Federal Register / Vol. 65, No. 204 / Friday, October 20, 2000 / Proposed Rules 63027

PART 20—ESTATE TAX; ESTATES OF

DECEDENTS DYING AFTER AUGUST

16, 1954

Paragraph 1. The authority citation

for part 20 is amended by adding an

entry in numerical order to read in part

as follows:

Authority: 26 U.S.C. 7805 * * *

Section 20.6081–1 also issued under

26 U.S.C. 6081(a). * * *

Par. 2. Section 20.6075–1 is revised to

read as follows:

§ 20.6075–1 Returns; time for filing estate

tax return.

The estate tax return required by

section 6018 must be filed on or before

the due date. The due date is the date

on or before which the return is

required to be filed in accordance with

the provisions of section 6075(a) or the

last day of the period covered by an

extension of time as provided in

§ 20.6081–1. The due date, for a

decedent dying after December 31, 1970,

is, unless an extension of time for filing

has been obtained, the day of the ninth

calendar month after the decedent’s

death numerically corresponding to the

day of the calendar month on which

death occurred, except that, if there is

no numerically corresponding day in

such ninth month, the last day of the

ninth month is the due date. For

example, if the decedent dies on July 31,

2000, the estate tax return and tax

payment must be made on or before

April 30, 2001. When the due date falls

on Saturday, Sunday, or a legal holiday,

the due date for filing the return is the

next succeeding day that is not

Saturday, Sunday, or a legal holiday.

For the definition of a legal holiday, see

section 7503 and § 301.7503–1 of this

chapter. As to additions to the tax in the

case of failure to file the return or pay

the tax within the prescribed time, see

section 6651 and § 301.6651–1 of this

chapter. For rules with respect to the

right to elect to have the property

valued as of a date or dates subsequent

to the decedent’s death, see section 2032

and § 20.2032–1, and section 7502 and

§ 301.7502–1 of this chapter. This

section applies to estates of decedents

dying after August 16, 1954.

Par. 3. Section 20.6081–1 is revised to

read as follows:

§ 20.6081–1 Extension of time for filing the

return.

(a) Extensions of time for good cause

shown. Where it is impossible or

impracticable to file a reasonably

complete return within the time

prescribed by statute, the person

required to file the return may request

an extension of time for filing. Except as

provided in paragraph (b) of this

section, an extension of time for filing

an estate tax return is not automatic and

is within the discretion of the Internal

Revenue Service. Unless the person

required to file the return is abroad, an

extension may not be granted for more

than 6 months from the filing date

prescribed by statute. Requests for an

extension of time for filing are made by

submitting Form 4768, ‘‘Application for

Extension of Time To File a Return and/

or Pay U.S. Estate (and GenerationSkipping Transfer) Taxes.’’ The

application must contain a full recital of

the causes for the delay. It should be

filed with the Internal Revenue Service

office designated in the application’s

instructions (except as provided in

§ 301.6091–1(b) of this chapter for handcarried documents). The application

should, where possible, be filed

sufficiently early to permit the Internal

Revenue Service time to consider the

matter and reply before what otherwise

would be the due date of the return.

Failure to file the application before the

expiration of the time within which the

return otherwise must be filed may

indicate negligence and constitute

sufficient cause for denial of the

extension.

(b) Automatic extension—(1)

Application for extension. Executors

who are required to file Form 706,

‘‘United States Estate (and GenerationSkipping Transfer) Tax Return,’’ may

request an automatic 6-month extension

of time beyond the date prescribed in

section 6075(a) for filing the return by

submitting Form 4768, ‘‘Application for

Extension of Time To File a Return and/

or Pay U. S. Estate (and GenerationSkipping Transfer) Taxes.’’ An

automatic extension will be allowed if—

(i) The application is filed on or

before the date prescribed in section

6075(a) for filing the return;

(ii) The application is filed with the

Internal Revenue Service office

designated in the application’s

instructions (except as provided in

§ 301.6091–1(b) of this chapter for handcarried documents); and

(iii) The application includes an

estimate of the amount of estate and

generation-skipping transfer tax liability

with respect to the estate.

(2) Executors who are abroad. If an

executor who is abroad has received an

automatic 6-month extension, the

executor may request an additional

extension of time by following the

procedures in paragraph (a) of this

section.

(c) Filing the return. A return as

complete as possible must be filed

before the expiration of the extension

period. The return thus filed will be the

return required by section 6018(a), and

any tax shown on the return will be the

amount determined by the executor as

the tax referred to in section 6161(a)(2),

or the amount shown as the tax by the

taxpayer upon the taxpayer’s return

referred to in section 6211(a)(1)(A). The

return cannot be amended after the

expiration of the extension period

although supplemental information may

subsequently be filed that may result in

a finally determined tax different from

the amount shown as the tax on the

return.

(d) Payment of the tax. An extension

of time for filing a return does not

operate to extend the time for payment

of the tax. See § 20.6151–1 for the time

for payment of the tax, and §§ 20.6161–

1 and 20.6163–1 for extensions of time

for payment of the tax.

(e) Effective date. This section applies

to estates of decedents dying after

August 16, 1954, except for paragraph

(b) of this section which applies to

estate tax returns due after the date

these regulations are published as a

final regulation in the Federal Register.

Robert E. Wenzel,

Deputy Commissioner of Internal Revenue.

[FR Doc. 00–26942 Filed 10–19–00; 8:45 am]

BILLING CODE 4830–01–P

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Parts 141 and 142

[WH–FRL–6888–8]

RIN 2040–AB75

National Primary Drinking Water

Regulations; Arsenic and Clarifications

to Compliance and New Source

Contaminants Monitoring

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Notice of data availability.

SUMMARY: The Environmental Protection

Agency (EPA) proposed regulations for

arsenic in drinking water on June 22,

2000 (65 FR 38888), and comments on

that action were due on September 20,

2000. Since that time, EPA has received

new risk information which the Agency

is considering during the development

of the final regulation. This document

summarizes the new risk information

received and analyzed by the Agency. In

addition, this document makes available

the cost curves used to develop the costs

published in the proposal. This

information does not change the overall

technical approach for the proposal.

EPA is requesting comments on EPA’s

63028 Federal Register / Vol. 65, No. 204 / Friday, October 20, 2000 / Proposed Rules

use of the new risk analysis and

development of cost estimates for the

final rule and any comments on other

parts of the proposal which would

change because of the information

provided today.

DATES: Your comments on this

document must be submitted to EPA in

writing and should be postmarked or

received November 20, 2000.

ADDRESSES: Send written comments to

the W–99–16 NODA Arsenic Comments

Clerk, Water Docket (MC–4101); U.S.

Environmental Protection Agency; 1200

Pennsylvania Ave., NW., Washington,

DC 20460. Comments may be handdelivered to the Water Docket, U.S.

Environmental Protection Agency; 401

M Street, SW; East Tower Basement,

room EB–57; Washington, DC 20460;

(202) 260–3027 between 9 a.m. and 3:30

p.m. Eastern Time, Monday through

Friday. Comments may be submitted

electronically, marked docket number

W–99–16 NODA, to ow-docket@epa.gov.

Please refer to the information under the

headings ‘‘Additional Information for

Commenters’’ and ‘‘Availability of

Docket’’ in SUPPLEMENTARY INFORMATION

for detailed information about filing and

docket review.

FOR FURTHER INFORMATION CONTACT: For

technical inquiries about risk and

benefits discussed in this notice, contact

Dr. John B. Bennett, (202) 260–0446,

email: bennett.johnb@epa.gov, and for

technical inquiries about treatment and

cost discussed in this notice, contact Jeff

Kempic, (202) 260–9567, email:

kempic.jeffrey@epa.gov. For general

information about this notice, contact

Irene Dooley, (202) 260–9531, email:

dooley.irene@epa.gov.

SUPPLEMENTARY INFORMATION:

Regulated Entities

A public water system, as defined in

40 CFR 141.2, provides water to the

public for human consumption through

pipes or other constructed conveyances,

if such system has ‘‘at least fifteen

service connections or regularly serves

an average of at least twenty-five

individuals daily at least 60 days out of

the year.’’ A public water system is

either a community water system (CWS)

or a non-community water system

(NCWS). A community water system, as

defined in § 141.2, is ‘‘a public water

system which serves at least fifteen

service connections used by year-round

residents or regularly serves at least

twenty-five year-round residents.’’ The

definition in § 141.2 for a non-transient,

non-community water system

[NTNCWS] is ‘‘a public water system

that is not a [CWS] and that regularly

serves at least 25 of the same persons

over 6 months per year.’’ EPA has an

inventory totaling over 54,000

community water systems and

approximately 20,000 non-transient,

non-community water systems

nationwide. Entities potentially

regulated by this action are community

water systems and non-transient, noncommunity water systems. The

following table provides examples of the

regulated entities under this rule.

TABLE OF REGULATED ENTITIES

Category Examples of potentially regulated entities

Industry ................................................. Privately owned/operated community water supply systems using ground water or mixed ground water

and surface water.

State, Tribal, and Local Government ... State, Tribal, or local government-owned/operated water supply systems using ground water or mixed

ground water and surface water.

Federal Government ............................ Federally owned/operated community water supply systems using ground water or mixed ground water

and surface water.

The table is not intended to be

exhaustive, but rather provides a guide

for readers regarding entities likely to be

regulated by this action. This table lists

the types of entities that EPA is now

aware could potentially be regulated by

this action. Other types of entities not

listed in this table could also be

regulated. To determine whether your

facility is regulated by this action, you

should carefully examine the

applicability criteria in §§ 141.11 and

141.62 of the rule. If you have any

questions regarding the applicability of

this action to a particular entity, consult

the general information person listed in

the FOR FURTHER INFORMATION CONTACT

section.

Additional Information for Commenters

Please submit an original and three

copies of your comments and enclosures

(including references) and identify your

submission by the docket number W–

99–16 NODA. To ensure that EPA can

read, understand, and therefore properly

respond to comments, the Agency

would prefer that comments cite, where

possible, the paragraph(s) or sections in

the document or supporting documents

to which each comment refers.

Commenters should use a separate

paragraph for each issue discussed. If

you are submitting your comments

electronically and mailing hard copies,

please indicate on your electronic

submission that hard copies are being

sent separately. Electronic comments

must be submitted as a WordPerfect 5.1,

WP6.1 or WP8 file or as an ASCII file

avoiding the use of special characters.

Comments and data will also be

accepted on disks in WP 5.1, WP6.1 or

WP8, or ASCII file format. Electronic

comments on this document may be

filed online at many Federal Depository

Libraries. Commenters who want EPA to

acknowledge receipt of their comments

should include a self-addressed,

stamped envelope. No facsimiles (faxes)

will be accepted.

Availability of Docket

The docket for this document has

been established under number W–99–

16–II, and includes supporting

documentation as well as printed, paper

versions of electronic comments. The

docket is available for inspection from

9 a.m. to 4 p.m., Monday through

Friday, excluding legal holidays, at the

Water Docket; EB 57; in the East Tower

basement of U.S. EPA; 401 M Street,

SW; Washington, DC. For access to

docket materials, please call (202) 260–

3027 to schedule an appointment.

Abbreviations Used

%—percent

AIC—Akaike information criterion

CWS—community water system

EB—East Tower Basement

ED01—Effective dose which results in

1% excess lifetime risk

EPA—U.S. Environmental Protection

Agency

et al.—et alibi, Latin for ‘‘and others’’

FR—Federal Register

i.e.—id est, Latin for ‘‘that is’’

kg—kilograms, 2.2 pounds

L—Liter, also referred to as lower case

‘‘l’’ in older citations

LED01—a 95% lower confidence limit

for ED01

MDBP—microbial/disinfection byproduct

MCL—maximum contaminant level

Federal Register / Vol. 65, No. 204 / Friday, October 20, 2000 / Proposed Rules 63029

mg—milligrams—one thousandth of a

gram, 1 milligram = 1,000 micrograms

microgram (μg)—One-millionth of gram

(3.5 × 10¥8 oz., 0.000000035 oz.)

μg/L—micrograms per liter

MOE01—margin of exposure, ratio of

ED01 to MCL

NAS—National Academy of Sciences

NODA—Notice of Data Availability

NRC—National Research Council,

operating agency of NAS

NRC—National Research Council, the

operating arm of NAS

O&M—operation and maintenance

ppb—Parts per billion. Also, μg/L or

micrograms per liter

RIA—Regulatory Impact Analysis

U.S.—United States

VSL—Value of a statistical life

WTP—Willingness to pay

How Does This Document Relate to the

June 22, 2000 Proposal?

In the Thursday, June 22, 2000,

Federal Register the U.S. Environmental

Protection Agency (EPA) proposed

regulations for arsenic and clarifications

to compliance and new source

contaminants monitoring (65 FR 38888).

This document applies only to the

arsenic part of the proposal.

Specifically, EPA noted that ‘‘Further

work on the risk assessment will also be

done before the final rule is issued to

analyze the risks of internal cancers (65

FR 38888 at 38899).’’ This document

discusses new risk information and

EPA’s subsequent risk analysis.

On page 39835 of the June 22, 2000,

arsenic proposal, EPA noted that the

unit cost curves are in the November

1999 ‘‘Technologies and Costs for the

Removal of Arsenic from Drinking

Water.’’ It has come to EPA’s attention

that the cost curves used to develop the

costs that are included in the proposal

and supporting Regulatory Impact

Analysis (RIA) are in an earlier version

of this document dated April 1999. This

document announces the availability of

the April 1999 version, with curves that

more accurately reflect the analysis in

the preamble and the RIA. The overall

approach to cost estimation in the

proposed rule and the proposed

Maximum Contaminant Level (MCL)

remain unchanged.

What New Risk Data Has EPA

Analyzed?

In the proposal we calculated bladder

cancer benefits and risks using the

bladder cancer risk analysis from the

1999 National Research Council (NRC)

report, Arsenic in Drinking Water. We

also estimated lung cancer benefits in a

‘‘What If’’ analysis based on a

qualitative statement about lung cancer

deaths from the 1999 NRC report. At

that time we noted that a peer-reviewed

lung cancer risk study would probably

become available before the final rule

came out (65 FR 38888 at 38944). This

Spring, we received a copy of a peerreviewed article by Morales et al.

(2000). This article presented additional

analyses of bladder cancer risks as well

as estimates of lung and liver cancer

risks for the same Taiwanese population

analyzed in the NRC report. This

document makes available for public

comment the Morales et al. (2000)

information and the Agency’s analysis

of the bladder and lung cancer risks

from that paper.

What Is in the Article by Morales et al.?

The article ‘‘Risk of Internal Cancer

from Arsenic in Drinking Water’’

(Morales et al., 2000) presents an

assessment of the magnitude of risk for

cancers of the bladder, liver and lung

from exposure to arsenic in water, based

on data from 42 villages in an arseniasis

endemic region of Taiwan. The authors

calculated excess lifetime risk estimates

using several Poisson regression models

and a multistage-Weibull model. (Excess

lifetime risk is the additional probability

of disease or death due to the given

cause over the course of a lifetime.) Risk

estimates are expressed as ED01, the

concentration at which 1% additional

lifetime risk of death is incurred; LED01,

a 95% lower confidence limit for ED01;

and MOE01(50), the ‘‘margin of

exposure,’’ or the ratio of ED01 to the

current MCL of 50 μg/L. The authors

found that risk estimates are sensitive to

the choice of model, to whether a

comparison population is used to define

the unexposed disease mortality rates,

and whether the comparison population

is all of Taiwan or just an unexposed

portion of the population in the study

area. The authors noted that some of the

factors that may affect the magnitude of

risk could not be evaluated

quantitatively: The ecological nature of

the data, the nutritional status of the

study population, and the dietary intake

of arsenic. Despite all these sources of

uncertainty, however, the analysis

suggests that the current standard of 50

μg/L is associated with a substantial

increased risk of cancer and thus is not

suffciently protective of public health.

(The authors state that ‘‘the risk

associated with a concentration of 50

μg/L is approximately 1 in 300, based on

linear extrapolation from the point of

departure. * * * This is an extremely

high value.’’)

The Morales et al. (2000) article uses

several statistical models to estimate

bladder, lung, and liver cancer risk from

arsenic exposure. It also presents the

combined risk of all three cancers. The

risk assessments are based on a study

from Taiwan published by Chen et al.

(1985), with the data grouped at the

village level. These data are also used

for the bladder cancer risk analysis in

the 1999 NRC report. Morales et al.

(2000) examine issues of dose-response

modeling for the generalized linear

model. The authors identify several

Poisson and multistage-Weibull models

which fit the data about equally well.

They prefer the Poisson models, in part

because the fit of the Weibull models is

more sensitive to the omission of

subsets of individual villages. The

models are based on mortality data from

Taiwan, and model results are

transferred to the United States (U.S.)

without adjustment for differences in

mortality-to-incidence ratios for the

various illnesses. The authors adjusted

the risk analyses to reflect differences in

average population weight and in the

consumption of drinking water between

the U.S. and Taiwan (assuming a

representative person in the U.S. weighs

70 kg and drinks 2 liters of water per

day vs. a Taiwanese weighing 55 kg and

drinking 3.5 liters). Two comparison

populations, one from all of Taiwan and

one from southwestern Taiwan, were

used in the modeling to estimate

background levels of risk.

The various model results present

considerable variability in cancer risk

estimates for arsenic. The authors

propose several reasons for the

variability, including the large

variability of exposure among people

within each village and use of a

comparison population in the analysis.

The authors also suggest that a variety

of factors for which data were not

available, including the dietary intake of

inorganic arsenic, could influence or

even confound these models. They

observe that ‘‘* * * this is an ecological

study wherein only relatively simple

exposure and population characteristics

could be measured. It will be important

to consider this and other sources of

uncertainty when interpreting the

results (Morales et al., 2000).’’ The

authors conclude, however, that it

seems likely that arsenic is contributing

to excess cancer mortality in the U.S.

based on their evaluation of combined

risks of bladder, lung, and liver cancer:

‘‘Despite the considerable variation in

estimated ED01, the results are sobering

and indicate that current standards are

not adequately protective against cancer

(Morales et al., 2000).’’

What Models Did EPA Choose To Use

for Additional Analysis?

Ten risk models were presented in

Morales et al. (2000). Following Dr.

Louise Ryan’s presentation to the SAB

63030 Federal Register / Vol. 65, No. 204 / Friday, October 20, 2000 / Proposed Rules

Drinking Water Committee (SAB, 2000),

and after additional consultation with

the primary authors (Morales and Ryan),

EPA chose Model 1 with no comparison

population for further analysis. In

Model 1 the dose effect is assumed to

follow a linear function and the age

effect is assumed to follow a quadratic

function.

EPA believes, after consultation with

the authors, that the models in Morales

et al. (2000) with a comparison

population are less reliable than those

without a comparison population. With

no comparison population, the arsenic

dose-response curve is estimated only

from the study population. Models with

a comparison population include

mortality data from a similar population

(in this case either all of Taiwan or part

of southwestern Taiwan), whose

exposure is assumed to be zero. Most of

the models with comparison

populations resulted in dose-response

curves that were supralinear (higher

than a linear dose-response) at low

doses. The curves were forced down at

zero dose because the comparison

population consists of a large number of

people with low risk and assumed zero

exposure. EPA believes, based on

discussions with the authors, that these

models are less reliable, for two reasons.

First, there is no basis in data on

arsenic’s carcinogenic mode of action to

consider a supralinear curve to be

biologically plausible. The conclusion

of the NRC panel (NRC, 1999) was that

the mode of action data led one to

expect dose responses that would be

either linear or less than linear at low

dose. However, the NRC indicated that

available data are inconclusive and

‘‘* * * do not meet EPA’s 1996 stated

criteria for departure from the default

assumption of linearity.’’ Second,

models which include comparison

populations assume that the exposure of

the comparison population is zero, and

that the study and comparison

populations are the same in all

important ways except for arsenic

exposure. Neither of these comparison

populations assumptions may be

correct: NRC (1999) notes that ‘‘the

Taiwanese-wide data do not clearly

represent a population with zero

exposure to arsenic in drinking water’’;

and Morales et al. (2000) agree that

‘‘[t]here is reason to believe that the

urban Taiwanese population is not a

comparable population for the poor

rural population used in this study.’’

Moreover, because of the large amount

of data in the comparison populations,

the model results are relatively sensitive

to assumptions about this group. For

these reasons, EPA believes that the

models without comparison populations

are more reliable than those with them.

Of the models that did not include a

comparison population, EPA believes

Model 1 fits the data best, based on the

Akaike information criterion (AIC), a

standard criterion of model fit, applied

to the Poisson models. EPA did not

consider the multi-stage Weibull model

for additional analysis, because of its

greater sensitivity to the omission of

individual villages (Morales et al., 2000)

and to the grouping of responses by

village (NRC, 1999), as occurs in the

Taiwanese data.

The Poisson regression model (Model

1), without a comparison population,

gave results for lifetime excess risk of

bladder cancer for males from arsenic

ingestion (about 1.3 in a 1000 at an

arsenic level of 50 μg/L) which were

approximately the same as those risks

found by the NRC (approximately 1 in

a 1000 at an arsenic level of 50 μg/L).

Among females, lifetime excess risk of

bladder cancer is estimated to be 2.0 in

1000 at 50 μg/L. We also considered

estimates using this model for excess

risks for lung and liver cancer due to

arsenic. The lung cancer risk estimates,

which were comparable to the bladder

cancer risk estimates, were of special

interest to the Agency, as the NRC

report did not provide a statistical

analysis of these risks.

However, EPA did not further

consider the Taiwan liver cancer

estimates for U.S. liver cancer risks.

Angiosarcoma liver cancer (cancer in

the liver’s blood vessels) has been

linked to arsenic exposure in Germany

(Roth, 1957, as reported in Smith et al.,

1992), Chile (Zaldivar et al., 1981, as

reported in Smith et al., 1992), and the

U.S. (Falk et al., 1981, as reported in

Smith et al., 1992). However, most liver

cancers in Taiwan were hepatocellular

(i.e., liver cell) carcinomas linked to

hepatitis (Chen et al., 1985 & 1986),

rather than angiosarcoma cancer, and

are extremely rare in the U.S.

How Will the New Data Affect EPA’s

Risk Analysis?

This section describes EPA’s risk

analysis in the June 22, 2000, proposed

arsenic rulemaking, then extends the

analysis to incorporate new information

from Morales et al. (2000).

The June 22, 2000, proposed arsenic

rulemaking contained an analysis of the

excess exposed population risks

associated with arsenic consumption for

bladder cancer. This analysis was based

on the 1999 National Research Council

(NRC) report, in which the NRC

examined risk distributions for male

bladder cancer in 42 villages in Taiwan.

This population was exposed to

drinking water with arsenic ranging

from 10 to 934 μg/L; arsenic exposure

estimates were grouped by village. To

monetize bladder cancer benefits, EPA

calculated the number of cases

potentially avoided, based on the NRC

bladder cancer risk analyses, for

populations exposed to MCL options of

3 μg/L, 5 μg/L, 10 μg/L, and 20 μg/L.

The proposal’s analytic approach

included five components. First, EPA

used data from the recent EPA water

consumption study (US EPA, 2000a).

Second, we used Monte Carlo

simulations to develop a distribution of

‘‘relative exposure factors,’’ which

account for individual variations in risk

due to water consumption and body

weight. Third, arsenic occurrence

estimates (US EPA, 2000c) were used to

identify the population exposed to

levels above 3 μg/L. We assumed

drinking water exposure reflected

treatment to 80% of the MCL level,

because water systems tend to treat

below the MCL level in order to provide

a margin of safety. Fourth, EPA chose

four NRC risk distributions (NRC, 1999,

from Tables 10–11 and 10–12) for the

analysis, that used Poisson-model

derived risk estimates, with and without

baseline comparison data. Fifth, EPA

used Monte Carlo simulations to

develop estimates of the risks faced by

the exposed population, using the

relative exposure factors, occurrence,

and the NRC risk distributions. These

components of the analysis are

described in the proposed rulemaking

(US EPA, 2000d, section X.A). EPA also

monetized the potential benefits of

avoided lung cancer, using a ‘‘What If’’

analysis based on statements in the NRC

report.

Table 1 shows the mean and 90th

percentile bladder cancer incidence

risks summarized from Tables X–4A, X–

4B, X–2A, and X–2B in the June 22,

2000, arsenic proposed rulemaking (65

FR 38888), after treatment, for the U.S.

population currently exposed at or

above 3 μg/L, 5 μg/L, 10 μg/L, and 20

μg/L. These risk distributions are based

on bladder cancer mortality data in

Taiwan, in a section of Taiwan where

arsenic concentrations in the water are

very high by comparison to those in the

U.S. It is also an area of low incomes

(NRC, 1999, pg. 292) and poor diet

(NRC, 1999, pg. 295), and the

availability and quality of medical care

is not of high quality, by U.S. standards.

In its estimate of bladder cancer risk, the

Agency assumed that within the

Taiwanese study area at the time of the

study, the risk of contracting bladder

cancer was relatively close to the risk of

dying from bladder cancer (that is, that

Federal Register / Vol. 65, No. 204 / Friday, October 20, 2000 / Proposed Rules 63031

the bladder cancer incidence rate was

equal to the bladder cancer mortality

rate). Survival rates for bladder cancer

in the U.S. have been improving from

1973 to 1996 (i.e., U.S. bladder cancer

mortality rates decreased overall 24% to

26%). Recent bladder cancer survival

rates in developing countries range from

23.5% to 66.1%, and are currently 45%

for bladder cancer in Taiwan, as

discussed in the proposed rulemaking

(65 FR 38888 at 38942). At most, the

Agency concluded that bladder cancer

incidence could be no more than 2

times bladder cancer mortality; and that

an 80% mortality rate would be

plausible. The benefits analysis

included estimates using an assumed

mortality rate ranging from 80% to

100%.

TABLE 1.—BLADDER CANCER RISKS FROM THE JUNE 22, 2000 PROPOSAL: MEAN (FROM TABLES X–4A AND X–4B) AND

90TH PERCENTILE (FROM TABLES X–2A AND X–2B) LIFETIME INCIDENCE RISKS,1 FOR U.S. POPULATIONS EXPOSED

AT OR ABOVE MCL OPTIONS, AFTER TREATMENT 2 (LOWER BOUNDS: LOW NRC RISK, CWS WATER CONSUMPTION;

UPPER BOUNDS: HIGH NRC RISK, TOTAL WATER CONSUMPTION)

MCL μg/L Mean exposed

population risk

90th percentile

exposed population risk

3 ................................................................................................................................................... 2.1¥4.5 × 10¥5 4¥7 × 10¥5

5 ................................................................................................................................................... 3.6¥7.5 × 10¥5 6¥12 × 10¥5

10 ................................................................................................................................................. 5.5¥11.4 × 10¥5 1¥2 × 10¥4

20 ................................................................................................................................................. 6.9¥13.9 × 10¥5 1.4¥2.8 × 10¥4

1Actual risks could be lower, given the various uncertainties discussed, or higher, as these estimates assume a 100% mortality rate. 2The risk analysis assumed exposure at 80% of the MCL level, because water systems tend to treat below the MCL level in order to provide a

margin of safety.

The Morales et al. (2000) article

provided a new analysis of bladder

cancer risk. Although the data used

were the same as used by the NRC to

analyze bladder cancer risk in their

1999 publication, Morales et al. (2000)

consider more dose-response models

and evaluate how well they fit the

Taiwanese data. Therefore the Agency

decided to examine the implications of

the new bladder cancer risk assessment

from Morales et al. (2000), as well as the

lung cancer risk assessment. Using the

same analytical approach as in the

arsenic proposed rule (with Monte Carlo

simulations combining relative

exposure factors, occurrence estimates,

and risk distributions), the Agency

recalculated the mean bladder cancer

risks for U.S. populations, based on the

risk estimates from Morales et al. (2000),

derived from Model 1 with no

comparison population. The results are

shown in Table 2, along with the

bladder cancer risks remaining, after

treatment, for the 90th percentile U.S.

population.

TABLE 2.—BLADDER CANCER: MEAN AND 90TH PERCENTILE LIFETIME INCIDENCE RISKS,1 FOR U.S. POPULATIONS EXPOSED AT OR ABOVE MCL OPTIONS, AFTER TREATMENT 2 (MORALES RISK, LOW WATER CONSUMPTION FOR LOWER

BOUND, HIGH WATER CONSUMPTION FOR UPPER BOUND)

MCL μg/L Mean exposed

population risk

90th percentile

population risk

3 ................................................................................................................................................... 4.9¥6.0 × 10¥5 1¥1.2 × 10¥4

5 ................................................................................................................................................... 8.4¥10.2 × 10¥5 1.8¥2.0 × 10¥4

10 ................................................................................................................................................. 1.2¥1.47 × 10¥4 2.6¥3.1 × 10¥4

20 ................................................................................................................................................. 1.55¥1.89 × 10¥4 3.5¥4.1 × 10¥4

1Actual risks could be lower, given the various uncertainties discussed, or higher, as these estimates assume a 100% mortality rate. 2The risk analysis assumed exposure at 80% of the MCL level, because water systems tend to treat below the MCL level in order to provide a

margin of safety.

The Agency also estimated the mean

and 90th percentile lung cancer risks for

U.S. populations, using the same

analytical approach and the risk

estimates from Morales et al. (2000),

derived from Model 1 with no

comparison population. The results are

shown in Table 3.

63032 Federal Register / Vol. 65, No. 204 / Friday, October 20, 2000 / Proposed Rules

TABLE 3.—LUNG CANCER: MEAN LIFETIME INCIDENCE RISKS,1 FOR U.S. POPULATIONS EXPOSED AT OR ABOVE MCL OPTIONS, AFTER TREATMENT 2 (MORALES RISK, LOW WATER CONSUMPTION FOR LOWER BOUND, HIGH WATER CONSUMPTION FOR UPPER BOUND)

MCL μg/L Mean exposed

population risk

90th percentile

population risk

3 .............................................................................................................................................. 4.9¥6.1 × 10¥5 1.0¥1.2 × 10¥4

5 .............................................................................................................................................. 8.2¥10.5 × 10¥5 1.7¥2.1 × 10¥4

10 ............................................................................................................................................ 1.21¥1.46 × 10¥4 2.7¥3.1 × 10¥4

20 ............................................................................................................................................ 1.52¥1.87 × 10¥4 3.4¥4.3 × 10¥4

1Actual risks could be lower, given the various uncertainties discussed, or higher, as these estimates assume a 100% mortality rate. 2The risk analysis assumed exposure at 80% of the MCL level, because water systems tend to treat below the MCL level in order to provide a

margin of safety.

EPA believes, based upon this most

recent risk information, that the

combined risk of excess cases of lung

and bladder cancer attributable to

arsenic in drinking water could be at

least twice that of bladder cancer alone.

However, EPA will need to conduct

additional analyses of this risk

information, together with additional

analyses of the various uncertainties

associated with the underlying data, and

of comments submitted in response to

the proposed rule, to develop its best

estimate of the overall risk in support of

a final rulemaking.

How Did EPA Analyze the Lower

Bound of its Risk Estimates?

The Agency performed a sensitivity

analysis of the lower bound risk

estimates, considering the effect on risk

estimates of exposure to arsenic through

water used in preparing food in Taiwan.

The 1988 EPA ‘‘Special Report on

Ingested Inorganic Arsenic’’ contained

the following discussion:

For the studied population, rice and sweet

potatoes were the main staple and might

account for as much as 80% of food intake

per meal. For the purpose of discussion we

will assume that a man in the study

population ate one cup of dry rice and two

pounds of potatoes per day and that the

amount of water required to cook the rice and

potatoes was about 1 L. Under this

assumption, the risk calculated before is

overestimated by about 30% (1 L/ 3.5 L). This

calculation considers only the water used for

cooking; the arsenic content in the rice and

potatoes that might have been absorbed from

soil arsenic is not considered because of the

lack of information.

The Taiwanese staple foods were dried

sweet potatoes and rice (Wu et al.,

1989). Both the 1988 EPA report and the

1999 NRC report assumed that an

average Taiwanese male weighed 55 kg

and drank 3.5 liters of water daily, and

that an average Taiwanese female

weighed 50 kg and drank 2 L of water

daily. Using these assumptions, along

with an assumption that Taiwanese men

and women ate one cup of dry rice and

two pounds of sweet potatoes a day, the

Agency re-estimated risks for bladder

and lung cancer, using one additional

liter water consumption for food

preparation (i.e., the water absorbed by

hydration during cooking). The food

consumed in Taiwan contains more

arsenic than in the U.S.: on average,

about 50 μg/day in Taiwan, versus about

10 μg/day in the U.S. (NRC, 1999, pp.

50–51). Thus our analysis may still

overstate the risk to the U.S. population,

when the total consumption of

inorganic arsenic (from food preparation

and drinking water) is considered.

Results of the EPA analysis considering

water used in cooking are shown in

Table 4, using the NRC bladder cancer

risk, the Morales et al. (2000) bladder

cancer risk, and the Morales et al. (2000)

lung cancer risk estimates utilized

earlier in this Document. Table 5 shows

the cancer risks remaining, after

treatment to 80% MCL options, for high

percentile U.S. populations, providing a

sensitivity analysis for the lower bound

risk taking into account the arsenic

intake from water used in cooking dried

foods.

TABLE 4.—SENSITIVITY ANALYSIS OF MEAN LOWER BOUND INCIDENCE RISK ESTIMATES,1, 2 RISKS ADJUSTED FOR WATER

USED IN COOKING (CWS WATER CONSUMPTION DATA)

MCL (μg/L) Bladder (NRC) Bladder

(Morales)

Lung

(Morales)

3 .......................................................................................................................................... 1.7 × 10¥5 3.5 × 10¥5 3.6 × 10¥5

5 .......................................................................................................................................... 2.9 × 10¥5 5.7 × 10¥5 5.7 × 10¥5

10 ........................................................................................................................................ 4.1 × 10¥5 8.4 × 10¥5 8.4 × 10¥5

20 ........................................................................................................................................ 5.1 × 10¥5 1.01 × 10¥5 1.06 × 10¥5

1 Risks are adjusted under assumption that Taiwanese males and females consume one additional liter of water in rehydrating dried rice and

sweet potatoes. 2The bladder cancer risks presented in this table provide ‘‘best’’ estimates. Actual risks could be lower, given the various uncertainties discussed, or higher, as these estimates assume a 100% mortality rate.

Federal Register / Vol. 65, No. 204 / Friday, October 20, 2000 / Proposed Rules 63033

1The June 20, 2000, proposal (65 FR 38888) cited

the central tendency estimate of the VSL as $5.8

million in 1997 $ in the preamble text. However,

the analyses presented in the proposal’s tables

reflect 1999 $ values, as noted.

2The June 20, 2000, proposal (65 FR 38888) cited

the central tendency estimate of the WTP as

$536,000 in 1997 $ in the preamble text. However,

the analyses presented in the proposal’s tables

reflect 1999 $ values, as noted.

TABLE 5.—SENSITIVITY ANALYSIS OF 90TH PERCENTILE LOWER BOUND INCIDENCE RISK ESTIMATES,1, 2 RISKS ADJUSTED

FOR WATER USED IN COOKING (CWS WATER CONSUMPTION DATA)

MCL (μg/L) Bladder (NRC) Bladder

(Morales)

Lung

(Morales)

3 .......................................................................................................................................... 3.5 × 10¥5 7.5 × 10¥5 7.2 × 10¥5

5 .......................................................................................................................................... 5.9 × 10¥5 1.2 × 10¥4 1.2 × 10¥4

10 ........................................................................................................................................ 9.0 × 10¥5 1.8 × 10¥4 1.8 × 10¥4

20 ........................................................................................................................................ 1.1 × 10¥4 2.3 × 10¥4 2.4 × 10¥4

1 Risks are adjusted under assumption that Taiwanese males and females consume one additional liter of water in rehydrating dried rice and

sweet potatoes. 2The bladder cancer risks presented in this table provide ‘‘best’’ estimates. Actual risks could be lower, given the various uncertainties discussed, or higher, as these estimates assume a 100% mortality rate.

How Will EPA Evaluate Benefits in the

Final Rule?

The benefits of a regulatory option

depend primarily on the number of

cases of an illness avoided due to the

reduction in risk resulting from the

implementation of the option. For the

arsenic proposed rule and following

established Agency practices, EPA

estimated the number of cases of

bladder cancer avoided using mean

exposed population incidence risk

estimates at various MCL levels (these

mean exposed population incidence

risks are shown in Table 1). We

converted lifetime risk estimates to

annual risk factors, and applied these to

the exposed population to determine the

number of cases avoided (both fatal and

non-fatal). We adjusted the upper bound

bladder cancer number of cases

estimates by assuming an 80% mortality

rate in Taiwan, which is a plausible

mortality rate for the area of Taiwan

during the Chen study. The lower

bound estimates assumed a 100%

mortality rate from bladder cancer in

Taiwan. For the benefits assessment,

EPA used U.S. mortality information to

divide the number of cases into fatal

and non-fatal cases avoided. Benefits are

assumed to begin to accrue on the

effective date of the arsenic rule (65 FR

38888 at 38946).

The avoided cases of fatal bladder

cancer are valued by what is known as

the ‘‘value of a statistical life’’ (VSL),

currently estimated at $6.1 million (in

1999 dollars).1 VSL does not refer to the

value of an identifiable life, but instead

to the value of small reductions in

mortality risks in a population. We used

the central tendency estimate of

$604,000 (1999 dollars) 2 of the

willingness to pay (WTP) to avoid a case

of chronic bronchitis to monetize the

benefits of avoiding non-fatal bladder

cancers (Viscusi et al., 1991). WTP data

for avoiding chronic bronchitis has been

used before by EPA (the microbial/

disinfection by-product (MDBP)

rulemaking) as a surrogate for the WTP

to avoid non-fatal bladder cancer. EPA

summed the monetized benefits for fatal

and non-fatal bladder cancer cases

avoided to obtain total monetized

benefits for avoided bladder cancer

cases (shown in Tables X–7 and XI–1 of

the proposed rule preamble, in 1999

dollars).

In the arsenic proposed rule, EPA also

estimated the number of lung cancer

cases avoided, for the various options

considered, using a ‘‘What If’’ analysis,

and monetized these cases using the

same process that was used to monetize

the benefits of avoided bladder cancer

cases. The ‘‘What If’’ analysis examined

possible benefits from avoided lung

cancer cases if the number of those

cases in the U.S. which were fatal in

outcome was 2–5 times the number of

fatal bladder cancer cases (the implicit

risk for lung cancer ranged from about

half to about twice that of the risk for

bladder cancer).

EPA plans to use the benefits

evaluation process described in this

section for the final rule, using the data

and analysis of the bladder and lung

cancer risks described in this document

instead of the ‘‘What If’’ lung cancer

analysis included in the proposal. These

more definitive benefits estimates will

be derived from the new risk

calculations that will accompany the

final rule (based upon further

consideration of additive risk analyses)

and other pertinent information.

Background information on the

economic concepts that provide the

foundation for benefits valuation, and

the methods that are typically used by

economists to monetize the value of risk

reductions, such as wage-risk, cost of

illness, and contingent valuation studies

are provided in the arsenic RIA.

EPA Benefits Summary and

Conclusions

Morales et al. (2000) assess the risks

of lung and bladder cancer associated

with arsenic consumption in water,

based on data from Taiwan, using

several statistical models. Although the

data used were the same as used by the

NRC (1999). Morales et al. consider

more dose-response models, providing a

more exhaustive treatment of model fit.

They also discuss additional factors, for

which data were not available, which

might influence or confound the

analysis. Dose-response risk estimate for

both bladder and lung cancer, derived

from the best-fitting model, were

analyzed further by the Agency. The

Agency calculated new risk estimates

for the U.S. exposed population, for the

various MICL options under

consideration. The resulting risk

estimates for bladder cancer are higher

than those examined in detail in the

proposal, and the new lung cancer risks

are approximately equal to the new

bladder cancer risks. As noted earlier,

EPA believes that the combined risk of

excess cases from lung and bladder

cancer could be at least twice that of

bladder cancer alone and will be

refining its overall risk estimate in

support of the final rule based on a

number of factors, with a particular

focus on the additive risks of lung and

bladder cancer. Monetized benefits from

avoided cases overall are expected to

fall within the ranges presented in the

June 22 Proposed Rule, because of the

implicit assumptions of lung cancer risk

in the ‘‘What If’’ analysis. However, the

lung cancer monetized benefits would

be more certain, and removed from the

‘‘What If’’ categorization. In addition,

the Agency performed a lower bound

sensitivity analysis of risk estimates

given a variation in the assumption

about water used for cooking in Taiwan.

What Technologies and Costs Document

Is Being Made Available?

In the June 22, 2000, Federal Register,

the EPA presented national cost

63034 Federal Register / Vol. 65, No. 204 / Friday, October 20, 2000 / Proposed Rules

3Table VIII–3. Annual Costs of Treatment Trains

(Per Household); Table IX–11. National Annual

Treatment Costs; Table IX–12. Total Annual Costs

Per Household; Table IX–13. Incremental National

Annual Costs; Table IX–14. Incremental Annual

Costs Per Household; Table X–7. Estimated Costs

and Benefits From Reducing Arsenic in Drinking

Water; Table XI–1. Estimated Costs and Benefits

From Reducing Arsenic in Drinking Water; Table

XIII–3. Estimated Costs and Benefits From Reducing

Arsenic in Drinking Water; Table XIII–4. Estimated

Annualized National Costs of Reducing Arsenic

Exposures; Table XIII–5. Estimated Annual Costs

Per Household and (Number of Households

Affected); Table XIII–6. Summary of the Total

Annual National Costs of Compliance with the

Proposed Arsenic Rule Across MCL Options; Table

XIII–7. Estimates of the Annual Incremental Risk

Reduction, Benefits, and Costs of Reducing Arsenic

in Drinking Water; Table XIV–2. Average Annual

Cost per CWS by Ownership; Table XIV–3. Average

Compliance Costs per Household for CWSs

Exceeding MCLs; and Table XIV–4. Average

Compliance Costs per Household for CWSs

Exceeding MCLs as a Percent of Median Household

Income.

estimates of the proposed arsenic rule

(65 FR 38888). In several tables 3 in the

preamble EPA presented annualized

national cost estimates for four MCL

options (3, 5, 10 and 20 μL). The

methodology and data used to develop

these estimates are described in the

Regulatory Impact Analysis (RIA) (EPA

2000b). This document is making

available for public comment additional

information on the costs of treatment

technologies EPA: ‘‘Technologies and

Costs for the Removal of Arsenic From

Drinking Water,’’ April 1999, which has

been placed in the docket, and will be

made available on EPA’s website. EPA

used this April 1999 document to

develop the national estimates

presented in the proposed rule.

The RIA describes the model

(SafeWaterXL) that was used by EPA to

estimate national costs. The model uses

data on arsenic occurrence, compliance

decision trees, unit treatment

technology train costs and other

relevant data to generate national cost

estimates. All of these inputs are

described in the RIA. The treatment

trains that were used in the national

cost estimation are given in Exhibit 6–

1 of the RIA. The RIA provides

information on treatment technology

costs by system size in Exhibit 6–2. The

exhibit has cost estimates on treatment

capital, treatment operation and

maintenance (O&M), waste disposal

capital, and waste disposal O&M costs

for each treatment train.

Today’s document is advising the

public about the availability in the

docket of ‘‘Technologies and Costs for

the Removal of Arsenic from Drinking

Water,’’ April 1999, which provides the

unit cost curves (regressions) that were

used to generate Exhibit 6–1 of the RIA.

The April 1999 technology and cost

document contains curves for several

removal efficiencies, including the ones

corresponding to the removal

efficiencies identified in Exhibit 6–1 of

the RIA.

The unit cost treatment curves for

each technology can be found in the

April 1999 technology and cost

document. The unit cost waste disposal

curves can be derived from Table 4–1,

‘‘Summary of Residuals

Characteristics,’’ in the technology and

cost document. Those interested in

reproducing the waste disposal curves

should consult the ‘‘Small Water System

Byproducts Treatment and Disposal

Cost’’ (EPA 1993a) document and the

‘‘Water System Byproducts Treatment

and Disposal Cost’’ (EPA 1993b)

document. The former is for small water

systems, and the latter is for larger ones.

An electronic copy of the treatment

technology and waste disposal

equations used in the development of

the RIA can also be found in the docket.

Why Does the Docket Have a Copy of

a Newer Version of the Technologies &

Costs for Comment?

The EPA has continued to refine and

update cost estimates of the treatment

technologies discussed in the proposed

rule. In addition, EPA is following the

development of emerging technologies

that would be relevant for arsenic

removal. An update of the April 1999

document was inadvertently included

in the docket: EPA, ‘‘Technologies and

Costs for Removal of Arsenic from

Drinking Water,’’ November 1999. This

was not, however, the version used to

develop the RIA. The RIA costs were

developed using the earlier April 1999

version, which is being provided with

this document. This data and

information is being made available to

those interested in reproducing our

national cost estimates.

The differences between the cost

curves in the April and November drafts

are attributable to the different design

criteria assumptions made when

running the unit cost models. Three unit

cost models were used: ‘‘Very Small

Systems’’ (for systems between 0.015 to

0.100 mgd), ‘‘Water model’’ (for systems

between 0.27 and 1.00 mgd), and ‘‘W/

W Cost’’ (for systems between 10 to 200

mgd). The design criteria assumptions

are described prior to the presentation

of the cost curves in each document. For

example, the design criteria

assumptions for coagulation assisted

microfiltration are listed on page 3–47

of the November 1999 document and on

page 3–60 of the April 1999 document.

EPA will continue to refine the cost

curves and other cost of compliance

information and data based on

comments submitted on the proposal.

How Will EPA Use the November 1999

Cost Document?

EPA will carefully consider all

comments on the proposed rule and will

develop new national cost estimates for

the final rule, along with a new

supporting treatment technology and

cost document, which would update

both the April 1999 and November 1999

versions of the treatment technology

and cost document. The new version

that will be developed will include cost

estimates for emerging technologies, and

where necessary, updates to the

treatment technology cost curves

already developed. EPA may also

develop an updated decision tree to

refine and improve the cost estimates,

based on comments received on the

proposal. Changes in these inputs to

EPA’s models for determining the cost

of compliance and any changes to the

national cost estimates generated by the

model will be presented in the final

rule.

References

Chen, C. J., Y. C. Chuang, T. M. Lin and H.

Y. Wu. 1985. Malignant neoplasms

among residents of a Blackfoot disease

endemic area in Taiwan: High arsenic

well water and cancers. ‘‘Cancer

Research’’ 45:5895–5899.

Chen, C. J., Y. C. Chuang, T. M. Lin and H.

Y. Wu. 1986. A retrospective study on

malignant neoplasms of bladder, lung

and liver in Blackfoot disease endemic

area in Taiwan. ‘‘British Journal of

Cancer’’ 53:399–405.

Morales, K.H., L. Ryan, K.G. Brown, T–L

Kuo, M–M Wu, and C.J. Chen. 2000. Risk

of Internal Cancers from Arsenic in

Drinking Water. ‘‘Environmental Health

Perspectives’’ 108:655–661.

National Research Council. 1999. ‘‘Arsenic in

Drinking Water.’’ Washington, DC.

National Academy Press.

Smith, A.H., C. Hopenhayn-Rich, M.N. Bates,

H.M. Goeden, I. Hertz-Picciotto, H.M.

Duggan, R. Wood, M.J. Kosnett, and M.T.

Smith. 1992. Cancer risks from arsenic in

drinking water. ‘‘Environmental Health

Perspectives’’ 97:259–267.

US EPA. 1988. ‘‘Special Report on Ingested

Inorganic Arsenic: Skin Cancer;

Nutritional Essentiality.’’ Risk

Assessment Forum. EPA/625/3–87/013.

124 pp. July 1988.

US EPA. 1993a. Small Water System

Byproducts Treatment and Disposal Cost

Document. April 1993.

US EPA. 1993b. Water System Byproducts

Treatment and Disposal Cost Document.

April 1993.

US EPA. 1999a. Technologies and Costs for

Removal of Arsenic From Drinking

Water. EPA–815–R–00–012. Prepared by

International Consultants, Inc. and

Malcolm Pirnie, Inc. under contract to

EPA OGWDW. November 1999.

US EPA. 1999b. Technologies and Costs for

the Removal of Arsenic From Drinking

Water. Prepared by International

Federal Register / Vol. 65, No. 204 / Friday, October 20, 2000 / Proposed Rules 63035

1See section 1128 of the Act; 42 U.S.C. 1320a–

7.

2See Manocchio v. Kusserow (961 F.2d 1539

(11th Cir. 1992)), which held that exclusions are

remedial.

Consultants, Inc. and Malcolm Pirnie,

Inc. under contract 68–C–C6–0039 with

EPA OGWDW. April 1999.

US EPA. 2000a. ‘‘Estimated Per Capita Water

Ingestion in the United States: Based on

Data Collected by the United States

Department of Agriculture’s (USDA)

1994–1996 Continuing Survey of Food

Intakes by Individuals.’’ Office of Water,

Office of Standards and Technology.

EPA–822–00–008. April 2000.

US EPA. 2000b. Proposed Arsenic in

Drinking Water Rule: Regulatory Impact

Analysis (RIA). Prepared by Abt

Associates, Inc. under contract to EPA

OGWDW. EPA 815–R–013. June 2000.

US EPA. 2000c. ‘‘Arsenic Occurrence in

Public Drinking Water Supplies.’’ Public

Comment Draft. Office of Water,

Washington DC. EPA 815–D–00–001.

May 2000.

US EPA. 2000d. National Primary Drinking

Water Regulations; Arsenic and

Clarifications to Compliance and New

Source Contaminants Monitoring;

Proposed Rule. Federal Register. Vol. 65,

No. 121, p. 38888. June 22, 2000.

Viscusi, W.K., W.A. Magat, and J. Huber.

1991. Pricing Environmental Health

Risks: Survey Assessments of Risk-Risk

and Risk-Dollar Trade-Offs for Chronic

Bronchitis. ‘‘Journal of Environmental

Economics and Management.’’ 21:32–51.

Wu, M.M., T.L. Kuo, Y.H. Hwant, and C.J.

Chen. 1989. Dose-response relation

between arsenic concentration in well

water and mortality from cancers and

vascular diseases. American Journal of

Epidemiology. 130:1123–1132.

Authority: 42 U.S.C. 300f, 300g–1, 300g–2,

300g–3, 300g–4, 300g–5, 300g–6, 300j–4,

300j–9, and 300j–11.

Dated: October 13, 2000.

J. Charles Fox,

Assistant Administrator for Water.

[FR Doc. 00–27034 Filed 10–19–00; 8:45 am]

BILLING CODE 6560–50–P

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Office of Inspector General

42 CFR Parts 1001, 1003, 1005 and

1008

RIN 0991–AB09

Medicare and State Health Care

Programs: Fraud and Abuse;

Revisions and Technical Corrections

AGENCY: Office of Inspector General

(OIG), HHS.

ACTION: Proposed rule.

SUMMARY: This proposed rule sets forth

several revisions and technical

corrections to the OIG regulations. This

rule proposes revisions or clarifications

to the definition of the term ‘‘item or

service’’, to the reinstatement

procedures relating to exclusions

resulting from a default on health

education or scholarship obligations,

and to the limitations period applicable

to exclusions. In addition, this rule

would make a number of minor

technical corrections to the current

regulations, and serves to clarify various

issues and inadvertent errors appearing

in the OIG’s existing regulatory

authorities in order to achieve greater

clarity and consistency.

DATES: To assure consideration, public

comments must be mailed and delivered

to the address provided below by no

later than 5 p.m. November 20, 2000.

ADDRESSES: Please mail or deliver your

written comments to the following

address: Department of Health and

Human Services, Office of Inspector

General, Room 5246, Attention: OIG–

62–P, Washington, D.C. 20201.

FOR FURTHER INFORMATION CONTACT: Joel

J. Schaer, Office of Counsel to the

Inspector General, (202) 619–0089.

SUPPLEMENTARY INFORMATION: Consistent

with existing regulatory authority, the

OIG is proposing the following revisions

to 42 CFR chapter V, many of which are

technical in nature:

• Limitations Period for Exclusions;

§ 1001.1 (Scope of Exclusions).

The purpose of an OIG program

exclusion is to protect Medicare,

Medicaid and all other Federal health

care programs from fraud and abuse,

and to protect beneficiaries of those

programs from untrustworthy providers.

Questions have been raised as to

whether a limitations period is

applicable to the imposition of OIG

program exclusions. The OIG frequently

determines that conduct which occurred

several years in the past does not

warrant an exclusion (other than an

exclusion that is mandated by statute).

However, there is no statute of

limitations specified for exclusions in

the Social Security Act (the Act).1

Moreover, program exclusions are

remedial in nature,2 and it is the OIG’s

position that if we determine that an

exclusion is necessary to protect the

programs and beneficiaries from

untrustworthy individuals and entities,

we are authorized to impose such an

exclusion without being subject to a

limitations period. To eliminate any

confusion on this point, we are

clarifying § 1001.1 to indicate that there

is no time limitation on the imposition

of a program exclusion.

Thus, for example, when a program

exclusion imposed under section

1128(b)(7) of the Act is based on

violations of another statute, such as the

civil money penalty (CMP) statute

(section 1128A of the Act), which has a

6 year statute of limitations, the program

exclusion is not similarly time limited.

• Amendment to § 1001.101(c) (Basis

for Liability)

In introductory paragraph (c) of

§ 1001.101, we propose to add the word

‘‘financial’’ before the word

‘‘misconduct.’’ This revision would be

consistent with the statutory language

set forth in section 1128(a)(3) of the Act

which specifically uses the word

‘‘financial’’ to describe the felony under

which the OIG will exclude an

individual or entity. The revision to this

paragraph is intended to mirror the

statutory language.

• Revisions to §§ 1001.102 and

1001.201 With Respect to Financial Loss

and the Threshold Amount

Currently, §§ 1001.102 and 1001.201

set forth an aggravating factor for

lengthening the period of exclusion

when an individual’s conviction, or

similar acts, resulted in financial loss of

$1,500 or more. First, we are proposing

to revise §§ 1001.102(b)(1) and

1001.201(b)(2)(i) to increase the

financial loss considered to be an

aggravating factor from $1,500 to $5,000.

We believe that this revision would

more properly reflect the current

economics of health care fraud in the

programs and would establish a more

reasonable threshold amount as an

aggravating factor to be considered as a

basis for lengthening a period of

exclusion.

In addition, we are proposing to

clarify §§ 1001.102(b)(1) and

1001.201(b)(2)(i) to reflect as an

aggravating factor both the actual and

intended loss to the programs associated

with this conduct. We believe that any

loss—not just the actual, out-of-pocket

loss—that is designed to cause harm to

the programs should be taken into

consideration. For example, in a

situation where an individual intends to

commit damage to the programs by

filing false cost reports, but whose plans

are detected and prevented from

reaching fruition by an intermediary

who intercepts the damage before it can

occur, we believe the intended loss, and

not just any actual loss, should also be

taken in consideration as a valid

measure of the individual’s culpability.

Accordingly, we would also clarify

§§ 1001.102(b)(1) and 1001.201(b)(2)(i)