[Federal Register Volume 64, Number 110 (Wednesday, June 9, 1999)]
[Proposed Rules]
[Pages 31040-31050]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-14477]



[[Page 31039]]

_______________________________________________________________________

Part II





Environmental Protection Agency





_______________________________________________________________________



40 CFR Part 180



Pesticides; Tolerance Processing Fees



Proposed Rule

  Federal Register / Vol. 64, No. 110 / Wednesday, June 9, 1999 / 
Proposed Rules  

[[Page 31040]]



ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 180

[OPP-30115; FRL-6028-2]
RIN 2070-AD23


Pesticides; Tolerance Processing Fees

AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.

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

SUMMARY: The Food Quality Protection Act of 1996, by providing 
increased protection from the risks of pesticides especially to infants 
and children, has changed the number of regulatory actions that now 
fall under the heading of ``tolerance processing'' along with the 
responsibilities associated with reviewing tolerance petitions and 
other tolerance actions. In addition, over the last 15 years, factors 
such as expanded data requirements, changes in risk assessment methods, 
improvements in data base management and tracking systems, and the 
increasing complexity of scientific review of petitions have resulted 
in costs substantially exceeding the fees currently charged. Today, the 
difference between costs for processing tolerance actions and fees 
collected is substantial. This proposal, when promulgated, will make 
the tolerance processing system self-supporting. It would revise the 
fees charged for processing tolerance actions for pesticides under the 
Federal Food, Drug, and Cosmetic Act. The statute requires EPA to 
collect fees that will, in the aggregate, be sufficient to cover the 
costs of evaluating tolerances for pesticide products. Once in place, 
the financial burden to process tolerance actions would be borne 
primarily by those constituencies who directly benefit, rather than by 
the taxpayer.
DATES: Written comments, identified by the docket control number [OPP-
30115], must be received on or before September 7, 1999.
ADDRESSES: Comments must be submitted by regular mail, electronically 
or in person. Please follow the detailed instructions for each method 
as provided in Unit I of the SUPPLEMENTARY INFORMATION section of this 
document.
FOR FURTHER INFORMATION CONTACT: Carol Peterson, Office of Pesticide 
Programs (7506C), U.S. Environmental Protection Agency, 401 M St., SW., 
Washington, DC 20460; telephone: (703) 305-6598; e-mail: 
[email protected].
SUPPLEMENTARY INFORMATION:

I. General Information

A. Does this Notice Apply to Me?

    This proposed rule may directly affect any person who might 
petition the Agency for new tolerances, hold a pesticide registration 
with existing tolerances, or anyone who is interested in obtaining or 
retaining a tolerance in the absence of a registration. This group can 
include pesticide manufacturers or formulators, companies that 
manufacture inert ingredients, importers of food, grower groups, or any 
person who seeks a tolerance. Federal, State, local, territorial, or 
tribal government agencies that petition for, or hold, emergency 
exemption tolerances are exempt from this rule. The vast majority of 
potentially affected categories and entities may include, but are not 
limited to:

------------------------------------------------------------------------
                                                         Examples of
             Category                NAICS     SIC       Potentially
                                                      Affected Entities
------------------------------------------------------------------------
Chemical Industry................     325320   0286  Pesticide chemical
                                                      manufacturers,
                                                      formulators
  ...............................     115112   0287  Chemical
                                                      manufacturers of
                                                      inert ingredients
------------------------------------------------------------------------

    This listing is not intended to be exhaustive, but rather provides 
a guide for readers regarding entities likely to be regulated by this 
action. Other types of entities not listed above could also be 
regulated. If available, the four-digit Standard Industrial 
Classification (SIC) codes or the six-digit North American Industrial 
Classification System (NAICS) codes have been provided to assist you 
and others in determining whether or not this notice applies to certain 
entities. To determine whether you or your business is regulated by 
this action, you should carefully examine the applicability provisions 
in the rule (see Unit V of this preamble). If you have any questions 
regarding the applicability of this action to a particular entity, 
consult the person listed in the ``FOR FURTHER INFORMATION CONTACT'' 
section.

 B. How Can I Get Additional Information or Copies of this Document or 
Other Documents?

    1.  Electronically. You may obtain electronic copies of this 
document and various support documents from the EPA internet Home Page 
at http://www.epa.gov/. On the Home Page select ``Laws and 
Regulations'' and then look up the entry for this document under the 
``Federal Register - Environmental Documents.'' You can also go 
directly to the ``Federal Register'' listings at http://www.epa.gov/
homepage/fedrgstr/.
    2. Fax on demand. You may request to receive a faxed copy of this 
document, as well as some supporting information, if available, by 
using a faxphone to call (202) 401-0527 and selecting item 6037, the 
economic analysis and item 6038 ICR form 1915.01. You may also follow 
the automated menu.
    3. In person. If you have any questions or need additional 
information about this action, you may contact the technical person 
identified in the ``FOR FURTHER INFORMATION CONTACT'' section. In 
addition, the official record for this notice, including the public 
version, has been established under docket control number OPP-30115 
(including comments and data submitted electronically as described 
below). A public version of this record, including printed, paper 
versions of any electronic comments, which does not include any 
information claimed as CBI, is available for inspection in Rm. 119, 
Crystal Mall #2, 1921 Jefferson Davis Highway, Arlington, VA, from 8:30 
a.m. to 4 p.m., Monday through Friday, excluding legal holidays. The 
Public Information and Records Integrity Branch telephone number is 
703-305-5805.

C. How and to Whom Do I Submit Comments

    You may submit comments through the mail, in person, or 
electronically. Be sure to identify the appropriate docket number 
(i.e., ``OPP-30115'') in your correspondence.
    1. By mail. Submit written comments to: Public Information and 
Records Integrity Branch, Information Resources and Services Division 
(7502C), Office of Pesticide Programs, Environmental Protection Agency, 
401 M St., SW., Washington, DC 20460.
    2. In person or by courier. Deliver written comments to: Public 
Information and Records Integrity Branch, Information Resources and 
Services Division (7502C), Office of Pesticide Programs, Environmental 
Protection Agency, Rm. 119, Crystal Mall #2, 1921 Jefferson Davis 
Highway, Arlington, VA.
    3. Electronically. Submit your comments and/or data electronically 
by e-mail to: [email protected]. Do not submit any information 
electronically that you consider to be Confidential Business 
Information (CBI). Submit electronic comments as an ASCII file, 
avoiding the use of special characters and any form of encryption. 
Comment and data will also be accepted

[[Page 31041]]

on standard computer disks in WordPerfect 5.1/6.1 or ASCII file format. 
All comments and data in electronic form must be identified by the 
docket control number [OPP-30115]. Electronic comments on this notice 
may also be filed online at many Federal Depository Libraries.
    D. How Should I Handle CBI Information That I Want to Submit to the 
Agency? 
    You may claim information that you submit in response to this 
document as CBI by marking any part or all of that information as CBI. 
Information so marked will not be disclosed except in accordance with 
procedures set forth in 40 CFR part 2. A copy of the comment that does 
not contain CBI must be submitted for inclusion in the public record. 
Information not marked confidential will be included in the public 
docket by EPA without prior notice. If you have any questions about CBI 
or the procedures for claiming CBI, please consult with the technical 
person identified in the ``FOR FURTHER INFORMATION CONTACT'' section.

E. What Should I Consider as I Prepare My Comments for EPA?

    We invite you to provide your views on the various options we 
propose, new approaches we haven't considered, the potential impacts of 
the various options (including possible unintended consequences), and 
any data or information that you would like the Agency to consider 
during the development of the final action. You may find the following 
suggestions helpful for preparing your comments:
     Explain your views as clearly as possible.
     Describe any assumptions that you used.
     Provide solid technical information and/or data to support 
your views.
     If you estimate potential burden or costs, explain how you 
arrived at the estimate.
     Tell us what you support, as well as what you disagree 
with.
     Provide specific examples to illustrate your concerns.
     Offer alternative ways to improve the rule or collection 
activity.
     Make sure to submit your comments by the deadline in this 
notice.
     At the beginning of your comments (e.g., as part of the 
``Subject'' heading), be sure to properly identify the document you are 
commenting on. You can do this by providing the docket number assigned 
to the notice, along with the name, date, and Federal Register 
citation.

II. Authority

    Prior to being amended by the Food Quality Protection Act (FQPA), 
the Federal Food, Drug, and Cosmetic Act (FFDCA) (21 U.S.C. 321 et 
seq.) required EPA to collect fees to support the processing of 
petitions for tolerances (maximum allowable pesticide residue level) on 
raw agricultural commodities. FFDCA required EPA to collect such fees 
that will, in the aggregate, be sufficient to cover the costs of 
processing petitions, so that the tolerance program is as self-
supporting as possible. FFDCA section 408(m)(1), as amended by FQPA, 
states that the Agency shall collect tolerance fees that, in the 
aggregate, will cover all costs associated with processing tolerance 
actions, including filing a tolerance petition and establishing, 
modifying, leaving in effect, or revoking a tolerance or tolerance 
exemption. These FQPA provisions also added to the types of regulatory 
actions that now fall under the heading of tolerance activities along 
with the responsibilities associated with reviewing tolerance petitions 
and other tolerance actions. EPA maintains the authority under section 
408(m)(1)(D) to waive or refund part or all of the required fee when, 
in its judgement, the waiver or refund is equitable and not contrary to 
the purposes of the fee requirement.

III. Background

A. Regulatory History

    Regulations governing the Agency's fee schedule were revised in 
1972 and again in 1986 (40 CFR 180.33). In 1986, EPA used data from a 
1983 Tolerance Cost Analysis to set tolerance petition fees ``based on 
the actual cost of providing services.'' The 1986 Federal Register 
Notice also stated fees were set at ``a level to recover through fees 
all costs of tolerance setting activity, less specifically waived or 
excluded activities.''
    Cost data for each type of tolerance action were developed using 
employee time accounting information, along with data on the number of 
completed actions for tolerance petitions, the frequency of actions, 
and processing costs by fee categories. Fiscal year (FY) 1982 was the 
base year used to gather data for direct costs and completions by fee 
category. Using the figure of $38,900 as the average salary and 
expenses for a full-time EPA employee, per tolerance category, the 
total annual cost of the tolerance program (in FY82) per tolerance type 
was calculated.
     Over the years, tolerance fees have been increased only to reflect 
annual increases in Federal salaries. For instance, in 1986, the fee 
for a petition to establish a new tolerance, or to increase the level 
of an established tolerance was set at $44,100, and the fee for a 
petition for an exemption from the requirement of a tolerance was set 
at $8,100. As a result of these annual incremental payroll increases, 
the 1998 fees for these actions are $65,600 and $12,100, respectively.

B. Revenues

    In fiscal years 1986 through 1996, tolerance fee collections ranged 
from $1.1 to $2.5 million and averaged $1.8 million annually. During 
fiscal years 1994-1996, EPA waived and/or refunded fees that amounted 
to $329,000 annually: an average of $91,000 annually based on those 
found to be in the public interest or on economic hardship plus an 
average of $238,000 annually from petitions submitted by the U.S. 
Department of Agriculture's Interregional Research Project No. 4 (IR-
4)1.
---------------------------------------------------------------------------

    1U.S. Department of Agriculture's Interregional Research Project 
No. 4 (IR-4) is a program that supports the registration of minor 
crop use pesticides by performing crop field trial studies and 
generating pesticide residue data.
---------------------------------------------------------------------------

    In addition to tolerance fee revenues, other sources of revenue 
contribute in part to tolerance activities. Product maintenance fees 
are currently assessed on all registered products. These fees are used 
to support the reregistration program. Of the total $16 million 
collected annually, the Agency estimates that approximately $6.72 
million in revenues goes to reassessing tolerances.
    Registration fees were imposed in 1988 to cover most types of 
registration actions. Later that same year, FIFRA was amended and these 
fees were temporarily suspended. FQPA extended the suspension until 
September 2001. However, as part of the FY 2000 budget, the 
administration proposes to reinstate pesticide registration fees in FY 
2000. An estimated 0.38 million to be collected from the registration 
fee will support analyses that are needed for both general registration 
program activities and for tolerance setting activities. Whether it 
occurs in FY 2000 or in FY 2002, the costs for these analyses are not 
included in this tolerance fee proposal.

IV. 1997 Cost Estimates

A. Factors

    Since the 1983 cost analysis, factors such as expanded data 
requirements, changes in risk assessment methods, improvements in data 
base management and tracking systems, the increasing

[[Page 31042]]

complexity of scientific review, and the provisions of FQPA have 
resulted in costs substantially exceeding the revenues from current 
fees.
    The new FFDCA section 408(m) states that EPA must collect fees 
sufficient in the aggregate over a reasonable term to cover the costs 
incurred in processing tolerance actions. However, under the new 
legislation, more tolerance actions and more types of tolerance actions 
are required. For example, because all tolerances now are set under 
section 408, EPA has the authority to collect monies to cover the costs 
incurred for processed food tolerances or tolerances for processed 
foods for residues that occur following the treatment of a raw 
agricultural commodity. In addition, because FQPA includes other 
ingredients in its definition of a pesticide chemical, other tolerances 
are subject to fees. Similarly, section 18 emergency exemptions now 
require tolerances and also are subject to fees.
    In addition, FQPA increases the Agency's responsibilities 
associated with evaluating each tolerance petition. More analyses must 
be performed prior to the establishment of a tolerance. EPA must now 
consider aggregate risk, which includes drinking water and non-
occupational exposure, common mechanism of toxicity, and other factors 
in its tolerance reviews. The Agency must also make a specific finding 
that the tolerances are protective with respect to infants and 
children. FQPA also requires that all existing tolerances (over 9,700) 
be reassessed within 10 years.
    All of these factors--more tolerances required, more extensive and 
resource intensive evaluations, and comprehensive reassessments on a 
short time frame--mean that the difference between costs for processing 
tolerance actions and fees collected is substantial.

B. Cost Analysis

    Using methods similar to those used in 1983, the Agency estimated 
the average cost of processing tolerance actions today. It found that 
from fiscal year prior to the enactment of FQPA, the unit cost (that 
is, the cost to process one new chemical tolerance petition) was 
$282,600. This cost rose to $376,900 per new chemical petition after 
FQPA. These figures show that FQPA mandates increased tolerance 
processing costs for a new chemical by 33 percent. In the first 21 
months since FQPA, the Agency's total costs for processing petitioned 
tolerances was estimated to be $7.7 million annually.
    FQPA's mandate that EPA reassess all existing tolerances within a 
10-year period also adds a substantial cost to the program--
approximately $20.1 million annually. Many tolerances are currently 
being reassessed as part of the Agency's reregistration efforts on all 
pesticide chemicals registered prior to 1984. For these chemicals, the 
Agency estimates that additional analyses required by FQPA will cost 
about $1.7 million annually for those chemicals for which a 
reregistration eligibility decision has been made, and about $10.2 
million annually for those pre-1984 chemicals for which a risk 
assessment has not yet been completed. Some examples of new program 
costs for which fees may be charged include the reassessment of 
tolerances established after 1984 and all tolerances on other 
chemicals. Annual costs for these two categories will amount to about 
$2.0 million and $4.7 million, respectively.
    The overall total for processing tolerance actions for registration 
and reassessment activities is estimated to be $27.8 million annually. 
Since $7.10 million will be collected through other fees, the total 
annual additional amount that the Agency needs to recoup for all 
tolerance activities is $20.7 million. Copies of the Agency's 
``Tolerance Fee Economic Analysis'' and supplementary materials are 
available in the public docket at the address given above in ADDRESSES.

C. Future Costs

    EPA anticipates additional costs for processing tolerance actions 
in the near future. The costs will be incurred upon the implementation 
of FFDCA section 408(b)(2)(E) ``Data and Information Regarding 
Anticipated and Actual Residue Levels,'' section 408(b)(2)(F) ``Percent 
of Food Actually Treated,'' and section 408(f) ``Special Data 
Requirements.'' Under these sections, whenever the Agency uses or has 
used anticipated or actual residue levels from field monitoring, in the 
evaluation of a new or existing tolerance, it must call-in additional 
data within 5 years to ensure that the residue levels (and associated 
risks) of those of the crops have not increased unacceptably. EPA is in 
the process of developing workplans and estimating resource needs for 
implementing these sections of the law in the hope of finalizing a 
policy by the end of 1999. Rather than delay today's proposal, the 
Agency hopes to issue an amendment to the Final Rule on Tolerance Fees 
sometime in the later part of the year 2000 to include these costs in 
the fee schedules.
    Additional costs relating to tolerances also will stem from 
analyses such as, special subpopulations susceptibilities, common 
mechanisms of toxicity from similar substances, and endocrine effects 
(FFDCA sections 408(b)(2)(C) ``Exposure of Infants and Children'' and 
408(p) ``Estrogenic Substances Screening Program''). The current state 
of scientific knowledge does not lend itself to the development and 
implementation of standardized guidelines in these areas. Determining 
and quantifying appropriate endpoints and incorporating these endpoints 
into risk assessments is still very much under debate. EPA is currently 
working with the scientific community to determine the proper course of 
action and establish appropriate protocols. Once policies are made in 
these areas and guidelines are established, the resources required to 
review the data and perform the analyses will be estimated and the 
tolerance fee schedule will be amended to include the additional costs.

V. New Tolerance Fee System

    The goal of designing and updating a new tolerance fee system is to 
develop a truly self-supporting tolerance program, as required by 
Congress. The criteria that were used in considering various approaches 
was a system that would be reasonable, uncomplicated, fair and 
equitable. Moreover, the new fee system must be fully accountable. EPA 
is committed to subject whatever approach is finally adopted to an 
annual independent audit. This will ensure the resulting tolerance fee 
system is adequately covering our needs and, at the same time, not 
overcharging those required to pay.

A. Possible Approaches

    Once the total costs of the tolerance programs were determined, the 
question that remained was how to devise a system to recoup the money--
not only who should pay, but what basis should be used to determine the 
fee amounts. Various approaches were considered. Each was based on a 
specific parameter, or factor, that would promote the Agency's goal of 
reducing the risks associated with pesticides.
    For example, tolerance fees could be based on a sliding scale. 
Differential fees could be risk-based or set according to the toxicity 
of a chemical. The more toxic a chemical, the higher the tolerance fee 
would be. Biopesticides in general, reduced-risk chemicals, or 
candidates for FIFRA 25(b) exempted chemicals would pay the lowest 
fees. Another approach discussed was setting tolerance fees based on 
chemical use and/or usage. Similar to this approach is a fee based on 
sales. The underlying concept in these examples is that the more widely 
used chemicals usually generate the most sales for a company,

[[Page 31043]]

thus putting it in a better position to absorb an increased fee. 
Products with niche markets, or those used on minor uses would incur a 
much lower fee.

B. Proposed Approach

    While the above approaches, and many others considered, have merit, 
they were dismissed for not meeting one or more of the accepted 
criteria. In many cases, some sort of evaluation had to be performed in 
order to determine the appropriate fee. Chemicals could not be easily 
classified until the end of our review and additional fees would have 
to be collected or fees rebated. Some fee structures considered were 
too costly to administer, required intricate screening procedures or 
complicated tracking systems, or were beyond our legislative authority.
    The Agency opted to propose tolerance fees based on the resource 
needs required to review a specific type of tolerance action. Even 
within this approach, there were several different ways to identify the 
tolerance categories and assess the appropriate fee amounts. The Agency 
considered: (1) Continuing the practice of charging by petition, (2) 
charge by crop, use, or chemical, or (3) charge by tolerance. Each of 
the first two had significant problems. Moreover, since the Agency is 
shifting toward a more systematic and consistent way of tracking its 
actions by tolerance, it sought to design the new tolerance fee system 
on a per tolerance basis. The following is a detailed description of 
its preferred approach for a new tolerance fee system.
    1. Petitioned tolerance actions. The Agency proposes to set new 
tolerance fees based on resource needs for each type of tolerance 
action. This means that the Agency would charge a significantly larger 
amount for the first tolerance of a chemical, whether it be a new or 
registered chemical, since this would require the most work to process. 
Subsequent tolerances for the same crop or tolerances for additional 
crops within the same petition would be charged considerably less. In 
contrast, a separate new food use tolerance petition submitted at a 
later date, would be charged a slightly higher fee per tolerance than 
if the use was included in the original petition because processing it 
would require some amount of rework. This means that, resources are 
used to review the existing file and apply the new information to the 
previous assessments. A single tolerance fee was set for this category 
because historically, petitioners have submitted one crop per new use 
petition. If this practice is likely to change, (for example a 
petitioner would choose to add several crops to its label), the Agency 
could consider an incremental fee structure similar to a first food use 
petition. Tolerances for antimicrobial pesticides would be charged a 
different fee because these types of pesticides require a different set 
of data that must be submitted. Fees for temporary tolerances for 
experimental use permits, and tolerance exemptions also reflect the 
reduced data sets, and thus reduced review resources, that are 
required.
    Fees will be imposed for any crop and/or use that ultimately 
results in the establishment of a tolerance or exemption from the 
requirement of a tolerance. This includes direct application to an 
agricultural plant or crop, preplant uses in the soil, or indirect uses 
that may result in inadvertent residues in a raw agricultural 
commodity. Some examples of when a tolerance fee would be imposed, in 
addition to direct agricultural crop uses, are for pesticide residues 
that indirectly occur in food or feed as a result of aquatic weed 
control in irrigation ditches, mosquito control use, bulk storage 
fumigation use, as a bird repellent, or for residues that could occur 
in rotated crops. Dermal applications to livestock, use in ponds or 
reservoirs for weed control or disease control of fish, shellfish, 
oysters etc., forestry uses (for residues in maple sap), and use in or 
around apiaries (residues in honey or beeswax) are all subject to 
tolerance fees. Similarly, uses of pesticides in food or feed handling 
establishments, such as restaurants, breweries, supermarkets, 
processing plants, dairies, or canneries, are subject to tolerance fees 
should residues occur.
    For the purposes of assessing a fee, an import tolerance (a 
pesticide tolerance with no current U.S. uses or registrations) would 
be treated as if there was a U.S. registration for the chemical. The 
party wishing to obtain or retain a tolerance for import purposes would 
be responsible for the payment of the fee. Further, under this revised 
fee system, the tolerance modification category includes renewals, 
extensions, and conversions of a temporary tolerance or time-limited 
(non-section 18) tolerance as well as all amendments to existing 
tolerances.
    i. Counting tolerances. The new fee would be based on the number of 
individual tolerances required rather than on a petition basis. 
(Currently, one petition may include up to nine crops for one base 
fee.) This means that every food or feed item for which a tolerance is 
either established or exempted, that is, every line item listed in 
Title 40 of the Code of Federal Regulations (CFR) is counted as one 
tolerance. A crop group tolerance (a single tolerance which is 
applicable to a group of similar crops) would be considered one 
tolerance action. An exemption from the requirement of a tolerance for 
``all food commodities'' would be considered one tolerance action, 
whereas a tolerance exemption request for a chemical on barley and corn 
would be considered two tolerance actions.
    A separate fee would be imposed for each raw and processed 
commodity that would require a tolerance or exemption. If residues are 
found to concentrate in processed commodities or are found in livestock 
tissue, separate tolerances would be required. A chemical used on 
almonds therefore would be charged for a minimum of two tolerances--on 
the raw commodities nutmeats and hulls, whereas a chemical used on 
oranges would require one tolerance for the fruit (the raw commodity), 
and if residues were found to concentrate in the dry pulp, peel, oil, 
molasses, or juice, additional tolerances would be needed and fees 
charged. In addition, if the almond hulls or the orange pulp or 
molasses were to be used as feed and livestock feeding studies are 
required, then a fee for each tolerance required on meat, fat, meat by 
products, milk, poultry and eggs would be charged.
    An example of how this scheme would work is if a company wished to 
register a new active ingredient on cotton. The company would petition 
the Agency for tolerances on the raw commodities cottonseed and forage 
(two tolerances). Processing studies reveal that the chemical 
concentrates in the meal, crude oil, and refined oil (three tolerances) 
and livestock feeding studies show that hulls fed to cattle result in 
residues in the meat, fat and milk (three tolerances). Using the table 
in Unit V.B.1.iii. of this preamble, the registrant would be charged a 
total of $537,300 in tolerance fees ($504,400 for the first tolerance 
of a new active ingredient, plus $4,700 for each of the seven 
additional tolerances). If however, in a subsequent petition, this 
company wished to add cotton to an existing food-use product label, it 
would be charged $135,200 ($16,900 for each of the eight new use 
tolerances) because the review costs are substantially less than for a 
new active ingredient.
    ii. Deficient petitions. The Agency would not process a petition 
that is deficient. Administrative deficiencies that may be easily 
corrected, such as improper formatting, illegible pages, etc., would 
not incur any penalty if the error can be corrected within 14 calendar 
days. If the petitioner believes that the correction cannot be made

[[Page 31044]]

within this time frame, it must notify the Agency. If, after 14 days 
the petitioner has not responded, the petition would be treated as if 
it has been withdrawn and the original fee, less $7,500 for handling 
and initial review, would be returned.
    Once the Agency has initiated its scientific review, a resubmission 
fee would be imposed for substantially flawed petitions that require 
one or more resubmissions of data or other required information. 
Defective studies cost the Agency a tremendous amount of resources and 
delay the review of the petition considerably. Resources are wasted 
reviewing an unacceptable study and, in many cases, more times and 
effort is spent working with the affected petitioner to generate useful 
data. For this reason, EPA is instituting an admittedly large penalty 
for ineffective and/or poorly conducted studies. We hope that this will 
serve as an incentive to submit only quality data and information for 
review.
    Petitioners would have up to 75 calendar days from the date of EPA 
notification to correct the deficiency without penalty, after which an 
additional 35 percent of the original fee would be charged. The 
resubmission fee would be required at the time the requested studies 
and/or other material are submitted. If the correction cannot be made 
within this time frame, the petitioner must notify the Agency, as soon 
as possible within the 75 days, of the circumstances surrounding the 
delay. If, after 75 days the petitioner has not responded, or 
subsequently fails to submit the required material within the 
negotiated time frame, the petition would be treated as if it had been 
withdrawn in the manner consistent with 40 CFR 152.105, and the 
original fee would not be returned. A deficiency that would warrant the 
resubmission fee would include a study that is not fully acceptable and 
must be repeated in its entirety or in parts (e.g., a toxicology study 
that is categorized as ``non-upgradable''), or any other significant 
issue that prevents the continuation of the science review or the 
Agency from reaching a regulatory decision.
    iii. Fee schedule. Using this scheme, EPA proposes the following 
fee schedule for petitioned tolerance actions.

------------------------------------------------------------------------
               Petitioned action                           Fee
------------------------------------------------------------------------
First Food-use Petition for a New Active           (1st tol.) = $504,400
 Ingredient\1\.................................     (add'l tol.) = 4,700
First Food-use Petition for a Registered Non-       (1st tol.) = 468,800
 Food Active Ingredient\1\.....................     (add'l tol.) = 4,700
New Use Tolerance or Exemption for an Active or                   16,900
 Other Ingredient..............................
Temporary Tolerance or Exemption for an                           51,200
 Experimental Use Permit.......................
Time-limited Tolerance for an Emergency                                0
 Exemption.....................................
Exemption from the Requirement of a Tolerance                    145,400
 for an Active Ingredient\1\...................
Tolerance Modification for an Active or Other                      4,400
 Ingredient....................................
Tolerance for an Other Ingredient..............                   62,300
Exemption from the Requirement of a Tolerance                     59,300
 for an Other Ingredient.......................
Tolerance or Exemption for an Antimicrobial                       68,200
 Active Ingredient.............................
Request for Fee Waiver or Refund\2\............                   7,500
------------------------------------------------------------------------
\1\ Excluding antimicrobial active ingredients.
\2\ Fee will be returned if waiver or refund is warranted.

    2. Reassessed tolerances. As with petitioned tolerances, EPA 
proposes to set fees for reassessing tolerances based on estimated 
resource needs for each type of reassessment. Different fee amounts 
would be charged for a pre-1984 chemical for which a Reregistration 
Eligibility Decision document (RED) has been completed, a pre-1984 
chemical that is currently in the reregistration queue, or a chemical 
for which tolerances were set after 1984. Differences would take into 
account the amount of review that has already taken place (i.e., 
whether the chemical has or will go through, or is even subject to, the 
reregistration process), and the additional analyses that must be 
performed due to FQPA provisions.
    For tolerances that were reassessed as part of a reregistration 
eligibility decision that has already been made, the basic science 
evaluation has already occurred. For these chemicals, the Agency must 
go back and perform the FQPA analyses, such as a drinking water 
exposure assessment, the aggregate risk assessment, and the special 
finding for infants and children. The Agency, however, must perform a 
complete risk assessment, including the FQPA requirements, for 
chemicals that had not gone through reregistration at the time FQPA was 
passed, or are not subject to reregistration, i.e., those chemicals 
registered between November 1984 and August 1996. The fee proposed for 
the chemicals subject to reregistration but for which a RED is issued 
after the enactment of FQPA does not reflect the actual amount of 
resources needed to review these tolerances because credit is given for 
product maintenance fees that have already been paid. Moreover, for the 
tolerances of chemicals that were registered after November 1984 and as 
such are not subject to reregistration, the Agency must reevaluate all 
existing data and perform a complete risk assessment.
    i. Counting tolerances. For the group of chemicals that are already 
registered, tolerances have been added over the lifetime of the 
registration (some older chemicals have over 100 tolerances). The 
amount a registrant would pay for tolerance reassessment would depend 
on the total number of tolerances to be reassessed. The Agency would 
charge one amount for the first tolerance and a lesser amount for 
additional tolerances. As with petitioned tolerance actions, a crop 
group tolerance would be considered one tolerance action. Similarly, an 
exemption from the requirement of a tolerance for ``all food 
commodities'' would be considered one tolerance action. A chemical with 
tolerances on corn (fresh, grain, and forage) would be considered three 
tolerance actions. A tolerance exemption for a chemical on barley and 
corn would be considered two tolerance actions.
    ii. Fee schedule. Using this scheme, the Agency proposes the 
following fee schedule for tolerance reassessments.

------------------------------------------------------------------------
             Tolerance reassessment                        Fee
------------------------------------------------------------------------
Tolerance for an Active Ingredient for which a                   $12,500
 Reregistration Eligibility Document was issued
 before August 1996............................

[[Page 31045]]

 
Tolerance for an Active Ingredient for which a       (1st tol) = 227,700
 Reregistration Eligibility Document is issued         (add'l tol) = 500
 after August 1996\1\..........................
Tolerance for an Active Ingredient First             (1st tol) = 289,800
 Registered between November 1984 and August         (add'l tol) = 1,700
 1996..........................................
Active Ingredient Tolerance Exemption..........                   20,600
Other Ingredient Tolerance.....................                  201,400
Other Ingredient Tolerance Exemption...........                   79,300
Request for Fee Waiver or Refund\2\............                   7,500
------------------------------------------------------------------------
\1\ The calculated tolerance fees for the chemicals in reregistration
  are offset by monies received via product maintenance fees.
\2\ Fee will be returned if waiver or refund is warranted.

    iii. Payment schedule. Fees generally would be collected prior to 
the commencement of the reassessment and would be independent of the 
resulting tolerance decision. Itemized payment statements would be sent 
to the registrant(s) of a technical active ingredient (or chemical 
case) at the beginning of the fiscal year that the tolerance 
reassessment is scheduled. The registrant(s) would have 90 days to 
remit the appropriate amount. Registrants who share the responsibility 
for a single active ingredient or chemical case will be encouraged to 
work together to determine how the fee will be paid. The Agency will 
include in its reassessment only those tolerances for which it receives 
payment. For those chemicals whose tolerance reassessments have 
commenced prior to the promulgation of this rule, a bill will be sent 
to affected parties for work performed. A tolerance reassessment will 
not become final until the required fee is submitted. EPA will revoke 
any existing tolerance for non-payment of the fee.
    3. Tolerance fee waivers. As part of the new fee structure, the 
Agency proposes to grant routine fee waivers for certain tolerance 
actions. Fee waivers are proposed for:
    i. Petitions submitted by IR-4. U.S. Department of Agriculture's 
Interregional Research Project No. 4 (IR-4) is a program that supports 
the registration of minor crop use pesticides by performing crop field 
trial studies and generating pesticide residue data. Since this program 
is supported by taxpayer dollars, charging a fee would be contrary to 
the purposes of this proposal.
    ii. Minor use tolerances actions, except when the minor use 
constitutes the first food use or the sole use(s) of an existing 
chemical. Traditionally, minor use pesticides are produced for niche 
markets with often low profit margins. Because of this, many minor use 
crop farmers do not have a wide selection of pest control products and 
an increase in fees may jeopardize the continued registrations. FQPA 
has essentially put into law the Agency's long standing policies to aid 
the registration and retention of pesticides used on minor crops. 
Granting an automatic fee waiver for tolerance actions for minor use 
crops is consistent with Agency policy and Congressional intent. For 
the purposes of this proposal, EPA is defining a minor use as any crop 
use other than that on alfalfa, almonds, apples, barley, beans (dry and 
snap), canola, corn (field, sweet, and pop), cottonseed, grapes, hay, 
pecans, potatoes, rice, rye, sorghum, soybeans, sugarbeets, sugarcane, 
sunflower, oats, oranges, peanuts, tomatoes, or wheat.
    Fees for pesticide chemicals used solely on minor uses, however, 
cannot be automatically exempt from the proposed fees because of the 
large amount of resources required to process or reassess the 
tolerances. While the submission of a new chemical registration for 
strictly minor uses is extremely rare, there are a handful of existing 
pesticide chemicals that are registered for use only on minor crops. To 
establish or reassess the tolerances the Agency must still review a 
full set of data and conduct a complete risk evaluation. For all minor 
use only chemicals, the Agency proposes to impose a fee equivalent to a 
single, first tolerance, temporary tolerance or tolerance exemption. 
For example, if a registrant is applying for a new chemical 
registration and has submitted a tolerance petition for use on garden 
beets, onions, and turnips, the fee would be $504,400, regardless of 
how many individual tolerances were established. Similarly, if an 
existing chemical was registered in 1985 for use on garden beets, 
onions, and turnips and tolerances were established for beet roots, 
beet greens, onion bulbs, turnip roots, turnip tops, and several 
livestock commodities, the registrant would be charged a tolerance 
reassessment fee of $289,800.
    iii. Time-limited tolerances for emergency exemptions. If, in a 
single year, there occurs a severe pest infestation for which there is 
no registered pesticide available, EPA may grant an emergency exemption 
from FIFRA requirements for that pesticide. And because an emergency 
situation is occurring, the Agency must respond quickly. The passage of 
FQPA now requires the Agency to set time limited tolerances for these 
emergency uses. The States submit the exemption requests and 
accompanying tolerance petitions on behalf of their growers. Due to the 
urgent nature of these types of tolerance actions, and given that the 
state governments would be paying the fees with taxpayer dollars, 
charging a fee would be contrary to the purposes of this proposal.
    iv. Petitions to revoke a tolerance and tolerance revocations. 
Imposing a fee for these types of tolerance actions would be 
impractical.
    v. Biopesticide tolerance actions, except plant-pesticides.  
Biopesticides usually affect a single pest and, similar to minor use 
pesticides, often have low profit margins. Because these pesticides are 
by and large less risky than conventional, synthetic pesticide 
chemicals, EPA has adopted a number of policies to encourage their 
development and registration. The assessment of biopesticides requires 
a different and abbreviated set of data for registration and any 
associated tolerance actions, therefore less resources are generally 
required to reach a regulatory decision. Waiving the tolerance fee is 
consistent with existing policies. The tolerance review for plant-
pesticides, however, cannot be waived at this time. Although the Agency 
also believes that plant-pesticides are inherently lower risk, the fees 
cannot be routinely waived because of the large amount of resources are 
necessary to process or reassess the tolerances. Moreover, these 
products often become profitable soon after introduction.
    vi. Other ingredients generally regarded as safe (List 4A inerts). 
Tolerance reassessment fees would not be required for other ingredients 
the Agency has declared as minimal risk and generally regarded as safe, 
that is, those currently on List 4A. Fees for petitioned tolerance 
exemptions for

[[Page 31046]]

other ingredients to be added to List 4A would be refunded once it was 
determined that the List 4A designation was warranted. The most current 
listing of the List 4A inerts can be found posted on the Internet on 
EPA's home page at http://www.epa.gov/opprd001/inerts/lists.html, or by 
writing Registration Support Branch (Inerts), Registration Division 
(Mail Code 7505C), Office of Pesticide Programs, Environmental 
Protection Agency, 401 M St., SW., Washington, DC 20460.
    vii. Tolerance exemptions for chemicals exempted from FIFRA 
regulations under section 25(b). Similarly, tolerance reassessment fees 
would not be required for active ingredients that have been exempted 
from FIFRA regulation under section 25(b). These chemicals have been 
declared by the Agency to be of a character which is unnecessary to be 
subject to the Act in order to carry out its purposes. Fees for 
petitioned tolerance exemptions for active ingredients to be added to 
this list would be refunded once it was determined that the 25(b) 
designation was warranted. The list of FIFRA exempted substances can be 
found in 40 CFR part 152.25.
    EPA believes that the above waivers are equitable and not contrary 
to the purposes of the fee requirement, yet invites the public to 
comment on this issue. Other views have been raised. For example, 
although it is the Agency's policy to promote the development and use 
of biopesticides, some companies engaged in the registration of these 
types of pesticides are large and can afford to pay a fee. The Agency 
recognizes that there are other ways to champion these products without 
granting a full fee waiver. One way is to grant fee waivers via the 
submission of a small business waiver request (see below). Similarly 
the minor use fee waiver would also apply to many biological pesticide 
petitions. Another option is to set fees for biologicals based on the 
percentage of the fee imposed for a conventional chemical. In 
deliberations for this fee proposal, the Agency found administrative 
costs and complexity argued against a case-by-case analysis for these 
categories. However, EPA would like to hear differing views.
    The Agency estimates that revenues waived from these waived actions 
will be $2.5 million annually for petitioned tolerance actions and $2.4 
million annually for tolerance reassessments. Because EPA must collect 
fees ``in the aggregate'' to cover its costs, all of the calculated 
fees for each category must be adjusted upwards in order to recover the 
$4.9 million annual revenue shortfall. Accordingly, the Agency raised 
the fees by 48 percent for the petitioned tolerance categories and 23 
percent for reassessed tolerance categories.
    EPA also will continue the practice of granting fee waivers on a 
case-by-case basis when warranted, and when requested in writing by the 
petitioner or registrant. For these requests, OPP has revised and 
expanded the current criteria for granting fee waivers for safer 
products, products that are in the public interest, and to those 
registrants who demonstrate an economic hardship. An updated Pesticide 
Registration Notice will be made available in draft form for public 
comment. A fee of $7,500 shall accompany every waiver or refund 
request. The fee will be returned if the request is granted. 
Conversely, the fee will be forfeited if the request is denied.
    4. Implementation. Petitioners would continue following the 
established procedures outlined in the current regulations. When 
applying for a tolerance or tolerance exemption, petitioners would send 
EPA their remittance, data, and supporting materials. The cover letter, 
application or petition, data, and all supporting materials would 
continue to be sent to EPA's Office of Pesticide Programs in 
Washington, DC. The payments themselves would continue to be sent to 
EPA's Financial Management Division (FMD) in Pittsburgh, Pennsylvania. 
The Agency would not begin processing the petition until it had been 
notified by FMD that the check had cleared.
    For tolerances that are to be reassessed, the Agency would send 
affected registrants a bill at the beginning of each fiscal year for 
those chemicals that are scheduled to be reevaluated during that year. 
Registrants would be sent a pre-printed form listing their chemical and 
all the associated tolerances. On the form, they would be asked to 
verify the list, identify those tolerances they wish to support, and 
calculate the appropriate fee amount. The Agency will use the 
information on the response forms and include only those tolerances for 
which the fee has been paid in its risk assessment. Multiple 
registrants of the same active ingredient would be given 90 days to 
coordinate their response and jointly pay the required fee for that 
chemical. If no registrant comes forth to pay for a particular 
tolerance, the Agency will publish a notice in the Federal Register 
which will alert other potential impacted parties and provide them with 
the opportunity to support the reassessment of that tolerance. 
Tolerances will be revoked for non-payment of fees.
    i. Annual adjustments. EPA proposes to continue the practice of 
raising fees annually to reflect inflation. Currently these annual fee 
adjustments are based on the total percentage change in basic pay in 
Federal employee salaries, that is, the Cost of Living Adjustment, or 
COLA. The Agency has looked at the issue of adjusting fees over time 
and proposes to continue to link the increases to the COLA. Other 
approaches that were suggested were tying the annual adjustment to the 
total percentage change that occurred during the previous year in the 
Consumer Price Index (CPI), or perhaps base the adjustment on the 
greater of either the COLA or the CPI. EPA invites comment on this 
issue. In addition to annual adjustments to the fee scale, the Agency 
intends to evaluate the tolerance fee system periodically to determine 
if revenues are adequately covering costs and whether fees should be 
adjusted accordingly.
    ii.  Transition. For the purposes of FFDCA section 408(m), a 
tolerance or exemption will not be considered officially granted or 
reassessed until the appropriate fee is paid. Registrants of chemicals 
for which a tolerance action has begun and not yet granted or declared 
reassessed prior to the finalization of this rule would be required to 
pay the revised fee. Petitioners or registrants that are in the 
tolerance review queue upon publication of this proposal would be 
subject to retroactive billing.
    Because this document is a proposal, it is important to note that 
the individual fee amounts proposed may change upon promulgation due to 
the comments received. Affected parties must keep in mind that, since 
the Agency must collect fees to cover its costs ``in the aggregate,'' a 
decrease in one fee will result in the increase of another.

VI. Regulatory Assessment Requirements

A. Executive Order 12866

     Under Executive Order 12866, entitled Regulatory Planning and 
Review (58 FR 51735, October 4, 1993), the Office of Management and 
Budget (OMB) determined that this proposed rule is not a ``significant 
regulatory action.'' The Agency determined that this rule, when 
promulgated, is estimated to impose an aggregate regulatory burden of 
$20.7 million annually and therefore is unlikely to have a major 
economic impact on pesticide registrants. Promulgation of

[[Page 31047]]

this proposed rule will have no impact on any other sector of the 
economy, or on any other government entities, programs or policies. In 
addition, the proposed rule is consistent with the purposes of FFDCA, 
and does not conflict with any other statutory mandate or with the 
principles of the Executive Order.

B. Regulatory Flexibility Act

     Pursuant to section 605(b) of the Regulatory Flexibility Act (5 
U.S.C. 601 et seq.), the Agency hereby certifies that this action will 
not have a significant economic impact on a substantial number of small 
entities. This determination is based on the Agency's 1997 Cost 
Analysis which is available in the OPP public docket for this 
rulemaking. In addition, for those small businesses that are affected 
by this action, EPA has provided the opportunity to request fee waivers 
and has set forth criteria based on economic hardship. Tolerance fee 
waivers will be granted on a case-by-case basis for petitioners or 
registrants who cannot pay.
    For this analysis, we have adopted the definition of small 
businesses from FIFRA section 4(i)(5)(E)(ii)(I): Entities with 150 or 
fewer employees and an average annual gross revenue of $40 million over 
a 3-year period. This definition differs from the standard definition 
applied under the Regulatory Flexibility Act (RFA). According to 
section 601(3) of the RFA, agencies must use the definition of ``small 
business'' that is provided under the Small Business Act, 15 U.S.C. 
section 631 et seq., unless it establishes an alternative definition. 
The agency may use the alternative definition for RFA purposes only 
after it has consulted with the Office of Advocacy of the Small 
Business Administration (SBA) and provided an opportunity for public 
comment.
    According to SBA, small entities vary by Standard Identification 
Code (SIC), and, for chemical manufacturers, are based solely on the 
number of employees. Most establishments producing organic chemicals 
are defined as small if they have fewer than 500 employees. For 
chemical manufacturing, however, the number of employees may not be 
closely related to the total annual sales of a company. Since chemical 
testing primarily requires a financial outlay, EPA believes that the 
number of employees is a less reliable measure of a company's ability 
to pay applicable fees than is a company's total annual sales. 
Therefore, in this proposed rulemaking, the Agency is proposing to use 
the FIFRA definition of ``small business'' for RFA purposes. This 
definition is discussed in the document that gives additional 
information on small entity impacts.
    EPA is hereby seeking comment on the use of the Agency's definition 
of ``small business,'' as well as on the ``Small Entity Impacts of the 
Economic Analysis of Proposed Tolerance Fee Schedule'' document. EPA is 
also consulting with the Office of Advocacy of the SBA concerning the 
Agency's use of the EPA definition. Any comments regarding the impacts 
that this action may impose on small entities should be submitted to 
the Agency in the manner specified in Unit I of this preamble.

C. Unfunded Mandates Reform Act

    Under Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) 
(Pub.L. 104-4), EPA has determined that this action does not contain a 
Federal mandate that may result in expenditures of $100 million or more 
for State, local, and tribal governments, in the aggregate, or the 
private sector in any one year. The cost associated with this action 
are described in the Executive Order 12866 section above. Therefore, 
this action is not subject to the requirements of sections 202 and 205 
of the UMRA.

D. Consultation and Coordination with Indian Tribal Governments

    Under Executive Order 13084, entitled Consultation and Coordination 
with Indian Tribal Governments (63 FR 27655, May 19,1998), EPA may not 
issue a regulation that is not required by statute, that significantly 
or uniquely affects the communities of Indian tribal governments, and 
that imposes substantial direct compliance costs on those communities, 
unless the Federal government provides the funds necessary to pay the 
direct compliance costs incurred by the tribal governments. Today's 
proposal would implement requirements specifically set forth by the 
Congress in FFDCA without the exercise of any discretion by EPA. The 
proposal does not significantly or uniquely affect the communities of 
Indian tribal governments. Tribal governments would not be subject to 
the requirements of today's proposal. Accordingly, the requirements of 
section 3(b) of Executive Order 13084 do not apply to this proposal.

E. Enhancing Intergovernmental Partnerships

    Under Executive Order 12875, entitled Enhancing Intergovernmental 
Partnerships (58 FR 58093, October 28, 1993), EPA may not issue a 
regulation that is not required by statute and that creates a mandate 
upon a State, local or tribal government, unless the Federal government 
provides the funds necessary to pay the direct compliance costs 
incurred by those governments. Today's proposal would implement 
requirements specifically set forth by the Congress in FFDCA without 
the exercise of any discretion by EPA. It would not create a mandate on 
State, local or tribal governments. The proposal would not impose any 
enforceable duties on these entities. Accordingly, the requirements of 
section 1(a) of Executive Order 12875 do not apply to this proposal.

F. Children's Health Protection

    This proposed rule is not subject to Executive Order 13045, 
entitled Protection of Children from Environmental Health Risks and 
Safety Risks (62 FR 19885, April 23, 1997), because this is not an 
economically significant regulatory action as defined by Executive 
Order 12866 (see Unit VI.A. above). In addition, this proposed rule is 
procedural in nature and does not involve decisions on environmental 
health risks or safety risks that may disproportionately affect 
children.

G. National Technology Transfer and Advancement Act

    This proposed regulation does not involve technical standards. As 
such, the requirement in section 12(d) of the National Technology 
Transfer and Advancement Act of 1995 (NTTAA), (15 U.S.C. 272 note) 
which directs EPA to use voluntary consensus standards in its 
regulatory activities unless to do so would be inconsistent with 
applicable law or impractical, does not apply to this action. Voluntary 
consensus standards are technical standards (e.g., materials 
specifications, test methods, sampling procedures, business practices, 
etc.) that are developed or adopted by voluntary consensus standards 
bodies. EPA invites public comment on this conclusion.

H. Environmental Justice

    This proposed rule does not directly affect minority populations or 
low-income groups. Therefore, under Executive Order 12898, entitled 
Federal Actions to Address Environmental Justice in Minority 
Populations and Low-Income Populations (59 FR 7629, February 16, 1994), 
the Agency does not need to consider environmental justice-related 
issues regarding the environmental and health conditions in low-income 
and minority communities.

I. Paperwork Reduction Act

    The new information collection requirements contained in this 
proposed

[[Page 31048]]

rule have been submitted to the Office of Management and Budget (OMB) 
under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq, and in 
accordance with the procedures at 5 CFR 1320.11. An Information 
Collection Request (ICR) document has been prepared by EPA (EPA ICR No. 
1915.01) and a copy may be obtained from Sandy Farmer, OP Regulatory 
Information Division; U.S. Environmental Protection Agency (2137); 401 
M St., S.W.; Washington, DC 20460, by calling (202) 260-2740, or 
electronically by sending an e-mail message to 
``[email protected].'' An electronic copy has also been posted with 
the Federal Register notice on EPA's homepage with other information 
related to this action.
    The information collection requirements related to the tolerance 
petition process are already approved under OMB control number 2070-
0024 (EPA ICR #597), and this proposed rule does not affect that 
activity. However, this proposed rule does contain two minor 
information collection activities that are not currently approved, 
including the requirements related to the identification of the 
tolerances that the Agency should include in the reassessment of the 
chemical, and the process for requesting a fee waiver or refund. These 
new activities are discussed in the ICR document, and are not effective 
until EPA issues a final rule and until OMB has approved the 
information collection under the Paperwork Reduction Act (PRA) and 
assigned an OMB control number to that approval. An Agency may not 
conduct or sponsor, and a person is not required to respond to a 
collection of information subject to OMB approval under the PRA unless 
it displays a currently valid OMB control number. The OMB control 
numbers for EPA's regulations, after initial publication in the Federal 
Register, are maintained in a list at 40 CFR part 9.
    The annual burden for the proposed information collection 
activities contained in this proposed rule are estimated to be 2.3 
hours for each submission of the tolerance reassessment form, 2 hours 
for each fee waiver or refund request submitted, and 0.3 hours to 
maintain records. These estimates include the time needed to become 
familiar with the requirements (first year implementation is an 
additional 1 hour per registrant), review the instruction, complete the 
form, and transmit or otherwise disclose the information. Under the 
PRA, ``burden'' means the total time, effort, or financial resources 
expended by persons to generate, maintain, retain, or disclose or 
provide information to or for a Federal agency. This includes the time 
needed to review instructions; develop, acquire, install, and utilize 
technology and systems for the purposes of collecting, validating, and 
verifying information, processing and maintaining information, and 
disclosing and providing information; adjust the existing ways to 
comply with any previously applicable instructions and requirements; 
train personnel to be able to respond to a collection of information; 
search data sources; complete and review the collection of information; 
and transmit or otherwise disclose the information
     Any comments regarding the burden estimate or any other aspect of 
this collection of information, including suggestions for reducing this 
burden, increasing electronic submissions, etc. may be sent to EPA at 
the address provided in Unit I of this preamble. Please include the 
docket number and ICR number in any correspondence related to the 
information collection components of this proposed rule. The final rule 
will respond to any comments received on the information collection 
requirements contained in this proposal.

List of Subjects in 40 CFR Part 180

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

    Dated: May 28, 1999.

Carol M. Browner,

Administrator.
    Therefore, 40 CFR part 180 is proposed to be amended as follows:

PART 180--[AMENDED]

    1. The authority citation for part 180 would continue to read as 
follows:
    Authority: 21 U.S.C. 321(q), 346a, 371.


    2. Section 180.33 would be revised to read as follows:


Sec. 180.33   Fees.

    (a) Fees for petitioned tolerance actions. (1) Each petition to 
establish, modify, or leave in effect a tolerance or exemption from the 
requirement of a tolerance must be accompanied by the appropriate fee 
as listed in the following table unless such fee is waived according to 
paragraph (e) of this section.

------------------------------------------------------------------------
               Petitioned action                           Fee
------------------------------------------------------------------------
First Food-use Petition for a New Active           (1st tol.) = $504,400
 Ingredient\1\.................................     (add'l tol.) = 4,700
First Food-use Petition for a Registered Non-       (1st tol.) = 468,800
 Food Active Ingredient\1\.....................     (add'l tol.) = 4,700
New Use Tolerance or Exemption for an Active or                   16,900
 Other Ingredient..............................
Temporary Tolerance or Exemption for an                           51,200
 Experimental Use Permit.......................
Time-limited Tolerance for an Emergency                                0
 Exemption.....................................
Exemption from the Requirement of a Tolerance                    145,400
 for an Active Ingredient\1\...................
Tolerance Modification for an Active or Other                      4,400
 Ingredient....................................
Tolerance for an Other Ingredient..............                   62,300
Exemption from the Requirement of a Tolerance                     59,300
 for an Other Ingredient.......................
Tolerance or Exemption for an Antimicrobial                       68,200
 Active Ingredient.............................
Request for Fee Waiver or Refund \2\...........                   7,500
------------------------------------------------------------------------
\1\ Excluding antimicrobial active ingredients.
\2\ Fee will be returned if waiver or refund is warranted.

    (2) A petitioner must remit a fee for each tolerance requested for 
a pesticide chemical residue. A tolerance fee is required for each food 
or feed item that requires a tolerance or exemption from the 
requirement of a tolerance. Similarly, a tolerance fee is required for 
each processed food or feed item and each livestock food or feed item 
that requires a tolerance be established. A tolerance fee is required 
for residues that occur in or on individual food or feed items as a 
result of indirect pesticide use.
    (3)(i) A crop group tolerance petition, for the purposes of 
assessing a tolerance fee under this paragraph, will be

[[Page 31049]]

considered a request for a single tolerance action.
    (ii) A request for an exemption from the requirement of a tolerance 
on all food commodities, for the purposes of assessing a tolerance fee 
under this paragraph, will be considered a request for a single 
tolerance action.
    (iii) A modification to a tolerance includes renewals, conversions 
of a temporary tolerance or time-limited tolerance as well as all 
amendments to existing permanent or temporary tolerances or tolerance 
exemptions.
    (iv) For new chemical or first food-use tolerance petitions 
submitted for minor uses only, a fee equivalent to a single, first 
tolerance, temporary tolerance or tolerance exemption is required.
    (4) A petition will not be accepted for processing and the Agency 
will take no regulatory action until the required fee is submitted.
    (5) For the purposes of section 408(m) of the Federal Food, Drug, 
and Cosmetic Act, a tolerance or tolerance exemption will not be 
granted until the appropriate fee has been received.
    (b) Fees for reassessed tolerances. (1)(i) Applicable fees are 
required for each Agency action to modify or leave in effect an 
existing tolerance or exemption from the requirement of a tolerance 
that results from an Agency-initiated tolerance reassessment activity. 
The fee listed in the following table must be paid prior to the 
reassessment of the established tolerances of a particular chemical 
upon notice from the Agency. Such notice shall be sent to each producer 
of the particular pesticide chemical.

------------------------------------------------------------------------
          Tolerance reassessment type                      Fee
------------------------------------------------------------------------
Tolerance for an Active Ingredient for which a                   $12,500
 Reregistration Eligibility Document was issued
 before August 1996............................
Tolerance for an Active Ingredient for which a       (1st tol) = 227,700
 Reregistration Eligibility Document is issued         (add'l tol) = 500
 after August 1996\1\..........................
Tolerance for an Active Ingredient First             (1st tol) = 289,800
 Registered between November 1984 and August         (add'l tol) = 1,700
 1996..........................................
Active Ingredient Tolerance Exemption..........                   20,600
Other Ingredient Tolerance.....................                  201,400
Other Ingredient Tolerance Exemption...........                   79,300
Request for Fee Waiver or Refund \2\...........                    7,500
------------------------------------------------------------------------
\1\ The calculated fee is offset by monies received via product
  maintenance fees.
\2\ Fee will be returned if waiver or refund is warranted.

    (ii) Where a chemical has no registered uses in the United States, 
or where no registrant pays the applicable fee to support a particular 
tolerance to be reassessed for a chemical, a notice shall be published 
in the Federal Register to provide other potentially impacted parties 
the opportunity to support the retention of that tolerance by 
petitioning the Agency.
    (2) A single tolerance fee is required for every tolerance 
established or exemption from the requirement of a tolerance per raw 
agricultural commodity. Similarly a single tolerance fee is required 
for each processed commodity and each livestock commodity with an 
established tolerance. A tolerance fee is required for residues that 
occur in or on individual food or feed items as a result of indirect 
pesticide use.
    (3)(i) An established crop group tolerance, or an existing 
exemption from the requirement of a tolerance on all food commodities, 
for the purposes of assessing a tolerance reassessment fee under this 
paragraph, will be considered a single tolerance action.
    (ii) An existing exemption from the requirement of a tolerance on 
all food commodities, for the purposes of assessing a tolerance 
reassessment fee under this paragraph, will be considered a single 
tolerance action.
    (4) For the purposes of section 408(m) of the Federal Food, Drug, 
and Cosmetic Act, a tolerance reassessment will not become final until 
the required fee is submitted.
    (5) The Administrator shall revoke a tolerance or exemption from 
the requirement of a tolerance for non-payment of the applicable fee.
    (c) Withdrawal of a petition. If a petition is withdrawn by the 
petitioner before significant Agency scientific review has begun, the 
fee, less $7,500 for handling and initial review, shall be returned. No 
fee will be returned after the commencement of scientific review. If a 
withdrawn petition is resubmitted, it must be accompanied by the fee 
required in paragraph (a) of this section for a new submission.
    (d) Deficient petitions. (1) If a petition is not accepted for 
processing because it is administratively incomplete, and the 
petitioner rectifies the problem within 14 calendar days, no 
resubmission fee will be imposed. If the petitioner believes that the 
correction cannot be made within this time frame, it must notify the 
Agency. If, after 14 days the petitioner has not responded, the 
petition will be treated as if it has been withdrawn and the original 
fee, less $7,500 for handling and initial review, would be returned.
    (2)(i) If, after the Agency's scientific review has begun and a 
submission has been determined to be scientifically deficient, such 
that additional data are required or any other significant issue arises 
that prevents the continuation of the scientific review or the Agency 
from making a regulatory decision, a resubmission fee shall be imposed. 
Petitioners have up to 75 calendar days from the date of EPA 
notification to correct the deficiency without penalty, after which an 
additional 35 percent of the original fee will be charged. The 
resubmission fee would be required at the time the requested studies 
and/or other material is submitted. If the petitioner believes that the 
correction cannot be made within this time frame, it must notify the 
Agency. If, after 75 days the petitioner has not responded, or 
subsequently fails to submit the required material within the 
negotiated time frame, the petition will be treated as if it has been 
withdrawn. The original fee will not be returned.
    (ii) A deficiency that would warrant the resubmission fee would 
include a study that is not fully acceptable and must be repeated in 
whole or in part (e.g., a toxicology study that is categorized as 
``non-upgradable''), or any other significant issue that prevents the 
continuation of the scientific review or the Agency from reaching a 
regulatory decision.
    (e)  Fee waivers. (1) No fee under this section will be imposed for 
any of the following actions:
    (i) A petition submitted by the Inter-Regional Research Project 
Number 4 (IR-4 Program).
    (ii) A minor use tolerance action, except when the minor use 
constitutes the first food use or the sole use of an existing chemical.
    (iii) A biopesticide tolerance action, except for a plant-
pesticide.

[[Page 31050]]

    (iv) A petition for an emergency exemption tolerance under FFDCA 
section 408(l)(6).
    (v) A petition to revoke a tolerance or a tolerance revocation.
    (vi) Other ingredients generally regarded as safe (List 4A inerts).
    (vii) Tolerance exemptions for chemicals exempted from regulation 
under section 25(b) of FIFRA.
    (2) The Administrator may waive or refund part or all of any fee 
required by this section if the Administrator determines in his or her 
sole discretion that such a waiver or refund will promote the public 
interest, or that payment of the fee would result in an unreasonable 
economic hardship on the person required to remit the fee.
    (i) A request for a fee waiver or refund must be submitted to the 
Agency in writing and must adhere to Agency criteria for tolerance fee 
waiver or refund requests. A fee of $7,500 shall accompany every waiver 
or refund request. The fee will be returned if the request is granted. 
Conversely, the fee will be forfeited if the request is denied.
    (ii) A petition or tolerance reassessment action for which a waiver 
of the fee has been requested will not be acted upon until the fee has 
been waived, or if the waiver has been denied, the proper fee is 
submitted. A request for a refund will not be accepted after scientific 
review has begun.
    (3) For the purposes of this section, EPA defines a minor use as 
any crop use other than that on alfalfa, almonds, apples, barley, beans 
(dry and snap), canola, corn (field, sweet, or pop), cottonseed, 
grapes, hay, pecans, potatoes, rice, rye, sorghum, soybeans, 
sugarbeets, sugarcane, sunflower, oats, oranges, peanuts, tomatoes, or 
wheat.
    (4)(i) Fees for petitioned tolerance exemptions for other 
ingredients to be added to List 4A are to be refunded when it is 
determined by the Agency that the List 4A designation is warranted.
    (ii) The most current listing of List 4A inerts can be found posted 
on the Internet on EPA's home page at http://www.epa.gov/opprd001/
inerts/lists.html, or by writing Registration Support Branch (Inerts), 
Registration Division (Mail Code 7505C), Office of Pesticide Programs, 
Environmental Protection Agency, 401 M St., SW., Washington, DC 20460.
    (5) Fees for petitioned tolerance exemptions for active ingredients 
to be added to the list of chemicals exempted from regulation under 
FIFRA section 25(b) will be refunded when it is determined by the 
Agency that the 25(b) designation is warranted. The list of FIFRA 
exempted substances can be found in 40 CFR 152.25.
    (f) Objections, hearings, or requests for administrative review. 
(1) Objections, hearings, or requests for administrative review filed 
under section 408(g) of the Federal Food, Drug and Cosmetic Act must be 
accompanied by a fee of $15,500.
    (2) A person who files a requests for judicial review of an order 
under section 408(h) of the Federal Food, Drug and Cosmetic Act must 
pay the costs of preparing the record on which the order is based.
    (3) A person may file a written request for a waiver of the 
objection fee in lieu of the objection fee. A waiver fee of $7,500 
shall accompany the request only if the person has a financial interest 
in the matter. This waiver fee is not required to be remitted if the 
person does not have a financial interest in the matter.
    (g) Method of payment. All deposit and fee payments required under 
this section must be paid by money order, bank draft, or certified 
check drawn to the order of the Environmental Protection Agency. All 
remittances must be sent to the U.S. Environmental Protection Agency, 
Office of Pesticide Programs, P.O. Box 360277M, Pittsburgh, PA 15251. 
Both the envelope and the payment must be specifically labeled 
``Tolerance Fees'' and should include only a copy of the letter or 
petition requesting the tolerance or the tolerance reassessment filing 
form. The actual letter, petition, or form, along with supporting data 
must be forwarded within 30 days of payment to the Agency at its 
headquarters address in Washington, DC.
    (h) Changes to fee schedule. (1) This fee schedule will be 
increased annually to reflect the annual increase in Federal salaries. 
When such changes are made based on the Federal General Schedule (GS) 
pay scale, the new fee schedule will be published in the Federal 
Register as a Final Rule to become effective 30 days or more after 
publication, as specified in the rule.
    (2) Agency tolerance processing costs and existing fee amounts will 
be reviewed periodically to ensure that revenues collected are 
adequately covering the costs incurred. If, as a result of this review, 
adjustments in the fee schedule are warranted, the changes will be 
subject to public notice and comment procedures.

[FR Doc. 99-14477 Filed 6-8-99; 8:45 am]
BILLING CODE 6560-50-F