[Federal Register Volume 69, Number 246 (Thursday, December 23, 2004)]
[Rules and Regulations]
[Pages 76982-77009]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-27905]



[[Page 76981]]

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Part II





Environmental Protection Agency





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40 CFR Part 82



Protection of Stratospheric Ozone: Process for Exempting Critical Uses 
From the Phaseout of Methyl Bromide; Final Rule

  Federal Register / Vol. 69, No. 246 / Thursday, December 23, 2004 / 
Rules and Regulations  

[[Page 76982]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 82

[FRL-7850-8]
RIN 2060-AJ63


Protection of Stratospheric Ozone: Process for Exempting Critical 
Uses From the Phaseout of Methyl Bromide

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: EPA is taking final action to exempt production and import of 
methyl bromide for critical uses from the accelerated phaseout 
regulations that govern the production, import, export, transformation 
and destruction of substances that deplete the ozone layer under the 
authority of the Clean Air Act (CAA). Today's amendments establish the 
framework for an exemption permitted under the Montreal Protocol on 
Substances That Deplete the Ozone Layer (Protocol) and the CAA and 
specify the amount of methyl bromide that may be supplied in 2005 from 
available stocks and new production and consumption to meet approved 
critical uses. In addition, this action establishes the list of 
critical uses approved by EPA for 2005.

DATES: Effective Date: This final rule is effective on January 1, 2005.

ADDRESSES: EPA has established a docket for this action under Docket ID 
No. OAR-2003-0230. All documents in the docket are listed in the 
EDOCKET index at http://www.epa.gov/edocket. Although listed in the 
index, some information is not publicly available, i.e., CBI or other 
information whose disclosure is restricted by statute. Certain other 
material, such as copyrighted material, is not placed on the Internet 
and will be publicly available only in hard copy form. Publicly 
available docket materials are available either electronically in 
EDOCKET or in hard copy at the Air Docket, EPA/DC, EPA West, Room B102, 
1301 Constitution Ave., NW., Washington, DC. This Docket Facility is 
open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding 
legal holidays. The Public Reading Room is open from 8:30 a.m. to 4:30 
p.m., Monday through Friday, excluding legal holidays. The telephone 
number for the Public Reading Room is (202) 566-1744, and the telephone 
number for the Air Docket is (202) 566-1742.

FOR FURTHER INFORMATION CONTACT: Hodayah Finman, U.S. Environmental 
Protection Agency, Office of Air and Radiation, Stratospheric 
Protection Division (6205J), 1200 Pennsylvania Avenue, NW., Washington, 
DC 20460; telephone number: (202) 343-9246; fax numbers: (202) 343-
2338; [email protected]. You may also visit the EPA's Ozone 
Depletion Web site at www.epa.gov/ozone for further information about 
EPA's Stratospheric Ozone Protection regulations, the science of ozone 
layer depletion, and other related topics.

SUPPLEMENTARY INFORMATION: This final rule concerns CAA restrictions on 
the consumption, production and on the use of methyl bromide (class I, 
Group VI controlled substance) for critical uses after the phaseout 
date of January 1, 2005. Under the CAA, methyl bromide consumption and 
production will be phased out on January 1, 2005 apart from allowable 
exemptions, namely the critical use exemption and the existing 
quarantine and pre-shipment exemption. With today's action, EPA is 
establishing a framework for how the critical use exemption will 
operate as well as specific amounts of methyl bromide to be made 
available for approved critical uses in 2005.
    Section 553(d) of the Administrative Procedure Act (APA), 5 U.S.C., 
Chapter 5, generally provides that rules may not take effect earlier 
than 30 days after they are published in the Federal Register. Today's 
final rule is issued under section 307(d) of the CAA, which states: 
``The provisions of section 553 through 557 * * * of Title 5 shall not, 
except as expressly provided in this subsection, apply to actions to 
which this subsection applies.'' CAA Section 307(d)(1). Thus, section 
553(d) of the APA does not apply to this rule. EPA nevertheless is 
acting consistently with the policies underlying APA section 553(d) in 
making this rule effective January 1, 2005. APA section 553(d) provides 
an exception for any action that grants or recognizes an exemption or 
relieves a restriction. Today's final rule grants an exemption from the 
phaseout of production and import of methyl bromide for critical uses. 
Because the complete phaseout takes effect January 1, 2005, EPA is 
making this exemption effective on the same date to ensure the 
availability of methyl bromide for critical uses.

Table of Contents

I. General Information
    A. Does This Action Apply to Me?
II. What Is the Background of the Phaseout Regulations for Ozone 
Depleting Substances?
III. What Is Methyl Bromide?
IV. What Is the Background for Today's Action?
V. What Are the Details of Today's Action?
    A. Critical Need
    1. Should EPA Establish a Critical Use Exemption
    2. Should EPA Further Adjust the Amount of Methyl Bromide Under 
the Critical Use Exemption
    B. Amount From Stocks
    C. Access to Stocks
    D. Cap on Critical Use Methyl Bromide
    E. Critical Use Allowance Allocations
    1. Allocation of Critical Use Allowances
    2. Baseline for Critical Use Allowance Distribution
    3. Frequency of Critical Use Allowance Distribution
    F. Critical Stock Allowance Allocations
    G. Trading Allowances
    H. Acquiring Critical Use Methyl Bromide
    I. Who Is an Approved Critical User
    1. Users and Uses
    2. New Market Entrants
    J. Reporting and Recordkeeping Requirements
    1. Reporting
    2. Recordkeeping
    3. Treatment of Unused Critical Use Methyl Bromide
    K. Enforcement Provisions
    L. Export Provisions
VI. What Are the Other Considerations and Situations on Which EPA 
Received Comments?
    A. Distribution of Permits to Approved Critical Users
    B. Comments on the Burden Associated With This Regulatory System
VII. Statutory and Executive Order Reviews
    A. Executive Order No. 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order No. 13132: Federalism
    F. Executive Order No. 13175: Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order No. 13045: Protection of Children From 
Environmental Health & Safety Risks
    H. Executive Order No. 13211: Actions That Significantly Affect 
Energy Supply, Distribution, or Use
    I. National Technology Transfer Advancement Act
    J. Congressional Review Act

I. General Information

A. Does This Action Apply to Me?

    Entities potentially regulated by this proposed action are those 
associated with the production, import, export, sale, application and 
use of methyl bromide. Potentially regulated categories and entities 
include:

[[Page 76983]]



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             Category                  Examples of regulated entities
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Industry..........................  Producers, Importers and Exporters
                                     of methyl bromide; Applicators,
                                     Distributors of methyl bromide;
                                     Users of methyl bromide, e.g.
                                     farmers of vegetable crops, fruits
                                     and seedlings; and owners of stored
                                     food commodities and structures
                                     such as grain mills and processors,
                                     Government and non-government
                                     researchers.
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    The above table is not intended to be exhaustive, but rather 
provides a guide for readers regarding entities likely to be regulated 
by this proposed action. This table lists the types of entities that 
EPA is aware could potentially be regulated by this proposed action. To 
determine whether your facility, company, business, or organization is 
regulated by this proposed action, you should carefully examine the 
regulations promulgated at 40 CFR Part 82, Subpart A. If you have 
questions regarding the applicability of this action to a particular 
entity, consult the person listed in the preceding FOR FURTHER 
INFORMATION CONTACT Section.

II. What Is the Background of the Phaseout Regulations for Ozone 
Depleting Substances?

    The current regulatory requirements of the Stratospheric Ozone 
Protection Program that limit production and consumption of ozone 
depleting substances can be found at 40 CFR Part 82 Subpart A. The 
regulatory program was originally published in the Federal Register on 
August 12, 1988 (53 FR 30566), in response to the 1987 signing and 
subsequent ratification of the Montreal Protocol on Substances that 
Deplete the Ozone Layer (Protocol). The U.S. was one of the original 
signatories to the 1987 Montreal Protocol and the U.S. ratified the 
Protocol on April 21, 1988. Congress then enacted, and President Bush 
signed into law, the Clean Air Act Amendments of 1990 (CAAA of 1990) 
which included Title VI on Stratospheric Ozone Protection, codified as 
42 U.S.C. Chapter 85, Subchapter VI, to ensure that the United States 
could satisfy its obligations under the Protocol. EPA issued new 
regulations to implement this legislation and has made several 
amendments to the regulations since that time.

III. What Is Methyl Bromide?

    Methyl bromide is an odorless, colorless, toxic gas, which is used 
as a broad-spectrum pesticide and is controlled under the CAA as a 
Class I ozone depleting substance (ODS). Methyl bromide is used in the 
U.S. and throughout the world as a fumigant to control a wide variety 
of pests such as insects, weeds, rodents, pathogens, and nematodes. 
Additional characteristics and details about the uses of methyl bromide 
can be found in the proposed rule on the phaseout schedule for methyl 
bromide published in the Federal Register on March 18, 1993 (58 FR 
15014) and the final rule published in the Federal Register on December 
10, 1993 (58 FR 65018). The phaseout schedule for methyl bromide was 
revised in a direct final rulemaking on November 28, 2000 (65 FR 70795) 
which allowed for the phased reduction in methyl bromide consumption 
and extended the phaseout to 2005. The revised phaseout schedule was 
again amended to allow for an exemption for quarantine and preshipment 
purposes on July 19, 2001 (66 FR 37751) with an interim final rule and 
with a final rule (68 FR 238) on January 2, 2003. Information on methyl 
bromide can be found at the following sites of the World Wide Web: 
http://www.epa.gov/ozone/mbr and www.unep.org/ozone or by contacting 
the Stratospheric Ozone Hotline at 1-800-296-1996.
    Because it is a pesticide, methyl bromide is also regulated by EPA 
under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) 
and other statutes and regulatory authority and by States under their 
own statutes and regulatory authority. Under FIFRA, methyl bromide is a 
restricted use pesticide. Because of this status, a restricted use 
pesticide is subject to certain Federal and State requirements 
governing its sale, distribution, and use. Nothing in this final rule 
implementing the Clear Air Act is intended to derogate from provisions 
in any other Federal, State, or Local laws or regulations governing 
actions including, but not limited to, the sale, distribution, 
transfer, and use of methyl bromide. All entities that would be 
affected by provisions of this final rule must continue to comply with 
FIFRA and other pertinent statutory and regulatory requirements for 
pesticides (including, but not limited to, requirements pertaining to 
restricted use pesticides) when importing, exporting, acquiring, 
selling, distributing, transferring, or using methyl bromide for 
critical uses. The regulations in today's action are intended only to 
implement CAA restrictions on the production, consumption and use of 
methyl bromide for critical uses exempted from the phaseout of methyl 
bromide.

IV. What Is the Background for Today's Action?

    EPA published a proposed rule in the Federal Register on August 25, 
2004 (69 FR 52366) proposing an exemption to the phaseout of methyl 
bromide for critical uses, an allowance allocation system for critical 
use methyl bromide, and a list of approved critical uses. EPA received 
15,231 on-time comments related to Air Docket OAR-2003-0230 and 6 
people spoke at a hearing EPA held on September 20, 2004 in Washington 
D.C. that was attended by 20 individuals.
    Methyl bromide was added to the Protocol as an ozone depleting 
substance in 1992 through the Copenhagen Amendment to the Protocol. The 
Parties agreed that each industrialized country's level of methyl 
bromide production and consumption in 1991 should be the baseline for 
establishing a freeze in the level of methyl bromide production and 
consumption for industrialized countries. EPA published a final rule in 
the Federal Register on December 10, 1993 (58 FR 65018), listing methyl 
bromide as a class I, Group VI controlled substance, freezing U.S. 
production and consumption at this 1991 level, and, in Section 82.7 of 
the rule, setting forth the percentage of baseline allowances for 
methyl bromide granted to companies in each control period (each 
calendar year) until the year 2001, when the complete phaseout would 
occur (58 FR 65018). This phaseout date was established in response to 
a petition filed in 1991 under sections 602(c)(3) and 606(b) of the 
CAAA of 1990, requesting that EPA list methyl bromide as a class I 
substance and phase out its production and consumption. This date was 
consistent with Section 602(d) of the CAAA of 1990, which for newly 
listed class I ozone-depleting substances provides that ``no extension 
[of the phaseout schedule in section 604] under this subsection may 
extend the date for termination of production of any class I substance 
to a date more than 7 years after January 1 of the year after the year 
in which the substance is added to the list of class I substances.'' 
EPA based its action on scientific assessments and actions by the 
Parties to the Montreal Protocol to freeze the level of methyl bromide 
production and consumption for industrialized countries at the 1992 
Meeting of the Parties in Copenhagen.
    At their 1995 meeting, the Parties made adjustments to the methyl 
bromide control measures and agreed to reduction steps and a 2010 
phaseout date for industrialized countries with

[[Page 76984]]

exemptions permitted for critical uses. At this time, the U.S. 
continued to have a 2001 phaseout date in accordance with the CAAA of 
1990 language. At their 1997 meeting, the Parties agreed to further 
adjustments to the phaseout schedule for methyl bromide in 
industrialized countries, with reduction steps leading to a 2005 
phaseout for industrialized countries. In October 1998, the U.S. 
Congress amended the CAA to prohibit the termination of production of 
methyl bromide prior to January 1, 2005, to require EPA to bring the 
U.S. phaseout of methyl bromide in line with the schedule specified 
under the Protocol, and to authorize EPA to provide exemptions for 
critical uses. These amendments were contained in Section 764 of the 
1999 Omnibus Consolidated and Emergency Supplemental Appropriations Act 
(Pub. L. 105-277, October 21, 1998) and were codified in Section 604 of 
the CAA, 42 U.S.C. 7671c. On November 28, 2000, EPA issued regulations 
to amend the phaseout schedule for methyl bromide and extend the 
complete phaseout of production and consumption to 2005 (65 FR 70795).
    Today, in accordance with the 1998 amendments to the CAA, EPA is 
further amending 40 CFR Part 82 to implement an exemption to the 2005 
phaseout of methyl bromide that allows continued production and 
consumption of methyl bromide for critical uses. Section 604(d)(6) of 
the CAA provides that ``[t]o the extent consistent with the Montreal 
Protocol, the Administrator, after notice and the opportunity for 
public comment, and after consultation with other departments or 
instrumentalities of the Federal Government having regulatory authority 
related to methyl bromide, including the Secretary of Agriculture, may 
exempt the production, importation, and consumption of methyl bromide 
for critical uses.'' 42 U.S.C. 7671c(d)(6). Article 2H(5) of the 
Montreal Protocol provides that the 2005 methyl bromide phaseout shall 
not apply ``to the extent the Parties decide to permit the level of 
production or consumption that is necessary to satisfy uses agreed by 
them to be critical uses.''
    Both Section 604(d)(6) and Section 614(b) of the CAA address the 
relationship between the Montreal Protocol and actions taken under the 
CAA's stratospheric ozone provisions. Section 604(d)(6) addresses 
critical uses specifically, while Section 614(b) is more general in 
scope. Section 604(d)(6) states that ``to the extent consistent with 
the Montreal Protocol,'' the Administrator may exempt methyl bromide 
for critical uses. Section 614(b) states: ``This title as added by the 
Clean Air Act Amendments of 1990 shall be construed, interpreted, and 
applied as a supplement to the terms and conditions of the Montreal 
Protocol, as provided in Article 2, paragraph 11 thereof, and shall not 
be construed, interpreted, or applied to abrogate the responsibilities 
or obligations of the United States to implement fully the provisions 
of the Montreal Protocol. In the case of conflict between any provision 
of this title and any provision of the Montreal Protocol, the more 
stringent provision shall govern.''
    EPA must take into account not only the text of Article 2H but also 
the related Decisions of the Protocol Parties that interpret that text. 
Under customary international law, as codified in the 1969 Vienna 
Convention on the Law of Treaties (8 International Legal Materials 679 
(1969)) both the treaty text and the practice of the parties in 
interpreting that text form the basis for its interpretation. Although 
the United States is not a party to the 1969 Convention, the United 
States has regarded it since 1971 as ``the authoritative guide to 
current treaty law and practice.'' See Secretary of State William D. 
Rodgers to President Richard Nixon, October 18, 1971, 92d Cong., 1st 
Sess., Exec. L (Nov. 22, 1971). Specifically, Article 31(1) of the 
Vienna Convention provides that ``[a] treaty shall be interpreted in 
good faith in accordance with the ordinary meaning to be given to the 
terms of the treaty in their context and in light of its object and 
purpose.''
    Article 31(3) goes on to provide that ``[t]here shall be taken into 
account, together with the context: (a) Any subsequent agreement 
between the parties regarding the interpretation of the treaty or the 
application of its provisions.'' In the current circumstances, 
Decisions of the Parties can be construed as subsequent consensus 
agreements among the Parties to the Montreal Protocol, including the 
United States, regarding the interpretation and application of the 
Protocol.
    In accordance with Article 2H(5), the Parties have issued several 
Decisions pertaining to the critical use exemption. At their Ninth 
Meeting in 1997, the Parties issued Decision IX/6 which established 
criteria applicable to the critical use exemption. In paragraph 1 of 
Decision IX/6, the Parties agreed as follows:
    (a) That a use of methyl bromide should qualify as ``critical'' 
only if the nominating Party determines that:
    (i) The specific use is critical because the lack of availability 
of methyl bromide for that use would result in a significant market 
disruption; and
    (ii) There are no technically and economically feasible 
alternatives or substitutes available to the user that are acceptable 
from the standpoint of environment and health and are suitable to the 
crops and circumstances of the nomination;
    (b) That production and consumption, if any, of methyl bromide for 
critical uses should be permitted only if:

    (i) All technically and economically feasible steps have been 
taken to minimize the critical use and any associated emission of 
methyl bromide;
    (ii) Methyl bromide is not available in sufficient quantity and 
quality from existing stocks of banked or recycled methyl bromide, 
also bearing in mind the developing countries' need for methyl 
bromide;
    (iii) It is demonstrated that an appropriate effort is being 
made to evaluate, commercialize and secure national regulatory 
approval of alternatives and substitutes, taking into account the 
circumstances of the nomination * * * Non-Article V [Developed 
country] parties must demonstrate that research programmes are in 
place to develop and deploy alternatives and substitutes * * *.

    The Parties also agreed in Decision IX/6 that the technical panel 
(discussed below) that reviews nominations and makes recommendations to 
the Parties regarding approval of critical use exemptions, would base 
its review and recommendations on the criteria in paragraphs (a)(ii) 
and (b). The criterion in paragraph (a)(i) was not subject to review by 
this technical panel.
    At the First Extraordinary Meeting of the Parties in March of 2004, 
the Parties issued several decisions that address the agreed critical 
uses, the allowable levels of new production and consumption for 
critical uses, the conditions for granting critical use exemptions, and 
reporting obligations. Decision Ex. I/3 covers the agreed critical uses 
and allowable levels of new production and consumption for the year 
2005. This Decision includes the following terms:
    1. For the agreed critical uses set forth in annex II A to the 
report of the First Extraordinary Meeting of the Parties to the 
Montreal Protocol for each Party, to permit, subject to the conditions 
set forth in decision Ex. I/4, the levels of production and consumption 
set forth in annex II B to the present report which are necessary to 
satisfy critical uses, with the understanding that additional levels 
and categories of uses may be approved by the Sixteenth Meeting of the 
Parties in accordance with decision IX/6;
    2. That a Party with a critical-use exemption level in excess of 
permitted levels of production and consumption

[[Page 76985]]

for critical uses is to make up any such difference between those 
levels by using quantities of methyl bromide from stocks that the Party 
has recognized to be available;
    3. That a Party using stocks under paragraph 2 above shall prohibit 
the use of stocks in the categories set forth in annex II A to the 
report of the First Extraordinary Meeting of the Parties to the 
Montreal Protocol when amounts from stocks combined with allowable 
production and consumption for critical uses exceed the total level for 
that Party set forth in annex II A to the present report;
    4. That Parties should endeavor to allocate the quantities of 
methyl bromide recommended by the Technology and Economic Assessment 
Panel as listed in annex II A to the report of the First Extraordinary 
Meeting of the Parties;
    5. That each Party which has an agreed critical use should ensure 
that the criteria in paragraph 1 of decision IX/6 are applied when 
licensing, permitting or authorizing the use of methyl bromide and that 
such procedures take into account available stocks. Each Party is 
requested to report on the implementation of the present paragraph to 
the Ozone Secretariat.
    The agreed critical uses and allowable levels of production and 
consumption are set forth in annexes to the Parties' report. Decision 
Ex I/4 addresses the conditions for granting and reporting critical-use 
exemption for methyl bromide.
    Decisions IX/6, Ex. I/3, and Ex. I/4 are subsequent consensus 
agreements of the Parties that address the interpretation and 
application of the critical use provision in Article 2H(5) of the 
Protocol. For example, Decision Ex. I/3 reflects a decision called for 
by the text of Article 2H(5) where the parties are directed to ``decide 
to permit the level of production or consumption that is necessary to 
satisfy uses agreed by them to be critical uses.'' EPA intends to 
follow the terms of Decisions IX/6, Ex. I/3, and Ex. I/4. This will 
ensure consistency with the Montreal Protocol and satisfy the 
requirements of Section 604(d)(6) and Section 614(b) of the CAA.

V. What Are the Details of Today's Action?

A. Critical Need

1. Should EPA Establish a Critical Use Exemption?
    With today's final action, EPA is establishing the critical use 
exemption (CUE) by amending 40 CFR Part 82 to exempt production and 
import of methyl bromide from the January 1, 2005 phaseout to meet the 
needs of users who do not have technically and economically feasible 
alternatives available to them. In today's rulemaking, EPA is 
describing the framework for the critical use exemption, assigning 
allowances for critical use methyl bromide, and determining the 
quantities of exempted methyl bromide allowable under the Clean Air Act 
(CAA) and the Montreal Protocol.
    EPA received 15,176 on time comments requesting the Agency not to 
exempt any methyl bromide for critical uses. The CAA allows the Agency 
to create an exemption for critical uses to the extent consistent with 
the Protocol. The Protocol authorizes an exemption to the extent 
decided by the Parties. In Decision Ex. I/3, the Parties decided to 
permit a limited exemption for specified uses nominated by the United 
States. EPA, in conjunction with other U.S. government entities, spent 
substantial time reviewing applications for critical use exemptions and 
preparing a nomination based on the lack of technically and 
economically feasible alternatives for the nominated uses. As discussed 
below, EPA does not have new information that would change the basis 
for the nomination. Although the Act does not require EPA to establish 
an exemption, EPA believes that the lack of suitable alternatives for 
the uses listed as approved critical uses in today's rulemaking 
warrants the establishment of an exemption.
    The history of the ozone protection programs has been the 
transition of industries away from production, import, and use of ozone 
depleting chemicals to alternatives. In some instances a successful 
transition was possible within the allotted time. In other instances, 
additional time has been required to allow for the development and 
market penetration of alternatives. In fact, more than ten years after 
the phaseout of chloroflurocarbons (CFCs), the U.S. government is still 
exempting the production of CFCs for essential uses in metered dose 
inhalers. In the instance of critical uses where suitable alternatives 
are not yet available for all uses, EPA believes it would be 
inconsistent with the history and the goals of the ozone protection 
program to not allow for a safety valve in accordance with the 
provisions of both international and domestic law.
2. Should EPA Further Adjust the Amount of Methyl Bromide Available 
Under the Critical Use Exemption?
    Similar to CFCs which were used in varied applications, methyl 
bromide is a highly effective general biocide and is used in a wide 
variety of distinctly different pest control operations. Some of the 
effective treatments which are available as alternatives to methyl 
bromide work in certain niche applications or under specific 
conditions. There is no ``drop in'' replacement for all of the current 
uses of methyl bromide. The registration of alternatives continues to 
be a priority for the Agency.
    EPA conducted a thorough analysis on the technical and economic 
feasibility of available alternatives specified by the Methyl Bromide 
Technical Options Committee (MBTOC) for each critical use and the 
potential for significant market disruption in the event that methyl 
bromide were not available for a particular use. The analysis, in the 
form of the U.S. nomination of critical uses and answers to clarifying 
questions on those documents, is available in the docket OAR-2003-0230. 
A memorandum describing the review process, titled ``Memorandum: 2003 
Nomination Process'' is also available in the docket. In the notice of 
proposed rulemaking, EPA solicited comments on the technical and 
economic assessment conducted on the alternatives to methyl bromide.
    EPA received 14 comments on the technical and economic assessment 
of alternatives to methyl bromide. These comments did not provide the 
Agency with any new information for EPA's consideration on the efficacy 
and cost of alternatives. Therefore, EPA is not further adjusting the 
amount of methyl bromide available under the critical use exemption.
    One commenter stated that their products, 1,3-dichloropropene (1,3-
D) and sulfuryl flouride (SF), can displace a significant portion of 
the critical use market, 40% of the authorized amount, but they 
recognize that from a practical transition perspective, such reductions 
will not easily happen in the next year. The commenter provided a table 
indicating that these two products could be technical and economical 
substitutes in every critical use category for which their products are 
registered.
    In the U.S. nomination, the EPA took great pains to describe the 
specific circumstances that make 1,3-D, which may be otherwise 
technically and economically feasible, not feasible for a certain 
portion of total domestic use. The EPA determined that 1,3-D products 
can be used in a variety of circumstances but there are some factors, 
such as regulatory limits on the use of 1,3-D or the presence of heavy 
nutsedge weed populations that would

[[Page 76986]]

make the 1,3-D products not technically and economically feasible. EPA, 
in consultation with the U.S. Department of Agriculture (USDA), has 
determined that over the portion of the crop there may be technical 
limitations to the use of 1,3-D treatments or economic losses 
associated with the use of this fumigant.
    The commenter specifically pointed to comments made in the 2004 
Methyl Bromide Technical Options Committee (MBTOC) report where the 
committee indicated that there are technically feasible herbicides 
available to control nutsedge, specifically halosulfuron for peppers 
and halosulfuron and triflxysulfuron for tomatoes, that can be used in 
combination with 1,3-D products to provide complete spectrum pest 
control. As described in the nomination, both of these herbicides have 
been recently registered and can provide effective control of nutsedge 
populations, however certain regulatory restrictions exist on the use 
of these products causing them to be not technically available within 
current cropping systems for the exempted portion of production. For 
example, both products have plant back restrictions which limit the 
ability of growers to plant a second crop. Almost without exception, 
U.S. pepper and tomato farmers plant more than one crop on the same 
acreage. The U.S. nominations additionally analyzed the feasibility of 
using 1,3-D products without the herbicides and finds that the 
treatment is not economically feasible. For example, a typical tomato 
farm in the southeastern U.S. would experience approximately $5,700 in 
losses per acre using 1,3-D products compared to using methyl bromide 
due to losses in product yield and quality.
    The commenter indicated the use of alternatives, specifically an 
emulsified formulation of chloropicrin (Pic EC) and metham sodium in 
combination with chloropicrin, is technically feasible for strawberry 
production in California according to the 2004 MBTOC report. Again, the 
U.S. nomination describes the limitations of these alternatives for the 
specific circumstance of the nominated acreage. For example, 15% of the 
nominated area is located on hilly terrain that makes the use of drip 
applied fumigants a technically infeasible alternative. Furthermore, 
chloropicrin is not a full spectrum fumigant. Chloropicrin provides 
good control of disease but the nomination clearly states that the 
nominated area additionally has nematode and weed pressures as well. 
The commenter did not provide a copy of a study documenting comparable 
pest control and yields using Pic EC for areas with nematode, weed, and 
disease pressures. Further, metham sodium used with chloropicrin is not 
economically feasible according to the nomination. EPA, in consultation 
with USDA, has determined that yield differences could result in 24% 
decline in gross revenues on average compared to methyl bromide.
    Six of the 14 comments indicted above that the Agency should reduce 
the amounts the methyl bromide exempted from the phaseout to allow for 
the uptake of a newly registered alternative, sulfuryl fluoride, for 
mills and grains. Sulfuryl fluoride (SF) was registered by EPA for use 
on grains and flour mills on January 23, 2004 under the trade name 
Profume. The SF fumigant has been available in the U.S. since 1961 
under the trade name Vikane for non food uses such as structural 
termite fumigation. The registrant, Dow Agrochemicals, is pursuing 
registration of Profume for use on dried fruit and tree nuts and non-
specific food handling and storage.
    The U.S. originally nominated 536,328 kilograms (kg) of methyl 
bromide for critical uses in mills and processors for the year 2005. As 
described in the notice of proposed rulemaking, this nomination was 
reduced by the Parties to 483,000 kgs to account for the market uptake 
of alternatives including sulfuryl fluoride and to account for more 
efficient methyl bromide fumigation practices. This reduction is a 10% 
reduction from the originally nominated amount. The 2004 MBTOC report 
on recommended exemptions for next year (2006) states that a further 
10% reduction for flour mills could be warranted to allow for the 
adoption of a number of alternatives, of which sulfuryl fluoride is 
one, and more efficient methyl bromide fumigation techniques. Since the 
2005 exemption had already been reduced by 10% for sulfuryl fluoride 
and that 10% seems to be a reasonable technical adoption rate according 
to the MBTOC as quoted by the commenter. EPA does not believe further 
reductions for 2005 can be justified at this time given the lack of 
specific technical and economic feasibility data provided to the Agency 
on Profume and given the lack of specific market penetration data 
provided by the commenter to substantiate assertions for a larger 
market penetration.
    EPA understands that Profume can be effective in controlling 
insects, although higher rates of the chemical are required to control 
insect eggs. As this is a newly registered compound, EPA does not have 
sufficient data at this time to conduct a technical and economic 
analysis to determine if further reductions are warranted. One key 
uncertainty regarding the market penetration and economic feasibility 
of Profume is the cost of the product on a per pound basis and the cost 
of a typical fumigation. The Agency anticipates that as trial 
fumigations or commercial fumigations take place, that the registrant 
will be able to compile technical and economic data to EPA for use in 
the development of future critical use nominations.
    In addition to the technical and economic data required to conduct 
a critical use assessment, as noted by the Technology and Economic 
Assessment Panel (TEAP), a scientific panel that advises the Parties to 
the Montreal Protocol, a specific alternative may take up to 5 
fumigation cycles of use before efficacy can be determined in the 
specific circumstances of the user. This would mean that several repeat 
fumigations would be needed before determining the technical 
feasibility of an alternative. An additional limitation to SF uptake at 
this time is that many mills in the U.S. produce partial recipe 
products that contain ingredients such as sugar or baking soda. The 
registration of SF does not include tolerances for these ingredients 
thus limiting the use of this alternative for a certain portion of the 
sector. Finally SF is not registered in California and therefore can 
not be used by mills in that state.

B. Amount From Stocks

    EPA is allowing up to 1,283,214 kilograms of methyl bromide from 
inventories stockpiled before the phaseout date of January 1, 2005 to 
be sold for approved critical uses. In evaluating the issue of the 
amount of the critical use level for 2005 that should be met from 
stocks, EPA considered comments received and the following statements 
in Decision Ex. I/3. Decision Ex I/3(1) permits a level of production 
and consumption equal to 30% of the 1991 baseline and establishes an 
agreed critical use level equal to 35% of the 1991 baseline. With 
regard to drawdown from existing inventory, Decision Ex. I/3(2) states: 
``That a Party with a critical-use exemption level in excess of 
permitted levels of production and consumption for critical uses is to 
make up any such difference between those levels by using quantities of 
methyl bromide from stocks that the Party has recognized to be 
available.'' The availability of stocks is also addressed in Decision 
Ex. I/3(5), which states: ``That each Party which has an agreed 
critical use should ensure that the criteria in paragraph 1 of decision 
IX/6 are applied when licensing, permitting

[[Page 76987]]

or authorizing the use of methyl bromide and that such procedures take 
into account available stocks.
    In acting in accordance with Decision Ex. I/3, EPA looks to 
Paragraph (3) of that Decision, which states that a Party ``shall 
prohibit'' the use of stocks when the usage of stocks combined with 
production and consumption exceeds the total level of critical uses 
agreed to by the Parties, and to Paragraph (2) of that Decision, which 
states that a Party with a use exemption exceeding allowable production 
and consumption ``is to make up'' any such difference by using stocks 
recognized to be available. Additionally, Paragraph (5) of Decision Ex. 
I/3 states that Parties should ensure that Decision IX/6's criteria are 
applied, and Decision IX/6 states that production and consumption 
should not be permitted where stocks are recognized to be available.
    Taking into account the language of Decision Ex. I/3's first three 
Paragraphs, and the fact that the fifth Paragraph is hortatory, EPA 
concludes that the appropriate level of stocks utilization is set forth 
in Decision Ex. I/3(1), which establishes a critical use level of 35% 
but permits production and consumption of 30%. Paragraph (1) of 
Decision Ex. I/3, read in conjunction with paragraph (2) of the same 
Decision, specifies the amount of the critical use level for 2005 that 
should be met from stocks. Paragraph (1) establishes a critical use 
level of 35% of baseline but permits production and consumption of 30%. 
Paragraph (2) explains that the difference is to made up by using 
available stocks. Therefore, the amount of the United States' 2005 
critical use level that should be met from stocks is 1,283,214 
kilograms, i.e., an amount equivalent to 5% of baseline.
    EPA's conclusion is consistent with Paragraph (5) of Decision Ex. 
I/3. That Paragraph requests each Party with an agreed critical use to 
take into account available stocks when authorizing the use of methyl 
bromide. Given the language in Paragraphs (1) and (2) of Decision Ex. 
I/3, EPA interprets Paragraph (5)'s language as meaning that the U.S. 
should not authorize critical use exemptions without including 
provisions addressing drawdown from stocks for critical uses. EPA is 
acting consistently with Paragraph (5) by establishing requirements 
governing the sale of pre-phaseout inventories for approved critical 
uses. In section V.F of today's rulemaking, EPA describes the mechanism 
by which the Agency is allowing stocks of methyl bromide to be sold for 
approved critical uses. In addition, EPA is taking into account stocks 
through the trading provisions outlined in section V. G of today's 
rulemaking, which allow critical use allowances to be converted into 
critical stock allowances.
    EPA had proposed to undertake an independent analysis of the amount 
to come from stocks and to adjust the authorized level of new 
production and consumption for critical uses by the amount of 
``available'' stocks determined through this analysis. The methodology 
proposed for this analysis was elaborated in the NPRM and also in a 
Technical Support Document that can be obtained from the rulemaking 
docket.
    EPA also sought comment on an alternative approach: ``For the 2005 
calendar year, the Agency could make a determination that the amount of 
methyl bromide available from existing stocks is simply based on the 
difference between the limit on methyl bromide for critical uses (8,942 
metric tons) and the limit on new production and import (7,659 metric 
tons) in the Decision Ex. I/3.'' 69 FR 52375. This is essentially the 
approach adopted in today's final rule. EPA is clarifying, however, 
that the appropriate level of stock drawdown for critical uses in 2005 
is set out in Decision Ex. I/3.
    EPA received 10 comments on the independent assessment approach 
proposed in the NPRM for determining available stocks: five comments in 
favor of this approach and nine comments suggesting further refinements 
to the methodology. However, since EPA is not using the methodology to 
determine available stocks for the 2005 control period, the Agency is 
not responding to the details of the comments in today's rulemaking.
    One commenter stated that EPA should use a ``mathematical'' 
approach, under which the amount from stocks would equal the difference 
between the limit on methyl bromide for critical uses and the limit on 
new production and import. EPA believes that the approach adopted in 
this final rule is consistent with this commenter's recommendation.
    Two commenters stated that all stocks must be used before any new 
production is permitted and that all stocks other than those for export 
to developing countries should be considered ``available'' for critical 
uses. One commenter refers to Decision IX/6, paragraph (1)(b), in which 
the Parties agreed: ``That production and consumption, if any, of 
methyl bromide for critical uses should be permitted only if: * * * 
(ii) Methyl bromide is not available in sufficient quantity and quality 
from existing stocks of banked or recycled methyl bromide, also bearing 
in mind the developing countries' need for methyl bromide.'' EPA does 
not believe that this is an accurate characterization of Decision IX/6 
as it relates to Decision Ex. I/3. Paragraph 2 of Decision Ex. I/3 
states that a Party ``is to make up'' the difference between an agreed 
use level and production and consumption ``from stocks that the Party 
has recognized to be available.'' Moreover, Decision IX/6 asks Parties 
to permit production and consumption where ``methyl bromide is not 
available in sufficient quantity and quality from existing stocks of 
banked and recycled methyl bromide, also bearing in mind the developing 
countries' need for methyl bromide.'' Both of these statements 
contemplate the possibility that available stocks could be less than 
existing stocks. Moreover, the United States and other countries have 
interpreted identical decisional language in the essential use 
exemption context not to require the use of all existing stocks, and 
Decision Ex. I/3's consideration of stocks is consistent with this 
interpretation. In addition, EPA disagrees with the commenter's 
assumption that all stocks that are not specifically designated for 
export to developing countries are available for critical uses. For 
example, there may be stocks in the U.S. produced specifically for 
quarantine and pre-shipment uses or stocks held on behalf of another 
entity for a non-critical use during their transition to alternatives. 
In addition, the U.S. is a global supplier of methyl bromide and 
existing inventories may be tagged for critical uses in other developed 
countries.

C. Access to Stocks

    In the proposed rule, EPA described several different approaches to 
controlling access to stocks of methyl bromide produced or imported 
before the phaseout date of January 1, 2005. EPA proposed a limit on 
the sale of stocks to approved critical users. In addition, EPA 
proposed to prohibit sale of stocks to end users in nominated sectors 
who lacked the limiting critical conditions that make methyl bromide 
use critical for the categories listed in Decision Ex. I/3. EPA sought 
comment on whether to apply use restrictions to other groups. The 
Agency recognizes that a person who qualifies as an approved critical 
user may have both approved critical uses and other uses. Further, the 
Agency also recognizes the possibility that an approved critical user 
could grow two distinct crops or fumigate two distinct commodities in 
the same field or structure during a single control period. In today's 
rule, EPA is restricting access to stocks for approved critical uses. 
Approved

[[Page 76988]]

critical uses are listed in Appendix L to 40 CFR Part 82, Subpart A.
    The total amount of pre-phaseout inventory that may be sold as 
critical use methyl bromide is equivalent to 5% of the 1991 baseline. 
As discussed below, this rule creates critical stock allowances (CSAs) 
in this amount. For each kilogram of methyl bromide sold from pre-
phaseout inventories as critical use methyl bromide, a CSA holder must 
expend one CSA.
    In finalizing the provisions on access to stocks, EPA considered 
comments received and the language of Decision Ex I/3(3), which states: 
``That a Party using stocks under paragraph 2 above shall prohibit the 
use of stocks in the categories set forth in annex II A to the report 
of the First Extraordinary Meeting of the Parties to the Montreal 
Protocol when amounts from stocks combined with allowable production 
and consumption for critical uses exceed the total level for that Party 
set forth in annex II A to the present report.''
    EPA received four comments supporting unlimited access to stocks 
for approved critical uses and 24 additional comments supporting 
unlimited access to stocks for all uses. EPA also received 1 comment 
stating that there is no legal basis for allowing use of stocks by 
users that did not apply for or did not qualify for critical use 
status, and no basis for the Agency's supposition that some users did 
not apply for CUE status because they were counting on use of stocks.
    EPA reads Decision Ex I/3(3) as requiring limitations on the use of 
stocks only with respect to uses agreed by the Parties to be critical. 
Annex II A to the report of the First Extraordinary Meeting is titled 
``Agreed critical-use categories.'' Paragraph (1) of Decision Ex. I/3 
permits limited production and consumption ``[f]or the agreed critical 
uses set forth in annex II A.'' Because paragraph (3) of Decision Ex I/
3 also refers to Annex II A, EPA concludes that the burden of the stock 
restriction is coextensive with the benefit of the new production and 
import. EPA does not believe that Decision Ex I/3(3) can be read to 
allow unlimited access to stocks for approved critical uses because the 
prohibition is directly linked to ``the categories set forth in annex 
II A,'' which are the categories of critical uses agreed to by the 
Parties. Nor can the Decision be read to allow unlimited access to 
stocks for all uses: that would fail to give any effect to the phrase 
``shall prohibit the use of stocks.'' EPA disagrees with the comment 
that there is no legal basis for allowing use of stocks by users that 
did not apply for or did not qualify for critical use status. Decision 
Ex I/3(3) does not require that individual Parties prohibit use of 
stocks by users whose uses fall outside the categories of agreed 
critical uses. Nothing in the Protocol or the CAA mandates that EPA 
limit drawdown from stocks for such uses. In anticipating that some 
users did not apply for CUE status because they were counting on use of 
stocks, the Agency did not assume that any user had special knowledge 
of the total amount of stocks available but rather that an individual 
user might have confirmed with its supplier that enough methyl bromide 
would be available from that supplier's inventory to meet the 
individual user's limited transitional needs. For example, some onion 
growers in the southeastern U.S. informed EPA in their comments on the 
rulemaking they did not apply for an exemption because they intend to 
avail themselves of existing stocks.
    Nine commenters stated that EPA does not have legal authority to 
restrict the use of methyl bromide stocks. These commenters argue that 
no provision of the CAA authorizes EPA to impose such restrictions. 
Specifically, they state that section 604(d)(6) refers only to 
production, importation, and consumption, and that by addressing use in 
other sections of the CAA, Congress demonstrated its intent to deny EPA 
authority to regulate stocks under 604(d)(6). However, section 
604(d)(6) directly relates to use: the exempted production, importation 
and consumption is for critical ``uses.'' While Congress, in the CAA, 
generally mandated that production and consumption of ozone-depleting 
substances be phased out across the board, regardless of use, the Act 
does contain certain provisions, including section 604(d)(6), that 
authorize EPA to provide exceptions on the basis of use. Thus, section 
604(d)(6) is one of the provisions of the CAA where use is clearly at 
issue.
    In today's final rule, EPA is imposing narrowly tailored use 
restrictions as a condition of obtaining new production and import. EPA 
believes that section 604(d)(6) mandates this result. In section 
604(d)(6), Congress provided EPA authority to exempt production and 
import of methyl bromide for critical uses, but only ``to the extent 
consistent with the Protocol.'' The use restrictions in today's final 
rule are necessary to ensure that total usage for critical uses does 
not exceed the limit agreed to by the Parties in implementing the 
critical use provision in Article 2H of the Protocol. The relationship 
between sections 604(d)(6) and 614(b) of the CAA and the Protocol and 
its Decisions is discussed in detail in the NPRM and in the background 
section of this preamble.
    The commenters further argue that EPA cannot rely on Decision Ex I/
3 to justify restrictions on use of stocks. They state that while 
Decisions may be used to interpret existing requirements in the 
Protocol, they cannot be used to substantively change those 
requirements. However, EPA is not suggesting that Decision Ex I/3 
substantively changed the requirements of Article 2H. Article 2H 
establishes a prohibition on the production and consumption of methyl 
bromide, but states that the prohibition shall not apply ``to the 
extent the Parties decide to permit the level of production and 
consumption that is necessary to satisfy uses agreed by them to be 
critical uses.'' The Parties have not interpreted Article 2H in the 
manner the commenters assert. Instead, they understood the language 
referring to ``uses agreed by them to be critical uses'' to allow the 
Parties to tie the determinations of production and consumption to use. 
Under international law, this interpretation and practice of the 
Parties may, in the current situation, be read to be an accurate 
interpretation of Article 2H's language. Although Decision Ex. I/3 
focuses on regulating production and consumption, the Parties could 
reasonably set related conditions on agreeing to production and 
consumption at a particular level. Therefore, the stock restrictions 
are an integral part of the Parties' decision regarding the level of 
production and consumption necessary to satisfy critical uses.
    The commenters further characterize the restrictions on access to 
stocks proposed in the NPRM as ``an attempt by the Agency to bypass the 
Treaty Clause of the U.S. Constitution by unilaterally amending the 
Montreal Protocol through a rulemaking, without the advice and consent 
of the Senate.'' EPA rejects this characterization. Article 2H 
explicitly assigns to the Parties the task of deciding what level of 
production and consumption ``is necessary to satisfy uses agreed by 
them to be critical uses * * *.'' Therefore, EPA looks to the Parties' 
Decisions to provide the details of the exemption authorized in Article 
2H. In Decision Ex I/3, the Parties decided what level of production 
and consumption was necessary given certain assumptions about stocks. 
Accordingly, in compliance with Article 2H, this final rule addresses 
both production and consumption and the use of stocks.

[[Page 76989]]

D. Cap on Critical Use Methyl Bromide

    Based on the EPA's assessment of the technical and economic 
feasibility of alternatives and the potential for a significant market 
disruption if methyl bromide were not available for the uses listed in 
Appendix L, and the lack of any new information that would change EPA's 
assessment, EPA is establishing the following amounts of methyl bromide 
as critical use methyl bromide available only for approved critical 
uses as described in section V.H of this preamble for the control 
period of the year of 2005.
    With today's action, EPA is finalizing a determination that 
8,942,214 kgs of methyl bromide are required to satisfy critical uses 
for 2005. EPA intends to address supplemental and new CUE allocations 
in a subsequent rulemaking following the 16th Meeting of the Parties to 
the Montreal Protocol. EPA is authorizing the full amount of new 
production/import allowable under Decision Ex I/3, a total of 7,659,000 
kgs, and is authorizing those entities that hold inventories of methyl 
bromide to sell 1,283,214 kgs for approved critical uses during 2005. 
The details of allowance allocation for both critical production/import 
and critical stocks are described in sections V.E and V.F of this 
preamble.
    EPA co-proposed two options for the cap on critical use methyl 
bromide: A universal cap where all approved critical uses would 
purchase critical use methyl bromide under the same cap and a sector 
specific cap where each of the 16 critical use sectors would have their 
own cap of reserved material. EPA also solicited comment on an 
applicant-specific cap and on several hybrid options. In preparing this 
final rule, EPA considered comments received and Decision Ex I/3(4), 
which states: ``That Parties should endeavor to allocate the quantities 
of methyl bromide recommended by the Technology and Economic Assessment 
Panel as listed in annex II A to the report of the First Extraordinary 
Meeting of the Parties.''
    EPA received 28 comments supporting the fully flexible universal 
cap. Commenters supported this option for several reasons: ease of 
implementation, cost savings and efficiencies to the regulated 
community, and the inability of EPA to predict with precision the exact 
market demand for methyl bromide on a sector basis. EPA received four 
comments supporting a sector specific cap to ensure that smaller uses, 
less frequent uses, and uses that occur towards the end of the control 
period are guaranteed access to some minimum supply. EPA received one 
comment supporting an applicant specific approach so that the Agency 
can track use of methyl bromide at a more specific level. EPA also 
received one comment supporting a hybrid option that would separate 
pre-plant uses of methyl bromide from post-harvest uses. Additional 
comments received by EPA on other hybrids are addressed in the response 
to comment (RTC) document available in the docket for today's rule.
    In today's rulemaking, EPA is establishing two types of critical 
use allowances (CUAs) for the production/import of methyl bromide: CUAs 
for pre-plant soil uses and CUAs for post-harvest and structural uses. 
The portion of the critical use methyl bromide supplies obtained from 
available stocks, however, will be allocated as a universal cap as 
proposed. EPA did not receive any adverse comment on the proposal to 
make the quantities from stocks available in a universal fashion.
    EPA agrees with the comments made by entities supporting the 
universal option and believes that such a system would in fact lead to 
the most economically efficient outcome and impose the least burden on 
industry. However, to address concerns raised by smaller, less frequent 
and end of year uses, EPA is separating out the post-harvest uses of 
methyl bromide, which occur regularly throughout the year, from pre-
plant uses which tend to be clustered around a particular time in the 
growing season. Noting that Decision Ex I/3 (4) states that Parties 
``should endeavor'' to allocate ``as listed in annex II A,'' EPA 
examined our ability to implement a sector specific system. However, 
there are several practical impediments to implementing such a system. 
EPA does not have precise data on use of methyl bromide because the 
current regulations on methyl bromide require reporting of production, 
imports, and exports of methyl bromide, not use. The more specific the 
categories for which EPA is estimating use, the less precise the 
estimate becomes. Therefore, EPA is reluctant to create sector or 
applicant specific limits because of the inherent uncertainty of the 
data at that detailed level. With the establishment of the critical use 
exemption, EPA will begin to track sector level use data and therefore 
the concern about data viability should diminish over time.
    Another limitation to the sector or applicant specific approach is 
the upstream allowance allocation system itself where EPA issues 
allowances to producers and importers and not end users. Using an 
upstream allowance allocation system as proposed, EPA would be unable 
to adjust amounts of methyl bromide from one sector to another after 
the allowance was expended. This artifact of the allocation framework 
would deny the marketplace any flexibility to meet unforseen demand in 
a particular use. For example, under a sector specific system, if a 
pest outbreak were to occur in the peppers sector no additional 
material could be made available to peppers even if there were an 
unanticipated surplus in a different sector. For these reasons, EPA 
believes it is not practicable to implement a sector specific system at 
this time.
    The Agency believes, and has received comment to that effect, that 
the pre-plant and post-harvest markets operate as separate markets 
under the phaseout, as evidenced by the different prices for methyl 
bromide in the two markets, for several reasons. The timing and cycles 
of fumigations for the two sectors are different as well. Pre-plant 
fumigations typically occur once a year about a month before planting 
the first crop whereas fumigations for post-harvest uses occur 
routinely throughout the year to control ongoing insect pressures. The 
standard product formulations for pre-plant and post harvest uses 
substantially differ. In the pre-plant uses the formulations of methyl 
bromide contain substantially more chloropicrin, as much as 50%. 
Lastly, the post harvest sector has more purchasing power than the pre-
plant sector and is therefore willing to pay more for methyl bromide. 
Post-harvest uses rely on nearly pure methyl bromide. For all of these 
reasons, EPA believes that these two use categories already function as 
separate markets and therefore the hybrid option would not result in 
substantial regulatory burden but would achieve a careful balance 
between flexibility and greater assurance.
    EPA believes that establishing distinct caps for pre-plant and 
post-harvest uses is consistent with the Parties' statement in Decision 
Ex I/3(4) that each Party ``should endeavor'' to allocate ``as listed 
in annex II A.'' By virtue of this rulemaking process, EPA has made the 
endeavor to allocate quantities of methyl bromide in a manner 
consistent with Annex IIA of the Report to the First Extraordinary 
Meeting of the Parties. Because of the practical and administrative 
difficulties described above, however, EPA has arrived at an allocation 
system that relies at least partly on the market to allocate quantities 
on a sectoral basis. EPA anticipates, based on historical use patterns 
and the research undertaken pursuant to submitting the U.S. nomination, 
that usage patterns will

[[Page 76990]]

generally reflect the sectoral quantities found in Annex IIA.

E. Critical Use Allowance Allocations

1. Allocation of Critical Use Allowances
    EPA is allocating the following number of pre-plant and post-
harvest critical use allowances (CUAs) to the entities listed below 
subject to the trading provisions discussed in section V.G of the 
preamble. Through this rulemaking, EPA is notifying entities in Table I 
that they have an allocation of the number of critical use allowances 
specified in the table for 2005. Depending on the agreement of the 
Parties to the Protocol, EPA may engage in a subsequent rulemaking to 
allocate supplemental methyl bromide for 2005. Each allowance is 
equivalent to 1 kg of critical use methyl bromide. These allowances 
expire at the end of the control period and, consistent with the 
proposed rule and comments received, are not bankable from one year to 
the next.

             Table I.--Allocation of Critical Use Allowances
------------------------------------------------------------------------
                                         2005 Critical    2005 Critical
                                         use allowances   use allowances
                Company                  for pre-plant      for post-
                                             uses *       harvest uses *
                                          (kilograms)      (kilograms)
------------------------------------------------------------------------
Great Lakes Chemical Corp.............        4,357,690          297,049
Albemarle Corp........................        1,791,950          122,151
Ameribrom, Inc........................          989,911           67,479
TriCal, Inc...........................           30,679            2,091
                                       ------------------
      Total...........................        7,170,230         488,770
------------------------------------------------------------------------
* For production or import of class I, Group VI controlled substance
  exclusively for the Pre-Plant or Post-Harvest uses specified in
  Appendix L to 40 CFR Part 82.

2. Baseline for Critical Use Allowance Distribution
    EPA is using the 1991 methyl bromide consumption baseline for 
distribution of critical use allowances because this is the best data 
available to the Agency at the current time. EPA used the 1991 baseline 
to distribute allowances to the companies listed above during the 
phaseout of methyl bromide. The 1991 baseline is therefore familiar to 
the regulated community and poses the least steep learning curve on 
industry of all the options discussed in the proposed rule.
    EPA received four comments supporting use of the 1991 baseline for 
distribution of allowances and two comments favoring a baseline that 
uses the volume of methyl bromide marketed over the past three years. 
EPA does not have the necessary data to implement a marketed volume 
baseline representing the past three years and the time required to 
gather, verify, and make publically available such data would prohibit 
the Agency from implementing this exemption before the beginning of the 
control period. Such a baseline is therefore not practical to 
implement.
3. Frequency of Critical Use Allowance Distribution
    EPA will issue critical use allowances once a year through an 
annual rulemaking as proposed, with one important exception noted 
below. EPA described scenarios where the Agency would distribute 
allowances more than once a year but did not receive any comments in 
favor of such options.
    The exception to the once a year allocation of allowances applies 
when the Parties authorize supplemental critical use exemptions for a 
given control period after EPA has already initiated the notice and 
comment rulemaking process for the original authorized exemptions. For 
example, the Parties authorized exemptions for 2005 at their First 
Extraordinary Meeting of the Parties in March 2004. The Parties are 
considering additional exemptions for 2005 at the Sixteenth Meeting of 
the Parties to be held November 2004. EPA would propose additional 
exemptions as a result of additional authorizations made by the 
Parties. In this situation, EPA could in fact issue allowances twice 
for a single control period.

F. Critical Stock Allowance Allocations

    EPA is allocating critical stock allowances (CSAs) to the entities 
listed below in Table 2 for the control period of 2005. CSAs are being 
issued on a pro-rata basis according to the amount of stocks owned by 
the entity based on an average of their December 31, 2003 and August 
25, 2004 data because only that entity has the ability to sell the 
quantities of material associated with the CSAs on a kilogram basis, 
regardless of which company is physically holding the stocks. Similar 
to CUAs, CSAs can not be banked from one control period to the next.
    Critical stock allowances (CSAs) are not used to produce or import 
methyl bromide but are rights that enable the holder to sell pre-
phaseout inventories of methyl bromide for use in approved critical 
uses. A CSA is expended when the entity selling methyl bromide sells 
the material, or fumigation services with the material, to an approved 
critical user who certifies that the material is for an approved 
critical use. Thus, the movement of pre-phaseout inventories of methyl 
bromide along the supply chain does not require expenditure of a CSA.
    EPA has determined that the individual holdings of stocks of methyl 
bromide are confidential business information. The amount of CSAs 
allocated to each company could be used to calculate the individual 
stock holdings if information on aggregate stock holdings were 
released. EPA has determined that the aggregate stock information is 
not confidential business information but is currently withholding that 
information due to the filing of complaints seeking to enjoin the 
Agency from its release. Because release could occur depending on the 
outcome of that litigation, EPA is not listing the number of allowances 
distributed to each entity. Concurrent with today's rule, EPA is 
sending letters to each entity to inform them of the number of critical 
stock allowances EPA has issued them. In addition, EPA is placing a 
document listing the allocations and distribution basis of critical 
stock allowances for each entity in the confidential portion of the 
docket.

[[Page 76991]]



            Table 2.--Allocation of Critical Stock Allowances
------------------------------------------------------------------------
                                 Company
-------------------------------------------------------------------------
Albemarle
Ameribrom, Inc.
Bill Clark Pest Control, Inc.
Blair Soil Fumigation
Burnside Services, Inc.
Cardinal Professional Products
Carolina Eastern, Inc.
Degesch America, Inc.
Dodson Bros.
Great Lakes Chemical Corp.
Harvey Fertilizer & Gas
Helena Chemical Co.
Hendrix & Dail
Hy Yield Bromine
Industrial Fumigation Company
J.C. Ehrlich Co.
Pacific Ag
Pest Fog Sales Corp.
Pro Source One
Reddick Fumigants
Royster-Clark, Inc.
Southern State Cooperative, Inc.
Trical Inc.
Trident Agricultural Products
UAP Southeast (NC)
UAP Southeast (SC)
Univar
Vanguard Fumigation Co.
Western Fumigation
    Total 1,283,214 kilograms
------------------------------------------------------------------------

G. Trading Allowances

    In accordance with Section 607 of the CAA of 1990, EPA is allowing 
producers and importers of methyl bromide to trade or transfer critical 
use allowances subject to the provisions of 40 CFR part 82. In 
accordance with paragraph (c) of Section 607, EPA is establishing an 
offset of one tenth of one percent of the amount of the CUAs 
transferred consistent with proposed rule. The Act requires that 
transfers of allowances result in lower production than if the trade 
had not occurred.
    The offset will be deducted from the transferor's allowance balance 
at the time of a trade. A one tenth of one percent offset is consistent 
with the offset required for the transfer of essential use allowances 
under the phaseout program for class I controlled ozone-depleting 
substances (ODS), which, like critical use allowances permit the 
exempted production or import of ODS beyond a phaseout date.
    Because, CSAs govern the amount of existing material that can be 
sold, EPA is not implementing an offset for the transfer of CSAs. If 
the holder of a CSA does not wish to sell his inventories of methyl 
bromide to the critical use market, he (the transferor) may sell his 
allowances to another methyl bromide producer, importer, distributer, 
or applicator (the transferee).
    EPA received seven comments supporting the ability of allowance 
holders to trade allowances. EPA did not receive any adverse comments 
on the one tenth of one percent offset that is similarly applied to the 
essential use exemption and is implementing this offset in today's 
rule.
    EPA received one comment suggesting that the Agency should modify 
its proposed CSA trading framework to allow anyone who wishes to sell 
inventories of critical use methyl bromide to buy CSAs, not just 
initial CSA recipients. EPA modified its proposal to allow for any 
entity in the methyl bromide supply chain to acquire CSAs even if they 
did not receive an initial CSA allocation from EPA. EPA agrees that the 
Agency should not restrict the normal flow of commerce.
    Lastly, the Agency is allowing for trades of CUAs into CSAs and is 
not requiring an offset to accompany such transactions. A CUA holder 
would retire a number of allowances to EPA and EPA would then issue 
additional CSAs to the allowance holder. EPA is allowing this type of 
allowance trade to accommodate an entity who wishes to forgo exempted 
production or import of new methyl bromide to make more of pre-phaseout 
inventories available for approved critical uses. EPA believes that an 
environmental benefit would be derived in this type of exchange since 
the result is less new production or import. As described in the 
proposed rule, EPA is not allowing the reverse transaction, exchange of 
CSAs for CUAs, because Decision Ex I/3 imposes a cap of no more than 
30% production and import for critical uses in 2005. If the Agency were 
to allow CSAs to become additional rights to production or import, the 
U.S. would potentially run into non-compliance with the 30% production 
cap.
    For consistency with the requirements governing other types of 
allowance transfers in the ozone protection program, EPA is requiring 
that an entity who sells allowances must file an allowance transfer 
form with EPA. Existing regulations require EPA to process these forms 
within 3 business days of receipt.
    The Agency believes that trading critical use allowances and 
critical stock allowances will allow entities to make rational business 
decisions as to the amount of critical use methyl bromide to produce or 
import in a given control period and thus supports flexible trading 
provisions with appropriate environmental offsets as described in this 
section of today's rule.

H. Acquiring Critical Use Methyl Bromide

    Approved critical users who have an approved critical use may 
acquire methyl bromide, as described in the proposal, in a similar 
manner to which they acquire methyl bromide exempted for quarantine and 
pre-shipment uses (68 FR 237, January 2, 2003). EPA received eight 
comments supporting the ``QPS-like'' approach because it is familiar to 
the regulated community.
    Approved critical users who have an approved critical use may 
acquire critical use methyl bromide, or fumigation services with 
critical use methyl bromide, by certifying at the point of purchase 
that they are in fact approved critical users and that they will use 
the methyl bromide for an approved critical use. The certifications 
shall be retained by the supplier for a minimum of three years and are 
part of the reporting and recordkeeping requirements set forth in Sec.  
82.13 of this regulation.
    Specifically, the certification will state, in part: ``I certify, 
under penalty of law, I am an approved critical user and I will use 
this quantity of methyl bromide for an approved critical use. My action 
conforms to the requirements associated with the critical use exemption 
published in 40 CFR part 82. I am aware that any agricultural commodity 
within a treatment chamber, facility, or field I fumigate with critical 
use methyl bromide can not subsequently or concurrently be fumigated 
with non-critical use methyl bromide during the same control period, 
excepting a QPS treatment or a treatment for a different use (e.g., a 
different crop or commodity). I will not use this quantity of methyl 
bromide for a treatment chamber, facility, or field that I previously 
fumigated with non-critical use methyl bromide purchased during the 
same control period, excepting a QPS treatment or a treatment for a 
different use (e.g., a different crop or commodity), unless a local 
township limit now prevents me from using methyl bromide 
alternatives.'' The form will further require users to provide 
information on the type of critical use methyl bromide purchased, the 
location of the treatment, the crop or commodity treated, the quantity 
of critical use methyl bromide purchased and the acreage/cubic footage 
treated. This information is required so that distributers and 
applicators are able to meet their annual reporting obligations to EPA. 
Providing false information on this form constitutes a violation.

[[Page 76992]]

    EPA is prohibiting suppliers from selling critical use methyl 
bromide without first obtaining a signed and dated certification form.

I. Who Is an Approved Critical User

1. Users and Uses
    An approved critical user may obtain access to exempted production/
import and reserved inventories of pre-phaseout methyl bromide stocks, 
the combination of which constitute the supply of ``critical use methyl 
bromide'' intended to meet the needs of agreed critical uses. However, 
a condition for obtaining access to critical use methyl bromide is a 
limit on the amount of stocks that can be purchased in the control 
period, as described under section V.D of this rule.
    An approved critical user is a self identified entity who meets the 
following requirements:
    (1) For the applicable control period, applied to EPA for a 
critical use exemption or is a member of a consortium that applied for 
a critical use exemption for a use and location of use that was 
included in the U.S. nomination, authorized by a Decision of the 
Parties to the Montreal Protocol, and notice and comment rulemaking to 
be a critical use in that location, and
    (2) Has an area in the applicable location of use that requires 
methyl bromide fumigation because the person reasonably expects that 
the area will be subject to a limiting critical condition (LCC) during 
the applicable control period, if an LCC is given in Appendix L.
    Using these criteria, an approved critical user could be a tomato 
farmer in Florida whose farm is over karst topography but would not 
include a tomato farmer in Oklahoma even if he too has a farm over 
karst topography because no exemption application was filed on behalf 
of Oklahoma tomato farmers. Similarly, a Florida tomato farmer who did 
not have a field with karst topography, or one of the other limiting 
critical conditions specified in this rule, would not be an approved 
critical user because the circumstance of the use is not an approved 
critical use.
    Approved critical uses are those uses of methyl bromide listed in 
Appendix L to 40 CFR Part 82 for the use listed in column A and the 
location of use in Column B, reproduced from the regulatory text in the 
table below.

                                        Table 3.--Approved Critical Uses
----------------------------------------------------------------------------------------------------------------
                                               Column B--approved critical user    Column C--limiting critical
       Column A--approved critical uses               and location of use                   conditions
----------------------------------------------------------------------------------------------------------------
                                                 PRE-PLANT USES
----------------------------------------------------------------------------------------------------------------
Cucurbits....................................  (a) Michigan growers............  With a reasonable expectation
                                                                                  that moderate to severe fungal
                                                                                  pathogen infestation already
                                                                                  either exists or could occur
                                                                                  without methyl bromide
                                                                                  fumigation.
                                               (b) Alabama, Arkansas, Georgia,   With a reasonable expectation
                                                North Carolina, South Carolina,   that moderate to severe yellow
                                                Tennessee, and Virginia growers.  or purple nutsedge infestation
                                                                                  already either exists or could
                                                                                  occur without methyl bromide
                                                                                  fumigation.
Eggplant.....................................  (a) Georgia growers.............  With a reasonable expectation
                                                                                  that moderate to severe yellow
                                                                                  or purple nutsedge infestation
                                                                                  either already exists or could
                                                                                  occur without methyl bromide
                                                                                  fumigation.
                                               (b) Florida growers.............  With a reasonable expectation
                                                                                  that one or more of the
                                                                                  following limiting critical
                                                                                  conditions either already
                                                                                  exists or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  Moderate to severe yellow or
                                                                                  purple nutsedge infestation,
                                                                                  or karst topography.
Forest Seedlings.............................  (a) Members of the Southern       With a reasonable expectation
                                                Forest Nursery Management         that one or more of the
                                                Cooperative limited to growing    following limiting critical
                                                locations in Alabama, Arkansas,   conditions already either
                                                Florida, Georgia, Louisiana,      exists or could occur without
                                                Mississippi, North Carolina,      methyl bromide fumigation:
                                                Oklahoma, South Carolina,         Moderate to severe yellow or
                                                Tennessee, Texas, and Virginia.   purple nutsedge infestation,
                                                                                  or moderate to severe disease
                                                                                  infestation.
                                               (b) International Paper and its   With a reasonable expectation
                                                subsidiaries limited to growing   that one or more of the
                                                locations in Arkansas, Alabama,   following limiting critical
                                                Georgia, South Carolina and,      conditions already either
                                                Texas.                            exists or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  Moderate to severe yellow or
                                                                                  purple nutsedge infestation,
                                                                                  or moderate to severe disease
                                                                                  infestation.
                                               (c) Weyerhaeuser Company and its  With a reasonable expectation
                                                subsidiaries limited to growing   that one or more of the
                                                locations in Alabama, Arkansas,   following limiting critical
                                                North Carolina, South Carolina,   conditions already either
                                                Oregon, and Washington.           exists or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  Moderate to severe yellow or
                                                                                  purple nutsedge infestation,
                                                                                  or moderate to severe disease
                                                                                  infestation.
                                               (d) Public (government owned)     With a reasonable expectation
                                                seedling nurseries in the         that one or more of the
                                                states of California, Idaho,      following limiting critical
                                                Illinois, Indiana, Kansas,        conditions already either
                                                Kentucky, Maryland, Missouri,     exists or could occur without
                                                Nebraska, New Jersey, Ohio,       methyl bromide fumigation:
                                                Oregon, Pennsylvania, Utah,       Moderate to severe yellow or
                                                Washington, West Virginia, and    purple nutsedge infestation,
                                                Wisconsin.                        or moderate to severe disease
                                                                                  infestation.
                                               (e) Members of the Nursery        With a reasonable expectation
                                                Technology Cooperative limited    that one or more of the
                                                to growing locations in Oregon    following limiting critical
                                                and Washington.                   conditions already either
                                                                                  exists or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  Moderate to severe yellow or
                                                                                  purple nutsedge infestation,
                                                                                  or moderate to severe disease
                                                                                  infestation.

[[Page 76993]]

 
                                               (f) Michigan seedling nurseries.  With a reasonable expectation
                                                                                  that one or more of the
                                                                                  following limiting critical
                                                                                  conditions already exists or
                                                                                  could occur without methyl
                                                                                  bromide fumigation: moderate
                                                                                  to severe yellow or purple
                                                                                  nutsedge infestation, or
                                                                                  moderate to severe disease
                                                                                  infestation.
Ginger.......................................  Hawaii growers..................  With a reasonable expectation
                                                                                  that the limiting critical
                                                                                  condition already either
                                                                                  exists or could occur without
                                                                                  methyl bromide fumigation, or
                                                                                  moderate to severe bacterial
                                                                                  wilt infestation.
Orchard Nursery Seedlings....................  (a) Members of the Western        With a reasonable expectation
                                                Raspberry Nursery Consortium      that one or more of the
                                                limited to growing locations in   following limiting critical
                                                California and Washington         conditions already either
                                                (Driscoll's raspberries and       exists or could occur without
                                                their contract growers in         methyl bromide fumigation:
                                                California and Washington).       Moderate to severe nematode
                                                                                  infestation, medium to heavy
                                                                                  clay soils, or a prohibition
                                                                                  of on the use of 1,3-
                                                                                  dichloropropene products due
                                                                                  to reaching local township
                                                                                  limits on the use of this
                                                                                  alternative.
                                               (b) Members of the California     With a reasonable expectation
                                                Association of Nurserymen-        that one or more of the
                                                Deciduous Fruit and Nut Tree      following limiting critical
                                                Growers.                          conditions already either
                                                                                  exists or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  Moderate to severe nematode
                                                                                  infestation, medium to heavy
                                                                                  clay soils, or a prohibition
                                                                                  of on the use of 1,3-
                                                                                  dichloropropene products due
                                                                                  to reaching local township
                                                                                  limits on the use of this
                                                                                  alternative.
                                               (c) Members of the California     With a reasonable expectation
                                                Association of Nurserymen-        that one or more of the
                                                Citrus and Avocado Growers.       following limiting critical
                                                                                  conditions already either
                                                                                  exists or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  Moderate to severe nematode
                                                                                  infestation, medium to heavy
                                                                                  clay soils, or a prohibition
                                                                                  of on the use of 1,3-
                                                                                  dichloropropene products due
                                                                                  to reaching local township
                                                                                  limits on the use of this
                                                                                  alternative.
Orchard Replant..............................  (a) California stone fruit        With a reasonable expectation
                                                growers.                          that one or more of the
                                                                                  following limiting critical
                                                                                  conditions already either
                                                                                  exists or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  Replanted (non- virgin)
                                                                                  orchard soils to prevent
                                                                                  orchard replant disease, or
                                                                                  medium to heavy soils, or a
                                                                                  prohibition on the use of 1,3-
                                                                                  dichloropropene products
                                                                                  because local township limits
                                                                                  for this alternative have been
                                                                                  reached.
                                               (b) California table and raisin   With a reasonable expectation
                                                grape growers.                    that one or more of the
                                                                                  following limiting critical
                                                                                  conditions already either
                                                                                  exists or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  Replanted (non-virgin) orchard
                                                                                  soils to prevent orchard
                                                                                  replant disease, or medium to
                                                                                  heavy soils, or a prohibition
                                                                                  on the use of 1,3-
                                                                                  dichloropropene products
                                                                                  because local township limits
                                                                                  for this alternative have been
                                                                                  reached.
                                               (c) California walnut growers...  With a reasonable expectation
                                                                                  that one or more of the
                                                                                  following limiting critical
                                                                                  conditions already either
                                                                                  exists or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  Replanted (non-virgin) orchard
                                                                                  soils to prevent orchard
                                                                                  replant disease, or medium to
                                                                                  heavy soils, or a prohibition
                                                                                  on the use of 1,3-
                                                                                  dichloropropene products
                                                                                  because local township limits
                                                                                  for this alternative have been
                                                                                  reached.
                                               (d) California almond growers...  With a reasonable expectation
                                                                                  that one or more of the
                                                                                  following limiting critical
                                                                                  conditions already either
                                                                                  exists or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  Replanted (non-virgin) orchard
                                                                                  soils to prevent orchard
                                                                                  replant disease, or medium to
                                                                                  heavy soils, or a prohibition
                                                                                  on the use of 1,3-
                                                                                  dichloropropene products
                                                                                  because local township limits
                                                                                  for this alternative have been
                                                                                  reached.
Ornamentals..................................  (a) Yoder Brothers Inc. in        For use in all chrysanthemum
                                                Florida.                          production.
                                               (b) California rose nurseries...  With a reasonable expectation
                                                                                  that the user may be
                                                                                  prohibited from using 1,3-
                                                                                  dichloropropene products
                                                                                  because local township limits
                                                                                  for this alternative have been
                                                                                  reached.

[[Page 76994]]

 
Peppers......................................  (a) California growers..........  With a reasonable expectation
                                                                                  that one or more of the
                                                                                  following limiting critical
                                                                                  conditions already either
                                                                                  exists or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  Moderate to severe disease
                                                                                  infestation, or moderate to
                                                                                  severe yellow or purple
                                                                                  nutsedge infestation, or a
                                                                                  prohibition on the use of 1,3-
                                                                                  dichloropropene products
                                                                                  because local township limits
                                                                                  for this alternative have been
                                                                                  reached.
                                               (b) Alabama, Arkansas, Georgia,   With a reasonable expectation
                                                North Carolina, South Carolina,   that one or more of the
                                                Tennessee and Virginia growers.   following limiting critical
                                                                                  conditions already either
                                                                                  exists or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  Moderate to severe yellow or
                                                                                  purple nutsedge infestation,
                                                                                  or the presence of an occupied
                                                                                  structure within 100 feet of a
                                                                                  grower's field the size of 100
                                                                                  acres or less.
                                               (c) Florida growers.............  With a reasonable expectation
                                                                                  that one or more of the
                                                                                  following limiting critical
                                                                                  conditions already either
                                                                                  exists or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  Moderate to severe yellow or
                                                                                  purple nutsedge infestation,
                                                                                  or karst topography.
Strawberry Nurseries.........................  (a) California growers..........  With a reasonable expectation
                                                                                  that one or more of the
                                                                                  following limiting critical
                                                                                  conditions already either
                                                                                  exists or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  Moderate to severe black root
                                                                                  rot or crown rot, or moderate
                                                                                  to severe yellow or purple
                                                                                  nutsedge infestation.
                                               (b) North Carolina and Tennessee  With a reasonable expectation
                                                growers.                          that the use will occur in the
                                                                                  presence of an occupied
                                                                                  structure within 100 feet of a
                                                                                  grower's field the size of 100
                                                                                  acres or less.
Strawberry Fruit.............................  (a) California growers..........  With a reasonable expectation
                                                                                  that one or more of the
                                                                                  following limiting critical
                                                                                  conditions already either
                                                                                  exists or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  Moderate to severe black root
                                                                                  rot or crown rot, moderate to
                                                                                  severe yellow or purple
                                                                                  nutsedge infestation, a
                                                                                  prohibition of the use of 1,3-
                                                                                  dichloropropene products
                                                                                  because local township limits
                                                                                  for this alternative have been
                                                                                  reached, time to transition to
                                                                                  an alternative.
                                               (b) Florida growers.............  With a reasonable expectation
                                                                                  that one or more of the
                                                                                  following limiting critical
                                                                                  conditions already either
                                                                                  exists or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  Moderate to severe yellow or
                                                                                  purple nutsedge, or karst
                                                                                  topography.
                                               (c) Alabama, Arkansas, Georgia,   With a reasonable expectation
                                                North Carolina, South Carolina,   that one or more of the
                                                Tennessee, Virginia, Ohio, and    following limiting critical
                                                New Jersey growers.               conditions already either
                                                                                  exists or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  Moderate to severe yellow or
                                                                                  purple nutsedge, or the
                                                                                  presence of an occupied
                                                                                  structure within 100 feet of a
                                                                                  grower's field the size of 100
                                                                                  acres or less.
Sweet Potatoes...............................  California growers..............  With a reasonable expectation
                                                                                  that the user may be
                                                                                  prohibited from using 1,3-
                                                                                  dichloropropene products
                                                                                  because local township limits
                                                                                  for this alternative have been
                                                                                  reached.
Tomatoes.....................................  (a) Michigan growers............  With a reasonable expectation
                                                                                  that one or more of the
                                                                                  following limiting critical
                                                                                  conditions already either
                                                                                  exists or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  Moderate to severe disease
                                                                                  infestation, fungal pathogens
                                                                                  infestation.
                                               (b) Alabama, Arkansas, Georgia,   With a reasonable expectation
                                                North Carolina, South Carolina,   that one or more of the
                                                Tennessee and Virginia growers.   following limiting critical
                                                                                  conditions already either
                                                                                  exists or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  Moderate to severe yellow or
                                                                                  purple nutsedge infestation,
                                                                                  or the presence of an occupied
                                                                                  structure within 100 feet of a
                                                                                  grower's field the size of 100
                                                                                  acres or less.
                                               (c) Florida growers.............  With a reasonable expectation
                                                                                  that one or more of the
                                                                                  following limiting critical
                                                                                  conditions already either
                                                                                  exists or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  Moderate to severe yellow or
                                                                                  purple nutsedge infestation,
                                                                                  or karst topography.

[[Page 76995]]

 
Turfgrass....................................  (a) U.S. turfgrass sod nursery    For the production of industry
                                                producers who are members of      certified pure sod.
                                                Turfgrass Producers
                                                International (TPI).
                                               (b) U.S. golf courses...........  For establishing sod in the
                                                                                  construction of new golf
                                                                                  courses or the renovation of
                                                                                  putting greens, tees, and
                                                                                  fairways.
----------------------------------------------
                                                POST-HARVEST USES
----------------------------------------------------------------------------------------------------------------
Food Processing..............................  (a) Rice millers in all           With a reasonable expectation
                                                locations in the U.S. who are     that one or more of the
                                                members of the USA Rice Millers   following limiting critical
                                                Association..                     conditions exists: older
                                                                                  structures that can not be
                                                                                  properly sealed to use an
                                                                                  alternative to methyl bromide,
                                                                                  or the presence of sensitive
                                                                                  electronic equipment subject
                                                                                  to corrosivity, time to
                                                                                  transition to an alternative.
                                               (b) Pet food manufacturing        With a reasonable expectation
                                                facilities in the U.S. who are    that one or more of the
                                                active members of the Pet Food    following limiting critical
                                                Institute. (For today's rule,     conditions exists: older
                                                ``pet food'' refers to domestic   structures that can not be
                                                dog and cat food).                properly sealed to use an
                                                                                  alternative to methyl bromide,
                                                                                  or the presence of sensitive
                                                                                  electronic equipment subject
                                                                                  to corrosivity, time to
                                                                                  transition to an alternative.
                                               (c) Kraft Foods in the U.S......  With a reasonable expectation
                                                                                  that one or more of the
                                                                                  following limiting critical
                                                                                  conditions exists: older
                                                                                  structures that can not be
                                                                                  properly sealed to use an
                                                                                  alternative to methyl bromide,
                                                                                  or the presence of sensitive
                                                                                  electronic equipment subject
                                                                                  to corrosivity, time to
                                                                                  transition to an alternative.
                                               (d) Members of the North          With a reasonable expectation
                                                American Millers' Association     that one or more of the
                                                in the U.S.                       following limiting critical
                                                                                  conditions already exists or
                                                                                  could occur without methyl
                                                                                  bromide fumigation: older
                                                                                  structures that can not be
                                                                                  properly sealed to use an
                                                                                  alternative to methyl bromide,
                                                                                  or the presence of sensitive
                                                                                  electronic equipment subject
                                                                                  to corrosivity, time to
                                                                                  transition to an alternative.
Commodity Storage............................  (a) Gwaltney of Smithfield in     For smokehouse ham curing
                                                the U.S.                          facilities owned by the
                                                                                  company.
                                               (b) California entities storing   With a reasonable expectation
                                                walnuts, beans, dried plums,      that one or more of the
                                                figs, raisins, and pistachios     following limiting critical
                                                in California.                    conditions exists: rapid
                                                                                  fumigation is required to meet
                                                                                  a critical market window, such
                                                                                  as during the holiday season,
                                                                                  rapid fumigation is required
                                                                                  when a buyer provides short (2
                                                                                  days or less) notification for
                                                                                  a purchase, or there is a
                                                                                  short period after harvest in
                                                                                  which to fumigate and there is
                                                                                  limited silo availability for
                                                                                  using alternatives.
----------------------------------------------------------------------------------------------------------------

    The approved critical uses and limiting critical conditions listed 
in the above table have been modified from the original proposal to 
reflect comments provided to EPA. EPA received clarifying comments from 
four commenters that EPA mischaracterized the scope of their 
application or misidentified some limiting critical conditions. For 
example, one commenter indicated to EPA that their application only 
covered dog and cat pet food facilities whereas EPA inadvertently 
listed all pet food facilities as part of the consortium.
    The most significant change to this section involves the limiting 
critical conditions (LCC). EPA received four comments with concerns 
about the LCCs and two in favor of the LCCs. The concerns raised in the 
comments is that these conditions are difficult to understand and 
identify. For example, one commenter asked how many nutsedges over what 
area constitute ``moderate to severe'' infestation. The same commenter 
also indicated that at the time of fumigation, nutsedges would not be 
visible. EPA recognizes that a user may not be able to certify that 
certain limiting critical conditions will definitely occur. For 
example, a grower may not know with one hundred percent certainty that 
moderate to severe nutsedge infestation would occur in a given field in 
the absence of methyl bromide fumigation. However, the grower should be 
able to form a reasonable expectation in this regard, based on past 
experience and the information included in the application. EPA has 
modified the definition of approved critical user to reflect the 
``reasonable expectation'' standard. Therefore, if a reasonable person 
expects that he would have high levels of nutsedge, perhaps because of 
a problem in a neighboring field or the field in question had problems 
the previous year, that would be a sufficient basis to meet the LCC. 
This renders it unnecessary for the grower to wait for a nutsedge 
problem to develop during the growing season when it is no longer 
possible to remedy the problem.
    EPA received two sets of comments requesting specific modifications 
to the LCCs. Based on those comments, EPA is making the following 
changes in today's rule: (a) Eliminating the LCC of ``moderate to 
severe nematode pressure'' in all uses except Michigan tomatoes because 
the commenter correctly states that there are effective alternatives to 
control this condition when it occurs alone; (b) eliminating ``moderate 
to

[[Page 76996]]

severe pathogens'' in all uses except Michigan tomatoes because there 
are effective alternatives to control this condition when it occurs 
alone and; (c) modifying the buffer zone LCC to reflect recent label 
changes that reduce the buffer to 100 feet from an occupied structure. 
The last LCC would apply, as the commenter pointed out, only in 
situations where methyl bromide has a less restrictive buffer zone. EPA 
is eliminating the first two LCCs on nematode and pathogen infestation 
because there are effective alternatives to control these pests when 
they happen to be the only key pest. EPA had incorrectly characterized 
these conditions as stand alone circumstances that would allow for the 
use of methyl bromide in the proposal although the nomination describes 
these situations as requiring methyl bromide when in conjunction with 
another circumstance. EPA did not eliminate the first two LCC for 
Michigan tomatoes because severe neamatode or pathogen pressures alone 
make the alternatives not feasible. This is because Michigan is a cold 
climate and the alternatives which would otherwise be effective can not 
properly diffuse in the cool soils.
2. New Market Entrants
    EPA received two favorable comments on the proposed method for 
regulating access to critical use methyl bromide by new market 
entrants. For example, a new market entrant may be a new farmer, a 
farmer who is expanding production of a crop that is an approved 
critical use or, a farmer that is moving production from one location 
to a new location that has the limiting critical condition. EPA is 
finalizing a framework in today's rule that allows a new market entrant 
who is a member of a consortium that applied for an exemption to be an 
approved critical user so long as the use is for a use listed in column 
A and a location listed in column B of Appendix L to 40 CFR 82. 
Therefore, an approved critical user includes those users who are 
members of a consortium that applied for an exemption, even if the user 
was not a member of the consortium at the time the application was 
filed. As described in the proposal, EPA will not increase the amount 
of methyl bromide exempted to accommodate new market entrants without 
first seeking authorization from the Parties through the nomination and 
then engaging in a notice and comment rulemaking process. Therefore any 
increase in demand for methyl bromide due to new market entrants must 
be met under the cap set forth in today's rule.
    For example, the Southern Forest Nursery Management Cooperative 
consists of a certain number of forest seedling nursery operators. The 
Cooperative made an application to EPA for an exemption solely on 
behalf of their membership. If a company that is a member of the 
Cooperative otherwise meets the definition of approved critical user, 
the company can access critical use methyl bromide even if it did not 
join the Cooperative until 2004.
    The Agency wishes to accommodate the ever shifting marketplace to 
allow growers to increase or move production as needed provided that 
critical use methyl bromide only goes to those uses and locations 
listed in Appendix L of 40 CFR part 82.
    EPA received three comments against EPA's definition because it 
allows for users to join a consortium in 2005 and use methyl bromide 
that should be reserved only for those who were part of the consortium 
at the time of application in the opinion of the commenters. One 
commenter provided an alternative approach that would have EPA disallow 
all new market entrants for the first year they enter the market. EPA 
considered this approach but EPA does not have information on every 
company that is part of a given consortium. Therefore, it would be 
difficult if not impossible for EPA to ``pre-qualify'' some companies 
as critical uses and disqualify others. Instead, EPA is finalizing an 
approach that leaves it up to each consortium to define their 
membership at the time of application for an exemption as broadly or 
narrowly as they choose.

J. Reporting and Recordkeeping Requirements

1. Reporting
    With today's action, producers and importers are required to report 
the number of expended and unexpended pre-plant CUAs and post-harvest 
CUAs on a quarterly basis to EPA. On an annual basis, producers, 
importers, distributers, and third-party applicators are required to 
report to EPA the following information: the number of expended and 
unexpended CSAs; a list of the total amount of pre-plant methyl bromide 
bought and the amount sold to approved critical users for each sector; 
a list of the total amount of post-harvest methyl bromide bought and 
the amount sold to approved critical users for each sector; the amount 
of critical use methyl bromide that has not been sold to an approved 
critical user as of the end of the control period that the reporting 
entity owns; the amount of critical use methyl bromide that has not 
been sold to an approved critical user that reporting entity is holding 
on behalf of another entity along with the name of the entity who owns 
the material.
    This information is required so that EPA can track compliance with 
the critical use allowance and critical stock allowance caps, determine 
how much methyl bromide is used on a sector (crop or use) basis, and 
determine how much critical use methyl bromide remains unused at the 
end of the compliance period. The information collected for this 
exemption is authorized under Sections 603(b), 603(d) and 614(b) of the 
CAAA of 1990. EPA believes these reporting requirements are necessary 
to meet U.S. reporting obligations under Article 7 of the Protocol, CAA 
reporting requirements to Congress under Section 603(d), and 
implementation of the exemption from one control period to the next.
    The reporting framework that EPA is implementing with today's 
action is consistent with the information requirements described in the 
proposal and section 114 request for information on inventories (69 FR 
52366 and 69 FR 52403). EPA did not receive any adverse comment on the 
information requirements although one entity indicated that EPA 
underestimated the time various compliance activities would take. EPA 
believes that today's recordkeeping and reporting requirements create 
the least burden while still ensuring compliance with Protocol 
requirements. See section VI.C of this preamble for EPA's response to 
those comments.
    EPA also received comment that the Agency should use a real time 
database system to track the use of methyl bromide. A system similar to 
this is used in California to allow regulators to prohibit the use of 
1,3-D products when the local township cap is close to its maximum 
allowable level. EPA is primarily concerned with understanding how much 
methyl bromide is used for each critical use sector on an annual basis. 
Therefore, a real time tracking system is not warranted. The reporting 
requirements described in today's action are sufficient to meet the 
information requirements under the Protocol and the CAAA of 1990 and to 
ensure that EPA can implement the exemption from one control period to 
the next. However, there is nothing in this rule to prohibit the 
private development of such a system and EPA understands that one such 
database company has had conversations with methyl bromide registrants 
about developing a database

[[Page 76997]]

similar to the one described in the proposal.
    EPA received one comment that the Agency should develop a better 
understanding on use of methyl bromide and to facilitate that 
understanding, EPA should require direct reporting on methyl bromide 
use by all large users, defined as those who use more than 10,000 kgs 
of methyl bromide a year. While EPA understands that at some point 
during the exemption program it may be helpful to understand use trends 
for major individual users, the Agency does not believe that it will 
derive any additional benefit from requiring annual reporting of the 
data. In addition this would impose additional burden on users and 
potentially on producers, importers, and distributers. In the event 
that EPA does need this data at some point, the Agency could use 
section 114 of the CAA to require distributers and third-party 
applicators to provide individual user data to EPA based on the 
recordkeeping requirements laid out in today's rule.
2. Recordkeeping
    Producers, importers, distributers, and third-party applicators are 
required to maintain self certification records for three years along 
with other transactional records such as invoices and order forms. EPA 
did not receive any adverse comments on the recordkeeping requirements 
described in the proposal and is implementing the recordkeeping 
requirements without modification.
3. Treatment of Unused Critical Use Methyl Bromide
    EPA will use the information collected through the annual reporting 
requirement to determine how much unused critical use methyl bromide is 
available, or not already sold to an approved critical user, at the end 
of the calendar year. EPA proposed deducting the corresponding amount 
from the total number of critical use allowances the Agency would make 
available for the following control period. A number of commenters 
correctly indicated that EPA would not have the data on the amount of 
critical use methyl bromide unused at the end of the year until the 
March of the following year when the last report is due. EPA is only 
issuing allowances once a year and such allowance allocations are 
likely to take place well before EPA has the required data on unused 
methyl bromide. Therefore, with today's action, EPA is creating a 
system for deducting the amount of unused methyl bromide from the total 
number of allowances issued for the control period following the 
control period immediately after the control period when the methyl 
bromide was unused for critical uses. The 2007 CUAs will reflect any 
unused critical use methyl bromide from 2005 and so forth. For the year 
2006, this will result in no reductions made; however all years after 
2006 will experience a reduction should there be any unused critical 
use methyl bromide.
    All pre-plant critical use methyl bromide from 2005 would remain 
pre-plant critical use methyl bromide in 2006 available for all 2006 
pre-plant approved critical uses, subject to any adjustments that may 
be described in the 2006 or 2007 allocation notice and comment 
rulemaking.
    EPA received comment that the Agency should account for the time 
lag between reporting and issuing of allowances for the following 
control period using an estimated approach. In other words, the Agency 
would estimate how much critical use methyl bromide would be unused and 
then deduct that amount from the number of allowances issued for the 
following year. EPA is requiring reporting of the required data once a 
year and so the Agency would have little basis for making realistic 
estimates of this nature. Although EPA could require more frequent data 
reports, EPA would still have to estimate year end data because of the 
large number of fumigations that occur late in the control period. EPA 
prefers to use actual data even if there is a time lag to ensure that 
those who need critical use methyl bromide have access to it and that 
future production can be adjusted to reflect the actual carryover.

K. Enforcement Provisions

    Unauthorized production, import, or sale of critical use methyl 
bromide will incur a violation on a per kilogram basis identical to 
nearly all other aspects of the ozone protection program. Section 113 
of the CAA governs enforcement activities for violations of 
requirements under Title VI. One commenter supported the size of 
violations EPA proposed for allowance holders. There were no dissenting 
comments on this point.
    EPA proposed adjusting the maximum potential fine applied to end 
users of methyl bromide because users typically operate on a smaller 
scale and have less ability to pay than chemical companies. EPA 
proposed defining a violation for improper use of critical use methyl 
bromide as one violation for every 200 kilograms of misuse. EPA 
received several comments that the Agency should further lower the 
penalties to be identical to those applied under the Federal 
Insecticide, Fungicide, and Rodenticide Act (FIFRA), the statute that 
usually governs use of fumigants. Today those penalties are $1,200 per 
violation, and a violation is the occurrence of misuse. EPA also 
received two comments supporting a maximum penalty of $25,000 per 
violation, and a violation is the occurrence of misuse and nine 
comments that end user penalties should be identical to those under 
FIFRA or should be handled exclusively under FIFRA authorities.
    With today's rule, EPA is defining a violation with respect to 
improper use by a user as one violation for every 200 kilograms noting 
that EPA typically uses discretion in assessing penalties and takes 
into account such things as the size of the operation and ability to 
pay as well as the circumstances--such as whether the misuse was self-
reported. Today's rule lowers the basis for calculating a maximum 
penalty and the Agency notes there is discretion to apply less than the 
maximum fine per each violation. Today's rule is providing assurances 
to the end users that they will not face the same level of fines as a 
chemical producer and codifies flexibility for the Agency to apply less 
than the maximum penalty for this type of violation. In assessing 
penalties, the Agency takes into consideration the size of the 
violator, the economic benefit or advantage achieved from the violation 
and the ability of the violator to pay a penalty. Thus, the concerns 
raised by commenters regarding the ability of methyl bromide users to 
pay the maximum allowable fine proposed by the Agency are addressed 
through the flexibility EPA provides to enforcement officers in 
assessing penalties.
    Because it is a pesticide, methyl bromide is also regulated by EPA 
under FIFRA and under other statutes and regulatory authority and by 
states under their own statutes and regulatory authority. Nothing in 
today's rule is intended to derogate from provisions in any other 
Federal, State, or local laws or regulations governing actions 
including, but not limited to, the sale, distribution, transfer, and 
use of methyl bromide.

L. Exporting Provisions

    We received two comments that noted the need for regulatory 
provisions that would permit U.S. producers of methyl bromide to 
manufacture material for other countries with critical uses authorized 
by the Parties. In today's action, the regulatory text includes 
provisions that permit methyl bromide production explicitly and solely 
to meet the needs of other countries that have been authorized critical 
use exemptions for the specific control period. The

[[Page 76998]]

producers will be required to report quarterly on quantities produced 
solely for export to meet orders placed by other countries with 
authorized critical needs. The proposal noted that the U.S. is the 
largest world manufacturer of methyl bromide and that U.S. 
manufacturers will likely produce to meet the needs of other non-
Article 5(1) countries that have critical uses authorized by the 
Parties, such as Canada, Australia or Italy. In creating the regulatory 
provisions in today's rule to permit production beyond the phaseout 
explicitly for export to other countries with critical uses authorized 
by the Parties, we are also correcting an oversight that was discussed 
in the final rule published in the Federal Register on January 2, 2003, 
(68 FR 238) regarding production beyond the phaseout for quarantine and 
preshipment applications. In that prior final rule (68 FR 238) as well 
as in the proposal, we discuss that exempt production for quarantine 
and preshipment applications is above and beyond the reduction steps 
prior to the phaseout, and continues after the phaseout. The addition 
of provisions regarding the quarantine and preshipment exemption is to 
correct the absence of the intended exemption beyond the phaseout.

VI. What Are the Other Considerations and Situations on Which EPA 
Received Comments?

A. Distribution of Permits to Approved Critical Users

    In today's rule, EPA is creating an exemption program that 
emphasizes direct regulation of the supply chain of methyl bromide 
through an allowance allocation system that distributes allowances to 
producers, importers, distributers, and third-party applicators of 
methyl bromide as described in section V of this preamble. EPA did 
receive two comments supporting a system that emphasizes direct 
regulation of the user community whereby EPA would issue critical use 
permits to end users of methyl bromide in order to direct critical use 
methyl bromide to the appropriate uses.
    One commenter supported the user oriented approach because the 
administrative burden of such a system would act as a deterrent to the 
use of methyl bromide and would lead to greater efficiencies. As EPA 
described in the proposal, the critical use permit (CUP) system would 
impose additional costs and burden on industry compared to the proposed 
option. Although these costs could be a deterrent to the use of methyl 
bromide and thus achieve an environmental objective of reducing methyl 
bromide use, EPA is committed to a regulatory approach that relies on 
existing market mechanisms. Certain critical uses were agreed to and 
determined through an extensive domestic and international review based 
on the technical and economic feasibility of alternatives. EPA does not 
want to impose a regulatory framework with the goal of establishing 
high administrative costs to force growers who do not have any 
alternative available to them out of the market. Doing so would obviate 
the purpose of an exemption altogether.
    EPA believes the timing of the domestic and international 
authorization process would not allow for the creation of a end user 
allocation scheme on a yearly basis. In addition the learning and 
transaction costs of changing the whole market structure in the face of 
the phaseout could adversely impact in U.S. agricultural sectors. For a 
more detailed description of the economic consideration of the user 
based system, please refer to the Regulatory Impact Assessment 
conducted for the proposed rulemaking available at EPA's e-docket 
number OAR-2003-0230.
    EPA received two comments on using an auction to distribute permits 
to users of methyl bromide, one in favor and one opposed. The commenter 
in favor of the auction indicated that the revenues derived from an 
auction could be used to fund transition activities. The other 
commenter indicated that the auction approach would take a significant 
amount of time to develop and methyl bromide would be directed to the 
highest value uses disadvantaging other important uses of methyl 
bromide. This commenter disputes EPA's assertion that an auction would 
serve to redistribute windfall profits. EPA did not propose and is not 
finalizing this option due to the lack of clear statutory guidance on 
some of the details of this approach, the time it would take to develop 
this program, and the relatively small size of the market compared to 
the burden associated with this approach.

B. Comments on the Burden Associated With This Regulatory System

    EPA received one comment on the estimated burden hours associated 
with this regulatory system. One commenter indicated that EPA grossly 
underestimated the time required for data compilation and reporting and 
suggested that it is at least two times greater than what EPA estimated 
in the Paperwork Reduction Analysis. This commenter did not provide 
additional comment to explain specifically how or why the EPA estimate 
was incorrect nor did they indicate which particular activities should 
be adjusted. Therefore, EPA has not adjusted the estimated burden 
hours.

VII. Statutory and Executive Order Reviews

A. Executive Order No. 12866: Regulatory Planning and Review

    Under Executive Order No. 12866, (58 FR 51735, October 4, 1993) the 
Agency must determine whether the regulatory action is ``significant'' 
and therefore subject to OMB review and the requirements of the 
Executive Order. The Order defines ``significant regulatory action'' as 
one that is likely to result in a rule that may:
    (1) have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.

OMB has notified EPA that it considers this a ``significant regulatory 
action'' under Executive Order No. 12866 and EPA has submitted it to 
OMB for review. We will document changes made in response to OMB 
suggestions or recommendations in the public record.
    EPA conducted an economic impact analysis that attempts to assess 
the likely effect of allowing critical use exemptions on the regulated 
entities using three illustrative alternatives. The estimated cost 
savings are approximately $19 million to $31 million on an annual 
basis. The two factors that affect these estimates are the size of the 
cap and how freely critical use methyl bromide is allocated. Since the 
assumed cap in the analysis is 39% of the 1991 baseline consumption, 
and the allocation system chosen for the final rule is not a full 
universal cap system, the likely cost savings that should result from 
this rule is lower than the estimates presented in the analysis.

B. Paperwork Reduction Act

    The information collection requirements in this rule will be

[[Page 76999]]

submitted for approval to the Office of Management and Budget (OMB) 
under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. The 
information collection requirements are not enforceable until OMB 
approves them.
    The information collection under this rule is authorized under 
Sections 603(b), 603(d) and 614(b) of the CAAA of 1990.
    The mandatory reporting requirements included in this rule are 
intended to:
    (1) Satisfy U.S. obligations under the international treaty, The 
Montreal Protocol on Substances that Deplete the Ozone Layer 
(Protocol), to report data under Article 7;
    (2) Fulfill statutory obligations under Section 603(b) of the CAAA 
of 1990 for reporting and monitoring;
    (3) Provide information to report to Congress on the production, 
use and consumption of class I controlled substances as statutorily 
required in Section 603(d) of the CAAA of 1990.
    Information will be collected through quarterly reporting by 
producers and importers and annual reporting by distributors and third 
party applicators of methyl bromide. EPA estimates the total burden 
associated with today's action to be 1,505 hours annually. EPA does not 
estimate any start-up or capital costs associated with today's action.

----------------------------------------------------------------------------------------------------------------
                                                      No. of       Total No. of      Hours per
               Collection activity                  respondents      responses       response       Total hours
----------------------------------------------------------------------------------------------------------------
Rule Familiarization............................              54              54            4                216
Report Inventory Data (one time)................              54              54            2.5              135
Data Compilation (quarterly basis)..............               4              16            4                 64
Data Compilation (annual basis).................              50              50            8                400
Data Reporting (quarterly basis)................               4              16             .5                8
Data Reporting (annual basis)...................              50              50             .5               25
Reporting on Allowance Trading Activities.......               4              16             .5                8
Self Certification Activities by Producers,                   54             100             .25              25
 Importers, and Distributors....................
Self Certification Activities by End Users......           2,000           2,500             .25             625
                                                 -----------------
    Total Burden Hours..........................  ..............  ..............           18              1,505
----------------------------------------------------------------------------------------------------------------

    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 in 40 CFR are listed in 40 CFR part 9. When this ICR is 
approved by OMB, the Agency will publish a technical amendment to 40 
CFR part 9 in the Federal Register to display the OMB control number 
for the approved information collection requirements contained in this 
final rule.

C. Regulatory Flexibility Act

    EPA has determined that it is not necessary to prepare a regulatory 
flexibility analysis in connection with this final rule. For purposes 
of assessing the impacts of today's rule on small entities, small 
entity is defined as: (1) A small business that is identified by the 
North American Industry Classification System (NAICS) Code in the Table 
below; (2) a small governmental jurisdiction that is a government of a 
city, county, town, school district or special district with a 
population of less than 50,000; and (3) a small organization that is 
any not-for-profit enterprise which is independently owned and operated 
and is not dominant in its field.

----------------------------------------------------------------------------------------------------------------
                                                                                           NAICS Small business
                                                                                            size standard  (in
              Category                       NAICS code                 SIC code            number of employees
                                                                                              or millions of
                                                                                                 dollars)
----------------------------------------------------------------------------------------------------------------
Agricultural production.............  1112--Vegetable and       0171--Berry Crops;        $0.75 million.
                                       Melon farming;           0172--Grapes;
                                      1113--Fruit and Nut Tree  0173--Tree Nuts;
                                       farming;                 0175--Deciduous Tree
                                      1114--Greenhouse,          Fruits (except apple
                                       Nursery, and              orchards and farms);
                                       Floriculture             0179--Fruit and Tree
                                       production.               Nuts, NEC;
                                                                0181--Ornamental
                                                                 Floriculture and
                                                                 Nursery products;
                                                                0831--Forest Nurseries
                                                                 and Gathering of Forest
                                                                 products.
Storage Uses........................  115114--Postharvest Crop  2041--Flour and Other     $6 million.
                                       activities (except        Grain; Mill Products;
                                       Cotton Ginning);         2044--Rice Milling.
                                      311211--Flour Milling;
                                      311212--Rice Milling.
                                      493110--General           4221--Farm Product        $21.5 million.
                                       Warehousing and           Warehousing and
                                       Storage; 493130--Farm     Storage;
                                       Product Warehousing and  4225--General
                                       Storage.                  Warehousing and
                                                                 Storage.
----------------------------------------------------------------------------------------------------------------


[[Page 77000]]

    After considering the economic impacts of today's final rule on 
small entities, EPA has concluded that this action will not have a 
significant economic impact on a substantial number of small entities. 
In determining whether a rule has a significant economic impact on a 
substantial number of small entities, the impact of concern is any 
significant adverse economic impact on small entities, since the 
primary purpose of the regulatory flexibility analyses is to identify 
and address regulatory alternatives ``which minimize any significant 
economic impact of the proposed rule on small entities.'' 5 U.S.C. 603 
and 604. Thus, an agency may conclude that a rule will not have a 
significant economic impact on a substantial number of small entities 
if the rule relieves regulatory burden, or otherwise has a positive 
economic effect on all of the small entities subject to the rule.
    Since this rule will make methyl bromide available for approved 
critical uses after the phaseout date of January 1, 2005, this is a de-
regulatory action which will confer a benefit to users of methyl 
bromide. EPA believes the estimated de-regulatory value for users of 
methyl bromide is between $20 million to $30 million annually. We have 
therefore concluded that today's final rule will relieve regulatory 
burden for all small entities.

D. 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 to State, local, and tribal governments, in 
the aggregate, or to 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. 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.
    EPA has determined that this rule does not contain a Federal 
mandate that may result in expenditures of $100 million or more for 
State, local, and tribal governments, in the aggregate, or the private 
sector in any one year. Today's rule creates a recordkeeping and 
reporting burden on the private sector that is estimated to be under 
$200,000 on an annual basis. Thus, today's rule is not subject to the 
requirements of sections 202 and 205 of the UMRA. Further, EPA has 
determined that this rule contains no regulatory requirements that 
might significantly or uniquely affect small governments because it 
does not create any requirements on any State, local, or tribal 
government.

E. Executive Order No. 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.''
    This final 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. Today's rule is expected to 
primarily affect producers, suppliers, importers and exporters and 
users of methyl bromide. Thus, Executive Order 13132 does not apply to 
this rule.

F. Executive Order No. 13175: Consultation and Coordination With Indian 
Tribal Governments

    Executive Order No. 13175, entitled ``Consultation and Coordination 
with Indian Tribal Governments'' (65 FR 67249, November 9, 2000), 
requires EPA to develop an accountable process to ensure ``meaningful 
and timely input by tribal officials in the development of regulatory 
policies that have tribal implications.'' This final rule does not have 
tribal implications, as specified in Executive Order No. 13175. Today's 
final rule does not significantly or uniquely affect the communities of 
Indian tribal governments. The final rule does not impose any 
enforceable duties on communities of Indian tribal governments. Thus, 
Executive Order No. 13175 does not apply to this final rule.

G. Executive Order No. 13045: Protection of Children From Environmental 
Health & Safety Risks

    Executive Order No. 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 or 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 final rule is not subject 
to Executive Order 13045 because it does not establish an environmental 
standard intended to mitigate health or safety risks.

H. Executive Order No. 13211: Actions That Significantly Affect Energy 
Supply, Distribution, or Use

    This rule is not a ``significant energy action'' as defined in 
Executive Order No. 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR 28355 
(May 22, 2001)) because it is not likely to have a significant adverse

[[Page 77001]]

effect on the supply, distribution, or use of energy. This rule does 
not pertain to any segment of the energy production economy nor does it 
regulate any manner of energy use. Therefore, we have concluded that 
this rule is not likely to have any adverse energy effects.

I. National Technology Transfer Advancement Act

    As noted in the proposed rule, 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 the Agency decides not to use available and 
applicable voluntary consensus standards. This action does not involved 
technical standards. Therefore, EPA did not consider the use of any 
voluntary consensus standards.

J. Congressional Review Act

    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. 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. A Major rule cannot 
take effect until 60 days after it is published in the Federal 
Register. This action is not a ``major rule'' as defined by 5 U.S.C. 
804(2). This rule will be effective on January 1, 2005.

List of Subjects in 40 CFR Part 82

    Environmental protection, Chemicals, Exports, Imports, Methyl 
bromide, Ozone, Production, Reporting and recordkeeping requirements, 
Treaties.

    Dated: December 15, 2004.
Michael O. Leavitt,
Administrator.

0
For the reasons stated in the preamble, 40 CFR part 82 is amended as 
follows:

PART 82--PROTECTION OF STRATOSPHERIC OZONE

0
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

0
2. Section 82.3 is amended as follows:
0
a. By adding definitions in alphabetical order for the terms, 
``Approved critical use(s),'' ``Approved critical user(s),'' 
``Consortium,'' ``Critical stock allowance (CSA),'' ``Critical stock 
allowance (CSA) holder,'' ``Critical use,'' ``Critical use allowance 
(CUA),'' ``Critical use allowance (CUA) for pre-plant use,'' ``Critical 
use allowance (CUA) for post-harvest use,'' ``Critical use allowance 
(CUA) holder,'' ``Critical use methyl bromide,'' ``Limiting critical 
condition,'' ``Location of use,'' ``Third party applicator,'' 
``Unexpended critical stock allowance (CUA),'' and ``Unexpended 
critical use allowances (CUA);''
0
b. By revising definition of ``Confer.''


Sec.  82.3  Definitions for class I and class II controlled substances.

* * * * *
    Approved critical use(s) means those uses of methyl bromide listed 
in Column A of appendix L to this subpart as further clarified in 
Columns B and C of that appendix.
    Approved critical user(s) means a person who:
    (1) For the applicable control period, applied to EPA for a 
critical use exemption or is a member of a consortium that applied to 
EPA for a critical use exemption for a use and location of use that was 
included in the U.S. nomination, authorized by a Decision of the 
Parties to the Montreal Protocol, and then finally determined by EPA in 
a notice-and-comment rulemaking to be an approved critical use; and
    (2) Has an area in the applicable location of use that requires 
methyl bromide fumigation because the person reasonably expects that 
the area will be subject to a limiting critical condition during the 
applicable control period.
* * * * *
    Confer means to shift the essential-use allowances obtained under 
Sec.  82.8 from the holder of the unexpended essential-use allowances 
to a person for the production of a specified controlled substance, or 
to shift the HCFC-141b exemption allowances granted under Sec.  
82.16(h) from the holder of the unexpended HCFC-141b exemption 
allowances to a person for the production or import of the controlled 
substance.
    Consortium means an organization representing a group of methyl 
bromide users that has collectively submitted an application for a 
critical use exemption on behalf of all members of the group. The 
members of a consortium shall be determined on the basis of the rules 
established by the organization. Members may either be required to 
formally join the consortium (e.g., by submitting an application or 
paying dues) or may automatically become members upon meeting 
particular criteria (e.g., a grower of a specific crop in a particular 
region).
* * * * *
    Critical stock allowance (CSA) means the right granted by this 
subpart to sell one (1) kilogram of class I, Group VI controlled 
substances from inventory produced or imported prior to the January 1, 
2005 phaseout date for an approved critical use during the specified 
control period to the extent permitted by federal and state pesticide 
statutes and regulations other than the Clean Air Act and regulations 
in this part. A person's critical stock allowances are the total of the 
allowances obtained under Sec.  82.8(c) as may be modified under Sec.  
82.12 (transfer of allowances).
    Critical stock allowance (CSA) holder means an entity to which EPA 
allocates a quantity of critical stock allowances as reflected under 
Sec.  82.8(c), or who receives a quantity of critical stock allowances 
through a transfer under Sec.  82.12.
    Critical use means a circumstance in which the following two 
conditions are satisfied:
    (1) There are no technically and economically feasible alternatives 
or substitutes for methyl bromide available that are acceptable from 
the standpoint of environment and health and are suitable to the crops 
and circumstances involved, and
    (2) The lack of availability of methyl bromide for a particular use 
would result in significant market disruption.
    Critical use allowance (CUA) means the privilege granted by this 
subpart to produce or import one (1) kilogram of methyl bromide for an 
approved critical use during the specified control period. A person's 
critical use allowances are the total of the allowances obtained

[[Page 77002]]

under Sec.  82.8(c) as may be modified under Sec.  82.12 (transfer of 
allowances).
    Critical use allowance for pre-plant uses means the privilege 
granted by this subpart to produce or import one (1) kilogram of methyl 
bromide solely for an approved critical use in pre-plant categories 
specified in Appendix L to this subpart during the specified control 
period. A person's critical use allowances for pre-plant uses are the 
total of the allowances obtained under Sec.  82.8(c) as may be modified 
under Sec.  82.12 (transfer of allowances).
    Critical use allowance for post-harvest uses means the privilege 
granted by this subpart to produce or import one (1) kilogram of methyl 
bromide solely for an approved critical use in post-harvest categories 
specified in appendix L to this subpart during the specified control 
period. A person's critical use allowances for post-harvest uses are 
the total of the allowances obtained under Sec.  82.8(c) as may be 
modified under Sec.  82.12 (transfer of allowances).
    Critical use allowance (CUA) holder means an entity to which EPA 
allocates a quantity of critical use allowances as reflected in Sec.  
82.8(c) or who receives a quantity of critical use allowances through a 
transfer under Sec.  82.12.
    Critical use methyl bromide means the class I, Group VI controlled 
substance produced or imported through expending a critical use 
allowance or that portion of inventory produced or imported prior to 
the January 1, 2005 phaseout date that is sold only for approved 
critical uses through expending a critical stock allowance.
* * * * *
    Limiting critical condition means the regulatory, technical, and 
economic circumstances listed in Column C of Appendix L to this subpart 
that establish conditions of critical use for methyl bromide in a 
fumigation area.
    Location of use means the geographic area (such as a state, region, 
or the entire United States) covered by an application for a critical 
use exemption in which the limiting critical condition may occur.
* * * * *
    Third party applicator means an applicator of critical use methyl 
bromide who fumigates or treats commodities, structures, crops, or land 
on behalf of an approved critical user.
* * * * *
    Unexpended critical stock allowance (CSA) means critical stock 
allowances against which methyl bromide has not yet been sold for an 
approved critical use.
    Unexpended critical use allowances (CUA) means critical use 
allowances against which methyl bromide has not yet been produced or 
imported. At any time in any control period a person's unexpended 
critical use allowances are the total of the level of critical use 
allowances the person holds at that time for that control period, minus 
the level of class I, Group VI controlled substances that the person 
has produced or has imported solely for approved critical uses in that 
control period.
* * * * *

0
3. Section 82.4 is amended by revising paragraphs (b), (d) and (n), and 
by adding paragraph (p) as follows:


Sec.  82.4  Prohibitions for class I controlled substances.

* * * * *
    (b) (1) Effective January 1, 1996, for any class I, Group I, Group 
II, Group III, Group IV, Group V, or Group VII controlled substances, 
and effective January 1, 2005, for any class I, Group VI controlled 
substance, and effective August 18, 2003, for any class I, Group VIII 
controlled substance, no person may produce, at any time in any control 
period, (except that are transformed or destroyed domestically or by a 
person of another Party) in excess of the amount of conferred 
unexpended essential use allowances or exemptions, or in excess of the 
amount of unexpended critical use allowances, or in excess of the 
amount of unexpended Article 5 allowances as allocated under Sec.  82.9 
as may be modified under Sec.  82.12 (transfer of allowances), for that 
substance held by that person under the authority of this subpart at 
that time for that control period. Every kilogram of excess production 
constitutes a separate violation of this subpart.
    (2) Effective January 1, 2005, production of class I, Group VI 
controlled substances is not subject to the prohibitions in paragraph 
(b)(1) of this section if it is solely for quarantine or preshipment 
applications as defined in this subpart, or it is solely for export to 
satisfy critical uses authorized by the Parties for that control 
period.
* * * * *
    (d) Effective January 1, 1996, for any class I, Group I, Group II, 
Group III, Group IV, Group V, or Group VII controlled substances, and 
effective January 1, 2005, for any class I, Group VI controlled 
substance, and effective August 18, 2003, for any class I, Group VIII 
controlled substance, no person may import (except for transhipments or 
heels), at any time in any control period, (except for controlled 
substances that are transformed or destroyed) in excess of the amount 
of unexpended essential use allowances or exemptions, or in excess of 
unexpended critical use allowances, for that substance held by that 
person under the authority of this subpart at that time for that 
control period. Every kilogram of excess importation (other than 
transhipments or heels) constitutes a separate violation of this 
subpart. It is a violation of this subpart to obtain unused class I 
controlled substances under the general laboratory exemption in excess 
of actual need and to recycle that material for sale into other 
markets.
* * * * *
    (n) No person may use class I controlled substances produced or 
imported under the essential use exemption for any purpose other than 
those set forth in this paragraph. Effective January 1, 1996, 
essential-use allowances are apportioned to a person under Sec.  
82.8(a) and (b) for the exempted production or importation of specified 
class I controlled substances solely for the purposes listed in 
paragraphs (n)(1)(i) through (iii) of this section.
    (1) Essential-uses for the production or importation of controlled 
substances as agreed to by the Parties to the Protocol and subject to 
the periodic revision of the Parties are:
    (i) Metered dose inhalers (MDIs) for the treatment of asthma and 
chronic obstructive pulmonary disease that were approved by the Food 
and Drug Administration before December 31, 2000.
    (ii) Space Shuttle--solvents.
    (iii) Essential laboratory and analytical uses (defined in Appendix 
G of this subpart).
    (2) Any person acquiring unused class I controlled substances 
produced or imported under the authority of essential-use allowances or 
the essential-use exemption granted in Sec.  82.8 to this subpart for 
use in anything other than an essential-use (i.e., for uses other than 
those specifically listed in paragraph (n)(1) of this section) is in 
violation of this subpart. Each kilogram of unused class I controlled 
substance produced or imported under the authority of essential-use 
allowances or the essential-use exemption and used for a non-essential 
use is a separate violation of this subpart. Any person selling unused 
class I controlled substances produced or imported under authority of 
essential-use allowances or the essential-use exemption for uses other 
than an essential-use is in violation of this subpart. Each kilogram of 
unused class I controlled substances produced or imported under 
authority of essential-use allowances or the essential-use exemption 
and sold for a use other than an essential-use is a

[[Page 77003]]

separate violation of this subpart. It is a violation of this subpart 
to obtain unused class I controlled substances under the exemption for 
laboratory and analytical uses in excess of actual need and to recycle 
that material for sale into other markets.
* * * * *
    (p) Critical Use Exemption: With respect to class I, Group VI 
substances (methyl bromide):
    (1) For critical use allowance holders and critical stock allowance 
holders:
    (i) No person shall sell critical use methyl bromide without first 
receiving a certification from the purchaser that the quantity 
purchased will be sold or used solely for an approved critical use. 
Every kilogram of critical use methyl bromide sold without first 
obtaining such certification constitutes a separate violation of this 
subpart.
    (ii) No person shall sell a portion of inventory produced or 
imported prior to the January 1, 2005 phaseout date as critical use 
methyl bromide in excess of the number of unexpended critical stock 
allowances held by that person.
    (iii) A person who sells methyl bromide produced or imported before 
the phaseout date of January 1, 2005 for a use identified by the user 
as a critical use must hold sufficient critical stock allowances (CSA) 
for the transaction and shall expend one allowance for each kilogram of 
methyl bromide sold. Every kilogram of critical use methyl bromide 
produced or imported before the phaseout date of January 1, 2005 that 
is sold without expending an allowance constitutes a separate violation 
of this subpart.
    (2) For approved critical users, each action associated with each 
200 kilograms of critical use methyl bromide for the following 
subparagraphs constitutes a separate violation of this subpart.
    (i) No person shall take possession of quantities of critical use 
methyl bromide or acquire fumigation services using quantities of 
critical use methyl bromide without first completing the appropriate 
certification in accordance with the requirements in Sec.  82.13.
    (ii) No person who purchases critical use methyl bromide may use 
such quantities for a use other than the specified critical use listed 
in Column A and the specified location of use in Column B of Appendix L 
to this subpart.
    (iii) No person who purchases critical use methyl bromide produced 
or imported with expended critical use allowances for pre-plant uses, 
may use such quantities for other than the pre-plant uses as specified 
in Column A and Column B of appendix L to this subpart.
    (iv) No person who purchases critical use methyl bromide produced 
or imported with expended critical use allowances for post-harvest 
uses, may use such quantities for other than the post-harvest uses as 
specified in Column A and Column B of appendix L to this subpart.
    (v) No person who uses critical use methyl bromide on a specific 
field or structure may concurrently or subsequently use non-critical 
use methyl bromide on the same field or structure for the same use (as 
defined in Column A and Column B of appendix L) in the same control 
period, excepting methyl bromide used under the quarantine and pre-
shipment exemption.
    (vi) No person who purchases critical use methyl bromide during the 
control period shall use that methyl bromide on a field or structure 
for which that person has used non-critical use methyl bromide for the 
same use (as defined in Columns A and B of appendix L) in the same 
control period, excepting methyl bromide used under the quarantine and 
pre-shipment exemption, unless, subsequent to that person's use of the 
non-critical use methyl bromide, that person becomes subject to a 
prohibition on the use of methyl bromide alternatives due to the 
reaching of a local township limit described in appendix L of this 
part.
* * * * *

0
4. Section 82.8 is added to read as follows:


Sec.  82.8  Grant of essential use allowances and critical use 
allowances.

    (a) Effective January 1, 1996, persons in the following list are 
allocated essential-use allowances or exemptions for quantities of a 
specific class I controlled substance for a specific essential-use (the 
Administrator reserves the right to revise the allocations based on 
future decisions of the Parties).

        Table 1.--Essential Use Allowances for Calendar Year 2004
------------------------------------------------------------------------
                                                             Quantity
            Company                     Chemical          (metric tons)
------------------------------------------------------------------------
 (1) Metered Dose Inhalers (for Oral Inhalation) for Treatment of Asthma
                and Chronic Obstructive Pulmonary Disease
------------------------------------------------------------------------
Armstrong Pharmaceuticals......  CFC-11 or CFC-12 or              390.60
                                  CFC-114.
Aventis Pharmaceutical Products  CFC-11 or CFC-12 or               48.40
                                  CFC-114.
Boehringer Ingelheim             CFC-11 or CFC-12 or              500.20
 Pharmaceuticals.                 CFC-114.
PLIVA Inc......................  CFC-11 or CFC-12 or              136.00
                                  CFC-114.
Schering-Plough Corporation....  CFC-11 or CFC-12 or              918.00
                                  CFC-114.
3M Pharmaceuticals.............  CFC-11 or CFC-12 or               84.71
                                  CFC-114.
--------------------------------
 (2) Cleaning, Bonding and Surface Activation Applications for the Space
                    Shuttle Rockets and Titan Rockets
------------------------------------------------------------------------
National Aeronautics and Space   Methyl Chloroform.....          141.877
 Administration (NASA)/Thiokol
 Rocket.
------------------------------------------------------------------------

    (b) A global exemption for class I controlled substances for 
essential laboratory and analytical uses shall be in effect through 
December 31, 2005 subject to the restrictions in Appendix G of this 
subpart, and subject to the record-keeping and reporting requirements 
at Sec.  82.13(u) through (x). There is no amount specified for this 
exemption.
    (c) Effective January 1, 2005, critical use allowances are 
apportioned as set forth in paragraph (c)(1) of this section for the 
exempted production and import of class I, Group VI controlled 
substances specifically for those approved critical uses listed in 
Appendix L to this subpart for the applicable control period. Every 
kilogram of production and import in excess of the total number and 
type of unexpended critical use allowances held for a particular type 
of use constitutes a separate violation of this subpart. Effective 
January 1, 2005,

[[Page 77004]]

critical stock allowances are issued as set forth in paragraph (c)(2) 
of this section for the sale of class I, Group VI controlled substances 
from inventory produced or imported before the January 1, 2005 phaseout 
date specifically for those approved critical uses listed in Appendix L 
to this subpart for the applicable control period.
    (1) Allocated critical use allowances granted for specified control 
period.

------------------------------------------------------------------------
                                           2005 Critical   2005 Critical
                                          use allowances  use allowances
                 Company                   for pre-plant     for post-
                                               uses*       harvest uses*
                                            (kilograms)     (kilograms)
------------------------------------------------------------------------
Albemarle Corp..........................       1,791,950         122,151
Ameribrom, Inc..........................         989,911          67,479
Great Lakes Chemical Corp...............       4,357,690         297,049
TriCal, Inc.............................          30,679           2,091
------------------------------------------------------------------------

    *For production or import of class I, Group VI controlled substance 
exclusively for the Pre-Plant or Post-Harvest uses specified in 
appendix L to this subpart.
    (2) Allocated critical stock allowances granted for specified 
control period. The following companies are allocated critical stock 
allowances for 2005 on pro-rata basis in relation to the stocks held by 
each.

------------------------------------------------------------------------
                                 Company
-------------------------------------------------------------------------
Albemarle
Ameribrom, Inc.
Bill Clark Pest Control, Inc.
Blair Soil Fumigation
Burnside Services, Inc.
Cardinal Professional Products
Carolina Eastern, Inc.
Degesch America, Inc.
Dodson Bros.
Great Lakes Chemical Corp.
Harvey Fertilizer & Gas
Helena Chemical Co.
Hendrix & Dail
Hy Yield Bromine
Industrial Fumigation Company
J.C. Ehrlich Co.
Pacific Ag
Pest Fog Sales Corp.
Pro Source One
Reddick Fumigants
Royster-Clark, Inc.
Southern State Cooperative, Inc.
Trical Inc.
Trident Agricultural Products
UAP Southeast (NC)
UAP Southeast (SC)
Univar
Vanguard Fumigation Co.
Western Fumigation
    Total--1,283,214 kilograms.
------------------------------------------------------------------------


0
5. Section 82.12 is amended by revising paragraph (a)(1) introductory 
text, (a)(1)(i)(H), (a)(1)(ii) introductory text, and (a)(1)(iii) and 
by adding paragraph (e) to read as follows:


Sec.  82.12  Transfers of allowances for class I controlled substances.

    (a) Inter-company transfers. (1) Until January 1, 1996, for all 
class I controlled substances, except for Group VI, and until January 
1, 2005, for Group VI, any person (``transferor'') may transfer to any 
other person (``transferee'') any amount of the transferor's 
consumption allowances or production allowances, and effective January 
1, 1995, for all class I controlled substances any person 
(``transferor'') may transfer to any other person (``transferee'') any 
amount of the transferor's Article 5 allowances. After January 1, 2002, 
any essential-use allowance holder (including those persons that hold 
essential-use allowances issued by a Party other than the United 
States) (``transferor'') may transfer essential-use allowances for CFCs 
to a metered dose inhaler company solely for the manufacture of 
essential MDIs. After January 1, 2005, any critical use allowance 
holder (``transferor'') may transfer critical use allowances to any 
other person (``transferee''). After January 1, 2005, any critical 
stock allowance holder (``transferor'') may transfer critical stock 
allowances to any critical stock allowance holder or any methyl bromide 
producer, importer, distributer or third party applicator 
(``transferee'').
    (i) * * *
    (H) The one percent offset applied to the unweighted amount traded 
will be deducted from the transferor's production or consumption 
allowance balance (except for trades from transformers and destroyers 
to producers or importers for the purpose of allowance reimbursement). 
In the case of transferring essential use allowances, the amount of one 
tenth of one percent of the amount traded will be deducted from the 
transferor's allowance balance. In the case of transferring critical 
use allowances, the amount of one tenth of one percent of the amount 
traded will be deducted from the transferor's critical use allowance 
balance.
* * * * *
    (ii) The Administrator will determine whether the records 
maintained by EPA, taking into account any previous transfers and any 
production, allowable imports and exports of controlled substances 
reported by the transferor, indicate that the transferor possesses, as 
of the date the transfer claim is processed, unexpended allowances 
sufficient to cover the transfer claim (i.e., the amount to be 
transferred plus, in the case of transferors of essential use 
allowances and critical use allowances, one tenth of one percent of the 
transferred amount). Within three working days of receiving a complete 
transfer claim, the Administrator will take action to notify the 
transferor and transferee as follows:
* * * * *
    (iii) In the event that the Administrator does not respond to a 
transfer claim within the three working days specified in paragraph 
(a)(1)(ii) of this section the transferor and transferee may proceed 
with the transfer. EPA will reduce the transferor's balance of 
unexpended allowances by the amount to be transferred plus, in the case 
of transfers of production or consumption allowances, one percent of 
that amount, and in the case of essential use allowances and critical 
use allowances, one tenth of one percent of that amount. However if EPA 
ultimately finds that the transferor did not have sufficient unexpended 
allowances to cover the claim, the transferor and transferee will be 
held liable for any violations of the regulations of this subpart that 
occur as a result of, or in conjunction with, the improper transfer.
* * * * *
    (e) Exchange of Critical Use Allowances for Critical Stock 
Allowances. (1) Critical use allowance holders may petition the 
Administrator to exchange a quantity of their unexpended critical use 
allowances for an equivalent amount of critical stock allowances. A 
person allocated critical stock allowances may not petition to exchange 
unexpended critical stock allowances for critical use allowances.
    (2) [Reserved]

[[Page 77005]]


0
6. Section 82.13 is amended as follows:
0
a. Revising paragraph (a).
0
b. Adding paragraphs (f)(2)(xx) through (f)(2)(xxii).
0
c. Revising paragraph (f)(3)(iv).
0
d. Adding paragraphs (f)(3)(xvi), and (f)(3)(xvii).
0
e. Adding paragraphs (g)(1)(xx) and (xxi).
0
f. Revising paragraph (g)(4)(vii).
0
h. Adding paragraphs (g)(4)(xviii) and (bb) through (dd).


Sec.  82.13  Recordkeeping and reporting requirements for class I 
controlled substances.

    (a) Unless otherwise specified, the recordkeeping and reporting 
requirements set forth in this section take effect on January 1, 1995. 
For class I, Group VIII controlled substances, the recordkeeping and 
reporting requirements set forth in this section take effect on August 
18, 2003. For class I, Group VI critical use methyl bromide, the 
recordkeeping and reporting requirements set forth in this section take 
effect January 1, 2005.
* * * * *
    (f) * * *
    (2) * * *
    (xx) For class I, Group VI controlled substances, dated records 
such as invoices and order forms, and a log of the quantity of 
controlled substances produced for critical use, specifying quantities 
dedicated for pre-plant use and quantities dedicated for post-harvest 
use, and the quantity sold for critical use, specifying quantities 
dedicated for pre-plant use and quantities dedicated for post-harvest 
use;
    (xxi) Written certifications that quantities of class I, Group VI 
controlled substances produced for critical use were purchased by 
distributors, applicators, or approved critical users to be used or 
sold only for critical use in accordance with the definitions and 
prohibitions in this subpart. Certifications must be maintained by the 
producer for a minimum of three years and;
    (xxii) For class I, Group VI controlled substances, dated records 
such as invoices and order forms, and a log of the quantity of 
controlled substances produced solely for export to satisfy critical 
uses authorized by the Parties for that control period, and the 
quantity sold solely for export to satisfy critical uses authorized by 
the Parties for that control period.
    (3) * * *
    (iv) The producer's total of expended and unexpended production 
allowances, consumption allowances, Article 5 allowances, critical use 
allowances (pre-plant), critical use allowances (post-harvest), 
critical stock allowances, and amount of essential-use allowances and 
destruction and transformation credits conferred at the end of that 
quarter;
* * * * *
    (xvi) For critical uses of class I, Group VI controlled substances, 
producers shall report annually the amount of critical use methyl 
bromide owned by the reporting entity, specifying quantities dedicated 
for pre-plant use and quantities dedicated for post-harvest use, as 
well as quantities held by the reporting entity on behalf of another 
entity, specifying quantities dedicated for pre-plant use and 
quantities dedicated for post-harvest use along with the name of the 
entity on whose behalf the material is held; and
    (xvii) A list of the quantities of class I, Group VI controlled 
substances produced by the producer and exported by the producer and/or 
by other U.S. companies in that control period, solely to satisfy the 
critical uses authorized by the Parties for that control period.
    (g) * * *
    (1) * * *
    (xx) For class I, Group VI controlled substances, dated records 
such as invoices and order forms, of the quantity of controlled 
substances imported for critical use, specifying quantities dedicated 
for pre-plant use and quantities dedicated for post-harvest use, and 
the quantity sold for critical use, specifying quantities dedicated for 
pre-plant use and quantities dedicated for post-harvest use, and;
    (xxi) Written certifications that quantities of class I, Group VI 
controlled substances imported for critical use were purchased by 
distributors, applicators, or approved critical users to be used or 
sold only for critical use in accordance with the definitions and 
prohibitions in this subpart. Certifications must be maintained by an 
importer for a minimum of three years.
    (4) * * *
    (vii) The importer's total sum of expended and unexpended 
consumption allowances by chemical as of the end of that quarter and 
the total sum of expended and unexpended critical use allowances (pre-
plant) and unexpended critical use allowances (post-harvest) and 
critical stock allowances;
* * * * *
    (xviii) For critical uses of class I, Group VI controlled 
substances, importers shall report annually the amount of critical use 
methyl bromide owned by the reporting entity, specifying quantities 
dedicated for pre-plant use and quantities dedicated for post-harvest 
use, as well as quantities held by the reporting entity on behalf of 
another entity, specifying quantities dedicated for pre-plant use and 
quantities dedicated for post-harvest use along with the name of the 
entity on whose behalf the material is held.
* * * * *
    (bb) Every distributor of methyl bromide (class I, Group VI 
controlled substances) who purchases or receives a quantity of critical 
use methyl bromide must comply with recordkeeping and reporting 
requirements specified in this paragraph (bb).
    (1) Recordkeeping--Every distributor of critical use methyl bromide 
must certify to the producer or importer or other entity from which 
they are acquiring quantities of critical use methyl bromide that such 
quantities received will be sold or used only for approved critical 
use(s) in accordance with the definitions and prohibitions in this 
subpart.
    (i) Every distributor of a quantity of critical use methyl bromide 
must receive from an applicator, or any other entity to whom they sell 
critical use methyl bromide, a certification of the quantity of 
critical use methyl bromide ordered, prior to delivery of the quantity, 
stating that the quantity will be sold or used only for approved 
critical uses in accordance with definitions and prohibitions in this 
subpart.
    (ii) Every distributor of methyl bromide who receives a 
certification from an applicator or any other entity to which they sell 
critical use methyl bromide must maintain the certifications as records 
for 3 years.
    (iii) Every distributor of a quantity of critical use methyl 
bromide must maintain invoice and order records related to the sale of 
such material for 3 years.
    (2) Reporting--Every distributor of critical use methyl bromide 
must report to the Administrator annually, the following items:
    (i) For critical uses of class I, Group VI controlled substances, 
an annual list of the amount of critical use methyl bromide bought;
    (ii) For critical uses of class I, Group VI controlled substances, 
an annual list of the amount of critical use methyl bromide sold for 
each specified critical use in Appendix L of this subpart;
    (iii) For critical uses of class I, Group VI controlled substances, 
report the amount of critical use methyl bromide owned by the reporting 
entity, specifying quantities dedicated for pre-

[[Page 77006]]

plant use and quantities dedicated for post-harvest use, as well as 
quantities held by the reporting entity on behalf of another entity, 
specifying quantities dedicated for pre-plant use and quantities 
dedicated for post-harvest use, along with the name of the entity on 
whose behalf the material is held;
    (iv) The number of unexpended critical stock allowances.
    (cc) Every third party applicator of methyl bromide (class I, Group 
VI controlled substances) that purchases or receives critical use 
methyl bromide must comply with recordkeeping and reporting 
requirements specified in this paragraph (cc).
    (1) Recordkeeping--Every third party applicator of critical use 
methyl bromide must certify to the producer or importer or other entity 
from which they are acquiring quantities of critical use methyl bromide 
that such quantities received will be sold or used only for approved 
critical use(s) in accordance with the definitions and prohibitions in 
this subpart.
    (i) Every third party applicator of a quantity of critical use 
methyl bromide must receive from any entity to whom they sell critical 
use methyl bromide, a certification of the quantity of critical use 
methyl bromide ordered, prior to delivery of the quantity, stating that 
the quantity will be sold or used only for approved critical uses in 
accordance with definitions and prohibitions in this subpart.
    (ii) Every third party applicator of methyl bromide who receives a 
certification from an entity to which they sell critical use methyl 
bromide must maintain the certifications as records for 3 years.
    (iii) Every third party applicator of a quantity of critical use 
methyl bromide must maintain invoice and order records related to the 
sale of such material for 3 years.
    (2) Reporting--Every third party applicator of critical use methyl 
bromide must report to the Administrator annually, the following items:
    (i) For critical uses of class I, Group VI controlled substances, 
an annual list of the amount of critical use methyl bromide bought;
    (ii) For critical uses of class I, Group VI controlled substances, 
an annual list of the amount of critical use methyl bromide sold for 
each specified critical use in Appendix L of this subpart;
    (iii) For critical uses of class I, Group VI controlled substances, 
report annually the amount of critical use methyl bromide owned by the 
reporting entity, specifying quantities dedicated for pre-plant use and 
quantities dedicated for post-harvest use, as well as quantities held 
by the reporting entity on behalf of another entity, specifying 
quantities dedicated for pre-plant use and quantities dedicated for 
post-harvest use, along with the name of the entity on whose behalf the 
material is held;
    (iv) The number of unexpended critical stock allowances.
    (dd) Every approved critical user purchasing an amount of critical 
use methyl bromide or purchasing fumigation services with critical use 
methyl bromide must, for each request, identify the use as a critical 
use and certify being an approved critical user. The approved critical 
user certification will state, in part: ``I certify, under penalty of 
law, I am an approved critical user and I will use this quantity of 
methyl bromide for an approved critical use. My action conforms to the 
requirements associated with the critical use exemption published in 40 
CFR part 82. I am aware that any agricultural commodity within a 
treatment chamber, facility, or field I fumigate with critical use 
methyl bromide can not subsequently or concurrently be fumigated with 
non-critical use methyl bromide during the same control period, 
excepting a QPS treatment or a treatment for a different use (e.g., a 
different crop or commodity). I will not use this quantity of methyl 
bromide for a treatment chamber, facility, or field that I previously 
fumigated with non-critical use methyl bromide purchased during the 
same control period, excepting a QPS treatment or a treatment for a 
different use (e.g., a different crop or commodity), unless a local 
township limit now prevents me from using methyl bromide 
alternatives.'' The certification will also indicate the type of 
critical use methyl bromide purchased, the location of the treatment, 
the crop or commodity treated, the quantity of critical use methyl 
bromide purchased, the acreage/square footage treated and will be 
signed and dated by the approved critical user.

0
7. Add Appendix L to subpart A to read as follows:

Appendix L to Subpart A Of Part 82--Approved Critical Uses, and 
Limiting Critical Conditions for Those Uses for the 2005 Control Period

----------------------------------------------------------------------------------------------------------------
                                               Column B--Approved critical user    Column C--Limiting critical
      Column A--Approved  critical uses               and location of use                   conditions
----------------------------------------------------------------------------------------------------------------
                                                 PRE-PLANT USES
----------------------------------------------------------------------------------------------------------------
Cucurbits....................................  (a) Michigan growers............  With a reasonable expectation
                                                                                  that moderate to severe fungal
                                                                                  pathogen infestation already
                                                                                  either exists or could occur
                                                                                  without methyl bromide
                                                                                  fumigation.
                                               (b) Alabama, Arkansas, Georgia,   With a reasonable expectation
                                                North Carolina, South Carolina,   that moderate to severe yellow
                                                Tennessee, and Virginia growers.  or purple nutsedge infestation
                                                                                  already either exists or could
                                                                                  occur without methyl bromide
                                                                                  fumigation.
Eggplant.....................................  (a) Georgia growers.............  With a reasonable expectation
                                                                                  that moderate to severe yellow
                                                                                  or purple nutsedge infestation
                                                                                  either already exist or could
                                                                                  occur without methyl bromide
                                                                                  fumigation.
                                               (b) Florida growers.............  With a reasonable expectation
                                                                                  that one or more of the
                                                                                  following limiting critical
                                                                                  conditions either already
                                                                                  exist or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  Moderate to severe yellow or
                                                                                  purple nutsedge infestation,
                                                                                  or karst topography.
Forest Seedlings.............................  (a) Members of the Southern       With a reasonable expectation
                                                Forest Nursery Management         that one or more of the
                                                Cooperative limited to growing    following limiting critical
                                                locations in Alabama, Arkansas,   conditions already either
                                                Florida, Georgia, Louisiana,      exist or could occur without
                                                Mississippi, North Carolina,      methyl bromide fumigation:
                                                Oklahoma, South Carolina,         Moderate to severe yellow or
                                                Tennessee, Texas, and Virginia.   purple nutsedge infestation,
                                                                                  or moderate to severe disease
                                                                                  infestation.

[[Page 77007]]

 
                                               (b) International Paper and its   With a reasonable expectation
                                                subsidiaries limited to growing   that one or more of the
                                                locations in Arkansas, Alabama,   following limiting critical
                                                Georgia, South Carolina and,      conditions already either
                                                Texas.                            exist or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  Moderate to severe yellow or
                                                                                  purple nutsedge infestation,
                                                                                  or moderate to severe disease
                                                                                  infestation.
                                               (c) Weyerhaeuser Company and its  With a reasonable expectation
                                                subsidiaries limiting to          that one or more of the
                                                growing locations in Alabama,     following limited critical
                                                Arkansas, North Carolina, South   conditions already either
                                                Carolina, Oregon, and             exist or could occur without
                                                Washington.                       methyl bromide fumigation:
                                                                                  Moderate to severe yellow or
                                                                                  purple nutsedge infestation,
                                                                                  or moderate to severe disease
                                                                                  infestation.
                                               (d) Public (government owned)     With a reasonable expectation
                                                seedling nurseries in the         that one or more of the
                                                states of California, Idaho,      following limiting critical
                                                Illinois, Indiana, Kansas,        conditions already either
                                                Kentucky, Maryland, Missouri,     exist or could occur without
                                                Nebraska, New Jersey, Ohio,       methyl bromide fumigation:
                                                Oregon, Pennsylvania, Utah,       Moderate to severe yellow or
                                                Washington, West Virginia and,    purple nutsedge infestation,
                                                Wisconsin.                        or moderate to severe disease
                                                                                  infestation.
                                               (e) Members of the Nursery        With a reasonable expectation
                                                Technology Cooperative limited    that one or more of the
                                                to growing locations in Oregon    following limiting critical
                                                and Washington.                   conditions already either
                                                                                  exist or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  Moderate to severe yellow or
                                                                                  purple nutsedge infestation,
                                                                                  or moderate to severe disease
                                                                                  infestation.
                                               (f) Michigan seedling nurseries.  With a reasonable expectation
                                                                                  that one or more of the
                                                                                  following limiting critical
                                                                                  conditions already exist or
                                                                                  could occur without methyl
                                                                                  bromide fumigation: Moderate
                                                                                  to severe yellow or purple
                                                                                  nutsedge infestation, or
                                                                                  moderate to severe disease
                                                                                  infestation.
Ginger.......................................  Hawaii growers..................  With a reasonable expectation
                                                                                  that the limiting critical
                                                                                  condition already either
                                                                                  exists or could occur without
                                                                                  methyl bromide fumigation, or
                                                                                  moderate to severe bacterial
                                                                                  wilt infestation.
Orchard Nursery Seedlings....................  (a) Members of the Western        With a reasonable expectation
                                                Raspberry Nursery Consortium      that one or more of the
                                                limited to growing locations in   following limiting critical
                                                California and Washington         conditions already either
                                                (Driscoll's raspberries and       exists or could occur without
                                                their contract growers in         methyl bromide fumigation:
                                                California and Washington).       Moderate to severe nematode
                                                                                  infestation, medium to heavy
                                                                                  clay soils, or a prohibition
                                                                                  of on the use of 1,3-
                                                                                  dichloropropene products due
                                                                                  to reaching local township
                                                                                  limits on the use of this
                                                                                  alternative.
                                               (b) Members of the California     With a reasonable expectation
                                                Association of Nurserymen-        that one or more of the
                                                Deciduous Fruit and Nut Tree      following limiting critical
                                                Growers.                          conditions already either
                                                                                  exists or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  Moderate to severe nematode
                                                                                  infestation, medium to heavy
                                                                                  clay soils, or a prohibition
                                                                                  of on the use of 1,3-
                                                                                  dichloropropene products due
                                                                                  to reaching local township
                                                                                  limits on the use of this
                                                                                  alternative.
                                               (c) Members of the California     With a reasonable expectation
                                                Association of Nurserymen-        that one or more of the
                                                Citrus and Avocado Growers.       following limiting critical
                                                                                  conditions already either
                                                                                  exists or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  Moderate to severe nematode
                                                                                  infestation, medium to heavy
                                                                                  clay soils, or a prohibition
                                                                                  of on the use of 1,3-
                                                                                  dichloropropene products due
                                                                                  to reaching local township
                                                                                  limits on the use of this
                                                                                  alternative.
Orchard Replant..............................  (a) California stone fruit        With a reasonable expectation
                                                growers.                          that one or more of the
                                                                                  following limiting critical
                                                                                  conditions already either
                                                                                  exists or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  Replanted (non-virgin) orchard
                                                                                  soils to prevent orchard
                                                                                  replant disease, or medium to
                                                                                  heavy soils, or a prohibition
                                                                                  on the use of 1,3-
                                                                                  dichloropropene products
                                                                                  because local township limits
                                                                                  for this alternative have been
                                                                                  reached.
                                               (b) California table and raisin   With a reasonable expectation
                                                grape growers.                    that one or more of the
                                                                                  following limiting critical
                                                                                  conditions already either
                                                                                  exists or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  Replanted (non-virgin) orchard
                                                                                  soils to prevent orchard
                                                                                  replant disease, or medium to
                                                                                  heavy soils, or a prohibition
                                                                                  on the use of 1,3-
                                                                                  dichloropropene products
                                                                                  because local township limits
                                                                                  for this alternative have been
                                                                                  reached.

[[Page 77008]]

 
                                               (c) California walnut growers...  With a reasonable expectation
                                                                                  that one or more of the
                                                                                  following limiting critical
                                                                                  conditions already either
                                                                                  exists or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  Replanted (non-virgin) orchard
                                                                                  soils to prevent orchard
                                                                                  replant disease, or medium to
                                                                                  heavy soils, or a prohibition
                                                                                  on the use of 1,3-
                                                                                  dichloropropene products
                                                                                  because local township limits
                                                                                  for this alternative have been
                                                                                  reached.
                                               (d) California almond growers...  With a reasonable expectation
                                                                                  that one or more of the
                                                                                  following limiting critical
                                                                                  conditions already either
                                                                                  exists or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  Replanted (non-virgin) orchard
                                                                                  soils to prevent orchard
                                                                                  replant disease, or medium to
                                                                                  heavy soils, or a prohibition
                                                                                  on the use of 1,3-
                                                                                  dichloropropene products
                                                                                  because local township limits
                                                                                  for this alternative have been
                                                                                  reached.
Ornamentals..................................  (a) Yoder Brothers Inc. in        For use in all chrysanthemum
                                                Florida.                          production.
                                               (b) California rose nurseries...  With a reasonable expectation
                                                                                  that the user may be
                                                                                  prohibited from using 1,3-
                                                                                  dichloropropene products
                                                                                  because local township limits
                                                                                  for this alternative have been
                                                                                  reached.
Peppers......................................  (a) California growers..........  With a reasonable expectation
                                                                                  that one or more of the
                                                                                  following limiting critical
                                                                                  conditions already either
                                                                                  exists or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  Moderate to severe disease
                                                                                  infestation, or moderate to
                                                                                  severe yellow or purple
                                                                                  nutsedge infestation, or a
                                                                                  prohibition on the use of 1,3-
                                                                                  dichloropropene products
                                                                                  because local township limits
                                                                                  for this alternative have been
                                                                                  reached.
                                               (b) Alabama, Arkansas, Georgia,   With a reasonable expectation
                                                North Carolina, South Carolina,   that one or more of the
                                                Tennessee and Virginia growers.   following limiting critical
                                                                                  conditions already either
                                                                                  exists or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  Moderate to severe yellow or
                                                                                  purple nutsedge infestation,
                                                                                  or the presence of an occupied
                                                                                  structure within 100 feet of a
                                                                                  grower's field the size of 100
                                                                                  acres or less.
                                               (c) Florida growers.............  With a reasonable expectation
                                                                                  that one or more of the
                                                                                  following limiting critical
                                                                                  conditions already either
                                                                                  exists or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  Moderate to severe yellow or
                                                                                  purple nutsedge infestation,
                                                                                  or karst topography.
Strawberry Nurseries.........................  (a) California growers..........  With a reasonable expectation
                                                                                  that one or more of the
                                                                                  following limiting critical
                                                                                  conditions already either
                                                                                  exists or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  Moderate to severe black root
                                                                                  rot or crown rote, or moderate
                                                                                  to severe yellow or purple
                                                                                  nutsedge infestation.
                                               (b) North Carolina and Tennessee  With a reasonable expectation
                                                growers.                          that the use will occur in the
                                                                                  presence of an occupied
                                                                                  structure within 100 feet of a
                                                                                  grower's field the size of 100
                                                                                  acres or less.
Strawberry Fruit.............................  (a) California growers..........  With a reasonable expectation
                                                                                  that one or more of the
                                                                                  following limiting critical
                                                                                  conditions already either
                                                                                  exists or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  Moderate to severe black root
                                                                                  rot or crown rot, moderate to
                                                                                  severe yellow or purple
                                                                                  nutsedge infestation, a
                                                                                  prohibition of the use of 1,3-
                                                                                  dichloropropene products
                                                                                  because local township limits
                                                                                  for this alternative have been
                                                                                  reached, time to transition to
                                                                                  an alternative.
                                               (b) Florida growers.............  With a reasonable expectation
                                                                                  that one or more of the
                                                                                  following limiting critical
                                                                                  conditions already either
                                                                                  exists or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  Moderate to severe yellow or
                                                                                  purple nutsedge, or karst
                                                                                  topography.
                                               (c) Alabama, Arkansas, Georgia,   With a reasonable expectation
                                                North Carolina, South Carolina,   that one or more of the
                                                Tennessee, Virginia, Ohio and,    following limiting critical
                                                New Jersey growers.               conditions already either
                                                                                  exists or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  Moderate to severe yellow or
                                                                                  purple nutsedge, or the
                                                                                  presence of an occupied
                                                                                  structure within 100 feet of a
                                                                                  grower's field the size of 100
                                                                                  acres or less.

[[Page 77009]]

 
Sweet Potatoes...............................  California growers..............  With a reasonable expectation
                                                                                  that the user may be
                                                                                  prohibited from using 1,3-
                                                                                  dichloropropene products
                                                                                  because local township limits
                                                                                  for this alternative have been
                                                                                  reached.
Tomatoes.....................................  (a) Michigan growers............  With a reasonable expectation
                                                                                  that one or more of the
                                                                                  following limiting critical
                                                                                  conditions already either
                                                                                  exists or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  moderate to severe disease
                                                                                  infestation, fungal pathogens
                                                                                  infestation.
                                               (b) Alabama, Arkansas, Georgia,   With a reasonable expectation
                                                North Carolina, South Carolina,   that one or more of the
                                                Tennessee and Virginia growers.   following limiting critical
                                                                                  conditions already either
                                                                                  exists or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  Moderate to severe yellow or
                                                                                  purple nutsedge infestation,
                                                                                  or the presence of an occupied
                                                                                  structure within 100 feet of a
                                                                                  grower's field the size of 100
                                                                                  acres or less.
                                               (c) Florida growers.............  With a reasonable expectation
                                                                                  that one or more of the
                                                                                  following limiting critical
                                                                                  conditions already either
                                                                                  exists or could occur without
                                                                                  methyl bromide fumigation:
                                                                                  Moderate to severe yellow or
                                                                                  purple nutsedge infestation,
                                                                                  or karst topography.
Turfgrass....................................  (a) U.S. turfgrass sod nursery    For the production of industry
                                                producers who are members of      certified pure sod.
                                                Turfgrass Producers
                                                International (TPI).
                                               (b) U.S. golf courses...........  For establishing sod in the
                                                                                  construction of new golf
                                                                                  courses or the renovation of
                                                                                  putting greens, tees, and
                                                                                  fairways.
----------------------------------------------
                                                POST-HARVEST USES
----------------------------------------------------------------------------------------------------------------
Food Processing..............................  (a) Rice millers in all           With a reasonable expectation
                                                locations in the U.S. who are     that one or more of the
                                                members of the USA Rice Millers   following limiting critical
                                                Association.                      conditions exists: Older
                                                                                  structures that can not be
                                                                                  properly sealed to use an
                                                                                  alternative to methyl bromide,
                                                                                  or the presence of sensitive
                                                                                  electronic equipment subject
                                                                                  to corrosivity, time to
                                                                                  transition to an alternative.
                                               (b) Pet food manufacturing        With a reasonable expectation
                                                facilities in the U.S. who are    that one or more of the
                                                active members of the Pet Food    following limiting critical
                                                Institute. (For today's rule,     conditions exists: Older
                                                ``pet food'' refers to domestic   structures that can not be
                                                dog and cat food).                properly sealed to use an
                                                                                  alternative to methyl bromide,
                                                                                  or the presence of sensitive
                                                                                  electronic equipment subject
                                                                                  to corrosivity, time to
                                                                                  transition to an alternative.
                                               (c) Kraft Foods in the U.S......  With a reasonable expectation
                                                                                  that one or more of the
                                                                                  following limiting critical
                                                                                  conditions exists: Older
                                                                                  structures that can not be
                                                                                  properly sealed to use an
                                                                                  alternative to methyl bromide,
                                                                                  or the presence of sensitive
                                                                                  electronic equipment subject
                                                                                  to corrosivity, time to
                                                                                  transition to an alternative.
                                               (d) Members of the North          With a reasonable expectation
                                                American Millers' Association     that one or more of the
                                                in the U.S.                       following limiting critical
                                                                                  conditions already exists or
                                                                                  could occur without methyl
                                                                                  bromide fumigation: Older
                                                                                  structures that can not be
                                                                                  properly sealed to use an
                                                                                  alternative to methyl bromide,
                                                                                  or the presence of sensitive
                                                                                  electronic equipment subject
                                                                                  to corrosivity, time to
                                                                                  transition to an alternative.
Commodity Storage............................  (a) Gwaltney of Smithfield in     For smokehouse ham curing
                                                the U.S..                         facilities owned by the
                                                                                  company.
                                               (b) California entities storing   With a reasonable expectation
                                                walnuts, beans, dried plums,      that one or more of the
                                                figs, raisins, and pistachios     following limiting critical
                                                in California.                    conditions exists: Rapid
                                                                                  fumigation is required to meet
                                                                                  a critical market window, such
                                                                                  as during the holiday season,
                                                                                  rapid fumigation is required
                                                                                  when a buyer provides short (2
                                                                                  days or less) notification for
                                                                                  a purchase, or there is a
                                                                                  short period after harvest in
                                                                                  which to fumigate and there is
                                                                                  limited silo availability for
                                                                                  using alternatives.
----------------------------------------------------------------------------------------------------------------

[FR Doc. 04-27905 Filed 12-22-04; 8:45 am]
BILLING CODE 6560-50-P