[Federal Register Volume 65, Number 169 (Wednesday, August 30, 2000)]
[Proposed Rules]
[Pages 52684-52690]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-22158]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 2

[FRL-6860-9]
RIN 2025-AA02


Elimination of Special Treatment for Category of Confidential 
Business Information: Reproposal

AGENCY: Environmental Protection Agency.

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA or Agency) published 
a document in the Federal Register on October 25, 1999 (64 FR 57421), 
proposing to amend its regulations to eliminate the special treatment 
of a category of confidential business information (CBI). This category 
of CBI includes comments received from businesses that substantiate 
their claims of confidentiality for previously submitted information. 
In response to requests from interested parties, EPA extended the 
comment period on the proposed rule from December 27, 1999, to January 
26, 2000 (64 FR 71366, December 21, 1999). EPA is now reproposing the 
rule to address some of the comments that it received.

DATES: Comments on this proposed rule must be submitted by October 30, 
2000.

ADDRESSES: Send written comments on this proposed rule to Docket Number 
EC-1999-015, Enforcement and Compliance Docket and Information Center 
(ECDIC), U.S. Environmental Protection Agency, 1200 Pennsylvania Ave., 
NW, Room 4033, Mail Code 2201A, Washington, DC 20460; Phone, 202-564-
2614 or 202-564-2119; Fax, 202-501-1011; Email, [email protected]. 
Documents related to this proposed rule are available for public 
inspection and viewing by contacting the ECDIC at this same address.

FOR FURTHER INFORMATION CONTACT: Rebecca Moser, Office of Information

[[Page 52685]]

Collection, Office of Environmental Information, U.S. Environmental 
Protection Agency, 1200 Pennsylvania Ave., NW, Mail Code 2822, 
Washington, DC 20460; Phone, 202-260-6780; Fax, 202-260-8550; Email, 
[email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    In 1976, EPA first promulgated its comprehensive CBI regulations as 
part of its regulations in 40 CFR part 2 for implementing the Freedom 
of Information Act (FOIA). These regulations include special provisions 
addressing CBI under specific EPA statutes. For all business 
information submitted to EPA, the regulations allow businesses that 
submit information to EPA to claim that information is entitled to 
confidential treatment. If information is claimed as CBI, EPA generally 
will not disclose the information to the public, in response to a FOIA 
request or otherwise, unless EPA makes a determination that the 
information is not entitled to confidential treatment and notifies the 
affected business giving the business an opportunity to seek judicial 
review of EPA's action. The regulations set out procedures for EPA to 
make confidentiality determinations for information claimed as 
confidential.
    At the time the 1976 regulations were issued, EPA concluded that 
when EPA received a FOIA request or otherwise needed to determine the 
confidentiality of particular information claimed as CBI, EPA would 
need to obtain comments from the business that made the CBI claim 
telling the Agency why the business believes its information is 
entitled to confidential treatment. Thus, the regulations provide that 
EPA will notify the business when information it has claimed as 
confidential is requested under FOIA or EPA has some other reason to 
make a determination whether it is entitled to confidential treatment, 
and the business is given an opportunity to submit comments supporting 
its confidentiality claim. EPA refers to these comments as ``CBI 
substantiations.''
    Under the FOIA and other statutes, such CBI substantiations were 
not required. At the time the CBI regulations were written, the leading 
case in this area was National Parks & Conservation Ass'n v. Morton, 
498 F.2d 765 (D.C. Cir. 1974), which held that information was deemed 
confidential if disclosure of such information was likely ``to impair 
the Government's ability to obtain necessary information in the 
future.'' Traditionally, the concept of impairment was applied when the 
information was voluntarily submitted and when the government believed 
that the submitter would not provide the information to the government 
if it were subject to disclosure. EPA believed that the public release 
of CBI substantiations would impair the Agency's ability to obtain 
necessary information substantiating CBI claims in the future.
    At that time, EPA believed that affected businesses would be more 
likely to submit adequate substantiation information if such 
information were protected and that release of such information was 
likely to impair the Agency's ability to obtain it in the future. 
Therefore, based on EPA's reading of National Parks, the 1976 
regulations encouraged the submission of CBI substantiations by 
granting such substantiations automatic confidential treatment by EPA 
if claimed by the business as confidential.
    Currently, for business information other than substantiations, 
when EPA makes an initial determination that the information may be 
entitled to confidential treatment (e.g., in response to a FOIA 
request), it notifies the business which asserted an applicable 
confidentiality claim, orally and in writing (40 CFR 2.204(e)). EPA's 
written notice provides the business with an opportunity to submit 
comments on the following:
    (1) The portions of the information which are alleged to be 
entitled to confidential treatment;
    (2) The period of time for which confidential treatment is desired 
by the business (e.g., until a certain date, until the occurrence of a 
specified event, or permanently);
    (3) The purpose for which the information was submitted to EPA and 
the approximate date of submission, if known;
    (4) Whether a business confidentiality claim accompanied the 
information when it was received by EPA;
    (5) Measures taken by the business to guard against undesired 
disclosure of the information to others;
    (6) The extent to which the information has been disclosed to 
others and the precautions taken in connection therewith;
    (7) Pertinent confidentiality determinations, if any, by EPA or 
other Federal agencies, and a copy of any such determination, or 
reference to it, if available;
    (8) Whether the business asserts that disclosure of the information 
would be likely to result in substantial harmful effects on the 
business's competitive position, and if so, what those harmful effects 
would be, why they should be viewed as substantial, and an explanation 
of the causal relationship between disclosure and such harmful effects; 
and
    (9) Whether the business asserts that the information is 
voluntarily submitted information, and if so, whether and why 
disclosure of the information would tend to lessen the availability to 
EPA of similar information in the future.
    Each business that is notified and invited to comment must submit 
comments to EPA by the date specified in the notice or, before the 
comments are due, request an extension of the comment period and 
receive approval from the EPA legal office (40 CFR 2.205(b)). If the 
business fails to submit comments by the due date (including any 
approved extension), the business waives its claim to confidentiality, 
and EPA may release the information without further notice.
    If the business submits a CBI substantiation, the EPA legal office 
makes a final confidentiality determination. In making the final 
determination, the EPA legal office considers the business's claim, the 
CBI substantiation, any previously-issued confidentiality 
determinations which are pertinent, and other materials it finds 
appropriate (40 CFR 2.205(d)). EPA's current regulations list the 
following criteria for determining whether business information is 
entitled to confidential treatment (40 CFR 2.208):
    (1) The business has asserted a business confidentiality claim 
which has not expired by its terms, nor been waived nor withdrawn;
    (2) The business has satisfactorily shown that it has taken 
reasonable measures to protect the confidentiality of the information 
and that it intends to continue to take such measures;
    (3) The information is not, and has not been, reasonably obtainable 
without the business's consent by other persons (other than 
governmental bodies) by use of legitimate means (other than discovery 
based on a showing of special need in a judicial or quasi-judicial 
proceeding);
    (4) No statute specifically requires disclosure of the information; 
and
    (5) Either--
    (a) The business has satisfactorily shown that disclosure of the 
information is likely to cause substantial harm to the business's 
competitive position; or
    (b) The information is voluntarily submitted information, and its 
disclosure would be likely to impair the Government's ability to obtain 
necessary information in the future. (See below for a discussion of a 
change in the concept of voluntarily-submitted information.)

[[Page 52686]]

    If EPA determines that the information is entitled to confidential 
treatment for the full period requested by the business, EPA will 
maintain the information as CBI for that period and deny any FOIA 
requests for the information. If EPA determines that the information is 
not entitled to confidential treatment, then EPA notifies the affected 
business of its intention to release the information within 10 working 
days (or other applicable time period specified in subpart B), unless 
the business first seeks judicial review of the determination and seeks 
preliminary injunctive relief against disclosure (40 CFR 2.205(f)).
    Under EPA's current regulations (40 CFR 2.205(c)), EPA will 
automatically treat a CBI substantiation marked as confidential as CBI 
(40 CFR 2.203(b)) if the information in the substantiation is not 
otherwise possessed by EPA. EPA does not request that the business 
submit comments substantiating why the information in its CBI 
substantiation should be treated as confidential. Thus, EPA does not 
make a substantive confidentiality determination for this information 
and treats it as confidential solely on the grounds that the business 
claims it as CBI. This means EPA will deny any FOIA request for the CBI 
substantiation. The result is that information submitted to EPA in a 
CBI substantiation and claimed as CBI is treated differently than all 
other business information submitted to EPA and claimed as CBI. This 
special treatment has been challenged in Federal Court (Northwest 
Coalition for Alternatives to Pesticides (NCAP) v. EPA, D.D.C., Civil 
Action No. 99-437) on the grounds that it violates FOIA.
    EPA reviewed the provision granting automatic CBI treatment in 
response to the legal challenge by NCAP. After considering the validity 
of 40 CFR 2.205(c) in light of legal developments since 1976, EPA 
believes it is unlikely that EPA could defend its original basis for 
providing automatic protection of CBI substantiations. As part of a 
motion to stay the proceedings, EPA agreed to propose removing 40 CFR 
2.205(c). (Orders granting a stay of the proceedings were filed on July 
23, 1999, January 13, 2000, and April 18, 2000.)
    On October 25, 1999, EPA published a notice in the Federal Register 
proposing to remove 40 CFR 2.205(c), eliminating the special treatment 
of CBI substantiations (64 FR 57421) and, thus, treating the 
information in CBI substantiations like all other business information 
submitted to EPA and claimed as CBI under 40 CFR part 2, subpart B. EPA 
proposed to eliminate the provision (1) because special treatment of 
substantiations is no longer necessary and (2) because elimination of 
the provision will bring EPA into conformity with other federal 
agencies. Comments to the proposed rule were due on December 27, 1999. 
In response to requests from interested parties, EPA extended the 
comment period from December 27, 1999, to January 26, 2000 (64 FR 
71366, December 21, 1999).
    EPA received comments on its proposed rule from nine entities: one 
in favor of the proposed rule [Northwest Coalition for Alternatives to 
Pesticides (NCAP)] and eight opposed (Chemical Specialities 
Manufacturers Association, Color Pigments Manufacturers Association, 
Inc., Edison Electric Institute, American Crop Protection Association, 
Utility Air Regulatory Group, Carolina Power & Light Company, 
FirstEnergy Corp., and Duke Energy Corporation).
    NCAP supported the proposed rule, stating that 40 CFR 2.205(c) 
should be removed since it currently allows EPA to exempt from 
disclosure an entire category of documents (i.e., CBI substantiations 
that are claimed as confidential) that should not be entitled to 
exemption under FOIA. NCAP added that EPA's current regulations allow 
the Agency to withhold an entire CBI substantiation without segregation 
of non-exempt material based solely on the desire of the business that 
submitted the substantiation, and that under FOIA (USC 552(b)), EPA is 
required to disclose any reasonable segregable information that is not 
exempt.
    Comments opposing the proposed rule included the following:
    (1) EPA did not provide sufficient rationale for removing 40 CFR 
2.205(c),
    (2) Businesses would be reluctant to provide the detailed 
information needed to substantiate original CBI claims for fear that a 
substantiation might be released,
    (3) The proposed rule could create an endless cycle of 
substantiations and place unnecessary burdens on EPA and industry, and
    (4) The rule should not be applied retroactively.
    Based on the comments received, EPA is reproposing the rule to 
provide a more thorough explanation for the proposed amendment which 
would change the CBI regulations to eliminate the automatic protection 
of CBI substantiations that are claimed as confidential and submitted 
to the Agency after the effective date of the final rule. EPA believes 
that the amendment to eliminate the special treatment in 40 CFR 
2.205(c) is justified for the following reasons:
    (1) Change in Concept of ``Voluntarily-Submitted Information.'' 
When the CBI regulations were written in 1976, EPA believed that the 
public release of CBI substantiations would impair the Agency's ability 
to obtain necessary information in the future. Traditionally, the 
concept of impairment was applied when the information was voluntarily 
submitted and when the government believed that the submitter would not 
provide the information if it were subject to disclosure. The leading 
case at the time, National Parks & Conservation Association v. Morton, 
448 F.2d 765 (D.C. Cir. 1974), concluded that information is 
confidential if disclosure of the information is likely ``to impair the 
Government's ability to obtain necessary information in the future.'' 
EPA, in issuing its 1976 regulations, believed substantiations should 
be considered as voluntarily-submitted information which, if released, 
would impair the Agency's ability to obtain such information in the 
future and, thus, granted substantiations automatic CBI status in the 
regulations.
    The U.S. Court of Appeals for the D.C. Circuit ruled in Critical 
Mass Energy Project v. NRC, 975 F.2d 871 (D.C. Cir. 1992), that 
``voluntarily'' submitted information should be categorically 
protected, provided it is not ``customarily'' disclosed to the public 
by the submitter. Subsequent judicial interpretation of the word 
``voluntary'' suggests that if an industry must submit information to 
obtain a benefit--as in this case, the nondisclosure of CBI--then the 
submission is not voluntary.
    In light of Critical Mass and subsequently decided cases, EPA 
believes it is unlikely that EPA could defend the position that CBI 
substantiations are voluntarily submitted and that they should 
therefore be automatically protected from disclosure without further 
finding that they are confidential. Thus, EPA believes it must have an 
independent rationale to determine whether any specific CBI 
substantiation submitted to the Agency is itself CBI. In response to 
the current litigation, EPA, in consultation with the Department of 
Justice, has determined that according to CBI substantiations the same 
treatment as other business information claimed as confidential under 
40 CFR part 2, subpart B, is the appropriate legal position.
    (2) Comparison to Practices at Other Federal Agencies. EPA 
contacted 12 other departments and agencies to determine how they 
handle CBI substantiations. These included the Department of 
Transportation, the Food

[[Page 52687]]

and Drug Administration, the Department of Energy, the Department of 
Commerce, the National Oceanic and Atmospheric Administration, the 
Department of Health and Human Services, the Department of the 
Interior, the Department of Education, the National Aeronautics and 
Space Administration, the Consumer Product Safety Commission, and the 
National Science Foundation. Although the specific procedures differ, 
none of these departments and agencies automatically protects CBI 
substantiations that are claimed as confidential from public 
disclosure. EPA's current practice of categorically protecting all CBI 
substantiations that are claimed as confidential, without examining the 
nature of these substantiations, appears to be unusual. The proposed 
rule would bring EPA into closer alignment with the practices of other 
departments and agencies.
    (3) Protecting Both Public Access and Confidentiality. The 
amendment to eliminate the special treatment in 40 CFR 2.205(c) will 
help ensure that EPA honors both the public's right to obtain 
government-held information under FOIA and other laws and a submitter's 
right to the protection of CBI, as required under FOIA and other 
statutes. Under the proposed amendment, when EPA receives a FOIA 
request for a CBI substantiation that has been claimed as confidential 
and submitted after the effective date of the final rule, EPA will no 
longer automatically deny the request; rather, as with all other 
business information claimed as CBI, EPA will notify the affected 
business, provide the business the same opportunity to comment on its 
confidentiality claim that the business would have for any other 
information claimed as CBI, and then make an individual determination 
whether the information in the CBI substantiation is entitled to 
confidential treatment. The information would continue to be protected 
from disclosure if the business submitted comments, and the Agency 
determined that the information was entitled to confidential treatment.
    EPA acknowledges that the proposed rule would create some 
additional burden for EPA and affected businesses when the Agency needs 
to make a final confidentiality determination for a particular CBI 
substantiation. EPA believes that only a portion of the CBI 
substantiations that are claimed as confidential would ever require 
such a determination (e.g., in response to a FOIA request for the 
substantiation or if EPA needed to determine its confidentiality for 
other reasons). The Agency does not expect the proposed rule to impose 
a significant burden on affected businesses (see below, V. Paperwork 
Reduction Act).

II. Description of the Proposed Rule

    EPA proposes to amend its general CBI regulations (40 CFR part 2, 
subpart B) to eliminate the special treatment of CBI substantiations. 
From the effective date of the rule forward, CBI substantiations would 
be treated in exactly the same manner as other business information 
that is claimed as confidential. Under the proposed rule, businesses 
would still be able to claim CBI substantiations as confidential as 
they can any other business information submitted to EPA (40 CFR 
2.204(e)(6)) and would be entitled to all the other procedural rights 
in 40 CFR part 2, subpart B.
    If EPA received a FOIA request for a CBI substantiation that had 
been marked as confidential and submitted to the Agency after the 
effective date of the final rule, EPA would make a preliminary 
determination of confidentiality, notify the affected business and 
request comments on its confidentiality claim, and then make a final 
confidentiality determination, in accordance with 40 CFR 2.204 and 
2.205. If EPA then determined that the CBI substantiation was entitled 
to confidential treatment, EPA would continue to protect the 
information and deny any pending FOIA request. If EPA determined that 
the CBI substantiation was not entitled to confidential treatment, it 
would notify the affected business of its intention to release the 
information within 10 working days (or other applicable time period 
specified in subpart B) of the business's receipt of the notice, unless 
the appropriate EPA legal office was first notified that the business 
had sought judicial review and had sought preliminary injunctive relief 
against disclosure (40 CFR 2.205(f)).
    This amendment would apply only to CBI substantiations submitted 
after the effective date of the final rule. Among the comments EPA 
received on the October 25, 1999, proposed rule were comments arguing 
that this proposed amendment, if adopted, should not be applied 
retroactively to CBI substantiations submitted to EPA before this 
change is made. Concerns were expressed about the fairness of applying 
the proposed rule to old substantiations which businesses claimed as 
confidential and submitted to EPA with the understanding that the 
substantiations would be protected. In response to these comments, EPA 
proposes to apply the rule only prospectively to CBI substantiations 
submitted after the change goes into effect.
    As discussed above, EPA does not believe it can successfully defend 
its existing regulation at 40 CFR 2.205(c), in light of case law 
developments since 1976. Thus, if EPA were to continue to deny FOIA 
requests for CBI substantiations based on Sec. 2.205(c), EPA could 
potentially be ordered by the courts to conduct a CBI determination or 
to disclose the information to FOIA requesters. EPA could also be 
potentially liable for attorneys' fees under FOIA. In addition, 
affected businesses would be at a disadvantage in protecting their CBI 
substantiations from disclosure in response to FOIA requests. Since the 
businesses would not have provided comments to EPA to substantiate why 
information in their CBI substantiations is entitled to confidential 
treatment, a court reviewing an EPA denial of a FOIA request for a 
substantiation would have only the issue of Sec. 2.205(c) before it. 
There would be no substantive argument about why the information in a 
particular CBI substantiation is confidential. Thus, if the court 
decided that Sec. 2.205(c) was not an appropriate basis for denying the 
FOIA request, EPA would be ordered to disclose the information.
    On the other hand, if a CBI substantiation submitted after the 
effective date of the final rule were requested under FOIA, EPA would 
give the affected business an opportunity to comment on why the CBI 
substantiation is confidential, and EPA would be able to make a 
substantive final confidentiality determination. EPA believes it would 
be much more likely to prevail in defending such a substantive 
determination than in defending a denial based solely on Sec. 2.205(c). 
EPA's purpose since 1976 has been to have CBI regulations that allow 
businesses to submit information to EPA while protecting its 
confidentiality and that allow EPA to make appropriate, defensible 
confidentiality determinations. We believe this proposed amendment is 
consistent with those goals and will allow businesses and EPA to have 
confidence that EPA can protect confidential CBI substantiations from 
public disclosure.
    Generally, a CBI substantiation exists only because someone has 
requested access under FOIA to specific business information claimed as 
CBI, and EPA has given the affected business an opportunity to comment 
in support of its confidentiality claim. If EPA were to conclude that 
the underlying information is not entitled to confidential treatment, 
the FOIA

[[Page 52688]]

requester would get the information and would be unlikely to have any 
interest in the content of the CBI substantiation, since it had not 
proven persuasive with EPA.
    If EPA were to conclude that the underlying information is entitled 
to confidential treatment, the FOIA requester would not get the 
information. Depending on the rationale in EPA's final confidentiality 
determination, the requester might subsequently ask to see the CBI 
substantiation since it had formed some or all of the basis for EPA's 
determination. The FOIA requester's interest in the CBI substantiation 
is contemporaneous with the final confidentiality determination. EPA 
believes that applying the rule prospectively will respond to the 
majority of future requests for CBI substantiations, and also avoid 
placing an undue burden on businesses that submitted CBI 
substantiations in the past.
    EPA proposes to apply the rule prospectively, without changing the 
procedures for handling substantiations that were submitted prior to 
the effective date of the final rule. At the same time, EPA would like 
to solicit public comments on two alternative approaches: (1) Applying 
the rule prospectively, but notifying affected businesses when old 
substantiations are requested under FOIA; and (2) applying the rule 
retroactively.
    (1) Under the first alternative approach, EPA would notify the 
affected business if a FOIA request were received for an old 
substantiation (i.e., a substantiation submitted prior to the effective 
date of the final rule) and provide the business with an opportunity to 
comment. In cases involving old substantiations, EPA would not treat 
the failure to comment as a waiver of the confidentiality claim. Any 
comments submitted by the affected business could provide EPA with an 
additional basis for defending its denial of a related FOIA request (in 
addition to Sec. 2.205(c)), if such a denial were ever challenged in 
court.
    If EPA were to take this approach, it might amend Sec. 2.205(c) to 
read as follows:
     If information submitted to EPA by a business as part of 
its comments under this section prior to [Insert effective date of 
final rule] pertains to the business's claim, is not otherwise 
possessed by EPA, and is marked when received in accordance with 
Sec. 2.203(b), it will be regarded by EPA as entitled to confidential 
treatment. This subsection does not apply to comments received after 
[Insert effective date of final rule].
     If EPA receives a request for comments submitted by an 
affected business under this section prior to [Insert effective date of 
final rule] which are entitled to confidential treatment, EPA will 
notify the affected business in accordance with Sec. 2.204(e) and 
provide the business with an opportunity to comment. However, 
notwithstanding Sec. 2.203(a)(2), failure to comment will not 
constitute a waiver of the confidentiality claim.
    (2) Under the second alternative approach, EPA could apply the rule 
retroactively. This approach would mean that all CBI substantiations, 
regardless of when they were submitted to EPA, would be treated in 
exactly the same manner as other types of CBI. If the rule were applied 
retroactively and EPA received a FOIA request for an old 
substantiation, the Agency would notify the affected business and 
provide it with an opportunity to submit comments. As described above, 
comments submitted by the affected business could be useful to EPA in 
defending the denial of a FOIA request if it were ever challenged in 
court. If the rule were applied retroactively, failure by the affected 
business to submit comments would constitute a waiver of its 
confidentiality claim.

III. Statutory Authority

    EPA is proposing this rule under the authority of 5 U.S.C. 301, 552 
(as amended), and 553.

IV. Economic Impact

    This proposed rule is not expected to have a significant economic 
impact on the parties affected by EPA's general CBI regulations (40 CFR 
part 2, subpart B). Any additional costs would be associated with 
preparing and submitting comments that explain why a CBI substantiation 
should be confidential. Based on best professional judgment, EPA 
estimates that of the approximately 360 substantiations it receives 
each year that are claimed as confidential, no more than about one-
fourth (i.e., 90) would be requested under FOIA or require final 
confidentiality determinations for other purposes. The total labor cost 
to businesses to submit comments defending the confidentiality of these 
90 CBI substantiations would be approximately $41,798.70 (see below, V. 
Paperwork Reduction Act). No capital costs or operation and maintenance 
costs would be incurred as a result of removing 40 CFR 2.205(c).

V. Paperwork Reduction Act

    The information collection requirements in this proposed rule have 
been submitted for approval to the Office of Management and Budget 
(OMB) under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. An 
Information Collection Request (ICR) document has been prepared by EPA 
(ICR No. 1665.04) and a copy may be obtained from Sandy Farmer by mail 
at Collection Strategies Division, U.S. Environmental Protection Agency 
Mail Code 2822, 1200 Pennsylvania Ave., NW, Washington, DC 20460; by 
email at [email protected]; or by calling (202) 260-2740. A 
copy may also be downloaded from the Internet at http://www.epa.gov/icr.
    This ICR deals with the information collection process that would 
occur under the proposed rule if EPA found it necessary to determine 
the confidentiality of a CBI substantiation received from a submitter 
and claimed as CBI (e.g., in response to a FOIA request or for some 
other purpose). EPA expects that it would need to make final 
confidentiality determinations for only some of the CBI substantiations 
that are claimed as confidential.
    Under the proposed rule, CBI substantiations that are claimed as 
CBI and submitted after the effective date of the final rule would be 
treated in the same manner as any other business information that is 
claimed as CBI. Thus, under 40 CFR 2.205(d), if EPA requests comments 
from a business related to a CBI substantiation submitted after the 
effective date of the proposed rule, and the business fails to furnish 
comments by the specified due date, the business waives its claim to 
confidentiality.
    EPA receives approximately 443 substantiations per year, 360 of 
which are claimed as confidential. Based on best professional judgment, 
the Agency estimates that under the proposed rule, EPA might be 
required to make final confidentiality determinations for about one-
fourth (i.e., 90) of the substantiations that are claimed as 
confidential. In each case, EPA estimates that it would take affected 
businesses approximately 14 hours (2 attorney hrs., 4 manager hrs., 7 
technical hrs., and 1 clerical hr.) at a cost of approximately $464.43 
in labor ($50.00/attorney hr., $33.42/manager hr., $30.66/technical 
hr., and $16.13/clerical hr.) to prepare and submit comments. Affected 
businesses would spend a total of approximately 1,260 hours and 
$41,798.70 in labor costs to submit 90 such substantiations to EPA. No 
capital costs or operation and maintenance costs would be incurred in 
response to this information collection request.
    Burden means the total time, effort, or financial resources 
expended by persons

[[Page 52689]]

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.
    Comments are requested on the Agency's need for this information, 
the accuracy of the provided burden estimates, and any suggested 
methods for minimizing respondent burden, including through the use of 
automated collection techniques. Send comments on the ICR to the 
Director, Collection Strategies Division U.S. Environmental Protection 
Agency, Mail Code 2822, 1200 Pennsylvania Ave., NW, Washington, DC 
20460; and to the Office of Information and Regulatory Affairs, Office 
of Management and Budget, 725 17th St., NW, Washington, DC 20503, 
marked ``Attention: Desk Officer for EPA.'' Include the ICR number (ICR 
No. 1665.04) in any correspondence. Since OMB is required to make a 
decision concerning the ICR between 30 and 60 days after August 30, 
2000, a comment to OMB is best assured of having its full effect if OMB 
receives it by September 29, 2000. The final rule will respond to any 
OMB or public comments on the information collection requirements 
contained in this proposal.

VI. Regulatory Flexibility Act, as Amended

    The Regulatory Flexibility Act, as amended by the Small Business 
Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 601 et seq., 
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. As indicated above, 
EPA expects that under the proposed rule, only a portion of the CBI 
substantiations that are submitted to EPA after the effective date of 
the final rule and marked as confidential would ever be requested under 
FOIA or require a confidentiality determination for some other reason. 
Based on best professional judgment, the Agency expects that about one-
fourth of the substantiations that are claimed as confidential might be 
requested under FOIA; about 90 businesses would be affected (some of 
which might be small) and the total labor costs to these businesses 
would be approximately $41,798.70. No capital costs or operation and 
maintenance costs would be incurred. Therefore, under 5 U.S.C. 605(b), 
I certify that this proposed rule will not have a significant economic 
impact on a substantial number of small entities.

VII. Environmental Impact

    This proposed rule is expected to have no environmental impact. It 
pertains solely to the collection and dissemination of information.

VIII. Executive Order 12866

    Under Executive Order 12866 [48 FR 51735 (October 4, 1993)], EPA 
must determine whether the regulatory action is ``significant'' and 
therefore subject to OMB review and the requirements of the Executive 
Order. The Executive 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.
    EPA has determined that this rule is not a ``significant regulatory 
action'' under the terms of Executive Order 12866 and is therefore not 
subject to interagency review under the Executive Order.

IX. Executive Order 13132 on 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 Section 6 of 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.
    This proposed rule does not have federalism implications. It 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 proposed rule eliminates 
the special treatment of a category of confidential business 
information. Thus, the requirements of section 6 of the Executive Order 
do not apply to this proposed rule.

X. Executive Order 13084 on Consultation 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 OMB, 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

[[Page 52690]]

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.''
    This proposed rule does not significantly or uniquely affect the 
communities of Indian tribal governments. This proposed rule applies to 
businesses, not government entities, submitting comments to 
substantiate CBI claims. Accordingly, the requirements of section 3(b) 
of Executive Order 13084 do not apply to this proposed rule.

XI. Unfunded Mandates Reform Act of 1995

    Under Section 202 of the Unfunded Mandates Reform Act of 1995 
(UMRA), Public Law 104-4, EPA must prepare a budgetary impact statement 
to accompany any general notice of proposed rulemaking or final rule 
that includes a federal mandate which may result in estimated costs to 
State, local, or tribal governments in the aggregate, or to the private 
sector, of $100 million or more. Under Section 205, for any rule 
subject to Section 202, EPA generally must select the least costly, 
most cost-effective, or least burdensome alternative that achieves the 
objectives of the rule and is consistent with statutory requirements. 
Under Section 203, before establishing any regulatory requirements that 
may significantly or uniquely affect small governments, EPA must take 
steps to inform and advise small governments of the requirements and 
enable them to provide input.
    EPA has determined that this proposed rule does not include a 
federal mandate as defined in UMRA. The proposed rule does not include 
a federal mandate that may result in estimated annual costs to State, 
local or tribal governments in the aggregate, or to the private sector, 
of $100 million or more, and does not establish regulatory requirements 
that may significantly or uniquely affect small governments.

XII. Executive Order 13045

    Executive Order 13045, entitled ``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 or safety risk that EPA has reason to believe 
may have a disproportionate effect on children. If the regulatory 
action meets both criteria, EPA must evaluate the environmental health 
or safety effects of the planned rule on children, and explain why the 
planned rule is preferable to other potentially effective and 
reasonably feasible alternatives considered by EPA.
    EPA believes Executive Order 13045 applies only to those regulatory 
actions that are based on health or safety risks, such that the 
analysis required under section 5-501 of the Executive Order has the 
potential to influence the regulation. This proposed rule is not 
subject to Executive Order 13045 because it does not establish an 
environmental standard intended to mitigate health or safety risks.

XIII. 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 EPA 
to provide Congress, through OMB, explanations when EPA decides not to 
use available and applicable voluntary consensus standards.
    This proposed rule does not involve any technical standards, and 
EPA is not considering the use of any voluntary consensus standards. 
EPA welcomes comments and specifically invites the public to identify 
any potentially-applicable voluntary consensus standards and explain 
why such standards should be used in this rule.

List of Subjects in 40 CFR Part 2

    Environmental protection, Administrative practice and procedure, 
Confidential business information, Freedom of information, Government 
employees.

    Dated: August 24, 2000.
Carol M. Browner,
Administrator.
    For the reasons set out above, EPA proposes to amend 40 CFR part 2 
as follows:

PART 2--PUBLIC INFORMATION

    1. The authority citation for part 2 continues to read as follows:

    Authority: 5 U.S.C. 301, 552 (as amended), 553; secs. 114, 205, 
208, 301, and 307, Clean Air Act, as amended (42 U.S.C. 7414, 7525, 
7542, 7601, 7607); secs. 308, 501, and 509(a), Clean Water Act, as 
amended (33 U.S.C. 1318, 1361, 1369(a); sec. 13, Noise Control Act 
of 1972 (42 U.S.C. 4912); secs. 1445 and 1450, Safe Drinking Water 
Act (42 U.S.C. 300j-4, 300j-9); secs. 2002, 3007, and 9005, Solid 
Waste Disposal Act, as amended (42 U.S.C. 6912, 6927, 6995); secs. 
8(c), 11, and 14, Toxic Substances Control Act (15 U.S.C. 2607(c), 
2610, 2613); secs. 10, 12, and 25, Federal Insecticide, Fungicide, 
and Rodenticide Act, as amended (7 U.S.C. 136h, 136j, 136w); sec. 
408(f), Federal Food, Drug and Cosmetic Act, as amended (21 U.S.C. 
346(f); secs. 104(f) and 108, Marine Protection Research and 
Sanctuaries Act of 1972 (33 U.S.C. 1414(f), 1418); secs. 104 and 
115, Comprehensive Environmental Response, Compensation, and 
Liability Act of 1980, as amended (42 U.S.C. 9604 and 9615); sec. 
505, Motor Vehicle Information and Cost Savings Act, as amended (15 
U.S.C. 2005).

    2. Section 2.205 is amended by revising paragraph (c) to read as 
follows:


Sec. 2.205  Final confidentiality determination by EPA legal office.

* * * * *
    (c) Confidential treatment of some comments from business. If 
information submitted to EPA by a business as part of its comments 
under this section prior to [effective date of final rule] pertains to 
the business's claim, is not otherwise possessed by EPA, and is marked 
when received in accordance with Sec. 2.203(b), it will be regarded by 
EPA as entitled to confidential treatment. This paragraph (c) does not 
apply to comments received after [effective date of final rule].
* * * * *
[FR Doc. 00-22158 Filed 8-29-00; 8:45 am]
BILLING CODE 6560-50-P