[Federal Register Volume 65, Number 4 (Thursday, January 6, 2000)]
[Rules and Regulations]
[Pages 716-728]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-273]


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

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 82

[FRL-6519-3]
RIN 2060-AI73


Protection of Stratospheric Ozone: Allocation of Essential Use 
Allowances for Calendar Year 2000: Allocations for Metered-Dose 
Inhalers and the Space Shuttle and Titan Rockets

AGENCY: Environmental Protection Agency (EPA).

ACTION: Interim final rule.

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

SUMMARY: With this action, EPA is allocating essential-use allowances 
for calendar year 2000 for ozone depleting substances (ODS) for use in 
medical devices and for use in the Space Shuttle Rockets and Titan 
Rockets for the year 2000 control period. Production and import of ODS 
for laboratory and analytical applications will be addressed in a 
separate rulemaking. The United States nominated specific uses of 
controlled ozone-depleting substances as essential for calendar year 
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 calendar year 2000 for the uses 
nominated by the United States. EPA allocates essential use allowances 
to an applicant for exempted production or import of a specific 
quantity of controlled substances solely for the designated essential 
purpose. These essential use allowances permit a person to obtain 
controlled ODS as an exemption to the January 1, 1996, regulatory 
phaseout of production and import.

DATES: This action is effective January 6, 2000. EPA will consider all 
written comments received by February 7, 2000 to determine if any 
change to this action is necessary.

ADDRESSES: Those wishing to notify EPA of their intent to submit 
adverse comments on this action should contact Erin Birgfeld, U.S. 
Environmental Protection Agency, Stratospheric Protection Division, 
Office of Air and Radiation (6205J), Ariel Rios Building, 1200 
Pennsylvania Avenue, NW., Washington, DC, 20460; <[email protected] 
>; (202) 564-9079 phone and (202) 565-2096 fax. Materials relevant to 
this rulemaking are contained in Docket No. A-92-13. The Docket phone 
is (202) 260-7548 and is located in room M-1500, First Floor, Waterside 
Mall 401 M Street, SW., Washington, DC 20460. 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 (800) 296-1996 or Erin Birgfeld, U.S. Environmental 
Protection Agency, Stratospheric Protection Division, Office of Air and 
Radiation (6205J), Ariel Rios Building, 1200 Pennsylvania Avenue, NW., 
Washington, DC, 20460; <[email protected] >; (202) 564-9079 phone 
and (202) 565-2096 fax.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background
II. Allocation Process for the Calendar Year 2000
III. Allocation of Essential Use Allowances for Calendar Year 2000
IV. Response to Comments
V. Administrative Requirements
VI. Judiciary Review
VII. Congressional Review

I. Background

Overview of the Notice of Proposed Rulemaking

    The Notice of Proposed Rulemaking (NPRM) for allocating essential 
use allowances was published on November 2, 1999 (64 FR 59141). In the 
NPRM, EPA proposed allocating chlorofluorocarbon (CFCs) for use in 
metered dose inhalers (MDIs), and methyl chloroform for use in the 
Space Shuttle and Titan Rocket. EPA explained that because of 
additional requirements in the Clean Air Act that apply beginning in 
calendar year 2000, before allocating CFCs for use in MDIs, EPA must 
receive a determination from the Food and Drug Administration (FDA) 
indicating the amount of CFCs that are necessary for use in MDIs. The 
quantities of CFCs proposed to be allocated were the quantities that 
were agreed upon at the Eighth Meeting of the Parties to the Montreal 
Protocol. FDA's determination of the amount of CFCs that are necessary 
for use in MDIs, which EPA has subsequently received, is substantially 
lower than what was proposed in the NPRM. The allocations

[[Page 717]]

in this action reflect these lowered amounts. Because stakeholders have 
not had a chance to comment on the lower amounts, today's action is 
being issued as an interim final rule effective January 6, 2000. This 
will allow essential use applicants access to necessary CFCs for 
continued production of MDIs, and at the same time will allow for 
further comment on and potential changes to the allocation.

    In the NPRM, EPA also explained that due to requirements of the CAA 
that apply beginning in calendar year 2000, the essential use exemption 
for import and production of small amounts of high purity ozone 
depleting substances (ODS) for laboratory and analytical uses may not 
be available after January 1, 2000. Today's action does not address 
this issue. EPA will issue a separate final rule on the topic of 
laboratory essential uses.

Overview of the Essential Use Process

    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 Parties 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 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.

    Persons requesting essential use exemptions submit applications 
which respond to the specific questions in the 1997 Handbook on 
Essential Use Nominations. This document 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 and enters the information 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 seem 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 the applications for consideration by the TEAP and the 
Parties to the Protocol.

    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 TEAP and make final decisions on essential use 
nominations.

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

[[Page 718]]

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 
the United Nations Environment Programme (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.

II. Allocation Process for the Calendar Year 2000

    The domestic allocation process for this year differs from past 
allocations due to changes in the requirements under the Clean Air Act 
(CAA or the Act). The purpose of this section is to explain the legal 
background behind these changes, and to outline the procedures that EPA 
and the Food and Drug Administration (FDA) used to fulfill our 
obligations under the CAA in allocating ozone depleting substances for 
calendar year 2000.

    Prior to the year 2000, EPA allocated essential use exemptions 
under the original phase-out schedule contained in section 604 of the 
Act. This schedule does not require the complete phaseout of any ODS 
prior to calendar year 2000. Under section 606 of the Act, EPA was 
obligated to create an accelerated phaseout through regulation to match 
the accelerated phaseout under the Protocol. However, EPA had the 
flexibility to create exemptions to the regulatory phaseout, where such 
exemptions had been approved under the Montreal Protocol. 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 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. Because CFCs are to be phased-out by 
calendar year 2000 under the original phase-out schedule, EPA must now 
implement essential use exemptions for these chemicals as specified 
under the Act in section 604(d).

    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 calendar year 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.

    For calendar year 2000, the entities in Table I submitted 
applications requesting class I controlled substances for essential 
uses. 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 certain class I controlled substances after the 
phaseout. The EPA reviewed the applications and nominated these uses to 
the Protocol Secretariat for analysis by the 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 allocates essential-
use allowances to U.S. entities as authorized by the Parties to the 
Montreal Protocol and to the extent consistent with the CAA.

    The Act provides for the following essential use exemptions to the 
ban on production and import. Section 604 (d)(2) 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, 2002 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

[[Page 719]]

available and that the production and use of the substance are 
necessary to protect national security interests.

    Today's action allocating CFCs for use in MDIs requires EPA to 
implement 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].

    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. It states 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.'' 
FDA has not yet determined that any non-CFC product is a safe and 
effective alternative to any CFC MDI. Accordingly, part (A) of the 
definition of medical device has not affected today's allocation.

    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 is relying 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 granting essential 
use allowances produce CFC MDIs that contain these active moieties. 
Thus, the products for which EPA is granting essential use allowances 
are ``determined to be essential'' by FDA.

    Also with respect to part (B) of the definition of ``medical 
device'', EPA and FDA considered how to interpret the language 
regarding approval by FDA of the ``device, product, drug, or drug 
delivery system.'' The complete phrase reads as follows: ``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 in consultation with the Administrator.'' 
The decision was made to interpret this phrase as referring to FDA's 
approval of an essential use and not the approval of the specific 
product in question through approval of the New Drug Application (NDA) 
or Abbreviated New Drug Application (ANDA) for that product. This means 
that any MDI whose active moiety appears on FDA's essential use list is 
eligible to receive essential use allowances. This interpretation was 
taken for the following reasons. The term ``approved'' must be 
interpreted in light of the surrounding language. Section 601(8)(B) 
requires notice and comment rulemaking and refers to action by FDA, in 
consultation with EPA. Since approval of an NDA or ANDA under the FDCA 
involves unilateral action by FDA without notice-and-comment 
rulemaking, it is reasonable to conclude section 601(8)(B) does not 
refer to approval of an NDA or ANDA under the FDCA. Therefore, FDA and 
EPA are interpreting section 601(8)(B) to refer to FDA's approval of an 
essential use. This interpretation is consistent with the surrounding 
language, since FDA engages in notice-and comment rulemaking in listing 
essential uses and since EPA has a strong interest in decisions about 
essential uses. This means that an MDI is ``approved and determined to 
be essential'' if the MDI contains an active moiety on FDA's essential 
use list. All of the MDIs for which we are allocating CFCs today meet 
this qualification.

    Implementing the essential use exemption for MDIs under the Act 
required EPA to consult with FDA regarding the quantity of CFCs to be 
allocated. 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. Administrator 
Carol Browner sent a letter to Dr. Jane Henney, Commissioner of FDA, 
dated October 28, 1999, requesting that FDA make a determination on the 
amount of CFCs that are ``necessary'' for the production of MDIs for 
calendar year 2000. A December 23, 1999, letter was sent in response 
from Commissioner Henney that contains FDA's determination.

    EPA also collected additional information relevant to the 
allocation. The 1997 TEAP Handbook on Essential Use Nomination 
(Handbook), the guidance document for essential use exemption 
applications, does not request information regarding specific products 
for which the CFCs will be used. As a result, EPA sought more detailed 
information including which drug products would be produced using the 
allocated CFCs for calendar year 2000. EPA sent out letters to the 
essential use applicants (separate letters were sent to the 
International Pharmaceutical Aerosol Consortium (IPAC) member 
companies) for medical devices, requesting this additional information 
under section 114 of the Act. The responses to the letters included 
confidential business information on the types of drug products to be 
manufactured, as well as the quantity and the specific CFC chemical to 
be used in the manufacture of each product. EPA shared the responses to 
these letters with FDA to assist it in determining the amount of CFCs 
for use in medical devices that are ``necessary.''

    Dr. Henney's letter in response to the Administrator dated December 
23, 1999, provided FDA's analysis of the amounts of CFCs that FDA 
determined are necessary in calendar year 2000 for the production of 
medical devices as defined under the Clean Air Act. FDA determined that 
a total of 2737.3 metric tons are necessary for use in MDIs for 
calendar year 2000. In contrast, the total amount of CFCs proposed to 
be allocated in the NPRM (November 2, 1999 64 FR 59141) was 3735 metric 
tons. The rationale underlying FDA's determination is provided in Dr. 
Henney's December 23, 1999 letter:

    ``In listing the amounts we believe to be necessary for use in 
medical devices, we referred to historical use and have included an 
additional amount to allow for overage, for waste during manufacturing, 
for uncertainties in the

[[Page 720]]

supply chain of CFCs since they are no longer produced in the United 
States, for changes in future market shares of specific products, as 
well as for unforeseen circumstances in the market. We also provided 
additional amounts based on our knowledge of certain manufacturing 
problems. In addition, we eliminated any double-counting we found and 
eliminated allocations for uses not considered essential by the parties 
to the Montreal Protocol, even if those uses are currently listed in 
our regulation at 21 CFR 2.125(e).'' FDA also noted that they accounted 
for CFCs for use in the production of MDIs that would ultimately be 
exported to Canada.

    FDA's determination that 2737.3 metric tons of CFCs are necessary 
for use in MDIs is consistent with EPA's data on historical use and 
import for MDIs. In order for companies to place an order for CFCs they 
must provide a letter from EPA which indicates the amount of CFC that 
they are allowed to purchase from chemical producers. Before issuing 
these letters, EPA asks companies if they still need the entire 
allocation of CFCs. In many cases, companies voluntarily give up part 
of their CFC allocation for various reasons. The net result is that the 
amount of CFCs actually purchased each year is substantially less than 
the amount of CFCs allocated each year. For example, in 1998, 4,363 
tons of CFCs were allocated for use in medical devices. However, only 
2,235.6 tons were actually imported or produced for MDIs in that year, 
and a total of 2,425.5 tons were actually used in the production of 
MDIs. Similarly in 1997, 4,656.0 tons of CFCs were allocated for use in 
MDIs while 2,032.3 tons were imported or produced, and 2,255.1 tons 
were used in MDI production (data from the EPA CFC accounting 
framework). Thus, the amount of CFCs that FDA has determined is 
``necessary'' is about 300 metric tons higher than EPA's data on actual 
use of CFCs in MDIs for 1998. As stated in the letter from FDA, this 
additional amount will act as a safety factor accounting for any 
unplanned interruptions in CFC supply that could occur during the 
course of the year.

    As mentioned above, section 604(d)(2) of the Act states that EPA's 
allocation must be consistent with the Montreal Protocol. Article 2A(4) 
of the Protocol states that Parties such as the United States may not 
produce or import CFCs after January 1, 1996, except that the Parties 
may decide collectively to permit a specified amount of production or 
import for uses that they agree to be essential. The Parties to the 
Protocol approved the U.S. nominations for essential use exemptions for 
calendar year 2000 during their Tenth Meeting in 1998 (Decision IX/8). 
The quantities we are allocating today do not exceed the amounts 
approved by the Parties. Therefore, we believe that this action is 
consistent with the Protocol.

Can I Submit Comments on This Interim Final Eule?

    In the interest of maintaining as open and transparent a process as 
possible, this year's allocation for medical devices and the space 
program is being issued as an interim final rule instead of a final 
rule. This will allow stakeholders to comment on the appropriateness 
and accuracy of the allocation while still allowing pharmaceutical 
companies access to CFCs in the near term for continued manufacture of 
MDIs. Today's action allocates 2737.3 tons of CFCs for use in medical 
devices instead of the 3735 metric tons proposed in the NPRM. EPA 
received no comments on the NPRM stating that the proposed allocation 
was insufficient for an applicant's needs. While we are accepting 
comment on the lowered allocation figures, EPA, under the terms of the 
Montreal Protocol cannot allocate CFCs in an amount higher than 3735 
metric tons because no more than that amount has been approved for 
essential use by the Parties to the Montreal Protocol. Because we are 
issuing this action as an interim final rule, the following paragraphs 
explain the relevant procedures under the CAA and the Administrative 
Procedures Act (APA), as well as EPA's findings.

    Section 307(d) of the CAA states that in the case of any rule to 
which section 307(d) applies, notice of proposed rulemaking must be 
published in the Federal Register (CAA 307(d)(3)). The promulgation or 
revision of regulations under title VI of the CAA is generally subject 
to section 307(d). However, section 307(d) does not apply to any rule 
referred to in subparagraphs (A) or (B) of section 553(b) of the 
Administrative Procedures Act (APA), 5 U.S.C. 551 et seq.

    Section 553 of the Administrative Procedures Act, 5 U.S.C. 
553(b)(B), provides that, when an agency for good cause finds that 
notice and public procedure are impracticable, unnecessary or contrary 
to the public interest, the agency may issue a rule without providing 
notice and opportunity for public comment. In its proposed rule, 64 FR 
59141 (Nov. 2, 1999), EPA provided notice that the allocation of 
essential use allowances for MDIs for calendar year 2000 would be made 
in accordance with CAA sections 601(8) and 604(d)(2). EPA also provided 
preliminary interpretations of the relevant statutory language and 
announced that the final allocation would be based on what FDA 
determined was ``necessary'' under section 604(d)(2) of the CAA. The 
proposed allocation reflected the quantities of CFCs that had been 
approved by the Parties to the Montreal Protocol for this use. Because 
the quantities that appear in today's allocation differ significantly 
from the quantities that appeared in the proposal, EPA has decided to 
provide an opportunity for post-promulgation comment on this 
allocation.

    EPA has determined that there is good cause for making today's 
allocation final without prior notice of FDA's determination or an 
opportunity to comment on the allocation, as adjusted to reflect FDA's 
determination. The allocation of these essential-use allowances to the 
specified MDI manufacturers will allow for the pharmaceutical industry 
to continue to produce life-saving MDIs for the treatment of asthma and 
chronic obstructive pulmonary disease. Thus, prior notice and an 
opportunity to comment with regard to today's allocated quantities are 
impracticable and contrary to the public interest. EPA finds that this 
constitutes good cause under 5 U.S.C. 553(b)(B). Nonetheless, EPA is 
providing 30 days for submission of public comments following today's 
action. EPA will consider all written comments submitted in the 
allotted time period to determine if any change to this action is 
required.

    Section 553(d) of the APA generally provides that rules may not 
take effect earlier than 30 days after they are published in the 
Federal Register. However, APA section 553(d) excepts from this 
provision any action that grants or recognizes an exemption or relieves 
a restriction. Since today's action grants an exemption to the phaseout 
of production and consumption of CFCs, EPA is making this action 
effective immediately to ensure the availability of CFCs for medical 
devices during the 2000 control period.

III. Allocation of Essential Use Allowances for Calendar Year 2000

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

    In today's action, EPA is allocating essential use allowances for 
the year 2000 control period to entities listed in Table I for exempted 
production or import of the specific quantity of class

[[Page 721]]

I controlled substances solely for the specified essential use. The 
final allocation for CFCs for use in MDIs reflects FDA's determination 
of the amounts of CFCs that are necessary as specified under section 
604(d)(2) of the Act.

        Table I.--Essential Use Allocation for Calendar Year 2000
------------------------------------------------------------------------
                                                               Quantity
              Company                       Chemical           (metric
                                                                tons)
------------------------------------------------------------------------
 
      (i) Metered Dose Inhalers for Treatment of Asthma and Chronic
 
------------------------------------------------------------------------
International Pharmaceutical         CFC-11................        381.0
 Aerosol Consortium (IPAC)--Medeva   CFC-12................       1169.0
 Americas, Inc., Boehringer          CFC-114...............         89.0
 Ingelheim Pharmaceuticals, Glaxo
 Wellcome, Rhone-Poulenc Rorer, 3M.
Medisol Laboratories, Inc..........  CFC-11................         13.0
                                     CFC-12................         29.0
                                     CFC-114...............          7.0
Schering Corporation...............  CFC-11................        301.0
                                     CFC-12................        747.0
                                     CFC-114...............          0.0
Sciarra Laboratories, Inc..........  CFC-11................          0.2
                                     CFC-12................          0.7
                                     CFC-114...............          0.4
------------------------------------------------------------------------
 
(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        Methyl Chloroform.....          3.4
 Rocket.
------------------------------------------------------------------------


    The table above reflects FDA's determination of the quantities CFCs 
that are necessary for calendar year 2000 and breaks down the amount of 
CFC by molecule. However, in developing today's action, EPA has decided 
to allocate essential-use allowances in aggregate amounts 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.'' EPA has determined that 
allocating essential-use allowances for CFCs for the manufacture of 
metered-dose inhalers in the aggregate instead of on a compound-by-
compound basis will add flexibility for protecting patient health by 
allowing companies to better meet market demand for MDIs. Because CFC-
11, CFC-12 and CFC-114 all have an ozone depleting potential of 1.0, 
allocating these substances in the aggregate will not cause any 
additional damage to the stratospheric ozone layer.

    The International Pharmaceutical Aerosol Consortium (IPAC) 
consolidated the essential use exemption requests of its member 
companies for administrative convenience. EPA will separately allocate 
the essential-use allowances that FDA has determined to be 
``necessary'' to each of IPAC's member companies by means of a 
confidential letter.

    Although the Montreal Protocol does allow for a global essential 
use exemption for small quantities of high quality Class I ODS for use 
in laboratory applications, the CAA does not contain an explicit 
exemption for this use. Therefore, import and production of CFCs and 
carbon tetrachloride for use in laboratory and analytical applications 
may no longer be available for this use. Today's action allocates CFCs 
for use in metered dose inhalers and methyl chloroform for use in the 
Space Shuttle and the Titan Rocket. Laboratory essential uses will not 
be addressed in today's rulemaking. A separate final rule addressing 
laboratory essential uses will be published at a later date.

What Reporting Requirements Relate to the Essential Uses of Ozone 
Depleting Substances?

    Any person obtaining class I controlled substances after the 
phaseout under the essential use exemptions in today's action is 
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.

IV. Response to Comments

    EPA received comments from six organizations in response to the 
proposed rule. Three of these organizations commented on various 
aspects of the allocation of ODSs for medical devices, and three 
discussed the possibility of the lack of essential use exemptions for 
laboratory essential uses. Because a final rule addressing laboratory 
essential uses will be published separately at a later date, the only 
comments discussed in this section are those regarding the essential 
use allocation for medical devices.

    One commenter stated that EPA may only authorize production and/or 
importation of CFCs for an MDI if EPA determines that there is no safe 
and effective alternative propellant to the CFCs used in the MDI. The 
commentor asserts that FDA approval of a product under the FDCA means 
that the alternative propellant in that product is safe and effective 
for purposes of the CAA. The effect of this interpretation would be 
limited, according to the commentor, because ``it is only the CFC-
containing product that contains the same active moiety and same 
labeled indications that no longer qualifies as a `medical device.' ''

    We do not share the commentor's interpretation of the statutory 
language.

[[Page 722]]

The first prong of the definition of ``medical device'' reads as 
follows: ``The term ``medical device'' means any device * * *, 
diagnostic product, drug * * *, and drug delivery system * * * 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.'' 
According to the commentor, the phrase ``for which no safe and 
effective alternative has been developed'' modifies ``class I or class 
II substance,'' and not ``device, product, drug, or drug delivery 
system.'' The difficulty with the commenter's interpretation is that 
FDA does not approve MDI propellants separately from drug products. 
Thus, it is impossible for FDA to approve an alternative to the class I 
or class II substance (i.e., the propellant) alone since FDA only 
approves MDIs under an ANDA or NDA as a whole unit and not by approving 
each of its components. For this reason, even if we were to agree with 
the commentor that the statutory language was clear on its face, this 
would be a situation where the literal meaning of the statutory text 
would produce absurd results. We believe that the overall purpose of 
the CAA language regarding medical devices is to ensure that EPA's 
mission of environmental protection does not conflict with FDA's 
mission of protecting the public health. Consistent with this purpose, 
we believe that in drafting this prong of the definition, Congress was 
focusing on the availability of alternative medical treatment for 
patients who rely on CFC MDIs. We are not the appropriate agency to 
decide whether such alternative medical treatment is available. We do 
not believe that Congress intended EPA to make decisions involving 
medical judgment. On such questions, we defer to FDA. Because FDA has 
not identified any ``safe and effective alternative,'' as the phrase is 
used in the CAA, for any CFC MDI, the first prong of the definition of 
``medical device'' has not affected today's allocation.

    One commentor asserted that ``the CAA contemplates a product-by-
product determination of essentiality at the time a particular product 
is approved,'' and that this principle applies to generic drugs as well 
as brand-name drugs. We do not believe that the statutory language 
requires each product's essentiality to be determined in a vacuum, as 
if no other products of that type existed. The definition of medical 
device states that a device, product, drug, or drug delivery system is 
a medical device if the first prong of the definition is satisfied and 
``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 in consultation with the 
Administrator.'' This language does not prevent FDA from grouping 
together particular types of products containing the same active moiety 
and determining that all products using a given active moiety are 
essential. Our understanding is that FDA has always added uses to its 
essential use list through notice and comment rulemaking. Because FDA's 
list of essential uses is determined by active moiety and makes no 
reference as to whether a drug product is generic or branded, we 
believe all MDIs for which we are allocating CFCs are covered by 21 CFR 
2.125, regardless of whether they were or will be approved under an NDA 
or ANDA.

    This commentor also objects to EPA's use of FDA's pre-1990 
determinations of essentiality in deciding whether an MDI qualifies as 
a ``medical device'' for purposes of the 1990 CAA Amendments. The 
commentor states that EPA cannot allocate essential use allowances for 
particular MDIs until FDA finalizes the proposed revisions to its 
essential use regulations or engages in a separate rulemaking to 
determine whether those MDIs are essential.

    While we are aware that FDA is currently engaged in rulemaking to 
revise its essential use regulations, we are relying on FDA's current 
essential use list at 21 CFR 2.125 for purposes of today's action. That 
list contains all of FDA's determinations regarding ``essentiality'' to 
date. The statute does not specify a particular time at which FDA must 
make such a determination or invalidate determinations made prior to 
the date of the 1990 CAA Amendments. Additionally, the 1990 Amendments 
to the Clean Air Act use language consistent with FDA's regulations at 
21 CFR 2.125. We presume that Congress was aware of FDA's regulations 
when it passed the 1990 Amendments to the CAA. Therefore, we believe 
that the current essential use list remains valid. If FDA revises its 
regulations, we will take the revised list into account in future 
allocation decisions.

    We received several comments on the meaning of the word 
``approved'' in section 601(8)(B). In the preamble to the proposed 
rule, we stated that EPA and FDA were discussing how best to interpret 
this term, and that there were at least two possible interpretations. 
One such interpretation was that FDA had to approve the specific 
product under the FDCA. The second interpretation was that FDA had to 
have approved either that product or another product that contained the 
same active moiety. Several commentors stated that the second 
interpretation would be contrary to the plain meaning of the statute.

    Section 601(8)(B) refers to approval as occurring ``after notice 
and opportunity for comment.'' FDA has informed us that approvals of 
drug products under the FDCA are issued without notice and comment. For 
this reason, FDA has concluded that in using the word ``approved,'' 
Congress cannot have been referring to approval of the drug product 
under the FDCA. We agree with this conclusion. We also note that the 
statutory language refers to actions taken by FDA, in consultation with 
EPA. FDA does not consult with EPA prior to approving drug products 
under the FDCA. Furthermore, FDA points out that it has provided notice 
and opportunity for comment prior to adding categories of drug products 
to the essential use list in 40 CFR 2.125. (FDA has also informally 
consulted with EPA in the course of such actions.) Therefore, FDA 
interprets the phrase ``approved and determined to be essential'' as 
referring to FDA's action in approving the use of CFCs in MDIs 
containing a particular active moiety as an essential use. As a result, 
FDA regards all MDIs containing an active moiety that appears on its 
essential use list as ``approved'' for purposes of 601(8)(B). According 
to this interpretation, an MDI that has not yet received approval of 
its ANDA or NDA under the FDCA is considered to be approved as an 
essential use if it contains an active moiety that appears on the 
essential use list.

    Two commentors stated that section 601(8)(B) requires FDA approval 
of the ``medical device'' itself and that an active moiety cannot be a 
``medical device''. We would like to clarify that the term ``device'' 
and the phrase ``medical device'' have two separate and distinct 
definitions. ``Medical device'' is defined under 601(8) of the CAA. 
``Device'' is defined under the FDCA. Furthermore, we are not stating 
that the active moiety in an MDI is a ``medical device'' under the CAA. 
Rather, FDA and EPA are interpreting section 601(8)(B) to allow MDIs to 
be ``approved and determined to be essential'' by active moiety. That 
is, if FDA, in consultation with EPA, has listed MDIs containing a 
particular active moiety as essential, then a separate determination is 
not necessary for each MDI that

[[Page 723]]

contains that active moiety. FDA has listed MDIs with reference to the 
active moiety. Therefore, an MDI that contains an active moiety that 
appears on FDA's essential use list has been ``approved and determined 
to be essential.''

    One commentor stated that according to principles of statutory 
construction, the term ``approved'' should be interpreted the same way 
in section 601(8)(A) and section 601(8)(B). We believe that the term 
``approved'' must be interpreted in light of the surrounding language 
in each instance. Section 601(8)(B) requires notice-and-comment 
rulemaking and refers to action by FDA, in consultation with EPA. Since 
approval under the FDCA involves unilateral action by FDA without 
notice-and-comment rulemaking, it is reasonable to conclude that 
section 601(8)(B) does not refer to approval of an NDA or ANDA under 
the FDCA. Instead, we interpret the phrase ``approved and determined to 
be essential'' as referring to any MDI that contains an active moiety 
appearing on FDA's essential use list. This interpretation is 
consistent with the surrounding language, as FDA adds uses to its list 
through notice-and-comment rulemaking, and EPA has a clear interest in 
being consulted regarding the listing of essential uses of ODS.

    In regard to section 601(8)(A), we interpret this section as 
requiring a determination by FDA that there is a ``safe and effective 
alternative'' to a CFC MDI. Approval under the FDCA may be a 
prerequisite to such a determination. (We note that the statutory 
language calls for approval ``where necessary.'') Because section 
601(8)(A) does not refer to notice and comment rulemaking or 
consultation with EPA, it is reasonable to interpret the reference to 
``approval'' as a reference to approval under the FDCA. However, 
neither EPA nor FDA views FDA approval of a non-CFC product under the 
FDCA as constituting a determination that the product is a ``safe and 
effective alternative'' to any CFC MDI. That determination would 
require a separate analysis. FDA has described some of the factors that 
would enter into such an analysis in the preamble to its September 1, 
1999 notice of proposed rulemaking on essential use determinations (64 
FR 47735), and we refer the reader to that notice for further details.

    This commentor also stated that the term ``approved'' as used in 
section 601(8)(B) should be interpreted as it is interpreted under the 
FDCA, to refer to the entire drug product rather than simply the active 
ingredients. For the reasons stated above, we have concluded that the 
word ``approved'' in section 601(8)(B) does not refer to approval under 
the FDCA.

    One commentor stated that EPA had not meaningfully addressed the 
requirements of section 604(d)(2) of the CAA, the exception for medical 
devices. This commentor stated that EPA must provide information on 
``current market demand for the use of CFCs in particular MDIs, what 
quantities of CFCs were requested by particular companies in their 
annual applications for each particular active moiety and how the 
essential use allowances are ``necessary'' or ``limited'', and how the 
applicant met its burden of demonstrating that it qualifies for CFCs 
under the essential use criteria set out in the Act.''

    Section 604(d)(2) of the CAA states that ``the Administrator, after 
notice and opportunity for public comment, shall, to the extent such 
action is consistent with the Montreal Protocol, authorize the 
production of limited quantities of class I substances solely for use 
in medical devices if such authorization is determined by the 
Commissioner, in consultation with the Administrator, to be necessary 
for use in medical devices.'' As described in Section II of this 
preamble, EPA and FDA have consulted on whether the limited quantities 
contained in the proposed rule were ``necessary'' for use in medical 
devices, and FDA has determined that 2737.3 tons of the proposed amount 
are ``necessary.'' Accordingly, in this interim final rule, EPA is 
allocating 2737.3 tons for use in medical devices.

    With regard to the commentor's request for information, the letter 
from FDA states the following: ``. . . we [FDA] have examine the table 
in your [EPA] proposed rule that lists the essential use amounts 
requested by sponsors for production of medical devices (64 FR 59143, 
Table 1). We have also examined the information you obtained from 
individual sponsors regarding their intended use of CFCs in specific 
products. We compared this information to the information filed with us 
by sponsors in their annual reports.'' FDA goes on to say ``In listing 
the amounts we believe to be necessary for use in medical devices, we 
referred to historical use and have included an additional amount to 
allow for overage, for waste during manufacturing, for uncertainties in 
the supply chain of CFCs since they are no longer produced in the 
United States, for changes in future market shares of specific 
products, as well as for unforeseen circumstances in the market. We 
also provided additional amounts based on our knowledge of certain 
manufacturing problems. In addition, we eliminated any double-counting 
we found and eliminated allocations for uses not considered essential 
by the parties to the Montreal Protocol, even if those uses are 
currently listed in our regulation at 21 CFR 2.125(e).'' FDA also noted 
that they accounted for CFCs for use in the production of MDIs that 
would ultimately be exported to Canada. It should be noted that much of 
the data that FDA used in their analysis were confidential business 
information and cannot be shared publicly. These confidential data 
included each applicant's response to EPA's request for information on 
the quantity of each CFC to be used in the manufacture of specific 
products in calendar year 2000, EPA's historical data on yearly import 
and actual use of CFCs for each company, and information filed with FDA 
by drug sponsors in their annual reports.

    The commentor further stated that in order to achieve the 
congressional objective of reducing and eliminating production and use 
of ODS ``as expeditiously as possible,'' ``EPA and FDA must conclude 
that new MDIs are not `necessary' where FDA has approved or issued an 
`apposable' letter for a CFC-free alternative involving the same active 
moiety and overlapping labeling as that in the CFC-containing MDI.'' 
The commentor also states that if EPA nonetheless finds that CFCs are 
necessary for these MDIs, EPA must limit the quantities allocated to 
those that are necessary until the CFC-free alternative is approved. 
The commentor goes on to describe this stance as a ``policy.''

    Under section 604(d)(2) of the CAA, FDA (in consultation with EPA) 
determines whether production or import of CFCs for MDIs is necessary. 
EPA does not independently make such a determination, as the comment 
appears to suggest. We defer to FDA on the wisdom of adopting the 
policy urged by the commentor. The commentor has not demonstrated that 
this policy is compelled by the statutory language. For purposes of 
today's action, we are relying on FDA's determination that the 
quantities allocated in the final rule are ``necessary.''

    One commenter stated that EPA must ensure that its allocation is 
consistent with the decisions and recommendations of the Parties to the 
Montreal Protocol. The commenter refers to two existing decisions: 
Decision IV/25, which provides criteria for assessing essential uses 
for purposes

[[Page 724]]

of the Protocol's control measures, and Decision VIII/10, which 
addresses the transition away from CFC-based MDIs.

    Decision IV/25 contemplates that Parties nominating essential uses 
will apply the stated criteria at the time of nomination, and that the 
Protocol's Technology and Economic Assessment Panel will apply these 
criteria in developing its recommendations on whether the Parties 
should approve the nominated uses and quantities at their yearly 
meeting. Thus, these criteria drive the essential use process at the 
international level. The uses to which we are allocating CFCs in 
today's action were approved at the Tenth Meeting of the Parties, after 
nomination by the U.S. and evaluation by the Technology and Economic 
Assessment Panel. Therefore, we believe today's allocation is 
consistent with the Protocol. In addition, the commenter has not 
identified any respect in which these uses fail to meet the criteria in 
Decision IV/25.

    Decision VIII/10 describes a variety of actions that Parties are to 
request MDI companies to undertake. For example, Parties are to 
``request companies applying for MDI essential-use exemptions to 
demonstrate that they are undertaking individual or collaborative 
industry efforts, in consultation with the medical community, to 
educate health-care professionals and patients about other treatment 
options and the transition to non-CFC alternatives.'' (Decision VIII/
10(2)) The TEAP Handbook on Essential Use Nominations was revised in 
1997 to incorporate requests relevant to Decision VIII/10. For example, 
question B.2. of the form entitled ``Nomination of the Aerosol Metered 
Dose Inhaler (MDI) as an Essential Use,'' in Appendix D of the TEAP 
Handbook on Essential Use Nominations, requests applicants to ``List 
and describe in detail the education efforts, individual and/or 
collaborative, being undertaken to advise patients and health care 
professionals about treatment options and the transition to non-CFC 
alternatives.'' EPA requests companies applying for MDI essential-use 
exemptions to submit the information specified in the TEAP Handbook, 
including the information relevant to Decision VIII/10 . Nevertheless, 
we do not view Decision VIII/10 as imposing barriers to allocation. The 
Decision does not attach any consequences to the company's failure to 
comply with any of the requests. The commenter incorrectly describes 
Decision VIII/10 as ``requiring'' manufacturers of CFC MDIs to take the 
specified actions. By its own terms, the Decision simply states that 
Parties ``will request'' companies to take these actions.

    One commenter stated that under the CAA EPA cannot allocate CFCs to 
Medisol Laboratories for use in their generic albuterol MDI because 
this product does not fall within the definition of a ``medical 
device'' under the statute. For reasons stated above, EPA considers the 
generic albuterol MDI to be a medical device as defined by the statute 
and thus eligible to receive essential use allowances. While we are 
aware that FDA has approved a CFC-free albuterol product, FDA has not 
determined that this product is a ``safe and effective alternative'' to 
the Medisol generic albuterol MDI. In addition, albuterol is an 
adrenergic bronchodilator. FDA continues to regard the use of CFCs in 
``[m]etered-dose adrenergic bronchodilator human drugs for oral 
inhalation'' as essential (21 CFR 2.125(e)(3)). Because FDA's list of 
essential uses makes no reference as to whether a drug product is 
generic or branded, we believe all MDIs for which we are allocating 
CFCs are covered under 21 CFR 2.125 regardless of whether they were or 
will be approved under an NDA or ANDA. Therefore, we believe that CFC 
albuterol MDIs are ``medical devices.'' Finally, we have based our 
allocation of 49 tons of CFCs to Medisol on FDA's determination that 
this quantity is ``necessary'' under CAA section 604(d)(2).

    One commenter stated that Sciarra's application for essential use 
allowances for production of albuterol, epinephrine hydrochloride, 
ipratropium bromide, triamcinalone acetonide, beclomethasone 
dipropionate, and cromolyn sodium MDIs should be denied because these 
products do not satisfy many, if not all of the requirements set by the 
CAA. According to the commenter, an albuterol MDI should not qualify as 
a ``medical device'' under the CAA because there is a ``safe and 
effective alternative propellant'' (HFC-134a), that is, a safe and 
effective alternative to the CFCs used in albuterol MDIs. Additionally, 
the commenter stated that FDA has not determined that the generic 
products listed above are essential after notice and opportunity for 
public comment. The commenter also noted that FDA has issued apposable 
letters for CFC-free versions of all the above moieties except 
epinephrine and ipratripium, and concluded that even if these products 
qualify as ``medical devices,'' the allocation of CFCs is not 
``necessary.'' Additionally, the commenter stated that Sciarra's 
application provided inadequate information in its response to the 
Protocol criteria. Specifically, Sciarra did not provide information 
about the availability of alternatives to CFC MDIs or information on 
its plans for implementation of these alternatives. The commenter did 
note that Sciarra had stated that it would develop its own non-CFC 
products after receiving approval for its CFC-containing products.

    As stated before, while FDA has approved a CFC-free albuterol 
product, FDA has not determined that this product is a ``safe and 
effective alternative'' to any other albuterol product. In addition, 
albuterol is an adrenergic bronchodilator. FDA continues to regard the 
use of CFCs in ``[m]etered-dose adrenergic bronchodilator human drugs 
for oral inhalation'' as essential (21 CFR 2.125(e)(3)). Therefore, we 
believe that CFC albuterol MDIs are ``medical devices.'' Our 
understanding is that FDA has always added uses to its essential use 
list through notice and comment rulemaking. Because FDA's list of 
essential uses makes no reference as to whether a drug product is 
generic or branded, we believe all MDIs for which we are allocating 
CFCs are covered under 21 CFR 2.125 regardless of whether they were or 
will be approved under an NDA or ANDA. In Sciarra's response to the CAA 
section 114 letter that EPA sent to MDI manufacturers on October 13, 
1999, Sciarra provided a refined list of moieties for the MDIs for 
which it is requesting CFCs. The use of any of these moieties in an MDI 
is essential under 21 CFR 2.125(e). With the regard to the issue of 
whether CFCs are ``necessary'' for the Sciarra MDIs, we are relying on 
FDA's determination. FDA, in its analysis of the amount of CFCs 
necessary for the production of MDIs, determined that much of the 
quantity we had proposed to allocate to Sciarra was not ``necessary'' 
because at present, Sciarra does not have any currently approved CFC 
MDIs. The essential use allocation for Sciarra was reduced accordingly 
in this interim final rule.

    The TEAP Handbook contains several questions relating to the 
availability of alternatives. As we noted earlier, many of the 
questions in the current TEAP Handbook derive from Decision VIII/10. 
This Decision directs the Parties to request certain information from 
companies applying for MDI essential-use exemptions. However, it does 
not attach specific consequences to a company's failure to provide 
information, nor does it state what constitutes an adequate response.


[[Page 725]]


    One commenter stated that the application for CFCs from Schering 
should be denied only if EPA also denies CFC applications for albuterol 
MDIs for all other companies marketing such products. The commenter 
identified Schering as the company that markets the non-CFC albuterol 
MDI. For the reasons stated above, EPA is allocating CFCs to 
manufacturers of CFC albuterol MDIs, including Schering.

    One commenter stated that the public version of the application for 
the International Pharmaceutical Aerosol Consortium (IPAC) did not 
provide information about the specific products that would be 
manufactured using the essential use allowances. The commenter noted 
that Medeva Americas is one of the companies identified in the IPAC 
proposal, and stated that this company markets a generic CFC albuterol 
MDI. The commenter further stated that another IPAC company, Glaxo 
Wellcome, markets a CFC albuterol MDI. According to the commenter, 
neither of these companies should receive CFC allocations for these 
products.

    IPAC completed the application for essential use allowances in 
accordance with the TEAP Handbook. EPA requested information about the 
specific products for which the allowances would be used from IPAC's 
member companies in a letter issued pursuant to section 114 of the CAA 
on October 13, 1999. The responses to these letters are considered 
confidential business information and are therefore not available in 
the public docket. As stated earlier FDA used this information in its 
analysis of what quantities of CFCs are necessary for the production of 
medical devices as defined in the Act. Each of the products for which 
FDA determined a quantity of CFCs to be necessary is ``essential'' 
under 21 CFR 2.125(e). Since the commenter specifically mentions 
albuterol, we note again that albuterol is an adrenergic 
bronchodilator. FDA continues to regard the use of CFCs in ``[m]etered-
dose adrenergic bronchodilator human drugs for oral inhalation'' as 
essential (21 CFR 2.125(e)(3)). Our understanding is that FDA has 
always added uses to its essential use list through notice and comment 
rulemaking. Because FDA's list of essential uses makes no reference as 
to whether a drug product is generic or branded, we believe all MDIs 
for which we are allocating CFCs are covered under 21 CFR 2.125 
regardless of whether they were or will be approved under an NDA or 
ANDA. Furthermore, as stated before, while FDA has approved a CFC-free 
albuterol product, FDA has not determined that this product is a ``safe 
and effective alternative'' to any other albuterol product. Therefore, 
we believe that CFC albuterol MDIs are ``medical devices.''

    One commenter stated that EPA determines the safety and efficacy of 
alternatives to CFCs under the Significant New Alternatives Policy 
(SNAP) program (section 612 of the CAA). The commenter further stated 
that EPA relies upon FDA's approval of medical products containing 
alternative propellants as a determination that the alternative 
propellant has no adverse human health effects. The commenter concluded 
that ``when FDA approves a product containing an alternative propellant 
as safe and effective under the FDCA, EPA concludes that the non-CFC 
propellant in that product is safe and effective for the purposes of 
the CAA.''

    Under section 612 of the CAA, EPA determines whether substitutes 
for ozone-depleting substances may present adverse effects to human 
health or the environment. In the SNAP rule published in the Federal 
Register on March 18, 1994 (59 FR 13044), EPA stated: ``Some medical 
devices * * * currently contain class I or class II compounds. The 
Agency has determined that such products are exempt from further review 
for human health effects under the SNAP program where FDA approval of 
such effects is required before a product can be introduced into 
commerce. EPA will rely in its SNAP determination on FDA's conclusions 
regarding health effects. The Agency believes this exemption is 
justified because of the higher burden of proof placed on submitters 
under the FDCA. However, the Agency will continue to evaluate all other 
environmental effects of the proposed substitute, and will consult with 
the FDA to determine the appropriate course of action.'' (59 FR 
130660).

    The quoted language simply indicates that EPA will conclude that a 
substitute does not present adverse health effects if FDA approves, 
under the FDCA, a product containing the substitute. It does not say 
that EPA will treat the product approval as a determination that the 
substitute is a ``safe and effective alternative'' to the ODS for 
purposes of section 601(8)(A). FDA approval of a CFC-free MDI under the 
FDCA does not constitute approval of the non-CFC propellant as safe and 
effective. Such approval relates to the product in its entirety, not to 
the propellant. Therefore, it would be inappropriate for the EPA to 
conclude from FDA's approval of a non-CFC MDI that the non-CFC 
propellant had been approved for use in MDIs generally. In listing 
acceptable alternatives under the SNAP program, EPA does not intend to 
preempt FDA's role in approving individual products or in deciding 
whether a particular product is a safe and effective alternative for 
another.

V. Administrative Requirements

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.


[[Page 726]]


    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 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 rule 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 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 entitlement, 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 by OMB and EPA that this 
action is not a ``significant regulatory action'' under the terms of 
Executive Order 12866 and is therefore not subject to OMB review under 
the Executive Order.

C. 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.

D. 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 13084 
requires EPA to provide to the Office of Management and Budget, in a 
separately identified section of the preamble to the rule, a 
description of the extent of EPA's prior consultation with 
representatives of affected tribal governments, a summary of the nature 
of their concerns, and a statement supporting the need to issue the 
regulation. In addition, Executive Order 13084 requires EPA to develop 
an effective process permitting elected officials and other 
representatives of Indian tribal governments ``to provide meaningful 
and timely input in the development of regulatory policies on matters 
that significantly or uniquely affect their communities.'' Today's rule 
does not significantly or uniquely affect the communities of Indian 
tribal governments. Accordingly, the requirements of section 3(b) of 
Executive Order 13084 do not apply to this rule.

E. Regulatory Flexibility

    After considering the economic impacts of today's final rule on 
small entities, EPA has determined that it is not necessary to prepare 
a regulatory flexibility analysis in connection with this final rule. 
EPA has also determined that this action will not have a significant 
economic impact on a substantial number of small entities. This rule 
does not have a significant impact on a substantial number of small 
entities. The only entities that are directly affected by this 
allocation are those to which CFCs and other ODSs are being allocated. 
There are only ten entities which are affected by this rulemaking (see 
table 1 above). This rule does not have an adverse economic impact on 
any entity because it grants exceptions to a pre-existing ban.

F. Applicability of 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 rule is not subject to Executive Order 
13045 because it implements the phaseout schedule and exemptions 
established by Congress in Title VI of the Clean Air Act.

G. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law No. 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

[[Page 727]]

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

H. Executive Order 13132 (Federalism)

    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August 
10, 1999), requires EPA to develop an accountable process to ensure 
``meaningful and timely input by State and local officials in the 
development of regulatory policies that have federalism implications.'' 
``Policies that have federalism implications'' is defined in the 
Executive Order to include regulations that have ``substantial direct 
effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government.'' Under 
Executive Order 13132, EPA may not issue a regulation that has 
federalism implications, that imposes substantial direct compliance 
costs, and that is not required by statute, unless the Federal 
government provides the funds necessary to pay the direct compliance 
costs incurred by State and local governments, or EPA consults with 
State and local officials early in the process of developing the 
proposed regulation. EPA also may not issue a regulation that has 
federalism implications and that preempts State law unless the Agency 
consults with State and local officials early in the process of 
developing the proposed regulation.

    If EPA complies by consulting, Executive Order 13132 requires EPA 
to provide to the Office of Management and Budget (OMB), in a 
separately identified section of the preamble to the rule, a federalism 
summary impact statement (FSIS). The FSIS must include a description of 
the extent of EPA's prior consultation with State and local officials, 
a summary of the nature of their concerns and the agency's position 
supporting the need to issue the regulation, and a statement of the 
extent to which the concerns of State and local officials have been 
met. Also, when EPA transmits a draft final rule with federalism 
implications to OMB for review pursuant to Executive Order 12866, EPA 
must include a certification from the agency's Federalism Official 
stating that EPA has met the requirements of Executive Order 13132 in a 
meaningful and timely manner. This interim final rule will not have 
substantial direct effects on the States, on the relationship between 
the national government and the States, or on the distribution of power 
and responsibilities among the various levels of government, as 
specified in Executive Order 13132. This interim final rule will affect 
only the ability of private entities and the national government to 
request production of controlled ozone-depleting substances. Thus, the 
requirements of section 6 of the Executive Order do not apply to this 
rule.

VI. Judicial Review

    Under Section 307(b)(1) of the Act, EPA finds that these 
regulations are of national applicability. Accordingly, judicial review 
of this action is available only by the filing of a petition for review 
in the United States Court of Appeals for the District of Columbia 
Circuit within sixty days of publication of this action in the Federal 
Register. Under Section 307(b)(2), the requirements of this rule may 
not be challenged later in judicial proceedings brought to enforce 
those requirements.

VII. Congressional Review

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. Section 808 allows the issuing agency to make a rule 
effective sooner than otherwise provided by the CRA if the agency makes 
a good cause finding that notice and public procedure is impracticable, 
unnecessary or contrary to the public interest. This determination must 
be supported by a brief statement. 5 U.S.C. 808(2). As stated 
previously, EPA has made such a good cause finding, including the 
reasons therefor, and established an effective date of January 6, 2000. 
EPA will submit a report containing this rule and other required 
information to the U.S. Senate, the U.S. House of Representatives, and 
the Comptroller General of the United States prior to publication of 
the rule in the Federal Register. This action is not a ``major rule'' 
as defined by 5 U.S.C. 804(2).

List of Subjects in 40 CFR Part 82

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

    Dated: December 30, 1999.
Carol M. Browner,
Administrator.


    40 CFR Part 82 is 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) * * *

[[Page 728]]



        Table I.--Essential Use Allocation for Calendar Year 2000
------------------------------------------------------------------------
                                                               Quantity
              Company                       Chemical           (metric
                                                                tons)
------------------------------------------------------------------------
 
      (i) Metered Dose Inhalers for Treatment of Asthma and Chronic
 
------------------------------------------------------------------------
International Pharmaceutical         CFC-11 or.............       1639.0
 Aerosol Consortium (IPAC)--Medeva   CFC-12 or
 Americas, Inc., Boehringer          CFC-114
 Ingelheim Pharmaceuticals, Glaxo
 Wellcome, Rhone-Poulenc Rorer, 3M.
Medisol Laboratories, Inc..........  CFC-11 or.............         49.0
                                     CFC-12 or
                                     CFC-114
Schering Corporation...............  CFC-11 or.............       1048.0
                                     CFC-12 or
                                     CFC-114
Sciarra Laboratories, Inc..........  CFC-11 or.............          1.3
                                     CFC-12 or
                                     CFC-114
------------------------------------------------------------------------
  (2)(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        Methyl Chloroform.....          3.4
 Rocket.
------------------------------------------------------------------------

* * * * *
[FR Doc. 00-273 Filed 1-5-00; 8:45 am]
BILLING CODE 6560-50-P