[Federal Register Volume 64, Number 211 (Tuesday, November 2, 1999)]
[Proposed Rules]
[Pages 59141-59147]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-28506]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 82

[FRL-6467-7]
RIN 2060-AI73


Protection of Stratospheric Ozone: Allocation of 2000 Essential 
Use Allowances

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of proposed rulemaking.

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SUMMARY: With this action, EPA is proposing the allocation of 
essential-use allowances for ozone depleting substances (ODS) for the 
2000 control period. The United States nominated specific uses of 
controlled ozone-depleting substances (ODS) as essential for 2000 under 
the Montreal Protocol on Substances that Deplete the Ozone Layer 
(Protocol). The Parties to the Protocol subsequently authorized 
specific quantities of ODS for 2000 for the uses nominated by the 
United States. Essential use allowances permit a person to obtain 
controlled ozone-depleting substances as an exemption to the January 1, 
1996 regulatory phaseout of production and import. EPA allocates 
essential use allowances to a person for exempted production or 
importation of a specific quantity of a controlled substance solely for 
the designated essential purpose.

DATES: Written comments on this proposed rule must be received on or 
before December 2, 1999, unless a public hearing is requested. Comments 
must then be received on or before 30 days following the public 
hearing. Any party requesting a public hearing must notify the 
Stratospheric Ozone Protection Hotline listed below by 5 p.m. Eastern 
Standard Time on November 12, 1999. If a hearing is held, EPA will 
publish a document in the Federal Register announcing the hearing 
information.

ADDRESSES: Comments on this rulemaking should be submitted in duplicate 
(two copies) to: Air Docket No. A-92-13, U.S. Environmental Protection 
Agency, 401 M Street, SW., Room M-1500, Washington, DC 20460. Inquiries 
regarding a public hearing should be directed to the Stratospheric 
Ozone Protection Hotline at 1-800-269-1996.
    Materials relevant to this rulemaking are contained in Docket No. 
A-92-13. The Docket is located in room M-1500, First Floor, Waterside 
Mall at the address above. The materials may be inspected from 8 a.m. 
until 4 p.m. Monday through Friday. A reasonable fee may be charged by 
EPA for copying docket materials.

FOR FURTHER INFORMATION CONTACT: The Stratospheric Ozone Protection 
Hotline at 1-800-296-1996 or Erin Birgfeld, U.S. Environmental 
Protection Agency, Stratospheric Protection Division, Office of 
Atmospheric Programs, 6205J, 401 M Street, SW., Washington, DC, 20460, 
202-564-9079.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background
II. Allocation of 2000 Essential Use Allowances
III. Summary of Supporting Analysis
    A. Unfunded Mandates Reform Act
    B. Executive Order 12875: Enhancing the Intergovernmental 
Partnership
    C. Executive Order 12866
    D. Paperwork Reduction Act
    E. Executive Order 13084: Consultation and Coordination With 
Indian Tribal Governments
    F. Regulatory Flexibility Act
    G. Executive Order 13045: Protection of Children from 
Environmental Health Risks and Safety Risks
    H. National Technology Transfer and Advancement Act
    I. Federalism

I. Background

How Are Essential Use Exemptions for Ozone-Depleting Substances 
Approved at the International Level?

    The Montreal Protocol on Substances that Deplete the Ozone Layer 
(Protocol) sets specific deadlines for the phaseout of production and 
importation of ozone depleting substances (ODS). At their Fourth 
Meeting in 1992, the signatories to the Protocol (the Parties) amended 
the Protocol to allow exemptions to the phaseout for uses agreed by the 
Parties to be essential. At the same Meeting, the Parties also adopted 
Decision IV/25, which established criteria for determining whether a 
specific use should be approved as essential, and the process for 
making such a determination.
    The criteria for an essential use as set forth in Decision IV/25 
are the following:
    ``(1) that a use of a controlled substance should qualify as 
`essential' only if:
    (i) it is necessary for the health, safety or is critical for the 
functioning of society (encompassing cultural and intellectual 
aspects); and
    (ii) there are no available technically and economically feasible 
alternatives or substitutes that are acceptable from the standpoint of 
environment and health;
    (2) that production and consumption, if any, of a controlled 
substance for essential uses should be permitted only if:
    (i) all economically feasible steps have been taken to minimize the 
essential use and any associated emission of the controlled substance; 
and
    (ii) the controlled substance is not available in sufficient 
quantity and quality from existing stocks of banked or recycled 
controlled substances, also bearing in mind the developing

[[Page 59142]]

countries' need for controlled substances.''
    The procedure set out by Decision IV/25 first calls for individual 
Parties to nominate essential uses. The Protocol's Technology and 
Economic Assessment Panel (TEAP or the Panel) evaluates the nominated 
essential uses and makes recommendations to the Protocol Parties. The 
Parties make the final decisions on essential use nominations at their 
annual meeting.

What Are the Essential Uses That EPA Has Nominated in the Past?

    Decision IV/25 was implemented initially in the context of halons 
which were phased out of production at the end of 1993. At that time, 
nominations for halons were separated from those for other ozone-
depleting substances. EPA issued a Federal Register notice requesting 
nominations for essential uses of halons (February 2, 1993; 58 FR 
06786). In response, the Agency received over ten nominations, but was 
able to work with applicants to resolve their near-term requirements. 
As a result, the U.S. did not nominate any uses for continued halon 
production in 1994. About a dozen other nations put forth nominations 
which were reviewed by the Panel, which determined that in each case 
alternatives existed or that the existing supply of banked halons was 
adequate to meet near-term needs. The Panel, therefore, did not 
recommend approval for any of the nominations. In November of 1993, at 
the Fifth Meeting, the Parties unanimously adopted the Panel's 
recommendation not to approve any essential uses for production and 
consumption of halons in 1994.
    EPA issued a second notice requesting applications for essential 
use applications for halons for the 1995 control period on October 18, 
1993 (58 FR 53722). In response to this inquiry, EPA received no 
applications. The TEAP received only one nomination (from France) for 
essential use exemptions for halons for production and consumption of 
halons for an essential use in 1995. The TEAP did not recommend 
approval of this nomination.
    In 1993, EPA issued a Federal Register notice requesting essential 
use applications for CFCs, methyl chloroform, carbon tetrachloride, and 
hydrobromofluorocarbons required beyond the 1996 phaseout of 
consumption and production of these class I substances (May 20, 1993, 
58 FR 29410). EPA received 20 applications in response to this notice. 
For several of these applications, EPA determined that the criteria 
contained in Decision IV/25 had not been satisfied. For example, EPA 
rejected two applications seeking CFCs for use in servicing air-
conditioning equipment on the basis that adequate supplies of banked 
and recycled CFCs were available. However, in rejecting these 
nominations, the United States noted that servicing existing air-
conditioning and refrigeration equipment remains a major challenge to 
the successful transition from ODSs and that a future nomination in 
this area might be necessary if a combination of retrofits, 
replacements, recycling, recovery at disposal, and banking do not 
adequately address these needs.
    In 1993, the United States forwarded essential use nominations to 
the Protocol Secretariat for the following uses of CFCs: metered dose 
inhalers and other selected medical applications; rocket motor assembly 
for the Space Shuttle; aerosol wasp killers; limited use in a specified 
bonding agent and polymer application; and a generic application for 
laboratory uses under specified limitations. (Letter from Pomerance to 
UNEP, September 27, 1993).
    The TEAP reviewed over 200 specific uses which were submitted to 
the Montreal Protocol Secretariat by the Parties to the Protocol. In 
March 1994, the Panel issued the ``1994 Report of the Technology and 
Economic Assessment Panel,'' which included the Panel's recommendations 
for essential-use production and consumption exemptions. The Panel 
recommended that essential use exemptions be granted for nominations 
of: methyl chloroform in solvent bonding for the Space Shuttle; CFCs 
used in metered dose inhalers; and specific controlled substances 
needed for laboratory and analytical applications. For each of the 
other nominations submitted, the TEAP determined that one or more of 
the criteria for evaluating an essential use had not been satisfied. 
The Parties approved essential use exemptions for the uses recommended 
in the 1994 TEAP report. The U.S. has continued to request and receive 
exemptions for those same uses in subsequent years.

Have There Been Any Recent Changes to the Essential Use Process at the 
International Level?

    At the Eighth Meeting of the Parties in 1996, a new timetable for 
nomination of essential uses was established in Decision VIII/9. This 
Decision states that Parties may nominate a controlled substance for an 
exemption from the production and consumption phaseout by January 31 of 
each year to the Ozone Secretariat. EPA has since issued Federal 
Register notices calling for essential use applications for class I 
controlled substances prior to the Protocol deadline for submission to 
the Ozone Secretariat.
    Decision V/18 directed the Technology and Economic Assessment Panel 
to develop a ``handbook on essential use nominations'' (Handbook). The 
July 1994 Handbook contained forms and instructions for how to apply 
for an essential-use exemption. Subsequent decisions by the Parties to 
the Protocol created additional criteria for essential use 
authorizations now reflected in the August 1997 Handbook on Essential 
Use Nominations. The Handbook may be obtained from the Stratospheric 
Protection Division, U.S. Environmental Protection Agency or the Ozone 
Secretariat of the Montreal Protocol in Nairobi. The Handbook can also 
be downloaded from the TEAP website at: http://www.teap.org/html/teap_
reports.html.

What Does EPA Do With the Information in the Essential Use 
Applications?

    The U.S. EPA carefully reviews all the information in each 
essential use application to ensure that it contains complete 
information in accordance with the Decisions of the Protocol Parties as 
reflected in the Handbook. EPA enters the information from each 
application into a tracking system which permits year by year 
comparison of quantities of ODS requested, quantities allocated, 
quantities of ODS received in previous years, and quantities of ODS 
used for the specific essential activity. The review of data enables 
EPA to assess whether entities are stockpiling ODS, whether there seems 
to be inflated requests relative to actual use, and whether there is 
possible double-counting between companies. For example, in 1998 we 
identified some double-counting in the requests for CFCs among 
companies. Our analysis also revealed that there were disparities 
between the total quantity of CFCs requested for MDIs and the actual 
quantity used to manufacture MDIs in previous years. To account for 
this inflation in the request for allocation, EPA reduced the total 
U.S. nomination for 1998 by 10 percent before forwarding them for 
consideration by the TEAP and the Parties to the Protocol.
    EPA recognizes that since companies must project their need for 
CFCs almost two years in advance, the actual needs of a company may 
change in the interim. Therefore, prior to allocation, EPA consults 
with companies to ensure they still require the total amount of ODS 
requested. For example, in 1999

[[Page 59143]]

several essential use applicants voluntarily indicated that they would 
not require the total quantity of ODSs requested in their original 
application submitted to EPA.
    Every year since 1994, EPA has reviewed applications for essential 
uses according to the above criteria and then forwarded the 
applications to the Parties. The Parties then review the 
recommendations by the Technology and Economic Assessment Panel and 
make final decisions on essential use nominations. Today's action 
follows decisions taken by the Parties after considering 
recommendations by the TEAP in 1998 and 1999.

II. Allocation of 2000 Essential Use Allowances

What Is EPA's Proposed Essential Use Allocation for the Year 2000?

    In today's action, EPA is proposing allocation of essential use 
allowances for the 2000 control period to entities listed in Table I 
for exempted production or import of the specific quantity of class I 
controlled substances solely for the specified essential use.

  Table I.--Essential Uses Agreed to by the Parties to the Protocol for
                    2000 and Essential Use Allowances
------------------------------------------------------------------------
                                                               Quantity
               Company                        Chemical          (metric
                                                                tonnes)
------------------------------------------------------------------------
      (i) Metered Dose Inhalers for Treatment of Asthma and Chronic
                      Obstructive Pulmonary Disease
------------------------------------------------------------------------
International Pharmaceutical Aerosol   CFC-11                      588.0
 Consortium (IPAC)--Medeva Americas,   CFC-12                     1516.0
 Inc., Boehringer Ingelheim            CFC-114                     301.0
 Pharmaceuticals, Glaxo Wellcome,
 Rhone-Poulenc Rorer, 3M.
Medisol Laboratories, Inc............  CFC-11                       70.0
                                       CFC-12                      120.0
                                       CFC-114                      10.0
Schering Corporation.................  CFC-11                      330.0
                                       CFC-12                      680.0
Sciarra Laboratories, Inc............  CFC-11                       25.0
                                       CFC-12                       75.0
                                       CFC-114                      20.0
------------------------------------------------------------------------
(ii) Cleaning, Bonding and Surface Activation Applications for the Space
                    Shuttle Rockets and Titan Rockets
------------------------------------------------------------------------
National Aeronautics and Space         Methyl Chloroform            56.7
 Administration (NASA)/Thiokol Rocket.
United States Air Force/Titan Rocket.  Methyl Chloroform             3.4
------------------------------------------------------------------------
               (iii) Laboratory and Analytical Applications
------------------------------------------------------------------------
Global Exemption (Restrictions in      Class I Controlled          (\1\)
 Appendix G Apply).                     Substances excluding
                                        CFCs, carbon
                                        tetrachloride,
                                        halons, and HBFCs
                                        (hydrobromoflouro
                                        carbons)
------------------------------------------------------------------------
\1\ No quantity specified.

    The International Pharmaceutical Aerosol Consortium (IPAC) 
consolidated the essential use exemption requests of its member 
companies for administrative convenience. EPA will separately allocate 
essential-use allowances to each of IPAC's member companies.
    In developing today's action, EPA considered allocating essential-
use allowances in accordance with Decision X/6 of the Parties to the 
Montreal Protocol. Paragraph 2 of Decision X/6 states that the ``levels 
of production and consumption necessary to satisfy essential uses of 
CFC-11, CFC-12, CFC-113, and CFC-114, for metered-dose inhalers for 
asthma and chronic obstructive pulmonary diseases...are authorized as 
specified in annex I to the report of the Tenth Meeting of the 
Parties.'' Paragraph 5 of Decision X/6 goes on to say that ``the 
quantities approved under paragraph 2 above and all future approvals 
are for total CFC volumes with flexibility between CFCs within each 
group.'' Thus, EPA is considering allocating essential-use allowances 
for CFCs for the manufacture of metered-dose inhalers in the aggregate 
instead of on a compound-by-compound basis and seeks comments on this 
option. CFC-11, CFC-12 and CFC-114 all have an ozone depleting 
potential of 1.0, so an aggregate allocation of essential-use 
allowances for all these CFCs would add some flexibility for protecting 
patient health by allowing companies to better meet market demand for 
MDIs without causing additional damage to the stratospheric ozone 
layer.

How Did EPA Determine the Proposed Essential Use Allocation?

    Applications submitted by the entities in Table I requested class I 
controlled substances for uses deemed essential for the 2000 control 
period. The applications provided information in accordance with the 
criteria set forth in Decision IV/25 of the Protocol and the procedures 
outlined in the ``1997 Handbook on Essential Use Nominations.'' The 
applications requested exemptions for the production and import of 
specific quantities of specific class I controlled substances after the 
phaseout as set forth in 40 CFR 82.4. The U.S. government reviewed the 
applications and nominated these uses to the Protocol Secretariat for 
analysis by the Technical and Economic Assessment Panel (TEAP) and its 
Technical Option Committees (TOCs). The Parties to the Montreal 
Protocol approved the U.S. nominations for essential-use exemptions 
during the Tenth Meeting in 1998 (Decision IX/18). Today's action 
proposes the allocation of essential-use allowances to U.S. entities as 
authorized by the Parties to the Protocol and consistent with the Clean 
Air Act.

Does the Clean Air Act Permit Production and Import of Ozone-Depleting 
Substances for Essential Uses?

    The Clean Air Act provides specific exemptions to the phaseout of 
ozone-depleting substances; unlike the Protocol, it does not provide 
for an open-ended essential use process. Thus, a use that is permitted 
under the Protocol may or may not be permitted under the Act. However, 
the Act's phaseout schedule for class I substances (except for methyl 
bromide) in Section 604 is less stringent than the Protocol phaseout 
schedule. For example, in 1999, three years after the phaseout of CFCs 
under the Protocol, the Act allows production of 15 percent of the 
baseline. (Note, however, that under EPA's regulations, the CFC 
phaseout date is the same as that under the Protocol in accordance with 
section 606 and 614(b) of the Act.) Thus, for the past several years, 
EPA has been able to authorize production and import of ozone-depleting 
substances for essential uses allowed under the Protocol, without 
regard to whether the Act contains exceptions for those uses, as long 
as the total authorized production does not exceed the amount permitted 
by the Act. However, January 1, 2000 is the phaseout date under Section 
604 of the Act for all class I substances with the exception of methyl 
chloroform and

[[Page 59144]]

methyl bromide. The phaseout dates for methyl chloroform and methyl 
bromide are January 1, 2002 and January 1, 2005, respectively. After 
the phaseout date for a particular substance has passed, EPA will no 
longer be able to authorize production of that substance on the basis 
of the slower phaseout schedule under the Act.
    The Act's provision for specific exemptions includes the following. 
Section 604 (d)(2) of the Act states that notwithstanding the phaseout, 
EPA shall, to the extent consistent with the Montreal Protocol, 
authorize production of limited quantities of class I substances for 
use in medical devices, if FDA, in consultation with EPA, determines 
that such production is necessary. Section 604(d)(3) states that EPA 
may, to the extent consistent with the Montreal Protocol, authorize 
production of limited quantities of halon-1211, halon-1301, and halon-
2402 solely for the purpose of aviation safety, if the Federal Aviation 
Administration, in consultation with EPA, determines that no safe and 
effective substitute has been developed and that such authorization is 
necessary for aviation safety purposes. Section 604(d)(1) provides that 
during the period from January 1, 1992 to January 1, 2005, EPA may, to 
the extent consistent with the Montreal Protocol, authorize the 
production of limited quantities of methyl chloroform solely for use in 
essential applications for which no safe and effective substitute is 
available. Section 604(d)(4) states that EPA cannot use any of these 
three exemptions to authorize any person to produce a class I substance 
in annual quantities greater than 10 percent of that person's baseline 
year as defined in Section 601(2). Section 604(g)(3) of the Act 
provides that EPA may, to the extent consistent with the Montreal 
Protocol, authorize the production of limited quantities of halon-1211, 
halon-1301, and halon-2402 after December 31, 1999 and before December 
31, 2004 for use in fire suppression and explosion prevention in 
association with domestic production of crude oil and natural gas 
energy supplies on the North Slope of Alaska, if it is determined that 
no safe and effective substitute has been developed and that such 
authorization is necessary for fire suppression or explosion prevention 
purposes. EPA cannot use this exemption to authorize any person to 
produce any of these halons in an amount greater than 3 percent of that 
person's baseline. Finally, section 604(f) states that the President 
may, to the extent consistent with the Montreal Protocol, provide an 
exemption for production of CFC -114, halon-1211, halon-1301, and 
halon-2402 as necessary to protect U.S. national security interests, if 
the President finds that adequate substitutes are not available and 
that the production and use of the substance are necessary to protect 
national security interests.

How Does the Allocation for the Year 2000 Differ From 1999 and Previous 
Years?

    Each year, the Parties to the Protocol have approved an unlimited, 
global essential use exemption for the production and consumption of 
high purity ozone depleting substances for use in laboratory and 
analytical techniques. EPA has implemented this exemption domestically 
through regulation. However, beginning January 1, 2000 EPA may no 
longer be able to allow laboratory essential use exemptions for most 
Class I substances because the Act does not specifically list 
laboratory and analytical uses as an exception to the phaseout. Thus, 
as of January 1, 2000, EPA may no longer be able to grant laboratory 
essential use exemptions for CFCs, halons, carbon tetrachloride, or 
HBFCs, because the phaseout date under the Act for these substances is 
January 1, 2000. It should be noted, however, that EPA believes that 
the ban would apply only to the import and production of these class I 
ODSs and would not apply to their actual use in the laboratory. 
Therefore, EPA believes that laboratories could continue to use 
stockpiles of class I ODSs that were produced or imported prior to 
January 1, 2000. Trade among companies of class I ODSs that were 
produced or imported for laboratory uses prior to January 1, 2000 would 
be permitted. The supply of this subset of class I ODSs (which includes 
CFCs and carbon tetrachloride) after this date however, would be 
finite, and once domestic stockpiles are depleted, laboratories would 
cease to have access to these chemicals. EPA solicits comment on the 
above interpretation and other possible interpretations of the 
statutory requirements related to EPA's ability to grant essential use 
exemptions for laboratory and analytical uses.
    For the year 2000, EPA is implementing the exception for medical 
devices found in section 604(d)(2) of the Clean Air Act. ``Medical 
device'' is defined in section 601(8) of the Clean Air Act as follows:

    [A]ny device (as defined in the Federal Food, Drug, and Cosmetic 
Act (21 U.S.C. 321), diagnostic product, drug (as defined in the 
Federal Food, Drug, and Cosmetic Act), and drug delivery system--
    [A] if such device, product, drug, or drug delivery system 
utilizes a class I or class II substance for which no safe and 
effective alternative has been developed, and where necessary, 
approved by the Commissioner [of FDA]; and
    [B] if such device, product, drug, or drug delivery system, has, 
after notice and opportunity for public comment, been approved and 
determined to be essential by the Commissioner [of FDA] in 
consultation with the Administrator [of EPA].

    EPA and FDA are discussing how best to interpret the above 
definition of ``medical device.'' With respect to part (A) of the 
definition (section 601(8)(A)), which relates to ``safe and effective 
alternative[s]'', the preamble to FDA's September 1, 1999 notice of 
proposed rulemaking on essential use determinations (64 FR 47735) 
discusses FDA's approach to determining whether ``safe and effective 
alternative[s]'' have been developed. FDA's preamble points out, and 
EPA agrees, that ``A non-CFC product simply having the same active 
moiety as a CFC product is only one factor to be considered. Other 
factors, such as whether the non-CFC product has the same route of 
administration, the same indication, and can be used with approximately 
the same level of convenience, are important considerations. 
Additionally, FDA must consider whether patients who medically need the 
CFC product are adequately served by the non-CFC product...FDA's 
approval of a non-CFC product is a determination that the product is 
safe and effective, but it is not a determination that the product is a 
safe and effective alternative to any other product. That requires a 
separate and distinct analysis.''
    With respect to part (B) of the definition of medical device 
(section 601(8)(B)), and in particular the use of the word 
``essential'' in that part of the definition, EPA proposes to rely on 
current FDA regulations (21 CFR 2.125) which contain a list of uses of 
CFCs that FDA in consultation with EPA has found to be essential. This 
list includes, among others, metered-dose steroids, metered-dose 
adrenergic bronchodilators, metered-dose cromolyn sodium, metered-dose 
ipratropium bromide, and metered-dose nedocromil sodium, all drugs for 
oral inhalation in humans. The companies for which EPA is proposing to 
grant essential use allowances produce MDIs that are covered by one of 
the categories on FDA's essential use list. Thus, the products for 
which EPA is proposing to provide essential use allowances belong to 
the product categories ``determined to be essential'' by FDA.
    Also with respect to part (B) of the definition of ``medical 
device'', EPA and

[[Page 59145]]

FDA are discussing at least two interpretations of the language 
regarding approval by FDA of the ``device, product, drug, or drug 
delivery system.'' First, one could interpret the word ``approved'' as 
referring to FDA's approval of the specific product in question through 
approval of the New Drug Application (NDA) or Abbreviated New Drug 
Application (ANDA) for that product. Alternatively, one could interpret 
it as referring to FDA's approval of the same active moiety under that 
or any other NDA or ANDA. (FDA regulation at 21 CFR.108(a) defines 
active moiety as ``the molecule or ion excluding those appended 
portions of the molecule that cause the drug to be an ester, salt 
(including a salt with hydrogen or coordination bonds), or other 
noncovalent derivatives (such as a complex, chelate or clathrate) of 
the molecule, responsible for the physiological or pharmacological 
action of the drug substance.'')
    The implications of adopting the first interpretation described 
above, would require EPA to have more information regarding product 
approvals. The 1997 TEAP Handbook on Essential Use Nomination is the 
guidance document used for application for essential use exemptions. 
Because this Handbook does not request companies to specifically list 
the products for which the CFCs will be used, EPA does not have the 
information necessary to determine whether the products are in fact 
``approved'' by FDA. Therefore, EPA has sent out formal requests for 
this additional information under section 114 of the Act to the 
pharmaceutical companies who requested CFCs for the year 2000. If the 
first interpretation is adopted, EPA will analyze the data received 
from these letters and will not allocate CFCs in the final rule for 
those individual products that are not approved by FDA. The allocation 
in this proposed rule represents the amount allocated by the Parties to 
the Montreal Protocol at the Tenth Meeting of the Parties, and may be 
reduced in the final rule.
    As stated earlier, section 604(d)(2) of the Act provides that EPA 
shall authorize production and import of limited quantities of class I 
substances for use in medical devices if FDA, in consultation with EPA, 
determines such authorization to be necessary. EPA and FDA are now 
discussing appropriate approaches to implementing the essential use 
exemption for medical devices. EPA's final essential use allocation for 
the year 2000 will be based on what FDA determines is ``necessary'' 
under section 604(d)2 of the Act.
    The phaseout date for methyl chloroform under the Act is January 1, 
2002. Until that date, the Act permits production and import of methyl 
chloroform equivalent to 20% of baseline. The amount of methyl 
chloroform allocated for 2000 is well below this limit. Beginning in 
the year 2002, EPA will implement the exception for essential uses of 
methyl chloroform found in 604(d)(1) of the Act.

What Reporting Requirements Must Be Followed for the Essential Uses of 
Ozone Depleting Substances?

    Any person obtaining class I controlled substances after the 
phaseout under the essential use exemptions proposed in today's action 
would be subject to all the restrictions and requirements in other 
sections of 40 CFR part 82, subpart A. Holders of essential-use 
allowances or persons obtaining class I controlled substances under the 
essential-use exemptions must comply with the record keeping and 
reporting requirements in 40 CFR 82.13.

III. Summary of Supporting Analysis

A. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector.
    Under section 202 of the UMRA, EPA generally must prepare a written 
statement, including a cost-benefit analysis, for proposed and final 
rules with ``Federal mandates'' that may result in expenditures by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100 million or more in any one year. Before 
promulgating an EPA rule for which a written statement is needed, 
section 205 of the UMRA generally requires EPA to identify and consider 
a reasonable number of regulatory alternatives and adopt the least 
costly, most cost-effective or least burdensome alternative that 
achieves the objectives of the rule. The provisions of section 205 do 
not apply when they are inconsistent with applicable law. Moreover, 
section 205 allows EPA to adopt an alternative other than the least 
costly, most cost-effective or least burdensome alternative if the 
Administrator publishes with the final rule an explanation why that 
alternative was not adopted. Section 204 of the UMRA requires the 
Agency to develop a process to allow elected state, local, and tribal 
government officials to provide input in the development of any 
proposal containing a significant Federal intergovernmental mandate.
    Before EPA establishes any regulatory requirements that may 
significantly or uniquely affect small governments, including tribal 
governments, it must have developed under section 203 of the UMRA a 
small government agency plan. The plan must provide for notifying 
potentially affected small governments, enabling officials of affected 
small governments to have meaningful and timely input in the 
development of EPA regulatory proposals with significant Federal 
intergovernmental mandates, and informing, educating, and advising 
small governments on compliance with the regulatory requirements.
    Today's rule contains no Federal mandates (under the regulatory 
provisions of Title II of the UMRA) for State, local, or tribal 
governments or the private sector. Because this proposed rule imposes 
no enforceable duty on any State, local or tribal government it is not 
subject to the requirements of sections 202 and 205 of the UMRA. EPA 
has also determined that this rule contains no regulatory requirements 
that might significantly or uniquely affect small governments; 
therefore, EPA is not required to develop a plan with regard to small 
governments under section 203. Finally, because this proposal does not 
contain a significant intergovernmental mandate, the Agency is not 
required to develop a process to obtain input from elected state, 
local, and tribal officials under section 204.

B. Executive Order 12875: Enhancing the Intergovernmental Partnership

    Under Executive Order 12875, 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, or EPA consults with those governments. If EPA complies by 
consulting, Executive Order 12875 requires EPA to provide to the Office 
of Management and Budget a description of the extent of EPA's prior 
consultation with representatives of affected State, local and tribal 
governments, the nature of their concerns, copies of written 
communications from the governments, and a statement supporting the 
need to issue the regulation. In addition, Executive Order 12875 
requires EPA to develop an effective process permitting elected 
officials and other representatives of State, local and tribal 
governments ``to provide meaningful and timely input in the development 
of

[[Page 59146]]

regulatory proposals containing significant unfunded mandates.''
    Today's proposed rule does not create a mandate on State, local or 
tribal governments. The proposed rule does not impose any enforceable 
duties on these entities. Accordingly, the requirements of section 1(a) 
of Executive Order 12875 do not apply to this proposed rule.

C. Executive Order 12866

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), the 
Agency must determine whether this regulatory action is ``significant'' 
and therefore subject to OMB review and the requirements of the 
Executive Order. The Order defines ``significant'' regulatory action as 
one that is likely to result in a rule that may:
    (1) have an annual effect on the economy of $100 million or more, 
or adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    It has been determined that this rule is not a ``significant 
regulatory action'' under the terms of Executive Order 12866 and is 
therefore not subject to OMB review.

D. Paperwork Reduction Act

    This action does not add any information collection requirements or 
increase burden under the provisions of the Paperwork Reduction Act, 44 
U.S.C. 3501 et seq. The Office of Management and Budget (OMB) 
previously approved the information collection requirements contained 
in the final rule promulgated on May 10, 1995, and assigned OMB control 
number 2060-0170 (EPA ICR No. 1432.16).
    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.
    An Agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations are listed in 40 CFR Part 9 and 48 CFR Chapter 15.

E. Executive Order 13084: Consultation and Coordination With Indian 
Tribal Governments

    Under Executive Order 13084, 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 or EPA consults with those 
governments. If EPA complies by consulting, Executive Order 12875 
requires EPA to provide to the Office of Management and Budget a 
description of the extent of EPA's prior consultation with 
representatives of affected State, local and tribal governments, the 
nature of their concerns, any written communications from the 
governments, and a statement supporting the need to issue the 
regulation. In addition, Executive Order 13084 requires EPA to develop 
an effective process permitting elected and other representatives of 
Indian tribal governments ``to provide meaningful and timely input in 
the development of regulatory policies or matters that significantly or 
uniquely affect their communities.''
    Today's proposed rule does not significantly or uniquely affect the 
communities of Indian tribal governments. The proposed rule does not 
impose any enforceable duties on Indian tribal governments. 
Accordingly, the requirements of section 3(b) of Executive Order 13084 
do not apply to this rule.

F. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to conduct a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements unless the agency certifies 
that the rule will not have a significant economic impact on a 
substantial number of small entities. Small entities include small 
businesses, small not-for-profit enterprises, and small governmental 
jurisdictions. This proposed rule would not have a significant impact 
on a substantial number of small entities since the rule allocates 
CFC's to specific entities which have previously submitted requests.
    This proposed rule would not have a significant impact on a 
substantial number of small entities, therefore, I hereby certify that 
this action will not have a significant economic impact on a 
substantial number of small entities. This rule, therefore, does not 
require a regulatory flexibility analysis.

G. Executive Order 13045: Protection of Children From Environmental 
Health Risks and Safety Risks

    Executive Order 13045: ``Protection of Children from Environmental 
Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997) applies 
to any rule that (1) is determined to be ``economically significant'' 
as defined under Executive Order 12866, and (2) concerns an 
environmental health and safety risk that EPA has reason to believe may 
have a disproportionate effect on children. If the regulatory action 
meets both criteria, the Agency must evaluate the environmental health 
or safety effects of the planned rule on children, and explain why the 
planned regulation is preferable to other potentially effective and 
reasonably feasible alternatives considered by the Agency.
    EPA interprets Executive Order 13045 as applying only to those 
regulatory actions that are based on health or safety risks, such that 
the analysis required under section 5-501 of the Order has the 
potential to influence the regulation. This proposed rule is not 
subject to Executive Order 13045 because it implements the phaseout 
schedule established by Congress in Title VI of the Clean Air Act.

H. National Technology Transfer and Advancement Act

    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) directs EPA to use voluntary consensus standards in its 
regulatory activities unless to do so would be inconsistent with 
applicable law or otherwise impractical. Voluntary consensus standards 
are technical standards (e.g., materials specifications, test methods, 
sampling procedures, and business practices) that are developed or 
adopted by voluntary consensus standards bodies. The NTTAA directs

[[Page 59147]]

EPA to provide Congress, through OMB, explanations when the Agency 
decides not to use available and applicable voluntary consensus 
standards.
    This proposed rule does not involve technical standards. Therefore, 
EPA is not considering the use of any voluntary consensus standards.

I. Federalism

    On August 4, 1999, President Clinton issued a new executive order 
on federalism, Executive Order 13132, [64 FR 43255 (August 10, 1999),] 
which will go into effect on November 2, 1999. In the interim, the 
current Executive Order 12612, [52 FR 41685 (October 30, 1987),] on 
federalism still applies. Under this order, this proposed rule will not 
have a substantial direct effect upon States, upon the relationship 
between the national government and the States, or upon the 
distribution of power and responsibilities among the various levels of 
government. This proposed rule will affect only the production of 
controlled ozone-depleting substances by private entities.

List of Subjects in 40 CFR Part 82

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Chemicals, Chlorofluorocarbons, Exports, 
Hydrochlorofluorocarbons, Imports, Labeling, Ozone layer, Reporting and 
recordkeeping requirements.

    Dated: October 26, 1999.
Carol M. Browner,
Administrator.

    40 CFR Part 82 is proposed to be amended as follows:

PART 82--PROTECTION OF STRATOSPHERIC OZONE

    1. The authority citation for part 82 continues to read as follows:

    Authority: 42 U.S.C. 7414, 7601, 7671-7671q.

Subpart A--Production and Consumption Controls

    2. Section 82.4(t)(2) is amended by revising the table to read as 
follows:


Sec. 82.4  Prohibitions.

* * * * *
    (t) * * *
    (2) * * *

  Table I.--Essential Uses Agreed to by the Parties to the Protocol for
                    2000 and Essential Use Allowances
------------------------------------------------------------------------
                                                               Quantity
               Company                        Chemical          (metric
                                                                tonnes)
------------------------------------------------------------------------
      (i) Metered Dose Inhalers for Treatment of Asthma and Chronic
                     Obstructive Pulmonary Disease
------------------------------------------------------------------------
International Pharmaceutical Aerosol   CFC-11                     588.0.
 Consortium (IPAC)--Medeva Americas,   CFC-12                   1,516.0.
 Inc., Boehringer Ingelheim            CFC-114                    301.0.
 Pharmaceuticals, Glaxo Wellcome,
 Rhone-Poulenc Rorer, 3M.
Medisol Laboratories, Inc............  CFC-11                      70.0.
                                       CFC-12                     120.0.
                                       CFC-114                     10.0.
Schering Corporation.................  CFC-11                     330.0.
                                       CFC-12                     680.0.
Sciarra Laboratories, Inc............  CFC-11                      25.0.
                                       CFC-12                      75.0.
                                       CFC-114                     20.0.
------------------------------------------------------------------------
(ii) Cleaning, Bonding and Surface Activation Applications for the Space
                   Shuttle Rockets and Titan Rockets
------------------------------------------------------------------------
National Aeronautics and Space         Methyl Chloroform           56.7.
 Administration (NASA)/Thiokol Rocket.
United States Air Force/Titan Rocket.  Methyl Chloroform            3.4.
------------------------------------------------------------------------
              (iii) Laboratory and Analytical Applications
------------------------------------------------------------------------
Global Exemption (Restrictions in      Class I Controlled             No
 Appendix G Apply).                     Substances excluding    quantity
                                        CFCs, carbon          specified.
                                        tetrachloride,
                                        halons, and HBFCs
                                        (hydrobromoflouro
                                        carbons)
------------------------------------------------------------------------

* * * * *
[FR Doc. 99-28506 Filed 11-1-99; 8:45 am]
BILLING CODE 6560-50-P