Federal Register / Vol. 62, No. 158 / Friday, August 15, 1997 / Rules and Regulations 43653

excluding legal holidays. The public

record is located in Room 1132 of the

Public Information and Records

Integrity Branch, Information Resources

and Services Division (7506C), Office of

Pesticide Programs, Environmental

Protection Agency, Crystal Mall #2,

1921 Jefferson Davis Highway,

Arlington, VA 22202.

Electronic comments can be sent

directly to EPA at:

opp-docket@epamail.epa.gov

Electronic comments must be

submitted as an ASCII file avoiding the

use of special characters and any form

of encryption.

The official record for this

rulemaking, as well as the public

version, as described above, is kept in

paper form. Accordingly, in the event

there are objections and hearing request,

EPA will transfer any copies of

objections and hearing requests received

electronically into printed, paper form

as they are received and will place the

paper copies in the official rulemaking

record. The official rulemaking record is

the paper record maintained at the

Virginia address in ‘‘ADDRESSES’’ at

the beginning of this document.

X. Regulatory Assessment

Requirements

This final rule establishes an

exemption from the tolerance

requirement under FFDCA section

408(d) in response to a petition

submitted to the Agency. The Office of

Management and Budget (OMB) has

exempted these types of actions from

review under Executive Order 12866,

entitled Regulatory Planning and

Review (58 FR 51735, October 4, 1993).

This final rule does not contain any

information collections subject to OMB

approval under the Paperwork

Reduction Act (PRA), 44 U.S.C. 3501 et

seq., or impose any enforceable duty or

contain any unfunded mandate as

described under Title II of the Unfunded

Mandates Reform Act of 1995 (UMRA)

(Pub. L. 104–4). Nor does it require any

prior consultation as specified by

Executive Order 12875, entitiled

Enhancing the Intergovernmental

Partnership (58 FR 58093, October 28,

1993), or special considerations as

required by Executive Order 12898,

entitled Federal Actions to Address

Environmental Justice in Minority

Populations and Low-Income

Populations (59 FR 7629), February 16,

1994), or require OMB review in

accordance with Executive Order 13045,

entitled Protection of Children from

Environmental Health Risks and Safety

Risks (62 FR 19885, April 23, 1997).

In additions, since tolerance

exemptions that are established on the

basis of a petition under FFDCA section

408(d), such as the exemption in this

final rule, do not require the issuance of

a proposed rule, the requirements of the

Regulatory Flexibility Act (RFA) (5

U.S.C. 601 et seq.) do not apply.

Nevertheless, the Agency previously

assessed whether establishing

tolerances, exemptions from tolerances,

raising tolerance levels or expanding

exemptions might adversely impact

small entities and concluded, as a

generic matter, that there is no adverse

economic impact. The factual basis for

the Agency’s generic certification for

tolerance actions published on May 4,

1981 (46 FR 24950), and was provided

to the Chief Counsel for Advocacy of the

Small Business.

XI. Submission to Congress and the

General Accounting Office

Under 5 U.S.C. 801(a)(1)(A), as added

by the Small Business Regulatory

Enforcement Fairness Act of 1996, the

Agency has submitted 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 General

Accounting Office prior to publication

of the rule in today’s Federal Register.

This is not a major rule as defined by

5 U.S.C. 804(2).

List of Subjects in 40 CFR Part 180

Environmental protection,

Administrative practice and procedure,

Agricultural commodities, Pesticides

and pests, Reporting and recordkeeping

requirements.

Dated: August 7, 1997.

Daniel M. Barolo,

Director, Office of Pesticide Programs.

Therefore, 40 CFR part 180 is

amended as follows:

1. The authority citation for part 180

continues to read as follows:

Authority: 21 U.S.C. 346a and 371.

2. Section 180.1183 is added to

subpart D to read as follows:

§ 180.1183 Replicase Protein of Potato

Leaf Roll Virus and the genetic material

necessary for its production; Exemption

from the requirement of a tolerance.

An exemption fron the requirement of

a tolerance is established for residues of

the biological plant pesticide Replicase

Protein of Potato Leaf Roll Virus and the

genetic material necessary for its

production in or on all food

commodities.

[FR Doc. 97–21691 Filed 8–14–97; 8:45 am]

BILLING CODE 6560–50–F

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 180

[OPP–300531; FLR–5738–4]

RIN 2070–AB78

Coat Protein of Potato Virus Y and the

Genetic Material Necessary for its

Production; Exemption From the

Requirement of a Tolerance

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Final Rule.

SUMMARY: This rule establishes an

exemption from the requirement of a

tolerance for residues of the biological

pesticide Coat Proteins of Potato Virus

Y and the genetic material necessary for

its production in or on all raw

agricultural commodities. Monsanto

Company submitted a petition to EPA

under the Federal Food, Drug and

Cosmetic Act as amended by the Food

Quality Protection Act of 1996

requesting the tolerance exemption.

This regulation eliminates the need to

establish a maximum permissible level

for residues of Coat Proteins of Potato

Virus Y and the genetic material

necessary for its production.

DATES: This regulation is effective

August 15, 1997. Objections and

requests for hearings must be received

by EPA on or before October 14, 1997.

ADDRESSES: Written objections and

hearing requests, identified by the

docket control number [OPP–300531],

must be submitted to: Hearing Clerk

(1900), Environmental Protection

Agency, Rm. M3708, 401 M St., SW.,

Washington, DC 20460. Fees

accompanying objections and hearing

requests shall be labeled ‘‘Tolerance

Petition Fees’’ and forwarded to: EPA

Headquarters Accounting Operations

Branch, OPP (Tolerance Fees), P.O. Box

360277M, Pittsburgh, PA 15251. A copy

of any objections and hearing requests

filed with the Hearing Clerk identified

by the docket control number, [OPP–

300531], must also be submitted to:

Public Information and Records

Integrity Branch, Information Resources

and Services Division (7506C), Office of

Pesticide Programs, Environmental

Protection Agency, 401 M St., SW.,

Washington, DC 20460. In person, bring

a copy of objections and hearing

requests to Rm. 1132, CM #2, 1921

Jefferson Davis Hwy., Arlington, VA.

A copy of objections and hearing

requests filed with the Hearing Clerk

may be submitted electronically by

sending electronic mail (e-mail) to: oppdocket@epamail.epa.gov. Copies of
43654 Federal Register / Vol. 62, No. 158 / Friday, August 15, 1997 / Rules and Regulations

electronic objections and hearing

requests must be submitted as an ASCII

file avoiding the use of special

characters and any form of encryption.

Copies of electronic objections and

hearing requests will also be accepted

on disks in WordPerfect 5.1 file format

or ASCII file format. All copies of

electronic objections and hearing

requests must be identified by the

docket number [OPP–300531]. No

Confidential Business Information (CBI)

should be submitted through e-mail.

Copies of electronic objections and

hearing requests on this rule may be

filed online at many Federal Depository

Libraries.

FOR FURTHER INFORMATION CONTACT: By

mail: Linda Hollis, c/o Product Manager

(PM) 90, Biopesticides and Pollution

Prevention Division (7501W),

Environmental Protection Agency, 401

M St., SW., Washington, DC 20460.

Office location, telephone number, and

e-mail: Rm. 5th fl., CS#1 2800 Crystal

Drive, Arlington, VA 22202, (703) 308–

8733, e-mail:

hollis.linda@epamail.epa.gov

SUPPLEMENTARY INFORMATION: In the

Federal Register of June 25, 1997 (62 FR

34281–34283)(FRL–5723–2), EPA issued

a notice pursuant to section 408(d), of

the Federal Food Drug & Cosmetic Act

(FFDCA), 21 U.S.C. 346a(d), announcing

the filing of a pesticide tolerance

petition by Monsanto Company, St.

Louis, MO. The notice contained a

summary of the petition prepared by the

petitioner and this summary contained

conclusions and arguments to support

its conclusion that the petition

complied with the Food Quality

Protection Act (FQPA) of 1996. The

petition requested that 40 CFR part 180

be amended by establishing an

exemption from the requirement of a

tolerance for residues of the biological

pest control agent Coat Protein of Potato

Virus Y and the genetic material

necessary for its production in or on all

raw agricultural commodities.

There were no comments or requests

for referral to an advisory committee

received in response to the notice of

filing.

The data submitted in the petition

and other material have been evaluated.

The toxicology data requirements in

support of this exemption from the

requirement of a tolerance were satisfied

via data waivers from the open scientific

literature.

I. Risk Assessment and Statutory

Findings

New section 408(c)(2)(A)(i) of the

FFDCA allows EPA to establish an

exemption from the requirement for a

tolerance (the legal limit for a pesticide

chemical residue in or on a food) only

if EPA determines that the tolerance is

‘‘safe.’’ Section 408(c)(2)(ii) defines

‘‘safe’’ to mean that ‘‘there is a

reasonable certainty that no harm will

result from aggregate exposure to the

pesticide chemical residue, including

all anticipated dietary exposures and all

other exposures for which there is

reliable information.’’ This includes

exposure through drinking water and in

residential settings, but does not include

occupational exposure. Section

408(c)(2)(B) requires EPA to give special

consideration to exposure of infants and

children to the pesticide chemical

residue in establishing a tolerance and

to ‘‘ensure that there is a reasonable

certainty that no harm will result to

infants and children from aggregate

exposure to the pesticide chemical

residue***.’’ EPA performs a number of

analyses to determine the risks from

aggregate exposure to pesticide residues.

First, EPA determines the toxicity of

pesticides. Second, EPA examines

exposure to the pesticide through food,

drinking water, and through other

exposures that occur as a result of

pesticide us in residential settings.

II. Toxicological Profile

Consistent with section 408(b)(2)(D)

of FFDCA, EPA has reviewed the

available scientific data and other

relevant information in support of this

action and considered its validity,

completeness and reliability and the

relationship of this information to

human risk. EPA has also considered

available information concerning the

variability of the sensitivities of major

identifiable subgroups of consumers,

including infants and children.

Additionally, section 408(b)(2)(D)(v)

requires that, when considering whether

to establish, modify, or revoke a

tolerance, the Agency consider

‘‘available information’’ concerning the

cumulative effects of a particular

pesticide’s residues and ‘‘other

substances that have a common

mechanism of toxicity.’’ All available

information indicates that viral coat

proteins in food have no human toxicity

and EPA is not aware of any other

substances within or outside of the food

supply that might have a common

mechanism of human toxicity with

residues of viral coat proteins produced

in plants as part of a plant-pesticide.

Data waivers were requested for acute

toxicity, genotoxicity, reproductive and

developmental toxicity, subchronic

toxicity and chronic toxicity data. The

data waivers were accepted based on the

long history of mammalian

consumption of the entire plant virus

particle in foods, without causing any

deleterious human health effects [See

OPP–300367A; FRL–5716–6]. Virusinfected plants currently are and have

always been a part of both the human

and domestic animal food supply and

there have been no findings which

indicate that plant viruses are toxic to

humans and other vertebrates. Further,

plant viruses are unable to replicate in

mammals or other vertebrates, thereby

eliminating the possibility of human

infection. More importantly, however,

this tolerance exemption will apply to

that portion of the viral genome coding

for the whole coat protein and any

subcomponent of the coat protein

expressed in the plant. This component

alone is incapable of forming infectious

particles.

The genetic material necessary for the

production of the plant-pesticides active

and inert ingredients are the nucleic

acids (DNA) which comprise (1) genetic

material encoding these viral coat

proteins and their regulatory regions.

‘‘Regulatory regions: are the genetic

material that control the expression of

the genetic material encoding the

proteins, such as promoters,

terminators, and enhancers. DNA is

common to all forms of plant and

animal life and the Agency knows of no

instance where these nucleic acids have

been associated with toxic effects

related to their consumption as a

component of food. These ubiquitous

nucleic acids as they appear in the

subject plant-pesticide’s inert ingredient

have been adequately characterized by

the applicant and supports EPA’s

conclusion that no mammalian toxicity

is anticipated from dietary exposure to

the genetic material necessary for the

production of the coat protein of Potato

Virus Y and inert plant pesticidal

ingredients.

III. Aggregate Exposures

In examining aggregate exposure,

FFDCA section 408 directs EPA to

consider available information

concerning exposures from the pesticide

residue in food and all other nonoccupational exposures, including

drinking water from groundwater or

surface water and exposure through

pesticide use in gardens, lawns, or

buildings (residential and other indoor

uses).

1. Dietary exposure—a. Food. The use

of viral coat protein mediated resistance

will not result in any new dietary

exposure to plant viruses. Entire

infectious particles of Potato Virus Y,

including the coat protein component,

are found in the fruit, leaves and stems

of most plants. Viruses are ubiquitous in

the agricultural environment at levels

higher than will be present in transgenic
Federal Register / Vol. 62, No. 158 / Friday, August 15, 1997 / Rules and Regulations 43655

plants. Virus infected food plants have

historically been a part of the human

and domestic animal food supply with

no observed adverse effects to human

health and infants and children upon

consumption. Therefore, the lack of

toxicity associated with plant viruses

and the history of contamination of the

food supply by virus coat proteins

provides a scientific rationale for

exempting from the requirement of a

tolerance transgenic plants expressing

virus coat proteins and leads the Agency

to conclude that the use of Coat Protein

of Potato Virus Y and the genetic

material necessary for its production

will not pose a dietary risk of concern

under normal conditions. Moreover,

there is no evidence which indicates

that adverse effects due to aggregate

exposure of viral coat proteins (with

substances outside the food supply)

through dietary, non-food oral, dermal

and inhalation occurs. This conclusion

is suppported by the EPA’s Scientific

Advisory Panel’s discussion regarding

the Agency’s Regulatory approach for

plant pesticides which concluded:

i. The levels of virus in the

agricultural environment are much

higher than those levels present in

transgenic plants.

ii. The existing contamination of the

current food supply provides a scientific

rationale for exempting from the

requirement of a tolerance transgenic

plants which express viral coat proteins.

b. Drinking water exposure. Potential

non-occupational exposures in drinking

water is negligible. Viral coat proteins

produced in plants as part of a plantpesticide are an integral part of the

living tissue of the plant. As such, these

components are subject to degradation

and decay, a process which occurs fairly

rapidly. Viral coat proteins produced in

plants as part of a plant-pesticide do not

persist in the environment or

bioaccumulate. The rapid turnover of

these substances in the environment

limits their ability to present anything

other than a very negligible exposure in

drinking water drawn from either

surface or groundwater sources.

2. Other non-occupational exposure.

Other non-occupational exposure of

engineered coat proteins via residential

and indoor uses, e.g., uses around

homes, parks, recreation areas, athletic

fields and golf courses, will be minimal

to non-existent as the coat protein is

expressed only within the plant tissues.

a. Dermal exposure. Due to the nature

of viral coat proteins produced in plants

as part of a plant-pesticide, exposure

through any route (i.e., dermal,

respiratory) other than dietary is

unlikely to occur. Physical contact with

the plant or raw agricultural food from

the plant may present some limited

opportunity for dermal exposure.

However, on a per person basis, the

potential amounts involved in this

exposure is negligible in comparison to

exposure through the dietary route.

Additionally, viral coat proteins

produced in plants as part of a plantpesticide are unlikely to cross the

barrier provided by the skin.

b. Inhalation exposure. The

occurrence of respiratory exposure of

viral coat proteins produced in plants as

part of a plant-pesticide is negligible in

comparison to potential exposure

through the dietary route. In some cases,

viral coat proteins may be present in

pollen, thus affording exposure to those

individuals in areas exposed to windblown pollen. However, it is unlikely

that exposure to the pollen is equivalent

to exposure to viral coat proteins

produced in plants as part of a plantpesticide. Viral coat proteins, when

present in pollen, will likely be

integrated into the tissue of pollen grain

and are unlikely to cross the barrier

provided by the mucous membrane of

the respiratory tract and thus are not

additive to dietary exposure. Moreover,

exposure through inhalation via windblown pollen occurs to the whole virus

particle and there is no evidence which

suggests that exposure to whole plant

viruses by wind-blown pollen results in

any adverse effects. Therefore, it is

unlikely that exposure to pollen that

may contain viral coat proteins

produced in plants as part of a plantpesticide would result in adverse

effects.

IV. Safety Factors

Rather than relying on available

animal experimentation data to support

a tolerance exemption for viral coat

proteins, EPA relied on the long history

of safe human consumption of food

containing plant viruses as the

appropriate information base for this

tolerance exemption. Because the EPA

did not rely on animal data,

determination of appropriate safety

factors to be used in a human risk

assessment was not considered.

V. Infants and Children

Consistent with section 408(b)(2)(C) of

the FFDCA, EPA has assessed the

available information about

consumption patterns among infants

and children, special susceptibility of

infants and children to pesticide

chemical residues and the cumulative

effects on infants and children of the

residues and other substances with a

common mechanism of toxicity. Based

on all available information, the Agency

concludes that viral coat proteins

produced in plants as part of a plantpesticide are ubiquitous in foods,

including those foods consumed by

infants and children. Moreover, there is

no reason to believe that plant viral coat

proteins are likely to occur in different

amounts in foods, consumed by

children and infants. Children are

exposed as part of a normal diet to viral

coat proteins and there is no evidence

which indicates that viral coat proteins

would have a diferent effect on children

than on adults. Further, there is no

evidence which suggests that such

exposure to either adults or infants and

children leads to any harm.

VI. Other Considerations

1. Endocrine disrupters. The Agency

has no informtion to suggest that Coat

Proteins of Potato Virus Y and the

genetic material necessary for its

production will have an effect on the

immune and endocrine systems. The

Agency is not requiring information on

the endocrine effects of this biological

pesticide at this time; Congress has

allowed 3 years after August 3, 1996, for

the Agency to implement a screening

program with respect to endocrine

effects.

2. Analytical method. The Agency

proposes to establish an exemption from

the requirement of a tolerance without

any numerical limitation; therefore, the

agency has concluded that an analytical

method is not required for enforcement

purposes for Coat Protein of Potato

Virus Y and the genetic material

necessary for its production.

VII. Determination of Safety for U.S.

Population, Infants and Children

For the U.S. population, including

infants and children, Potato Virus Y

Coat Protein and the genetic material

necessary for its production has no

known adverse effects. Extensive use

and experience show the safety of foods

containing viral coat proteins. There has

been no evidence in the many years of

human experience with the growing and

consumption of food from plants

containing viral coat proteins which

indicates that adverse effects due to

aggregate exposure through the dietary,

non-food oral, dermal and inhalation

routes occur. Therefore, EPA concludes

that there is reasonable certainty that no

harm will result to the U.S. population

from aggregate exposure to residues of

viral coat proteins produced in plants as

part of a plant-pesticide including all

anticipated dietary exposures and all

other exposures for which there is

reliable information. The Agency has

arrived at this conclusion because, as

discussed above, no toxicity to

mammals has been observed for coat
43656 Federal Register / Vol. 62, No. 158 / Friday, August 15, 1997 / Rules and Regulations

protein of Potato Virus Y and the

genetic material necessary for its

production. Thus, a tolerance for this

Coat Protein of Potato Virus Y and the

genetic material necessary for its

production is not necessary to protect

the public health. Therefore, 40 CFR

part 180 is amended as set forth below.

VIII. Objections and Hearing Requests

The new FFDCA section 408(g)

provides essentially the same process

for persons to ‘‘object’’ to a regulation

for an exemption from the requirement

of a tolerance issued by EPA under new

section 408(d) as was provided in the

old section 408 and in section 409.

However, the period for filing objections

is 60 days, rather than 30 days. EPA

currently has procedural regulations

which governs the submission of

objections and hearing requests. These

regulations will require some

modification to reflect the new law.

However, until those modifications can

be made, EPA will continue to use those

procedural regulations with appropriate

adjustments to reflect the new law.

Any person may, by October 14, 1997,

file written objections to any aspect of

this regulation and may also request a

hearing on those objections. Objections

and hearing requests must be filed with

the hearing clerk, at the address given

under the ‘‘ADDRESSES’’ section (40

CFR 178.20). A copy of the objections

and/or hearing requests filed with the

hearing clerk should be submitted to the

OPP docket for this rulemaking. The

objections submitted must specify the

provisions of the regulation deemed

objectionable and the grounds for the

objections (40 CFR 178.25). Each

objection must be accompanied by the

fee prescribed by 40 CFR 180.33(i). If a

hearing is requested, the objections

must include a statement of the factual

issues(s) on which a hearing is

requested, the requestor’s contentions

on such issues, and a summary of any

evidence relied upon by the objector (40

CFR 178.27). A request for a hearing

will be granted if the Administrator

determines that the material submitted

shows the following: There is a genuine

and substantial issue of fact; there is a

reasonable possibility that available

evidence identified by the requestor

would, if established resolve one or

more of such issues in favor of the

requestor, taking into account

uncontested claims or facts to the

contrary; and resolution of the factual

issues(s) in the manner sought by the

requestor would be adequate to justify

the action requested (40 CFR 178.32).

Information submitted in connection

with an objection or hearing request

may be claimed confidential by marking

any part or all of that information as

CBI. Information so marked will not be

disclosed except in accordance with

procedures set forth in 40 CFR part 2.

A copy of the information that does not

contain CBI must be submitted for

inclusion in the public record.

Information not marked confidential

may be disclosed publicly by EPA

without prior notice.

IX. Public Docket

A record has been established for this

rulemaking under docket control

number [OPP–300531]. A public version

of this record, which does not include

any information claimed as CBI, is

available for inspection from 8:30 a.m.

to 4 p.m., Monday through Friday,

excluding legal holidays. The public

record is located in Room 1132 of the

Public Information and Records

Integrity Branch, Information Resources

and Services Division (7506C), Office of

Pesticide Programs, Environmental

Protection Agency, Crystal Mall #2,

1921 Jefferson Davis Highway,

Arlington, VA 22202.

Electronic comments can be sent

directly to EPA at:

opp-docket@epamail.epa.gov

Electronic comments must be

submitted as an ASCII file avoiding the

use of special characters and any form

of encryption.

The official record for this

rulemaking, as well as the public

version, as described above, is kept in

paper form. Accordingly, in the event

there are objections and hearing request,

EPA will transfer any copies of

objections and hearing requests received

electronically into printed, paper form

as they are received and will place the

paper copies in the official rulemaking

record. The official rulemaking record is

the paper record maintained at the

Virginia address in ‘‘ADDRESSES’’ at

the beginning of this document.

X. Regulatory Assessment

Requirements

This final rule establishes an

exemption from the tolerance

requirement under FFDCA section

408(d) in response to a petition

submitted to the Agency. The Office of

Management and Budget (OMB) has

exempted these types of actions from

review under Executive Order 12866,

entitled Regulatory Planning and

Review (58 FR 51735, October 4, 1993).

This final rule does not contain any

information collections subject to OMB

approval under the Paperwork

Reduction Act (PRA), 44 U.S.C. 3501 et

seq., or impose any enforceable duty or

contain any unfunded mandate as

described under Title II of the Unfunded

Mandates Reform Act of 1995 (UMRA)

(Pub. L. 104–4). Nor does it require any

prior consultation as specified by

Executive Order 12875, entitiled

Enhancing the Intergovernmental

Partnership (58 FR 58093, October 28,

1993), or special considerations as

required by Executive Order 12898,

entitled Federal Actions to Address

Environmental Justice in Minority

Populations and Low-Income

Populations (59 FR 7629), February 16,

1994), or require OMB review in

accordance with Executive Order 13045,

entitled Protection of Children from

Environmental Health Risks and Safety

Risks (62 FR 19885, April 23, 1997).

In additions, since tolerance

exemptions that are established on the

basis of a petition under FFDCA section

408(d), such as the exemption in this

final rule, do not require the issuance of

a proposed rule, the requirements of the

Regulatory Flexibility Act (RFA) (5

U.S.C. 601 et seq.) do not apply.

Nevertheless, the Agency previously

assessed whether establishing

tolerances, exemptions from tolerances,

raising tolerance levels or expanding

exemptions might adversely impact

small entities and concluded, as a

generic matter, that there is no adverse

economic impact. The factual basis for

the Agency’s generic certification for

tolerance actions published on May 4,

1981 (46 FR 24950), and was provided

to the Chief Counsel for Advocacy of the

Small Business

XI. Submission to Congress and the

General Accounting Office

Under 5 U.S.C. 801(a)(1)(A), as added

by the Small Business Regulatory

Enforcement Fairness Act of 1996, the

Agency has submitted 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 General

Accounting Office prior to publication

of the rule in today’s Federal Register.

This is not a major rule as defined by

5 U.S.C. 804(2).

List of Subjects in 40 CFR Part 180

Environmental protection,

Administrative practice and procedure,

Agricultural commodities, Pesticides

and pests, Reporting and recordkeeping

requirements.

Dated: August 7, 1997.

Daniel M. Barolo,

Director, Office of Pesticide Programs.

Therefore, 40 CFR part 180 is

amended as follows:

1. The authority citation for part 180

continues to read as follows:
Federal Register / Vol. 62, No. 158 / Friday, August 15, 1997 / Rules and Regulations 43657

Authority: 21 U.S.C. 346a and 371.

2. Section 180.1182 is added to

subpart D to read as follows:

§ 180.1182 Coat Protein of Potato Virus Y

and the genetic material necessary for its

production; exemption from the

requirement of a tolerance.

An exemption fron the requirement of

a tolerance is established for residues of

the biological plant pesticide Coat

Protein of Potato Virus Y and the

genetic material necessary for its

production in or on all food

commodities.

[FR Doc. 97–21690 Filed 8–14–97; 8:45 am]

BILLING CODE 6560–50–F

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Health Care Financing Administration

42 CFR Parts 412, 413, and 414

[BPD–763–F]

RIN 0938–AG20

Medicare Program; End-Stage Renal

Disease (ESRD) Payment Exception

Requests and Organ Procurement

Costs

AGENCY: Health Care Financing

Administration (HCFA), HHS.

ACTION: Final rule.

SUMMARY: These final regulations

specify the criteria HCFA uses to

determine if a facility that furnishes

dialysis services to Medicare patients

with end-stage renal disease (ESRD)

qualifies for a higher payment under an

exception to its prospectively

determined payment rate and the

procedures HCFA uses to evaluate ESRD

payment exception requests. These

regulations also revise the way HCFA

computes acquisition costs for organs

that are transplanted into Medicare

beneficiaries.

EFFECTIVE DATE: September 15, 1997.

FOR FURTHER INFORMATION CONTACT:

Michael Powell, (410) 786–4557.

SUPPLEMENTARY INFORMATION:

I. Background

Under sections 1881(b)(2) and (b)(7)

of the Social Security Act (the Act), a

facility that furnishes dialysis services

to Medicare patients with ESRD is paid

a prospectively determined rate for each

dialysis treatment furnished. This rate is

a composite that includes all costs

associated with furnishing dialysis

services except for the costs of

physician services and certain

laboratory tests and drugs that are billed

separately. The composite rate may be

adjusted periodically to reflect actual

facility costs.

When a facility’s costs are higher than

the prospectively determined rate, we

may, under certain conditions, grant the

facility an exception to its composite

rate and set a higher prospective rate.

The facility must show, on the basis of

projected cost and utilization trends,

that it will have an allowable cost per

treatment higher than its prospective

payment rate and that the excess costs

are attributable to one or more specific

circumstances. These conditions are

specified in existing regulations at 42

CFR 413.170 and are discussed in

greater detail in Chapter 27 of the

Medicare Provider Reimbursement

Manual (PRM) (HCFA Pub. 15–1).

A facility may incur excess costs

when it furnishes dialysis services to a

patient population with a greater than

average number of pediatric patients or

patients with other medical conditions,

such as those with heart disease or

unstable medical conditions, who

require special equipment, procedures,

supplies, or staff trained in treating

these patients. This is referred to as

‘‘atypical’’ service intensity (or patient

mix). A facility may also incur increased

costs when it is the only supplier of

dialysis services in its geographical area

and its patients are unable to obtain

dialysis services elsewhere without

considerable hardship (an isolated

essential facility).

Increased training costs may also be

associated with a facility’s self-dialysis

training program. A facility may train

patients to perform self-dialysis with

little or no professional assistance in the

facility or at home. It may also train

other individuals to assist patients in

performing self-dialysis or home

dialysis. A facility that has training

costs greater than its composite training

rate may apply for an exception, but

must prove that the costs are reasonable

and allowable.

Typically, a patient undergoes

dialysis three times a week. A facility

may furnish a substantial number of

treatments to patients who dialyze less

frequently than three times a week. As

a result, the facility typically has higher

per treatment costs because the

treatments involve increased labor or

supplies. When this occurs, a facility

may apply for an exception to the

composite rate.

On several occasions, we have denied

exception requests based on application

of the criteria contained in the PRM,

and the facilities have appealed the

denials. Subsequently, some denials

have been overturned by the Provider

Reimbursement Review Board (PRRB)

because the PRRB is not bound by the

guidelines in the PRM. Therefore, we

believe it is necessary to codify in

regulations the specific requirements for

determining exceptions.

II. Provisions of the Proposed Rule

On August 26, 1994, we published in

the Federal Register (59 FR 44097) a

proposed rule that specified the

conditions (previously contained in the

PRM) that a facility furnishing dialysis

services to patients with ESRD must

meet in order to qualify for a higher

payment under an exception to the

prospectively determined payment rate.

The proposed rule also contained the

criteria that we would use to evaluate

whether the facility meets the

conditions.

We also proposed to revise 42 CFR

Part 413, Subpart H, Payment for ESRD

Services. Currently, all of the Medicare

payment rules for covered outpatient

maintenance dialysis treatments can be

found in § 413.170. We proposed to

reorganize the content of Subpart H and

divide existing § 413.170 into several

smaller sections so that readers can

more easily locate specific topics. The

table outlining this change is shown

below.

New section Old section

413.170 Scope .............................................................................................................................................................................. 413.170(a)

413.172 Principles of prospective payment ................................................................................................................................. 413.170(b)

413.174 Prospective rates for hospital-based and independent ESRD facilities ........................................................................ 413.170(c)

413.176 Amount of payments ...................................................................................................................................................... 413.170(d)

413.178 Bad debts ....................................................................................................................................................................... 413.170(e)

413.180 Procedures for requesting exceptions to payment rates ............................................................................................... 413.170(f)

413.182 Criteria for approval of exception requests .................................................................................................................... 413.170(g)

413.184 Payment exception: Atypical service intensity (patient mix) .......................................................................................... 413.170(g)(1)

413.186 Payment exception: Isolated essential facility ................................................................................................................ 413.170(g)(2)