Federal Register / Vol. 69, No. 227 / Friday, November 26, 2004 / Rules and Regulations 68809

responsibilities between the Federal 

Government and Indian tribes. 

Energy Effects 

We have analyzed this rule under 

Executive Order 13211, Actions 

Concerning Regulations That 

Significantly Affect Energy Supply, 

Distribution, or Use. We have 

determined that it is not a ‘‘significant 

energy action’’ under that Order because 

it is not a ‘‘significant regulatory action’’

under Executive Order 12866 and is not 

likely to have a significant adverse effect 

on the supply, distribution, or use of 

energy. It has not been designated by the 

Administrator of the Office of 

Information and Regulatory Affairs as a 

significant energy action. Therefore, it 

does not require a Statement of Energy 

Effects under Executive Order 13211.

List of Subjects in 33 CFR Part 165

Harbors, Marine safety, Navigation 

(water), Reporting and recordkeeping 

requirements, Security measures, 

Waterways.

■ For the reasons discussed in the 

preamble, the Coast Guard amends 33 

CFR part 165 as follows:

PART 165—REGULATED NAVIGATION 

AREAS AND LIMITED ACCESS AREAS

■ 1. The authority citation for part 165 

continues to read as follows:

Authority: 33 U.S.C. 1226, 1231; 46 U.S.C. 

Chapter 701; 50 U.S.C. 191, 195; 33 CFR 

1.05–1(g), 6.04–1, 6.04–6, and 160.5; Pub. L. 

107–295, 116 Stat. 2064; Department of 

Homeland Security Delegation No. 0170.1.

■ 2. Add temporary § 165.T07–108 to 

read as follows:

§ 165.T07–108 Savannah River, Savannah, 

GA. 

(a) Location: The Coast Guard is 

establishing a temporary safety zone 

encompassing all waters of the 

Savannah River from the Talmadge 

Bridge (32°05′19′′ N 081°05′58′′ W) to 

the east end of the Marriott hotel 

(32°04′52′′ N 081°05′18′′ W). 

(b) Regulations. In accordance with 

the general regulations in § 165.23 of 

this part, anchoring, mooring or 

transiting in this zone is prohibited, 

except as provided for herein, or unless 

authorized by the Coast Guard Captain 

of the Port Savannah, GA or his 

representative. Any concerned traffic 

can contact the representative of the 

Captain of the Port on board the U.S. 

Coast Guard vessel, which will be on 

scene throughout the event. Traffic 

needing permission to pass through this 

safety zone can contact the 

representative for the COTP on VHF–

FM channel 16 or via phone at (912) 

652–4181. 

(c) Dates: This rule is effective from 

4:45 p.m. on November 26, 2004 to 9:30 

p.m. on November 26, 2004.

Dated: November 10, 2004. 

M.D. Drieu, 

Captain, U. S. Coast Guard, Captain of the 

Port Savannah.

[FR Doc. 04–26097 Filed 11–24–04; 8:45 am] 

BILLING CODE 4910–15–P

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 355

[SFUND–2003–0007; FRL–7842–1] 

RIN 2050–AE42

Emergency Planning and Community 

Right-to-Know Act; Extremely 

Hazardous Substances List; Deletion 

of Phosmet

AGENCY: Environmental Protection 

Agency (EPA).

ACTION: Final rule.

SUMMARY: On November 12, 2003, the 

Environmental Protection Agency 

proposed to delete phosmet from the list 

of extremely hazardous substances 

(EHS) issued under the Emergency 

Planning and Community Right-toKnow Act (EPCRA). Today, EPA is 

taking final action to delete phosmet 

from the EHS list. Facilities with 

phosmet on-site will no longer be 

required to comply with emergency 

planning and emergency release 

notification requirements. In addition, 

facilities handling phosmet will no 

longer have to file an emergency and 

hazardous chemical inventory form and 

Material Safety Data Sheet (MSDS) for 

phosmet with their State Emergency 

Response Commission (SERC), Local 

Emergency Planning Committee (LEPC), 

and local fire department, for amounts 

less than 10,000 pounds.

DATES: This rule is effective December 

27, 2004.

ADDRESSES: EPA has established a 

docket for this action under Docket ID 

No. SFUND–2003–0007. 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., Confidential Business Information 

(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 Docket, 

EPA/DC, EPA West, Room B102, 1301 

Constitution Ave., NW., Washington, 

DC. 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 

Superfund Docket is (202) 566–0270.

FOR FURTHER INFORMATION CONTACT: For 

general information, contact the 

Emergency Planning and Community 

Right-to-Know Hotline at (800) 424–

9346; in the Washington, DC 

metropolitan area, contact (703) 412–

9810. The Telecommunications Device 

for the Deaf (TDD) Hotline number is 

(800) 535–7672. You may also access 

general information online at the 

Hotline Internet site, http://

www.epa.gov/epaoswer/hotline/. For 

questions on the contents of this 

document, contact Kathy Franklin, 

Office of Emergency Management 

(formerly Chemical Emergency 

Prevention and Preparedness Office), 

Office of Solid Waste and Emergency 

Response, (5104A), Environmental 

Protection Agency, 1200 Pennsylvania 

Ave., NW., Washington, DC 20460, 

Telephone (202)564–7987; Fax (202) 

564–8444 e-mail: 

franklin.kathy@epa.gov

SUPPLEMENTARY INFORMATION: 

I. General Information 

A. Does this Action Apply to Me?

Entities that would be affected by this 

section are those organizations and 

facilities subject to 40 CFR part 355—

Emergency Planning and Emergency 

Release Notification Requirements and 

40 CFR part 370—Hazardous Chemical 

Reporting. To determine whether your 

facility is affected by this action, you 

should carefully examine the 

applicability provisions at 40 CFR part 

355 and 40 CFR part 370. Entities 

potentially affected by this action are 

facilities that produce phosmet 

formulations, distribute phosmet as a 

pesticide for commercial use, and farms 

that store, handle and apply phosmet. If 

you have any questions regarding the 

applicability of this action to a 

particular entity, consult the person(s) 

listed in the FOR FURTHER INFORMATION

CONTACT section. 

B. Electronic Access. You may access 

this Federal Register document 

electronically through the EPA Internet 

under the ‘‘Federal Register’’ listings at 

http://www.epa.gov/fedrgstr. An 

electronic version of the public docket 

is available through EPA’s electronic 

public docket and comment system, 

EPA Dockets. You may use EPA Dockets 

68810 Federal Register / Vol. 69, No. 227 / Friday, November 26, 2004 / Rules and Regulations 

at http://www.epa.gov/edocket/ to view 

public comments, access the index 

listing of the contents of the public 

docket, and access those documents in 

the public docket that are available 

electronically. Once in the system, 

select ‘‘search,’’ then key in the 

appropriate docket identification 

number: SFUND–2003–0007. 

The information in this final rule is 

organized as follows:

I. Background 

A. Statutory Authority 

B. Extremely Hazardous Substances under 

EPCRA 

II. Basis for Final Rule 

III. The EHS Listing Criteria 

A. Primary Listing Criteria 

B. Secondary Listing Criteria

C. Development of Listing Criteria 

D. Toxicity Data Sources 

IV. Response to Comments on the November 

12, 2003 Proposed Rule 

V. Regulatory Impacts of This Rule 

VI. Statutory and Executive Order Reviews 

A. Executive Order 12866: Regulatory 

Planning and Review 

B. Paperwork Reduction Act 

C. Regulatory Flexibility Act 

D. Unfunded Mandates Reform Act 

E. Executive Order 13132: Federalism 

F. Executive Order 13175: Consultation 

and Coordination With Indian Tribal 

Governments 

G. Executive Order 13045: Protection of 

Children From Environmental Health 

Risks and Safety Risks 

H. Executive Order 13211: Actions That 

Significantly Affect Energy Supply, 

Distribution, or Use 

I. National Technology Transfer and 

Advancement Act of 1995

J. Congressional Review Act

I. Background 

A. Statutory Authority 

This final rule is issued under 

sections 302 and 328 of the Emergency 

Planning and Community Right-toKnow Act of 1986 (EPCRA). 

B. Extremely Hazardous Substances 

Under EPCRA 

On October 17, 1986, the President 

signed into law the Superfund 

Amendments and Reauthorization Act 

of 1986 (SARA), Pub. L. 99–499 (1986). 

Title III of SARA established a program 

designed to require state and local 

planning and preparedness for spills or 

releases of certain hazardous materials 

and to provide the public and local 

governments with information 

concerning potential chemical hazards 

in their communities. This program is 

codified as the Emergency Planning and 

Community Right-to-Know Act of 1986 

(EPCRA), 42 U.S.C. 11001–11050. 

Subtitle A of EPCRA establishes the 

framework for local emergency 

planning. The statute requires that EPA 

publish a list of ‘‘extremely hazardous 

substances’’ (EHSs). The EHS list was 

established by EPA to identify chemical 

substances which could cause serious 

irreversible health effects from 

accidental releases (51 FR 13378). EPA 

had previously published this list as the 

list of acutely toxic chemicals in 

November 1985, in Appendix A of the 

Chemical Emergency Preparedness 

Program Interim Guidance (CEPP 

Guidance). The Agency was also 

directed to establish ‘‘threshold 

planning quantities’’ (TPQs) for each 

extremely hazardous substance. 

Under EPCRA section 302, a facility 

which has on-site an EHS in excess of 

its TPQ must notify the State Emergency 

Response Commission (SERC) and Local 

Emergency Planning Committee (LEPC) 

as well as participate in local emergency 

planning activities. Under section 304 of 

EPCRA, the facility must also report 

accidental releases in excess of the 

Reportable Quantity (RQ) to the 

National Response Center, the LEPC and 

SERC. However, releases from the 

application of a registered pesticide are 

exempted from the EPCRA section 304 

emergency release notification 

according to 40 CFR 355.40(a)(2)(iv). 

As provided under 40 CFR 370.20, 

EHSs are subject to EPCRA section 311 

and 312 reporting requirements. 

Facilities with an EHS present on-site in 

excess of 500 pounds or its TPQ, 

whichever is lower, are required to 

submit an emergency and hazardous 

chemical inventory form and Material 

Safety Data Sheet (MSDS) to their SERC, 

LEPC and local fire department. 

Facilities must also submit chemical 

inventory forms and MSDS for other 

hazardous chemicals present on-site in 

quantities of 10,000 pounds or more. 

However, under sections 311 and 312 of 

EPCRA, facilities that apply chemicals 

to crops as a pesticide, do not have to 

file the inventory form or MSDS for 

those chemicals, because chemicals that 

are used at facilities in routine 

agricultural operations are not included 

as hazardous chemicals subject to the 

reporting requirements. 

The purpose of the extremely 

hazardous substance list is to focus 

initial efforts in the development of 

state and local contingency plans. 

Inclusion of a chemical on the EHS list 

does not mean state or local 

communities should ban or otherwise 

restrict use of a listed chemical. Rather, 

such identification indicates a need for 

the community to undertake a program 

to investigate and evaluate the potential 

for accidental exposure associated with 

the production, storage or handling of 

the chemical at a particular site. 

The list of extremely hazardous 

substances and their threshold planning 

quantities are codified in 40 CFR part 

355, appendices A & B. EPA first 

published the EHS list and TPQs along 

with the methodology for determining 

threshold planning quantities as an 

interim final rule on November 17, 1986 

(51 FR 41573–41579 and 41580). In the 

final rule, EPA made a number of 

revisions to the interim final rule (52 FR

13387, April 22, 1987). Among other 

things, the final rule republished the 

EHS list, with the addition of four new 

chemicals and revised the methodology 

for determining some TPQs. Details of 

the methodology used to determine 

whether to list a substance as an 

extremely hazardous substance and for 

deriving the threshold planning 

quantities are found in the November 

1986 and April 1987 Federal Register

notices and in technical support 

documents in the rulemaking records. 

These records are found in Superfund 

Docket No. 300PQ. See Section III of 

this notice for the criteria used for 

determining whether a substance 

qualifies as an extremely hazardous 

substance.

EPA has since received a number of 

petitions to amend the EHS list. To date, 

46 chemicals have been delisted from 

the EHS list in previous rulemakings 

because they did not meet the toxicity 

criteria for the list and were originally 

listed under section 302 in error. 

II. Basis for Final Rule 

On November 12, 2003 (68 FR 64041), 

EPA proposed to delete the chemical 

phosmet from the EHS list under 

Section 302 of EPCRA, in response to a 

petition from Gowan Company. Gowan 

believed that the listing of phosmet was 

based on an invalid toxicity study and 

argued that phosmet should be removed 

from the EHS list because there were no 

valid data to indicate that the chemical 

meets the listing criteria. 

Phosmet was originally listed on the 

EHS list because a four-hour rat 

inhalation LC50, reported in the 1985 

Registry of Toxic Effect of Chemical 

Substances (RTECS) database, met the 

EHS primary toxicity inhalation criteria 

of LC50 ≤ 0.5 mg/L. See Section III of this 

notice for discussion of the EHS listing 

criteria. The secondary toxicity criteria 

for EHSs did not apply to phosmet 

because it does not have a high 

production volume. Approximately 

1,125,000 pounds of phosmet as an 

active ingredient (a.i.) in pesticide 

formulations are used annually. The 

LC50 result of 0.054 mg/L was from in 

a 1969 Russian study, unavailable to 

EPA. However, a translation of a 1969 

Russian journal article about the study 

Federal Register / Vol. 69, No. 227 / Friday, November 26, 2004 / Rules and Regulations 68811

was available for review. The phosmet 

used in the experiment was 

manufactured in a Russian research 

institute using an unknown method. 

The journal article severely lacked key 

details of the experimental methods, 

such as the purity of phosmet, extent of 

animal body exposure, possibility of 

other routes of exposure, specific 

emulsion components and their toxicity. 

With the number of unanswered key 

questions regarding the experimental 

protocol, EPA agrees that the Russian 

study results were not a sufficient basis 

for keeping phosmet on the EHS list. 

However, before EPA took any 

regulatory action, a comprehensive 

review was undertaken of available 

acute toxicity studies by inhalation, 

dermal and oral routes; this review 

found no other inhalation or dermal 

study results for phosmet that met the 

EHS primary listing criteria of 

inhalation LC50 ≤ 0.5 mg/L or dermal 

LD50 of ≤50 mg/kg. A review of acute 

oral toxicity studies indicated that mice 

were more sensitive than rats to 

phosmet. The lowest reported rat oral 

LD50 for technical grade phosmet 

(96.1%) is 113 mg/kg, which did not 

meet the primary oral listing criteria of 

≤ 25 mg/kg. Technical grade phosmet is 

generally 94% or higher phosmet 

content. Reported acute oral toxicity 

LD50s of technical grade phosmet in 

mice varied from of 23.1 to 51 mg/kg, 

based on eight studies. 

Stauffer Chemical Company in 1971 

reported an oral LD50 of 23.3 mg/kg for 

mice for technical grade phosmet, purity 

unspecified. The phosmet used in the 

study was manufactured by a different 

synthesis method (using ethylene 

chloride (EDC) as solvent) than used by 

the current and previous pesticide 

registrants (Gowan and Stauffer) and 

thus the phosmet tested may not be 

representative of the phosmet used in 

commerce. The greater toxicity observed 

for technical phosmet synthesized via 

the EDC route presumably may have 

been due to impurities resulting from 

the starting material, incomplete 

synthesis, degradation or other 

syntheses method-specific factors. 

Because of these uncertainties, EPA 

does not believe the phosmet-EDC 

results are representative for the 

phosmet manufactured and registered 

with EPA by either Stauffer Chemical 

(former pesticide registrant) or Gowan 

Company (current pesticide registrant). 

Therefore, EPA did not consider these 

values in its review of phosmet for EHS 

listing purposes. 

Another study conducted by 

researchers at the National Center for 

Toxicological Research (NCTR) reported 

oral LD50 results of 23.1 and 24.9 mg/

kg for male and female mice, 

respectively, using 99.5% phosmet. The 

results from this study were presented 

in a journal article (Haley et al., 1975), 

but the actual study data could not be 

found. Because the actual doses and 

number of animals killed at each dose 

are not cited, the LD50 results could not 

be replicated or confirmed. Other 

concerns regarding the Haley study 

included the variations in mortality 

response, lack of information on the use 

of control data, and other questions or 

potential problems with the study 

methodology and design. The Agency 

discussed these issues in detail in the 

technical background document 

supporting this rulemaking. 

Because of the uncertainties 

surrounding result verification and the 

design details of the Haley study, EPA 

proposed conducting a new acute oral 

mouse LD50 study. Gowan then offered 

to conduct a new study in acute oral 

toxicity in mice, which they completed 

in December 2002. In Gowan’s study, 

twenty female mice were administered 

40 mg/kg of 98% pure phosmet, by oral 

gavage. No mortalities occurred. 

Because the tested dose produced no 

deaths in the twenty mice, testing at 

lower doses was considered 

unnecessary. EPA believes the Gowan 

study confirms the oral mouse LD50

results from the majority of the previous 

reported studies, which show LD50s 

greater than the EHS listing criterion of 

≤ 25 mg/kg. Therefore, EPA believes that 

phosmet does not meet the acute oral 

toxicity listing criterion and it should be 

removed from the EHS list. Because 

phosmet does not have a high 

production volume (about 1.25 million 

pounds are applied annually), only the 

primary listing criteria (discussed 

below) were used to evaluate whether 

phosmet should be retained on the EHS 

list. 

III. The EHS Listing Criteria 

As previously described, in November 

1985, EPA published a list of substances 

in appendix A of the ‘‘Chemical 

Emergency Preparedness Program 

Interim Guidance.’’ Under section 

302(a) of EPCRA, Congress required 

EPA to adopt that same list as the EHS 

list. Appendix A defines the list of 

chemicals as those ‘‘for which an acute 

toxicity measure has a value meeting the 

criteria stated in Chapter 6’’ of the 

November 1985 Interim Guidance. The 

listing criteria discussed in Chapter 6 

are the same criteria referenced and 

discussed in EPA’s interim final and 

final rules establishing the EHS list. 

Those criteria contain two sets of 

numerical acute toxicity measures. For 

purposes of clarification in today’s 

rulemaking, EPA will refer to the two 

sets of numerical acute toxicity criteria 

as the primary listing criteria and the 

secondary listing criteria. In developing 

these criteria, the Agency presumed that 

humans may be as sensitive as the most 

sensitive mammalian species tested. 

A. Primary Listing Criteria 

The primary acute toxicity criteria 

are, based on data from mammalian 

testing:

Inhalation LC50 ≤ 0.5 milligrams per 

liter of air (mg/L) (for exposure time 

≤ 8 hours), or 

Dermal LD50 ≤ 50 milligrams per 

kilogram of body weight (mg/kg), or

Oral—LD50 ≤ 25 milligrams per kilogram 

of body weight (mg/kg)

LC50 is the median lethal 

concentration, defined as the 

concentration level at which 50 percent 

of the test animals died when exposed 

by inhalation for a specified time 

period. 

LD50 is the median lethal dose, 

defined as the dose at which 50 percent 

of the test animals died during 

exposure. 

B. Secondary Listing Criteria 

EPA included on the EHS list other 

chemicals that did not meet the primary 

acute toxicity criteria. These were added 

based on the secondary acute toxicity 

criteria below as well as the following 

factors: large volume production and 

known risk, as indicated by the fact that 

some of the chemicals have caused 

death and injury in accidents. 

The secondary acute toxicity criteria 

are, based on data from mammalian 

testing:

Inhalation— LC50 ≤ 2 mg/L for exposure 

time of ≤ 8 hours, or 

Dermal—LD50 ≤ 400 mg/kg or 

Oral—LD50 ≤ 200 mg/kg

The chemical with the lowest 

production volume that was included as 

an EHS based on the secondary criteria 

and high production volume, had an 

annual production volume of 30 million 

pounds. In addition to high production 

chemicals meeting these criteria, several 

other chemicals slightly less toxic than 

the secondary criteria, were listed 

because of their recognized toxicity as a 

chemical of concern or known hazard; 

for example several of them have caused 

death or injury in accidents. 

C. Development of Listing Criteria 

The selection criteria were designed 

as screening tools to identify chemicals 

with high acute toxicity. The specific 

values chosen are recognized by the 

scientific community as indicating a 

high potential for acute toxicity, and 

68812 Federal Register / Vol. 69, No. 227 / Friday, November 26, 2004 / Rules and Regulations 

1 In addition, the Agency also received toxicity 

information on phosmet from the Working Group of 

Community Right-To-Know in July 2002, which 

requested that these documents be placed in the 

official docket if the Agency proposed to change 

phosmet’s listing as an Extremely Hazardous 

Substance under EPCRA.

chemicals meeting the toxicity criteria 

are considered potentially hazardous. 

Even with the amount of animal data 

that are available, some chemicals have 

no standard acute toxicity test data. 

In choosing chemicals for the EHS 

list, EPA matched the criteria against all 

mammalian test data for all chemicals. 

A chemical was identified as acutely 

toxic according to these criteria if 

mammalian acute toxicity data for any 

one of the three routes of administration 

was equal to or less than the numerical 

criteria specified for that route. The 

Agency used LCLO or LDLO data for a 

chemical in cases where median lethal 

concentration or dose (LC50 or LD50) 

were not available. The lethal 

concentration low (LCLO) and the lethal 

dose low (LDLO) are the lowest 

concentration in air or the lowest dose 

in milligrams of chemical per kilogram 

of body weight, respectively, at which 

any test animals died. These values may 

be more variable than those provided 

from median lethality tests, but for the 

purposes of screening large numbers of 

chemicals, it was deemed necessary to 

provide a second level screening tool in 

preference to missing potentially toxic 

chemicals because they were not 

adequately tested. For inhalation data, 

the Agency chose to use LC50 and LCLO

values with exposure periods up to 

eight hours or even with no reported 

exposure period. EPA recognized that 

this was a conservative approach, but 

wanted to ensure that acutely toxic 

chemicals of concern were identified. 

For purposes of this assessment, the 

Agency also used lethality data from the 

most sensitive mammalian species and 

not only those from rats because it was 

not possible to predict which species is 

the appropriate surrogate for humans for 

a given chemical. In addition, because 

populations are heterogeneous and 

individuals are expected to vary 

considerably in their sensitivity to 

chemical substances for this assessment, 

the Agency assumed that humans may 

be as sensitive as the most sensitive 

mammalian species tested. 

D. Toxicity Data Sources 

When the initial list was developed, 

the Agency used acute toxicity data 

from the Registry of Toxic Effects of 

Chemical Substances (RTECS), 

maintained by the National Institute of 

Occupational Safety and Health 

(NIOSH). The RTECS data was 

compared with the EHS listing toxicity 

criteria (both primary and secondary). 

The RTECS data base was used as the 

principal source of toxicity data for 

identifying acutely toxic chemicals 

because it represents the most 

comprehensive repository of acute 

toxicity information available with basic 

toxicity information and other data on 

more than 79,000 chemicals. Although 

RTECS is not formally peer-reviewed, 

data from RTECS is widely accepted 

and used as a toxicity data source by 

industry and regulatory agencies alike. 

The data presented are from scientific 

literature which has been edited by the 

scientific community before 

publication. 

IV. Response to Comments on the 

November 12, 2003 Proposed Rule 

EPA received eight comments during 

the comment period.1 Four were from 

growers or agricultural trade 

associations, one was from a 

horticultural agent, one was from a 

certified professional agronomist, one 

was from an pesticide/fertilizer retailer 

and one was from the petitioner seeking 

delisting of phosmet. All commenters 

supported the removal of phosmet from 

the EHS list. Most commenters stated 

that phosmet has been an essential pest 

control tool. Some commented that EPA 

used good science to eliminate 

unnecessary regulation and would 

provide regulatory relief. Additionally, 

several of these commenters stated that 

the delisting would allow public and 

private resources to be focused on more 

critical issues.

Gowan Company, the petitioner 

requesting the removal of phosmet from 

the EHS list and the one of the pesticide 

registrants, had already submitted many 

toxicity studies and other information to 

EPA before the proposal was published. 

Their comments on the proposed rule 

noted that in addition to no valid data 

being available that indicate phosmet 

meets the listing criteria, a robust set of 

valid data is available that 

unequivocally shows that phosmet does 

not meet any of the toxicity (or other) 

listing criteria. Gowan also believes that 

the proposed rulemaking will 

appropriately rectify the 

mischaracterization of risk.

EPA agrees that there are many acute 

toxicity studies available for phosmet 

with results that do not meet the listing 

criteria. The Federal Register notice for 

the proposed rule focused more on 

those studies that, at first, appeared to 

meet the listing criteria. As EPA 

explained in the notice for the proposal, 

other acute toxicity studies indicate that 

phosmet does not meet the listing 

criteria. These studies are summarized 

and discussed in the technical 

background document; and available for 

review in the public docket. EPA did 

take into consideration the many results 

of these other acute oral toxicity studies 

when making its decision to delist 

phosmet. 

EPA also reviewed the 17 technical 

references and reports submitted by the 

Working Group on Community Right-toKnow, in July 2002. These references 

primarily contained information on 

phosmet’s acute and chronic toxicity, 

human health effects and risks. EPA 

carefully reviewed the submitted 

information and saw no new data or 

studies on acute toxicity that had not 

already been reviewed and considered 

in the decision. The EHS listing criteria 

is based on specific LC50 or LD50 acute 

toxicity testing results in mammals and 

does not rely on chronic, long-term 

health effects. 

V. Regulatory Impacts of This Rule 

As a result of this final rule, phosmet 

will no longer be an EHS listed under 

section 302 of EPCRA. As a result, 

facilities that have phosmet on-site will 

no longer be required to (1) notify their 

SERCs and LEPCs that they are subject 

to the emergency planning provisions of 

EPCRA section 302 for the chemical 

phosmet; (2) provide to their LEPC a 

facility emergency coordinator (unless 

other listed EHS chemicals are present 

at the facility) and information about 

phosmet for developing and 

implementing the emergency plan; and 

(3) notify SERCs and LEPCs of 

accidental releases of phosmet under 

the requirements of EPCRA Section 304. 

Releases from application of a pesticide 

were already exempted from Section 

304 reporting. LEPCs would no longer 

be required to include phosmet as part 

of a local emergency plan for 

responding to a chemical emergency at 

a facility. 

Phosmet is still a ‘‘hazardous 

chemical’’ under Section 311 and 312 

requirements, except when it is used in 

routine agricultural operations, such as 

a pesticide applied on crops. According 

to 29 CFR 1900.1200(c), phosmet is 

considered a ‘‘toxic’’ health hazard 

because it has an oral rat acute toxicity 

LD50 of less than 200 mg/kg. Facilities 

that process or distribute phosmet, such 

as phosmet product manufacturers and 

agricultural chemical distributors would 

still be subject to EPCRA section 311 

and 312 reporting requirements for 

phosmet if they have phosmet present 

in amounts equal to or greater than 

10,000 pounds, as provided in 40 CFR 

370.20(b)(4). 

Federal Register / Vol. 69, No. 227 / Friday, November 26, 2004 / Rules and Regulations 68813

VI. Statutory and Executive Order 

Reviews

A. Executive Order 12866: Regulatory 

Planning and Review 

Under Executive Order 12866 (58 FR

51735, (October 4, 1993)), the Agency 

must determine whether this regulatory 

action is ‘‘significant’’ and therefore 

subject to formal review by the Office of 

Management and Budget (OMB) and to 

the requirements of the Executive Order. 

The Order defines ‘‘significant 

regulatory action’’ as one that is likely 

to result in a rule that may: (1) have an 

annual effect on the economy of $100 

million or more or adversely affect in a 

material way the economy, a sector of 

the economy, productivity, competition, 

jobs, the environment, public health or 

safety, or State, local, or tribal 

governments or communities; (2) create 

a serious inconsistency or otherwise 

interfere with an action taken or 

planned by another agency; (3) 

materially alter the budgetary impact of 

entitlements, grants, user fees, or loan 

programs or the rights and obligations of 

recipients thereof; or (4) raise novel 

legal or policy issues arising out of legal 

mandates, the President’s priorities, or 

the principles set forth in the Executive 

Order. 

It has been determined that this rule 

is not a ‘‘significant regulatory action’’

under the terms of Executive Order 

12866 and is therefore not subject to 

OMB review. 

B. Paperwork Reduction Act 

The Office of Management and Budget 

(OMB) has previously approved the 

information collection requirements 

contained in the existing regulations 40 

CFR part 355 under the provisions of 

the Paperwork Reduction Act, 44 U.S.C. 

3501 et seq. and has assigned OMB 

control number 2050–0092, (EPA ICR 

No. 1395.05). Copies of the ICR 

document(s) may be obtained from 

Susan Auby, by mail at U.S. 

Environmental Protection Agency, 

Collection Strategies Division (Mail 

Code 2822), 1200 Pennsylvania Ave., 

NW., Washington, DC 20460–0001, by email at auby.susan@epa.gov, or by 

calling 202–566–1672. A copy may also 

be downloaded off the Internet at

http://www.epa.gov/icr. Include the ICR 

and/or OMB number in any 

correspondence. 

This action does not impose any new 

information collection burden. This rule 

will relieve burden for facilities that 

have phosmet on-site. 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. 

C. Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA), 

as amended by the Small Business 

Regulatory Enforcement Fairness Act of 

1996 (SBREFA), 5 U.S.C. 601 et. seq.,

generally requires an agency to prepare 

a regulatory flexibility analysis of any 

rule subject to notice and comment 

rulemaking requirements under the 

Administrative Procedure Act or any 

other statute, unless the agency certifies 

that the rule will not have a significant 

economic impact on a substantial 

number of small entities. Small entities 

include small businesses, small 

organizations, and small governmental 

jurisdictions. 

For purposes of assessing the impacts 

of today’s rule on small entities, small 

entity is defined as: (1) A small business 

that is defined by the Small Business 

Administration by category of business 

using North America Industrial 

Classification System (NAICS) and 

codified at 13 CFR 121.201; (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-forprofit enterprise which is independently 

owned and operated and is not 

dominant in its field. 

After considering the economic 

impacts of the final rule on small 

entities, we have concluded that this 

action will not have a significant 

economic impact on a substantial 

number of small entities. This action 

would remove requirements for 

reporting and emergency planning for 

small entities with phosmet on site, and 

thus relieves regulatory burden. 

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 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 

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 to have meaningful 

and timely input in the development of 

EPA regulatory proposals, and 

informing, educating, and advising 

small governments on compliance with 

the regulatory requirements. 

EPA has determined that this rule 

does not include a Federal mandate that 

may result in expenditures of $100 

million or more for State, local, or tribal 

governments, in the aggregate, or the 

private sector in any one year. This rule 

will provide regulatory burden relief 

and does not impose any additional 

costs to any State, local, or tribal 

governments. 

EPA also has determined that this rule 

contains no regulatory requirements that 

might significantly or uniquely affect 

small governments. The rule will 

provide burden relief to regulated 

entities. 

E. Executive Order 13132: Federalism 

Executive Order 13132, entitled 

‘‘Federalism’’ (64 FR 43255, August 10, 

1999), requires EPA to develop an 

68814 Federal Register / Vol. 69, No. 227 / Friday, November 26, 2004 / Rules and Regulations 

accountable process to ensure 

‘‘meaningful and timely input by State 

and local officials in the development of 

regulatory policies that have federalism 

implications.’’ ‘‘Policies that have 

federalism implications’’ is defined in 

the Executive Order to include 

regulations that have ‘‘substantial direct 

effects on the States, on the relationship 

between the National Government and 

the States, or on the distribution of 

power and responsibilities among the 

various levels of government.’’

Under Executive Order 13132, EPA 

may not issue a regulation that has 

federalism implications, that imposes 

substantial direct compliance costs, and 

that is not required by statute, unless 

the Federal Government provides the 

funds necessary to pay the direct 

compliance costs incurred by State and 

local governments, or EPA consults with 

State and local officials early in the 

process of developing the regulation. 

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. This rule does 

not impose any new requirements on 

States or other levels of government. 

Instead, it relieves LEPCs of the 

responsibility of developing and 

maintaining emergency plans for 

facilities that handle and store phosmet. 

SERCs and LEPCs will no longer be 

notified of releases of phosmet under 

the requirements of EPCRA Section 304. 

Thus, the requirements of section 6 of 

the Executive Order do not apply to this 

rule. 

Because this rule deletes phosmet 

from the list of EHS chemicals, it 

relieves some burden on local 

governments for preparing emergency 

response plans because fewer facilities 

will be subject to reporting 

requirements. This action does not 

prevent any State government from 

enforcing more stringent standards for 

this chemical. 

F. Executive Order 13175: Consultation 

and Coordination With Indian Tribal 

Governments 

Executive Order 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 13175. It does not impose any 

new requirements on tribal officials. 

Instead it relieves them of the 

responsibility of developing emergency 

plans for facilities that handle and store 

phosmet. EPA does not believe that 

tribes have any significant number of 

facilities that handle, store or use 

phosmet. Phosmet formulations are 

handled and stored by farm chemical 

distributors and used mostly on fruit 

and nut crops. Today’s rule does not 

significantly or uniquely affect the 

communities of Indian tribal 

governments, nor would it impose 

substantial direct compliance costs on 

them. Thus, Executive Order 13175 does 

not apply to this rule. 

G. Executive Order 13045: Protection of 

Children From Environmental Health 

Risks and Safety Risks 

The Executive Order 13045, entitled 

‘‘Protection of Children from 

Environmental Health Risks and Safety 

Risks (62 FR 19885, April 23, 1997) 

applies to any rule that (1) is 

determined to be ‘‘economically 

significant’’ as defined under Executive 

Order 12866, and (2) concerns an 

environmental health or safety risk that 

EPA has reason to believe may have a 

disproportionate effect on children. If 

the regulatory action meets both criteria, 

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.

This final rule is not subject to the 

Executive Order because it is not 

economically significant as defined in 

Executive Order 12866, and because the 

Agency does not have reason to believe 

the environmental health or safety risks 

addressed by this action present a 

disproportionate risk to children. 

H. Executive Order 13211: Actions That 

Significantly Affect Energy Supply, 

Distribution or Use 

This rule is not subject to Executive 

Order 13211, ‘‘Actions Concerning 

Regulations That Significantly Affect 

Energy Supply, Distribution, or Use’’ (66 

FR 28355 (May 22, 2001)) because it is 

not a significant regulatory action 

defined under Executive Order 12866. 

I. National Technology Transfer and 

Advancement Act of 1995

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 

final rule does not involve technical 

standards. Therefore, EPA is not 

considering 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). The rule will 

be effective December 27, 2004.

List of Subjects in 40 CFR Part 355

Environmental protection, Air 

pollution control, Chemicals, Chemical 

accident prevention, Chemical 

emergency preparedness, Community 

emergency response plan, Community 

right-to-know, Extremely hazardous 

substances, Hazardous substances, 

Reportable quantity, Reporting and 

recordkeeping requirements, Superfund, 

Threshold planning quantity.

Dated: November 18, 2004. 

Michael O. Leavitt, 

Administrator.

■ For the reasons set out in the preamble, 

part 355 of title 40 of the Code of Federal 

Regulations is amended as follows:

PART 355—EMERGENCY PLANNING 

AND NOTIFICATION

■ 1. The authority citation for part 355 

continues to read as follows:

Authority: 42 U.S.C. 11002, 11004, and 

11048.

Federal Register / Vol. 69, No. 227 / Friday, November 26, 2004 / Rules and Regulations 68815

Appendices A and B—[Amended]

■ 2. Appendices A and B to part 355 are 

amended by removing the entry for CAS 

No. 732–11–6 for the Chemical Name 

Phosmet.

[FR Doc. 04–26162 Filed 11–24–04; 8:45 am] 

BILLING CODE 6560–50–P

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Part 447

[CMS–2175–F] 

RIN 0938–AM20

Medicaid Program; Time Limitation on 

Recordkeeping Requirements Under 

the Drug Rebate Program

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS.

ACTION: Final rule.

SUMMARY: This final rule finalizes 10-

year recordkeeping requirements for 

drug manufacturers under the Medicaid 

drug rebate program. Manufacturers 

must retain records for 10 years from the 

date the manufacturer reports data to us 

for a rebate period. 

This final rule also finalizes the 

requirement that manufacturers must 

retain records beyond the 10-year period 

if the records are known by the 

manufacturer to be the subject of an 

audit or a government investigation. 

Furthermore, this final rule responds 

to public comments on the January 6, 

2004 interim final rule with comment 

period and the proposed rule pertaining 

to the 10-year recordkeeping 

requirements, respectively.

DATES: This rule is effective January 1, 

2005.

FOR FURTHER INFORMATION CONTACT: Kim 

Howell, (410) 786–6762.

SUPPLEMENTARY INFORMATION: 

I. Background 

In order for a pharmaceutical 

manufacturer’s products to be eligible 

for Medicaid reimbursement under 

section 1903(a) of the Social Security 

Act (the Act), the manufacturer must 

sign an agreement with us on behalf of 

the Secretary of Health and Human 

Services to participate in the Medicaid 

drug rebate program. Among the terms 

to which the manufacturer must agree is 

the requirement to retain pricing data to 

support the calculation of average 

manufacturer price and best price as 

defined in section 1927 of the Act. 

Absent a regulatory or statutory 

requirement, it has been our position 

that manufacturers must retain these 

records indefinitely. 

On September 19, 1995, we published 

a proposed rule (60 FR 48442) in the 

Federal Register that proposed 

numerous provisions related to the 

Medicaid drug rebate program. As 

relevant to this rule, we proposed a new 

3-year recordkeeping requirement for 

drug manufacturers under the Medicaid 

drug rebate program and proposed a 3-

year time limitation during which 

manufacturers must recalculate and 

report data to us on the average 

manufacturer price and best price. On 

August 29, 2003, we published a final 

rule with comment period (68 FR 

51912) in the Federal Register that 

finalized both provisions. On September 

26, 2003, we issued a correction notice 

(68 FR 55527) in the Federal Register to 

change the effective date of the August 

29, 2003 rule from October 1, 2003 to 

January 1, 2004. 

II. Provisions of the Proposed 

Regulations and Interim Final Rule 

On January 6, 2004, we published an 

interim final rule with comment period 

that removed the 3-year recordkeeping 

requirement issued in the August 29, 

2003 final rule with comment period, 

and replaced it with 10-year 

recordkeeping requirements on a 

temporary basis for manufacturers 

participating in the Medicaid drug 

rebate program, and solicited comments 

on the 10-year requirement. 

Under the 10-year recordkeeping 

requirement, we required that 

manufacturers retain records for 10 

years from the date the manufacturer 

reports data to us for a rebate period. We 

also required that manufacturers retain 

records beyond the 10-year period if the 

records are the subject of an audit or a 

government investigation of which the 

manufacturer is aware and if the audit 

findings or investigation related to the 

average manufacturer price and best 

price have not been resolved. The 

provisions of the January 6, 2004 

interim final rule related to record 

retention are scheduled to sunset on 

December 31, 2004. 

In addition, the January 6, 2004 

interim final rule with comment period 

responded to public comments on the 

August 29, 2003 final rule with 

comment period that pertain to the 3-

year recordkeeping requirement at 

§ 447.534(h). The 3-year recordkeeping 

requirement for drug manufacturers 

participating in the Medicaid drug 

rebate program has caused a significant 

amount of concern from commenters 

with regard to the False Claims Act 

(FCA) and other possible fraud and 

abuse violations. 

Also, on January 6, 2004, we 

published a proposed rule (69 FR 565) 

that would remove the 3-year 

recordkeeping requirement and replace 

it with 10-year recordkeeping 

requirement on a permanent basis. We 

also proposed that manufacturers must 

retain records beyond the 10-year period 

if the manufacturers are aware that the 

records are the subject of an audit or a 

government investigation and if the 

audit findings or investigation related to 

the manufacturer’s average 

manufacturer price and best price have 

not been resolved. This final rule 

finalizes both the interim final rule and 

the proposed rule that we published on 

January 6, 2004.

III. Analysis of and Response to Public 

Comments on the January 6, 2004 

Interim Final With Comment Period 

and Proposed Rule 

We received 3 timely comments in 

response to the January 6, 2004 interim 

final rule with comment period and 

proposed rule. We received comments 

from an attorney who represents the 

pharmaceutical industry, a coalition 

comprised of national advocacy groups, 

and a non-profit organization. These 

comments and our responses are 

summarized below. 

Comment: One commenter urged us 

to promulgate the 10-year requirement 

as a final rule, effective before the 

expiration of the current 10-year 

requirement on December 31, 2004. 

Response: We agree; therefore, we are 

issuing this final rule to permanently 

establish the 10-year recordkeeping 

requirements for manufacturers. 

Comment: One commenter expressed 

the opinion that the January 6, 2004 

interim final rule and proposed rule 

should be modified to change the record 

retention requirements back to 3 years. 

A manufacturer would still have the 

discretion to retain records for as long 

as it wanted, but would not be subject 

to a mandatory requirement in excess of 

the 3-year period. The government 

would not be restricted by these rules 

from pursuing claims under the False 

Claims Act (FCA) or applicable health 

care laws against a manufacturer for 

fraud, abuse, or knowingly submitting 

false data to the government. Changing 

the record retention requirement back to 

3 years would reconcile the current 

conflict between the 10-year record 

retention requirement and the 3-year 

price recalculation reporting 

requirement. The commenter further 

stated that the interim final rule and the 

proposed rule should be finalized to 

clearly state that the 3-year time