 2004 and
titled Propiconazole; Time-Limited Pesticide Tolerances. EPA concluded,
that for all exposure durations and population subgroups, aggregate
exposures to 1,2,4-triazole are not expected to exceed its level of
concern.

	8. Endocrine disruption. The mammalian endocrine system includes
estrogen and androgens as well as other hormonal systems. Fenbuconazole
is not known to interfere with reproductive hormones; thus,
fenbuconazole should not be considered to be estrogenic or androgenic.
There are no known instances of proven or alleged adverse reproductive
or developmental effects to people, domestic animals, or wildlife as a
result of exposure to fenbuconazole or its residues.

C. Aggregate Exposure

	1. Dietary exposure. The exposure and risk resulting from agricultural
uses of fenbuconazole was considered for the U.S. population and special
sub-populations.  There are two direct sources of exposure to humans
considering fenbuconazole’s uses across all labels:  from food intake
and from consuming drinking water.  The exposure and risk are estimated
in this report for different durations of both routes of exposure and
their aggregated contribution.  In an aggregate assessment, exposures
from food residues were combined with conservative estimates of
potential water residues.  The current approach of the EPA Office of
Pesticide Programs (OPP) is to use a tiered approach for acute dietary
risk assessment that proceeds from very conservative assumptions about
food residues, to inclusion of more realistic residue values measured
closer to the point of consumption.

	i. Food.  The process of dietary risk assessment of pesticides
considers chronic and acute exposures to the U.S. population and
sensitive population sub-groups.  Critical to any dietary assessment is
residue and consumption data.  Because of the number of years
fenbuconazole has been used on crops, a substantial public dataset
exists of food residues as measured by the USDA's Pesticide Data Program
(PDP).  The PDP monitoring data realistically estimate the magnitude of
pesticide residue on food as it is purchased by the consumer, since
samples are taken closer to the point of consumption, and more
accurately represent actual patterns of use and food distribution than
measurements from a typical field trial.  Additional exposures from
potential residues in drinking water were also estimated.

The Dietary Exposure Evaluation Model (DEEM-FCID, version 2.14), a
commercially available software package, was used to estimate exposure
to fenbuconazole via food consumption by the general U.S. population and
certain subgroups.  The model combined the consumption data and residue
data for a given pesticide to analyze dietary risk.

Food consumption data from the USDA Continuing Survey of Food Intakes by
Individuals (CSFII) conducted from 1994 through 1998 including the
children's supplemental survey were used in this assessment.  The food
consumption data, i.e., foods as consumed, were translated into raw
agricultural commodities and their food forms using recipe translation
files contained within the DEEM software.  For chronic assessments, food
consumption values averaged across the populations of interest were
used. Because of the number of years that fenbuconazole has been used in
agriculture, the PDP data provides the best available information on
residues that may result from established uses on food crops.  It should
be noted that a number of the fenbuconazole uses are supported by
residue data supplied by the IR-4 program.  The section 3 tolerance
value was used for those foods that were not sampled by the PDP residue
program, and for which there is no established policy for surrogation
from another crop.  These crops include such uses as lime; plum, prune,
dried; pummelo; and tangerine.

a.  Acute dietary exposure.  Although, no acute adverse effect was
observed as a result of exposure to a single dose, EPA has established
an acute reference dose (aRfD) for the purpose of the acute dietary
assessment. This aRfD was set at 0.3 mg/kg/day for females 13+ years
old, the population sub-group of concern. This was based on the
developmental rat toxicity study with a NOAEL of 30 mg/kg/day and an
uncertainty factor of 100. The 100-fold safety factor includes
intraspecies and interspecies variations. Exposures from all existing
and proposed residues result in very low acute exposures. Using the
above assumptions for Tier 1 assessment, the food exposure to
fenbuconazole for females 13+ years old at the 95th percentile was
estimated to be 0.0133 mg/kg/day that utilized less that 5% of the aRfD.

b.  Chronic dietary exposure. EPA has established a chronic reference
dose (cRfD) for fenbuconazole at 0.03 mg/kg/day for all population
subgroups. The cRfD is based on the 2-year combined chronic
feeding-carcinogenicity study in rats with a NOAEL of 3.03 and 4.02
mg/kg/day in males and females respectively, and an uncertainty factor
of 100. The 100-fold safety factor includes intraspecies and
interspecies variations. No additional FQPA safety factor is required.
The food exposure for the overall U.S. population was estimated for the
Tier 1 assessment to be 0.0044 mg/kg/day that utilized 14.9% of the cRfD
using the Tier 1 conservative exposure assumptions of 100% crop treated
and residues at tolerance levels. The population subgroup with the
highest potential for exposure was children 1-2 years old with food
exposure of 0.018888 mg/kg/day that represented 63% of the cRfD.  For
the Tier 2 assessment, the estimated food exposure was reduced to less
than 3.0 % of the cRfD for the general population and 9.5% of the cRfD
for children 1-2 years.

 c.  Cancer dietary exposure. EPA has classified fenbuconazole as a
Group C carcinogen (possible human carcinogen with limited evidence of
carcinogenicity in animals) and has established a Q* of 0.00359
(mg/kg/day)-1 in human equivalents.  The group used in this analysis was
the general U. S. population.  A Tier I assessment using very
conservative assumptions of: 1) use of tolerance residues 2) 100% CT,
and 3) default processing factors, produces a dietary exposure that
exceeds the Agency threshold of a negligible cancer risk of 1 x 10-6.. A
more realistic estimate of the dietary exposure is obtained based on
using the actual residue values rather than the tolerance, average field
trial residues, available PDP monitoring data, actual processing factors
and estimates of the fraction of the crops actually exposed to
fenbuconazole.  Incorporation of these data into the Tier 3 assessment
resulted in an estimated food exposure of 0.000084 mg/kg/day including
pepper use with a cancer risk estimate of 3.01 x 10-7 .

Drinking Water.  Direct measurements of fenbuconazole in drinking water
were not available.  Estimates of potential water concentrations
resulting from agricultural use of fenbuconazole were estimated using
three environmental models, assuming certain environmental degradation
properties for fenbuconazole and modeled dynamics of ground water and
surface water bodies.  The acute drinking water estimates were estimated
using PRZM/EXAMS and SCI-GRO models and are known to overestimate
potential water residues.  These three models provide conservative,
screening level estimates of water concentrations.  PRZM/EXAMS  is used
for surface water while SCI-GROW is used to give estimates of ground
water concentrations.  Such water estimates are very sensitive to the
input parameters; however, they can still serve as a screening estimate
for exposure considerations. Based on the PRZM/EXAMS and SCI-GROW models
the US EPA estimated EECs of fenbuconazole for acute exposures to be
20.3 parts per billion (ppb) for surface water and 0.031 ppb for ground
water. The EECs for chronic (non-cancer) and for cancer exposures are
estimated to be 16.5 ppb for surface water and 0.031 ppb for
groundwater.   The potential, acute, aggregate exposures from food and
drinking water for females of child bearing age is approximately
0.013930 mg/kg-bw/day or 4.64 % of the acute reference dose (aRfD) for
the upper 95th %tile of the population using a Tier 1 assessment.

Potential chronic exposure to water residues was estimated using 16.5
ppb for the two commodities, i.e., “water, direct, all sources” and
“water, indirect, all sources” for input to DEEM-FCID for chronic
water (Tier III) analysis. After considering all existing and proposed
uses, the exposure to fenbuconazole residues is 5.0 % of the chronic
reference  dose for the most exposed population sub-group, non-nursing
infants.  Although this is much below the acceptable level, it is a very
conservative assessment, since about 96 % of the total dietary exposure
to non-nursing infants (4.8% of the cRfD) comes from the addition of
direct and indirect drinking water sources as estimated for the worst
possible scenario.  For the US population, direct and indirect drinking
water sources represent 81% of the total exposure and approximately 1%
of the cRfD.

Cancer dietary exposure with water was also calculated. Incorporation of
water at 16.5 ppb into the Tier 3 assessment resulted in an estimated
exposure of 0.000432 mg/kg/day including pepper use with a cancer risk
estimate of 1.55 x 10-6.

	2. Non-dietary exposure.  Fenbuconazole is not currently registered for
use on any sites that would result in residential exposure. Thus, the
risk from non-dietary exposure would be considered negligible.

D. Cumulative Effects.  Fenbuconazole is a member of the triazole class
of fungicides.  At this time, EPA does not have available data to
determine whether fenbuconazole exhibits a common mechanism of toxicity
with other triazole fungicides.  However, a cumulative risk assessment
was submitted to the Agency by the United States Triazole Task Force
(USTTF) on behalf of its members (of which, DAS is a member). Cumulative
exposure to triazole metabolites triazole alanine (TA), + triazole
acetic acid (TAA), and 1,2,4-triazole (1,2,4-T) derived from all uses of
triazole-derivative products registered in US was proved to be below the
Agency’s levels of concerns for dietary, drinking water, residential
and aggregated risk to adults and children. More details have been
published in EPA’s FR / Vol 70, No. 45 / March 9, 2005.

E. Safety Determination

	1. U.S. population. Using the above conservative exposure assumptions
and taking into account the completeness and reliability of the toxicity
data, chronic dietary exposure to fenbuconazole from all registered and
proposed uses and drinking water will utilize 14.9% of the cRfD for the
U. S. population (total).  Slight refinement (Tier 2) of the tolerance
residues by adjusting for the percent crop treated resulted in reduced
risk estimates of 2.7% of cRfD for the general U. S. population when
bell and non-bell was included in the assessment with all existing uses
of fenbuconazole.  Generally, EPA has no concern for exposures below
100% of the cRfD because the chronic RfD represents the level at or
below which daily dietary exposures over a lifetime will not pose
appreciable risks to human health.

 Likewise, the acute dietary food exposure at 95th percentile (Tier 1)
for females 13+ yrs, the population sub-group of concern is 4.45 % of
aRfD which is well below 100% of the aRFD.  Therefore, there is no
concern for exposure because the acute RfD represents the level at or
below which a single daily exposure will not pose appreciable risks to
human health.

When pepper use was included in the assessment with all existing and
pending uses of fenbuconazole, the cancer risk estimate was 1.55 x 10-6.
 Generally, the Agency has no concern for exposures that result in a
cancer risk estimate below 1 x 10-6.  Considering the conservative
assumptions of this assessment and the screening level exposure from
drinking water, the cancer risk is not expected to exceed 1 x 10-6 for
the U.S. population as a whole. However, for the US population,
estimates of direct and indirect drinking water sources represent 81% of
the total exposure.

Therefore, based on these risk assessments, Dow AgroSciences concludes
that there is reasonable certainty that no harm will result to the U. S.
population from aggregate exposure to fenbuconazole residues from all
supported registered and proposed uses.

	2. Infants and children. EPA uses a weight evidence approach in
determining what safety factor is appropriate for assessing risks to
infants and children.  This approach takes into account the nature and
severity of the effects observed in pre- and post-natal studies and
other information such as epidemiological data.  The completeness and
adequacy of the toxicity database is also considered.

Toxicity database and exposure data for fenbuconazole are complete.  No
indication of increased susceptibility of rats or rabbits to in utero
and/or postnatal exposure was noted in the acceptable developmental
toxicity studies in rats and rabbits as well as in a 2-generation
reproductive toxicity study in rats.  EPA has previously determined that
no additional safety factor to protect infants and children is necessary
for fenbuconazole and that the RfD at 0.03 mg/kg/day is appropriate for
assessing risk to infants and children.

Using the conservative assumptions (Tier 1) described above, the chronic
dietary exposure to fenbuconazole will utilize 28.3 % of the cRfD for
all infants (<1 yr old), 33.2 % of the cRfD for non-nursing infants,
63.0 % of the cRfD for children 1-2 yrs old and 43.4 % of the cRfD for
children 3-5 yrs old.

Slight refinement (Tier 2) by adjusting residues for % CT reduced the
risk estimates to 9.5% of the cRfD for children 1-2 yrs old, the
population sub-group with the highest potential exposure.  Similarly,
when bell and non-bell was included in the Tier 2 assessment with all
existing uses of fenbuconazole, the risk estimates were 4.0% of the cRfD
for all infants (<1 yr old), 4.6% of the cRfD for non-nursing infants,
and 6.8% of the cRfD for children 3-5 yrs old.

Even when considering the potential exposure to drinking water, the
aggregate exposure is not expected to exceed 100% of the cRfD.
Therefore, based on the completeness and reliability of the toxicity
data and the conservative exposure assessment, Dow AgroSciences
concludes with reasonable certainty that no harm will result to infants
and children from the aggregate exposure to fenbuconazole from all
current and proposed pending uses.

F. International Tolerances

	Codex MRL's are established on bananas and pecans at 0.05 ppm, wheat
grain at 0.1 ppm, peach at 0.5 ppm, cherries at 1.0 ppm, and wheat straw
at 3.0 ppm. Although the residue definitions differ (i.e., Codex does
not include the metabolites), the U.S. tolerances for pecans and wheat
grain match the Codex limits numerically. The U.S. stone fruit crop
group tolerance of 1.0 ppm is consistent with the highest Codex MRL on
an individual member (cherries) of that crop group. In the cases of
bananas and wheat straw, the levels of total residues in the U.S.
tolerance expression (which includes fenbuconazole metabolites) are
higher than the Codex MRL (which excludes these metabolites). Therefore,
EPA has not harmonized these values.