[Federal Register Volume 66, Number 5 (Monday, January 8, 2001)]
[Rules and Regulations]
[Pages 1462-1471]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-463]



[[Page 1461]]

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Part V





Environmental Protection Agency





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 40 CFR Part 82



Protection of Stratospheric Ozone: Allocation of Essential Use 
Allowances for Calendar Year 2001: Allocation for Metered Dose Inhalers 
and the Space Shuttle and Titan Rockets; Final Rule

Federal Register / Vol. 66, No. 5 / Monday, January 8, 2001 / Rules 
and Regulations

[[Page 1462]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 82

[FRL-6929-6]
RIN 2060-AJ33


Protection of Stratospheric Ozone: Allocation of Essential Use 
Allowances for Calendar Year 2001: Allocation for Metered Dose Inhalers 
and the Space Shuttle and Titan Rockets

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: With this action, EPA is allocating essential use allowances 
for stratospheric ozone depleting substances for calendar year 2001. 
EPA allocates essential use allowances to an applicant for exempted 
production or import of a specific quantity of class I ozone depleting 
substances solely for the designated essential use. Essential use 
allowances permit a person to obtain controlled substances as an 
exemption to the January 1, 1996 regulatory phase-out of production and 
import of these substances. Today, EPA is allocating essential use 
allowances for the production and/or import of class I substances for 
use in medical devices for the treatment of asthma and chronic 
obstructive pulmonary disease, and for use in the Space Shuttle and 
Titan Rockets for calendar year 2001. With today's action, EPA is also 
amending the regulations to allow essential use allowances for medical 
devices to be transferred among essential use allowance holders. The 
essential use exemption for class I ODSs for laboratory and analytical 
applications will be addressed in a separate rulemaking.

DATES: This action is effective January 8, 2001.

ADDRESSES: Materials relevant to this rulemaking are contained in 
Docket No. A-93-39. The Docket phone is (202) 260-7548 and is located 
in Waterside Mall, Room M-1500, 401 M Street, SW., Washington, DC, 
20460. The materials may be inspected from 8 a.m. until 5:30 p.m. 
Monday through Friday. A reasonable fee may be charged by EPA for 
copying docket materials.

FOR FURTHER INFORMATION CONTACT: The Stratospheric Ozone Protection 
Hotline at 1-800-296-1996 or Erin Birgfeld, U.S. Environmental 
Protection Agency, Global Programs Division, Office of Atmospheric 
Programs, 6205J, 1200 Pennsylvania Avenue N.W., Washington, DC, 20460; 
telephone (202) 564-9079; fax: (202) 565-2095; email: 
<a href="/cdn-cgi/l/email-protection#5b3932293c3d3e373f753e2932351b3e2b3a753c342d"><span class="__cf_email__" data-cfemail="9dfff4effafbf8f1f9b3f8eff4f3ddf8edfcb3faf2eb">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background
II. Allocation Process for CFCs for use in Medical Devices for the 
Year 2001
III. Allocation of Essential Use Allowances for Calendar Year 2001
IV. Transfer of Essential Use Allowances for CFCs Among Essential 
Use Allowance Holders
V. Administrative Requirements
VI. Judicial Review
VII. Submittal to Congress and the General Accounting Office

I. Background

    The Montreal Protocol on Substances that Deplete the Ozone Layer 
(Protocol) is the international agreement to reduce and eventually 
eliminate production and consumption\1\ of all stratospheric ozone 
depleting substances (ODSs). As of January 1996, production and import 
of class I ODSs (except methyl bromide) were phased out in all 
developed countries, including the United States. However, the Protocol 
and the Clean Air Act (CAA or Act) provide exemptions that allow for 
the continued import and/or production of class I ODSs for specific 
uses. Under the Montreal Protocol, exemptions are granted for uses that 
are determined by the Parties to be ``essential'' as defined by 
Decision IV/25. The procedure set out by Decision IV/25 first calls for 
individual Parties to nominate essential uses. The Protocol's 
Technology and Economic Assessment Panel (TEAP or the Panel) evaluates 
the nominated essential uses and makes recommendations to the Protocol 
Parties. The Parties make the final decisions on essential use 
nominations at their annual meeting.
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    \1\ ``Consumption'' is defined as the amount of a substance 
produced in the United States, plus the amount imported, minus the 
amount exported to Parties to the Montreal Protocol (see section 
601(6) of the Clean Air Act). Stockpiles of class I ODSs produced 
prior to the 1996 phase-out can continue to be used for purposes not 
expressly banned at 40 CFR part 82, subpart C--Ban on Nonessential 
Products Containing Class I Substances and Ban on Nonessential 
Products Containing or Manufactured with Class II Substances.
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    EPA is responsible for allocating essential use allowances (EUAs) 
at the domestic level through rulemaking in accordance with provisions 
in the CAA. The CAA provides a specific exemption from the phase-out of 
class I ODSs at section 604(d)(2) that allows for the continued import 
and production of CFCs for use in medical devices. Today's action 
allocates EUAs for CFCs for use in metered dose inhalers (MDIs) for the 
treatment of asthma and chronic obstructive pulmonary disease (COPD) 
for calendar year 2001. EPA is also allocating methyl chloroform for 
use in the Space Shuttle and the Titan Rocket for calendar year 2001 
under the authority of the statutory phase-out at section 604(a). 
Today's action also amends the regulations at 40 CFR 82.12 to allow 
transfer of EUAs for CFCs among MDI companies who hold essential use 
allowances.

Overview of the Notice of Proposed Rulemaking

    The Notice of Proposed Rulemaking (NPRM) proposing to allocate 
essential use allowances for calendar year 2001 was published on 
October 6, 2000 (65 FR 59783). In the NPRM, EPA proposed to allocate 
CFCs for use in metered dose inhalers (MDIs) and methyl chloroform for 
use in the Space Shuttle and Titan Rocket. EPA proposed to allocate a 
total of 3098.67 metric tons of CFCs, which is the quantity that the 
Food and Drug Administration (FDA), in consultation with EPA, 
determined to be ``necessary'' for use in MDIs. The total amount of 
essential use authorizations for MDIs granted to the U.S. by the 
Parties to the Montreal Protocol for 2001 is 3,101 metric tons. We 
explained in the NPRM that it would not be possible to allocate CFCs in 
an amount higher than allocated to the U.S. by the Parties to the 
Protocol. EPA also proposed changes to the regulations at 40 CFR 82.12 
that would allow transfer of EUAs for CFCs among essential use holders. 
We also proposed to allocate 60.1 metric tons of methyl chloroform 
(MCF) for use in the Space Shuttle and Titan Rockets.
    EPA received a total of eight comments on the NPRM. Six comments 
were from individual companies who produce MDIs,\2\ one was from a 
consortium group that represents MDI manufacturers,\3\ and one was from 
Friends of the Earth. Three commenters expressed support for the 
provision to allow transfer of EUAs for CFCs between allowance holders. 
One commenter requested additional EUAs to meet their projected needs 
for MDI production in 2001 without utilizing their strategic reserves. 
Two companies requested that their EUAs be reapportioned between them, 
but in the aggregate did not request an increase in EUAs. One commenter 
stated that EPA and FDA had improperly interpreted the

[[Page 1463]]

exemption for medical devices in the Act, and should not allocate CFCs 
for MDI products where an alternative propellant is available. Another 
commenter stated that the Act does not require EPA to transfer to FDA 
the responsibility to determine the amount of the allocation for CFCs, 
and that the FDA decision making process for determining the amount of 
CFCs necessary should be more transparent. EPA will summarize and 
address all comments in the body of this preamble. There were no 
comments on the proposed allocation of MCF for use in the Space Shuttle 
and Titan Rockets.
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    \2\ Pharmaceutical companies who commented were the following: 
Aventis Pharmaceuticals, 3M Pharmaceuticals, Boehringer Ingelheim 
Pharmaceuticals Inc., Schering Corporation, Sidmak Laboratories 
Inc., Glaxo Wellcome.
    \3\ The International Pharmaceutical Aerosol Consortium 
represents the following companies: AstraZeneca, Boehringer 
Ingelheim, Celltech-Medeva, Cheisi Farmaceutici, Glaxo Wellcome, and 
Norton Healthcare.
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How Do the Parties to the Montreal Protocol Define an ``Essential 
Use''?

    Decision IV/25 of the Parties to the Montreal Protocol set forth 
the criteria for determining whether a particular use of class I ODS is 
``essential'' and would thus be eligible to receive EUAs for controlled 
substances. This decision states the following:
    ``(1) that a use of a controlled substance should qualify as 
`essential' only if:
    (i) It is necessary for the health, safety or is critical for the 
functioning of society (encompassing cultural and intellectual 
aspects); and
    (ii) there are no available technically and economically feasible 
alternatives or substitutes that are acceptable from the standpoint of 
environment and health;
    (2) that production and consumption, if any, of a controlled 
substance for essential uses should be permitted only if:
    (i) all economically feasible steps have been taken to minimize the 
essential use and any associated emission of the controlled substance; 
and
    (ii) the controlled substance is not available in sufficient 
quantity and quality from existing stocks of banked or recycled 
controlled substances, also bearing in mind the developing countries' 
need for controlled substances.''

What Was the International Procedure for Approving Essential Use 
Exemptions for the Year 2001?

    The international process for nominating and approving essential 
use allowances for the year 2001 occurred in the same way as in prior 
years. The companies in Table I submitted applications either on their 
own or as a part of the International Pharmaceutical Aerosol Consortium 
(IPAC), requesting class I ODSs for essential uses in response to the 
August 10, 1998 Federal Register document (63 FR 42629). Their 
applications requested exemptions for the production and import of 
specific quantities of certain class I controlled substances after the 
phase-out, and provided information in accordance with the criteria in 
Decision IV/25 of the Protocol and the procedures outlined in the 
``1997 Handbook on Essential Use Nominations.'' EPA reviewed the 
applications and nominated these uses to the Protocol Secretariat for 
consideration by the Technical and Economic Assessment Panel (TEAP) and 
its Technical Options Committees. MDI producers requested a total of 
3,101 metric tons of CFCs for use in 2001. The Parties to the Montreal 
Protocol approved this amount as essential for the U.S. for 2001 at the 
Eleventh Meeting in 1999 (Decision XI/14). On September 15, 1999, EPA 
issued another notice requesting supplemental applications for 
essential use allowances for the year 2001 and beyond (64 FR 50083). No 
company requested a supplemental amount of CFCs for the year 2001 at 
that time.

How Does the Clean Air Act Authorize Essential Use Allowances for MDIs?

    Section 604(d)(2) of the CAA provides a standing exemption to the 
phase-out of class I ODSs for the production and importation of CFCs 
for use in medical devices which reads:

    ``Notwithstanding the termination of production required by 
subsection (b), the Administrator, after notice and opportunity for 
public comment, shall, to the extent such action is consistent with 
the Montreal Protocol, authorize the production of limited 
quantities of class I substances solely for use in medical devices 
if such authorization is determined by the Commissioner, in 
consultation with the Administrator, to be necessary for use in 
medical devices.''

    Section 601(8) of the Clean Air Act defines the term ``medical 
device'' and states the following:

[A]ny device (as defined in the Federal Food, Drug, and Cosmetic Act 
(21 U.S.C. 321), diagnostic product, drug (as defined in the Federal 
Food, Drug, and Cosmetic Act), and drug delivery system--
(A) if such device, product, drug, or drug delivery system utilizes 
a class I or class II substance for which no safe and effective 
alternative has been developed, and where necessary, approved by the 
Commissioner [of FDA]; and
(B) if such device, product, drug, or drug delivery system, has, 
after notice and opportunity for public comment, been approved and 
determined to be essential by the Commissioner [of FDA] in 
consultation with the Administrator [of EPA].

    As discussed in the NPRM, EPA is relying on FDA regulations at 21 
CFR 2.125 to provide determinations of whether a ``safe and effective 
alternative'' is available for any particular CFC MDI. It should be 
noted that FDA approval of a non-CFC product is a determination that 
the product is safe and effective, but it is not a determination that 
the product is a ``safe and effective alternative'' for any other CFC 
MDI product under the Act. FDA states in their notice of proposed 
rulemaking on essential use determinations that ``a non-CFC product 
simply having the same active moiety as a CFC product is only one 
factor to be considered. Other factors, such as whether the non-CFC 
product has the same route of administration, the same indication, and 
can be used with approximately the same level of convenience, are 
important considerations. Additionally, FDA must consider whether 
patients who medically need the CFC product are adequately served by 
the non-CFC product.'' (September 1, 1999, 64 FR 47735). While FDA has 
approved two non-CFC MDIs as of December 1, 2000, FDA has yet not 
identified any ``safe and effective alternative'' to any CFC MDI as 
specified by section 601(8)(A). Thus, part (A) of the definition of 
medical device has been met, and is consistent with today's rulemaking.
    With respect to section 601(8)(B), EPA is relying on current FDA 
regulations (21 CFR 2.125) listing medical devices that FDA has found 
to be essential. The companies for which EPA is granting essential use 
allowances produce CFC MDIs covered by this regulation. Thus, the 
products for which EPA is granting essential use allowances are 
``determined to be essential'' by FDA.
    One commenter stated that under section 601(8)(A), EPA must 
determine that no safe and effective alternative propellant exists for 
any MDI to meet the definition of ``medical device.'' EPA believes that 
the phrase ``safe and effective alternative'' at section 608(1)(A) does 
not refer an alternative propellant, but refers to a ``safe and 
effective alternative'' to a CFC MDI. This is because FDA only approves 
MDIs under a New Drug Application (NDA) or an Abbreviated New Drug 
Application (ANDA) as a whole unit and not by approving each of its 
components. Therefore, it is impossible for FDA to approve an 
alternative to the class I or class II substance (i.e. the propellant) 
alone, and it is reasonable to conclude that the phrase ``safe and 
effective alternative'' refers to an adequate replacement for the CFC 
MDI product.
    This commenter also quoted a passage from the legislative history 
of the 1990 Amendments which states that ``unless a safe substitute 
exists or until a

[[Page 1464]]

substitute is developed and approved by FDA, a drug delivery system may 
be found by the Commissioner and the Administrator to be essential'' 
(S. Rep No. 228, 101st Cong., 1st Sess. 1989, 1990). The commenter 
believes that this passage supports their belief that once a drug 
containing a safe and effective alternative propellant has been 
approved by FDA, FDA has no authority to continue to designate 
analogous CFC-containing products as ``essential''. In response, we 
note that the term ``drug delivery system'' indicates that Congress 
envisioned that FDA would need to approve an entire non-CFC drug 
delivery system, and not just the alternative propellant. Further, the 
use of the term ``substitute'' indicates that Congress was looking to 
FDA to determine whether a non-CFC MDI is a safe and effective 
replacement for a particular CFC MDI (i.e. a ``safe and effective 
alternative''). While this report refers to Senate language which is 
somewhat different from what appears in the 1990 Amendments, the 
Senate's intent, revealed by this passage is consistent with EPA and 
FDA's interpretation of the Act.
    The commenter also states that the safety and efficacy of 
alternatives to CFCs is determined by EPA under section 612 of the CAA, 
and that EPA had stated that it would rely upon FDA's approval of 
medical products containing alternative propellants under the Food Drug 
and Cosmetic Act (FDCA) for a determination that there are no human 
health effects from the use of the alternative propellant. Thus, the 
commenter believes that when FDA approves a non-CFC MDI as safe and 
effective under the FDCA, EPA must conclude that the non-CFC propellant 
in that product is safe and effective for the purposes of the CAA. In 
fact, EPA has already reviewed the health risks associated with 
alternative aerosol propellants for use in non-CFC MDIs under section 
612 of the Act. Nevertheless, EPA disagrees with the assertion that a 
determination that an alternative propellant to an ODS is acceptable 
under section 612 of the Act has any bearing on the determination of 
whether a non-CFC MDI is a ``safe and effective alternative'' to a CFC 
MDI as required by section 601(8)(A).
    The commenter states that when a non-CFC MDI is approved under the 
FDCA, only CFC-based products containing the same active moiety, and 
the same labeled indications would no longer qualify as ``medical 
devices'' under the Act, and that in instances where the labeled 
indications of a non-CFC drug do not fully duplicate those of a CFC 
product, EPA may only authorize production of limited quantities of 
CFCs that the EUA applicant demonstrates are necessary to serve 
patients not covered by the non-CFC drug product's indications. EPA 
believes that the commenter is wrong to assert that because a safe and 
effective non-CFC MDI is available, EPA should deem CFC MDIs with the 
same active moiety to be non-essential for the purposes of the CAA. As 
stated earlier, FDA approval of a non-CFC product is a determination 
that the product is safe and effective, but it is not a determination 
that the product is a safe and effective alternative for any other 
product under the Act. Because FDA has yet not identified any ``safe 
and effective alternative'' for any CFC MDI, today's allocation of CFCs 
for essential uses remains consistent with section 601(8)(A).
    The commenter's suggestion that EPA make medical decisions 
regarding whether a non-CFC MDI is an adequate alternative to a CFC MDI 
produces a result that would put asthma patient health at risk. FDA is 
the appropriate agency with expertise to make independent medical 
decisions that directly affect patients. The determination that a CFC 
MDI is no longer ``essential'' is not, as the commenter suggests, one 
where EPA could merely look at the active moiety of the product, read 
the non-CFC product indication, compare it to the CFC MDI product 
indication, and determine any CFC MDIs to be non-essential. FDA states 
in their notice of proposed rulemaking on essential use determinations 
that ``a non-CFC product simply having the same active moiety as a CFC 
product is only one factor to be considered. Other factors, such as 
whether the non-CFC product has the same route of administration, the 
same indication, and can be used with approximately the same level of 
convenience, are important considerations. Additionally, FDA must 
consider whether patients who medically need the CFC product are 
adequately served by the non-CFC product.'' (September 1, 1999, 64 FR 
47735). Most of these factors are not addressed on the indication label 
of an MDI. Thus the indication label alone cannot be used as the basis 
for determining whether a non-CFC product is an adequate alternative 
for any CFC MDI.
    We believe that the overall purpose of the language in the Act 
regarding medical devices is to ensure that EPA's mission of 
environmental protection does not conflict with FDA's mission of 
protecting the patient health. Consistent with this purpose, we believe 
that in drafting the definition, Congress was focusing on the 
availability of adequate alternative medical treatment for patients who 
rely on CFC MDIs. EPA is not the appropriate agency to decide whether 
such alternative medical treatment is available. We do not believe that 
Congress intended EPA to make decisions involving medical judgement and 
expertise. On such questions, we have and will continue to defer to 
FDA.
    The commenter states that FDA must approve and determine that the 
CFC-containing MDI is essential after notice and an opportunity for 
public comment, and asserts that once a drug containing a safe and 
effective alternative propellant has been approved by FDA, FDA has no 
authority to continue to designate analogous CFC-containing products as 
``essential''. Further, the commenter states that EPA may not wait for 
FDA to remove that product from its list of essential uses before 
finding that it no longer qualifies as a ``medical device'' under the 
Act. Again, EPA believes that this interpretation of the Act is flawed. 
This is because section 601(8)(B) refers to approval of an alternative 
as occurring after ``notice and opportunity for comment.'' Because FDA 
does not approve alternative propellants, and because approval of a 
specific MDI drug product through the New Drug Application or 
Abbreviated New Drug Application system under the FDCA involves 
unilateral action by FDA without notice-and-comment rulemaking or 
consultation with EPA, it is reasonable to conclude that section 
601(8)(B) refers to FDA's approval of an essential use listing in 21 
CFR 2.125 which does involve notice and comment rulemaking. Thus, EPA 
believes that by allocating CFCs for products covered by the list of 
``essential'' products at 21 CFR 2.125, we have fulfilled the 
requirements of section 601(8)(B).
    Finally, the commenter states that FDA cannot use the categorical 
exemptions at 21 CFR 2.125 created more than twenty years ago to 
establish the essentiality of particular CFC MDI under the statute 
today, and that by doing so EPA and FDA are not relying on standards 
adopted under the Act in 1990. EPA believes that our explanation of 
this issue in the interim final rule allocating essential use 
allowances for calendar year 2000 still stands (see 65 FR 716, January 
6, 2000).
    While we are aware that FDA is currently engaged in rulemaking to 
revise its essential use regulations, we are relying on FDA's current 
essential use list at 21 CFR 2.125 for purposes of today's action. The 
statute does not specify a particular time at which FDA must make such 
a determination or

[[Page 1465]]

invalidate determinations made prior to the date of the 1990 CAA 
Amendments. Additionally, the 1990 CAA Amendments use language 
consistent with FDA's regulations at 21 CFR 2.125. We presume that 
Congress was aware of FDA's regulations when it passed the 1990 
Amendments to the CAA. Therefore, we believe that the current essential 
use list remains valid. If FDA revises its regulations, we will take 
the revised list into account in future allocation decisions. EPA 
further notes that both EPA and FDA are implementing the more stringent 
provisions of the Montreal Protocol as specified by section 614(b) of 
the Act \4\ by following the essentiality determinations of the Parties 
to the Montreal Protocol in allocating new CFCs.
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    \4\ Section 614(b) states that ``* * * in the case of conflict 
between [the Act] and any provisions of the Montreal Protocol, the 
more stringent provision shall govern.''
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How Does the CAA Authorize the Exemption for Methyl Chloroform?

    With today's action, EPA is allocating methyl chloroform (MCF) for 
use in the Space Shuttle and Titan Rockets under the statutory phase-
out schedule at section 604(a). This section provides that MCF may be 
produced at up to 20 percent of the amount produced in 1989 (the 
baseline year as specified at section 601(2)(B) of the Act). EPA is 
allocating a total of 60.1 metric tons of MCF, an amount well below 20% 
of the baseline year production of 315,169 metric tons for MCF (defined 
at 40 CFR 82.6).
    Section 604(a) of the Act requires the complete phase-out of 
production of MCF after 2001. As a result, it is likely that EPA will 
be required to rely solely upon the exemption under section 604(d)(1), 
that may already be applicable, for the year 2002 and beyond. This 
exemption reads as follows:

    (1) Essential Uses of Methyl Chloroform.--Notwithstanding the 
termination of production required by subsection (b), during the 
period beginning on January 1, 2002, and ending on January 1, 2005, 
the Administrator, after notice and opportunity for public comment, 
may, to the extent such action is consistent with the Montreal 
Protocol, authorize the production of limited quantities of methyl 
chloroform solely for use in essential applications (such as 
nondestructive testing for metal fatigue and corrosion of existing 
airplane engines and airplane part susceptible to metal fatigue) for 
which no safe and effective substitute is available.

    EPA understands that research on alternatives is progressing well, 
and that in the year 2002 there may be no need for an essential use 
exemption for MCF. Nevertheless, EPA believes that section 604(d)(1) 
may allow for the continued limited use of methyl chloroform for Space 
Shuttle and Titan Rocket through 2004 under the essential use exemption 
as long as no substitute is available.

II. Allocation Process for CFCs for Use in Medical Devices for the 
Year 2001

    As explained earlier, section 604(d)(2) of the Act provides that 
EPA shall authorize production and import of limited quantities of 
class I substances for use in medical devices if FDA, in consultation 
with EPA, determines such authorization to be ``necessary.'' Thus, EPA 
in order to implement the exemption for medical devices must receive a 
formal determination on the amount of CFCs necessary for use in MDIs 
from FDA. FDA sent EPA a letter dated September 6, 2000 that provided 
their determination on the amount of CFCs necessary, and explained the 
bases for that determination.
    One commenter stated that the CAA does not delegate to FDA the 
authority to dictate the nomination quantity and allocation of class I 
substances for medical devices. Rather, according to the commenter, the 
CAA requires that EPA shall consult with FDA only as to whether the 
authorization of class I substances for medical devices is necessary, 
which requires a yes/no determination only. Thus, EPA should not 
transfer to the FDA the responsibility to determine the quantity of 
essential use allowances allocated to companies.
    EPA has addressed the comment that is raised here in the preamble 
to essential use allocation for calendar year 2000 (65 FR 40524, 40530-
40537). We believe that the same interpretation and explanation 
provided in the previous rulemaking is applicable here. Section 
604(d)(2) states the following: ``The Administrator, after notice and 
opportunity for public comment, shall, to the extent such action is 
consistent with the Montreal Protocol authorize the production of 
limited quantities of class I substances solely for use in medical 
devices if such authorization is determined by the Commissioner [of 
FDA], in consultation with the Administrator [of EPA], to be necessary 
for use in medical devices.'' (emphasis added) EPA believes that it is 
clear that the authorization in question is not for an indefinite 
amount but for ``limited quantities.'' It is equally clear that the 
subject of the Commissioner's determination of necessity is ``such 
authorization.'' Thus, if the latter part of the text quoted above were 
written in the active voice, it would say: ``if the Commissioner, in 
consultation with the Administrator, determines such authorization to 
be necessary for use in medical devices.'' We note that the expression 
``such authorization'' refers back to the phrase ``authorize the 
production of limited quantities of class I substances solely for use 
in medical devices.'' Thus, the Commissioner of FDA must consider not 
only whether any production is necessary, but what quantity of 
production is necessary for MDIs.
    Further, although EPA does have some data on CFC usage (which is 
shared with FDA), only FDA personnel are privy to confidential business 
information regarding annual sales and distribution of MDIs. This 
provides FDA with more complete knowledge of the MDI market than EPA. 
Because of FDA's access to additional information, and their medical 
expertise which is integral to making decisions that serve to protect 
the public health, EPA believes it is consistent with Congressional 
intent to consult with FDA in making decisions regarding the amount of 
CFCs necessary for the production of MDIs.
    The commenter's second point was that EPA should ensure that the 
rationale for adjustments made to allocations and the bases for FDA 
recommendations are open and available to the public for review and 
comment. EPA agrees that the allocation process should be as 
transparent as possible while accounting for the confidential nature of 
the data employed to make the determination on the amount of CFCs 
necessary. To this end, EPA and FDA planned a process described in the 
NPRM that we felt would allow this determination on the amount of CFCs 
necessary to occur as openly as possible. EPA sent letters pursuant to 
section 114 of the Act to each essential use applicant requesting 
specific information such as the number of units of each product 
produced in previous years, the number of units produced in the first 
quarter 2000, the gross target fill weight per unit, the total amount 
of CFCs to be contained in the product in 2001, the number of units of 
each product anticipated to be produced in 2001, the additional amount 
of CFCs necessary for production, and the total amount of CFCs 
requested for each product in 2001. FDA, in consultation with EPA, 
based the determination of necessary amounts and the allocation on this 
information. Thus, each company knows what information it has submitted 
as the basis for its own allocation while protecting against disclosure 
of confidential business information to competitors. Finally, we placed 
all non-confidential materials in

[[Page 1466]]

the docket, including the FDA letter of September 6, 2000 that provided 
EPA with their recommendation on the amount of CFCs necessary for MDIs 
for the year 2001.

III. Allocation of Essential Use Allowances for Calendar Year 2001

    EPA is allocating essential use allowances for calendar year 2001 
to entities listed in Table I for exempted production or import of the 
specific quantity of class I controlled substances solely for the 
specified essential use. The allocation of CFCs for use in MDIs 
reflects the determination on the amount of CFCs ``necessary'' as 
specified under section 604(d)(2) of the Act taking into account two 
companies requests for reapportioning EUAs among them.

        Table I.--Essential Use Allocation for Calendar Year 2001
------------------------------------------------------------------------
                                                             Quantity
              Company                     Chemical         (metric tons)
------------------------------------------------------------------------
 (i) Metered Dose Inhalers (for oral inhalation) for Treatment of Asthma
       and Chronic Obstructive Pulmonary Disease (in metric tons)
------------------------------------------------------------------------
Medeva, Armstrong Pharmaceuticals   CFC-11 or CFC-12 or           189.00
 Inc..                               CFC-114.
Boehringer Ingelheim                CFC-11 or CFC-12 or           338.36
 Pharmaceuticals.                    CFC-114.
Glaxo Wellcome Inc................  CFC-11 or CFC-12 or           858.10
                                     CFC-114.
Aventis Pharmaceuticals...........  CFC-11 or CFC-12 or           190.00
                                     CFC-114.
3M Pharmaceuticals................  CFC-11 or CFC-12 or           304.51
                                     CFC-114.
Sidmak Laboratories/Medisol         CFC-11 or CFC-12 or           192.20
 Laboratories, Inc..                 CFC-114.
Schering Corporation..............  CFC-11 or CFC-12 or          1025.20
                                     CFC-114.
Sciarra Laboratories, Inc.........  CFC-11 or CFC-12 or             1.30
                                     CFC-114.
------------------------------------------------------------------------
(ii) Cleaning, Bonding and Surface Activation Applications for the Space
                    Shuttle Rockets and Titan Rockets
------------------------------------------------------------------------
National Aeronautics and Space      Methyl Chloroform...            56.7
 Administration (NASA)/Thiokol
 Rocket.
United States Air Force/Titan       Methyl Chloroform...             3.4
 Rocket.
------------------------------------------------------------------------

Was the Allocation Listed in This Proposed Rule Changed in the Final 
Rule?

    The total amount of CFCs allocated for use in MDIs is the same as 
in the proposed rule. However, the amount of EUAs allocated to two MDI 
companies was reapportioned between them at their request. One 
commenter is the New Drug Application (NDA) holder, and the other is a 
contract filler for that NDA holder. The NDA holder stated that they 
had reassessed the amount of MDIs the contract filler would produce for 
them in 2001. The NDA holder requested that a certain amount of EUAs 
allocated to their contract filler and earmarked for the production of 
the NDA holder's products be re-apportioned back to the NDA holder. The 
contract filler provided comments that supported the transfer of EUAs 
from them to the NDA holder (this contract filler is also an essential 
use allowance holder with its own allocation for production of its own 
MDIs). EPA believes that in this case, it is not necessary for FDA to 
approve this adjustment to the essential use allocations because the 
total amount of EUAs allocated for use in the NDA holder's MDI products 
(i.e. the MDIs to be produced by the NDA holder themselves plus the MDI 
to be produced by contract filler) remains unchanged. Further, EPA is 
implementing provisions to allow transfer of EUAs between MDI 
companies. This provision, finalized in today's action, would allow 
this transfer to occur even in the absence of EPA re-apportioning the 
EUAs among these two companies.
    One company requested additional volumes of CFCs beyond the amount 
allocated to them in the NPRM. This company stated that it had 
anticipated an earlier timing for launch of certain new products, and 
that their current supplier of pharmaceutical-grade CFCs may shut down 
production in the next few years. For these reasons, they requested 
additional EUAs for calendar year 2001 to continue MDI production 
without utilizing their strategic reserves.
    EPA and FDA have concluded that the year 2001 essential use 
allocations already reflect the contingencies raised by the commenter 
and are protective of public health. These allocations are calculated 
to insure that the full range of medical needs is met throughout the 
entire patient population. It should be noted that this company, as 
well as all essential use holders, now have the opportunity to obtain 
additional EUAs through trading, and also had the opportunity to 
request additional CFCs for the year 2002 in response to the notice 
requesting essential applications for the years 2002 and 2003 published 
November 1, 2000 (65 FR 65311).

Were There Other Comments Regarding the Allocation of CFCs for Use in 
MDIs?

    One commenter who is a generic producer of MDIs stated that they 
were pleased with their proposed allocation. However, they commented 
that had they not been allocated EUAs, or had received an extremely low 
allocation, opportunities due to unexpected shifts in the market would 
fall to foreign manufacturers of MDIs who, the commenter asserts, can 
export CFC MDIs to the U.S. and are not subject to the same allocation 
requirements as U.S. MDI producers. EPA notes that companies who 
produce MDIs in other countries are also subject to the terms of the 
Montreal Protocol and must receive an allocation for CFCs to produce 
``essential'' MDIs \5\. The major production of MDIs abroad is in 
Europe where each company's CFC requirements are also extensively 
reviewed before allocation.
---------------------------------------------------------------------------

    \5\ EPA believes that all countries that produce MDIs are 
parties to the Montreal Protocol.
---------------------------------------------------------------------------

What Was EPA's Method for Allocating Methyl Chloroform (MCF) for Use in 
Solid Rocket Motors?

    With this action, EPA is allocating 60.1 metric tons of MCF for use 
in solid rocket motors, the same amount allocated in the years 1999 and 
2000. EPA proposed to allocate MCF in an amount lower than would be 
consistent with Decision X/6 taken at the Tenth meeting of the Parties 
to the Protocol because we believed, based on knowledge of past MCF 
use, that allocating a larger amount would be unnecessary. EPA did not 
receive any comments on this issue, and is allocating 60.1 metric tons 
MCF as proposed in the NPRM.

[[Page 1467]]

When Is This Rule Effective?

    This final rule is effective on January 8, 2001. Section 553(d) of 
the APA generally provides that rules may not take effect earlier than 
30 days after they are published in the Federal Register. However, APA 
section 553(d) excepts from this provision any action that grants or 
recognizes an exemption or relieves a restriction. Since today's action 
grants an exemption to the phase-out of production and consumption of 
CFCs, EPA is making this action effective immediately to ensure the 
availability of CFCs for medical devices during calendar year 2001.

Why is EPA Allocating CFC-11, CFC-12, and CFC-114 in the Aggregate To 
Each Company?

    As discussed in the proposal, EPA is allocating essential use 
allowances for CFC-11, CFC-12, and CFC-114 in the aggregate in 
accordance with Decision X/6 of the Parties to the Montreal Protocol 
which states that ``the quantities approved under paragraph 2 above and 
all future approvals are for total CFC volumes with flexibility between 
CFCs within each group.'' Allocating CFCs for MDI in the aggregate 
instead of on a compound-by-compound basis provides MDI producers with 
flexibility in obtaining CFCs without causing additional damage to the 
stratospheric ozone layer since CFC-11, CFC-12 and CFC-114 all have the 
same ozone depleting potential of 1.0.

Timing of This and Future Essential Use Allocation Rules

    One commenter noted that even though EPA sent letters to MDI 
companies in May 2000 requesting data needed to determine 2001 EUAs, 
the proposed allocation was not published until October. This commenter 
requested that EPA make every effort to issue a proposed rule 
allocating EUAs for 2002 in September of 2001, and states that as 
pharmaceutical-grade CFC production becomes increasingly tenuous, CFC 
suppliers are requiring advanced notice of MDI companies' CFC 
production needs. Further, MDI companies are unable to provide 
suppliers with this information until final EUA allocations are issued. 
Earlier rulemakings would help to ensure that MDI manufacturers are 
able to place CFC production orders, arrange for shipping, and make 
other administrative arrangements in a timely manner. EPA will make 
every effort to issue the notice of proposed rulemaking allocating 
essential use allowances for 2002 by September of 2001.
    Another commenter requested that EPA issue the final CFC 
allocations for 2001 as soon as possible so that necessary CFCs may be 
ordered and delivered from the supplier in Europe in time to meet MDI 
production needs in 2001. EPA has expedited this final rule and 
believes that companies should have sufficient time to place their 
orders for CFCs for the coming year.

What Reporting Requirements Must I Adhere To When Using My Essential 
Use Allocation?

    Any person obtaining class I controlled substances after the phase-
out under the essential use exemptions in today's action is subject to 
all the restrictions and requirements in other sections of 40 CFR part 
82, subpart A. Holders of essential use allowances or persons obtaining 
class I controlled substances under the essential use exemptions must 
comply with the recordkeeping and reporting requirements in 40 CFR 
82.13. Instructions and forms for reporting are found in the Guidance 
Document for the Stratospheric Ozone Protection Program after January 
1, 1996. This document can be obtained by contacting the Stratospheric 
Ozone Protection Hotline at (800) 296-1996 between 10:00 am and 4:00 pm 
Eastern Standard Time.
    Under 40 CFR 82.3 and 82.4 (63 FR 41626, August 4, 1998), entities 
receiving essential use allowances must be the importer of record for 
quantities of CFCs brought into the United States. This requires that 
the essential use allowance holder be listed as the importer of record 
on Customs Form 7501. As a result, the essential use allowance holder 
who imports quantities of class I controlled substances is responsible 
for submitting both an Importer Quarterly Report and an Essential Use 
Holder Quarterly Report.

IV. Transfer of EUAs for CFCs Among Essential Use Allowance Holders

    With this action EPA is adding essential use allowances to the list 
of allowances that can be transferred under 40 CFR 82.12. This change 
will enable companies to transfer EUAs for CFCs to other essential use 
holders for the production of MDIs. EPA believes that allowing EUAs to 
be transferred among essential use allowance holders will allow MDI 
companies to obtain CFCs beyond their allocation without increasing the 
total amount of ODSs allocated. EPA received three comments in support 
of the provision to allow transfer of EUAs among essential use holders. 
These commenters stated that this provision provides a responsible 
mechanism for addressing the inherent problem in attempting to predict 
the needs for MDI manufacturers.
    One commenter requested a clarification of the proposed regulations 
regarding the use of a contract filler. The commenter took issue with 
the fact that EPA would have to approve the use of a contract filler. 
The commenter believes it should be at the company's discretion as to 
whether it produces the product in-house or through the use of a 
contract filler. The new regulations provide a mechanism for transfer 
of EUAs from an NDA holder to a contract filler (provided they already 
have EUAs). However, EPA must continue to exercise strict control over 
the amount of CFCs produced and or imported to ensure U.S. compliance 
with the Decisions of the Parties to the Protocol. Thus, EPA believes 
that it is necessary to approve the transfer of EUAs between an NDA 
holder and a contract filler. It should be noted that EPA is not 
approving or disapproving the use of a contract filler per se, but 
merely ensuring that the ``transferor'' has sufficient allowances to 
cover the transaction.

Under the New Regulations Can I Transfer EUAs for CFCs To Anyone I 
Want?

    No; EUAs for CFCs are only transferable among those companies that 
have applied for and received EUAs for the year 2001. In addition, 
companies must certify in writing to EPA that the EUAs will only be 
used in the production of essential medical devices as defined in the 
FDCA at 21 CFR 2.125 and considered essential by the Parties to the 
Protocol.

Can EUAs for CFCs Be Transferred From Year to Year?

    No; EUAs are not transferable from year to year. Any EUAs for CFCs 
not expended in 2001 will expire at the end of 2001.

Is There a Cost for Transferring EUAs?

    Yes; the CAA at section 607(a) states that rules governing transfer 
of allowances for the production of class I and class II substances ``* 
* * shall insure that the transactions under the authority of this 
section will result in greater total reductions in the production in 
each year of class I and class II substances than would occur in that 
year in the absence of such transactions.'' In compliance with this 
section, current regulations at 40 CFR 82.12 governing transfers of 
production and consumption allowances require one percent of the traded 
amount to be deducted from the transferor's

[[Page 1468]]

unexpended allowances. EPA proposed to amend the regulations so that in 
the case of EUA transfers, one tenth of one percent of the amount 
traded would be deducted from the transferor's account. As stated in 
the preamble to the proposed rule, EPA believes that given the 
relatively small amount of EUAs available for use in MDIs, and that 
providing sufficient EUAs for MDIs is critically important for 
protecting public health, deducting one percent of the amount of EUAs 
to be traded would be too high a penalty and may create a barrier 
against transferring EUAs freely. Reducing the amount deducted from the 
transferor's account overcomes this potential barrier. EPA received no 
adverse comments on this issue, and is amending the regulation as 
described above.

How Can I Transfer EUAs From My Company to Another?

    In order to complete a transfer of EUAs for CFCs from one essential 
use allowance holder to another, the transferor would have to submit to 
the Administrator a letter with the information requested in 40 CFR 
82.12(a)(1). Under the regulations at 40 CFR 82.12, the transferor must 
submit to the Administrator a transfer claim with the following 
information:
    1. The identities and addresses of the transferor and transferee.
    2. The names and telephone numbers of contact persons for both the 
transferor and transferee.
    3. The type of allowances being transferred, which in this case 
would always be essential use allowances.
    4. The group of controlled substances being transferred, which 
would always be Group I.
    5. The amount of allowances being transferred in kilograms.
    6. The calendar year for which the allowances are being transferred 
(e.g. calendar year 2001).
    7. The amount of unexpended essential use allowances for the 
current calendar year.
    8. The amount of the 0.1% offset applied to the unweighted amount 
traded that will be deducted from the transferor's allowance balance.
    A sample form that outlines the necessary information that a 
transferor must submit to EPA will be available through the 
Stratospheric Ozone Hotline at 1-800-296-1996.
    As specified in 40 CFR 82.12, EPA will determine, based on records 
maintained by the EPA ODS tracking system, whether the transferor 
possesses as of the date of the transfer claim, unexpended allowances 
sufficient to cover the transfer claim (i.e., the amount to be 
transferred plus one tenth of one percent of that amount). Within three 
working days of receiving a complete transfer claim, EPA will notify 
the transferor and transferee if the transferor has sufficient 
unexpended allowances to confer the transfer claim, and will issue a 
notice indicating that EPA does not object to the transfer. EPA will 
then reduce the transferor's balance of essential use allowances by the 
amount to be transferred plus one tenth of one percent of that amount. 
When EPA issues a no objection notice, the transferor and the 
transferee may proceed with the transfer.
    If EPA's records show that the transferor has insufficient 
unexpended allowances to cover the transfer claim, or that the 
transferor has failed to respond to one or more Agency requests to 
supply information needed to make a determination, EPA will issue a 
notice disallowing the transfer. Within 10 working days after receipt 
of notifications, either party may file a notice of appeal, with 
supporting reasons, to EPA, in which case EPA may either affirm or 
vacate the disallowance. If no appeal is taken by the tenth working day 
after notification, the disallowance shall be final on that day. (The 
transferor and transferee will be held liable in accordance with 
section 113 of the Act for any violations that occur as a result of an 
improper transfer.) In the event that EPA does not respond to a 
transfer claim within three working days of receipt of the completed 
claim, the transferor and transferee may proceed with the transfer and 
EPA will reduce the transferor's balance accordingly.

V. Administrative Requirements

A. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector.
    Under section 202 of the UMRA, EPA generally must prepare a written 
statement, including a cost-benefit analysis, for proposed and final 
rules with ``Federal mandates'' that may result in expenditures by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100 million or more in any one year. Before 
promulgating an EPA rule for which a written statement is needed, 
section 205 of the UMRA generally requires EPA to identify and consider 
a reasonable number of regulatory alternatives and adopt the least 
costly, most cost-effective or least burdensome alternative that 
achieves the objectives of the rule. The provisions of section 205 do 
not apply when they are inconsistent with applicable law. Moreover, 
section 205 allows EPA to adopt an alternative other than the least 
costly, most cost-effective or least burdensome alternative if the 
Administrator publishes with the final rule an explanation why that 
alternative was not adopted. Section 204 of the UMRA requires the 
Agency to develop a process to allow elected state, local, and tribal 
government officials to provide input in the development of any 
proposal containing a significant Federal intergovernmental mandate.
    Before EPA establishes any regulatory requirements that may 
significantly or uniquely affect small governments, including tribal 
governments, it must have developed under section 203 of the UMRA a 
small government agency plan. The plan must provide for notifying 
potentially affected small governments, enabling officials of affected 
small governments to have meaningful and timely input in the 
development of EPA regulatory proposals with significant Federal 
intergovernmental mandates, and informing, educating, and advising 
small governments on compliance with the regulatory requirements.
    Today's rule contains no Federal mandates (under the regulatory 
provisions of title II of the UMRA) for State, local, or tribal 
governments or the private sector. Because this rule imposes no 
enforceable duty on any State, local or tribal government it is not 
subject to the requirements of sections 202 and 205 of the UMRA. EPA 
has also determined that this rule contains no regulatory requirements 
that might significantly or uniquely affect small governments; 
therefore, EPA is not required to develop a plan with regard to small 
governments under section 203. Finally, because this rule does not 
contain a significant intergovernmental mandate, the Agency is not 
required to develop a process to obtain input from elected state, 
local, and tribal officials under section 204.

B. Executive Order 12866

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), the 
Agency must determine whether this regulatory action is Significant and 
therefore subject to OMB review and the requirements of the Executive 
Order. The Order defines Significant regulatory action as one that is 
likely to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more, 
or adversely affect in a material way the economy, a sector of the 
economy,

[[Page 1469]]

productivity, competition, jobs, the environment, public health or 
safety, or State, local, or tribal governments or communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlement, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order. It has been determined by OMB and EPA that this 
action is not a Significant regulatory action under the terms of 
Executive Order 12866 and is therefore not subject to OMB review under 
the Executive Order.

C. Paperwork Reduction Act

    This action does not impose any new information collection burden 
as defined by the Paperwork Reduction Act (PRA). The Office of 
Management and Budget's draft guidance on PRA states that a rule is 
exempt from OMB review if it ``explicitly applies to nine or fewer 
persons''. Since the reporting requirements in this rule are not of 
general applicability, and apply only to the eight entities receiving 
EUAs for CFCs, and only if a company decides to transfer EUAs to 
another essential use holder, we believe that this rule is exempt from 
the requirement of submitting an Information Collection Request and 
undergoing OMB review.
    However, OMB has previously approved the information collection 
requirements that are contained in the existing regulations at 40 CFR 
82.12 that set forth the process for inter-company transfers of 
consumption allowances under the provisions of the Paperwork Reduction 
Act, 44 U.S.C. 3501 et seq. and has assigned OMB control number 2060-
0170 (EPA ICR No.1432.17). Copies of the ICR document(s) may be 
obtained from Sandy Farmer, by mail at the Office of Environmental 
Information, Collection Strategies Division; U.S. Environmental 
Protection Agency (2822); 1200 Pennsylvania Ave., NW, Washington, DC 
20460, by email at <a href="/cdn-cgi/l/email-protection#f89e998a959d8ad68b99969c81b89d8899d69f978e"><span class="__cf_email__" data-cfemail="422423302f27306c31232c263b022732236c252d34">[email protected]</span></a>, or by calling (202) 260-2740. 
A copy may also be downloaded off the internet at http://www.epa.gov/icr. Include the ICR and/or OMB number in any correspondence.
    Burden means the total time, effort, or financial resources 
expended by persons to generate, maintain, retain, or disclose or 
provide information to or for a Federal agency. This includes the time 
needed to review instructions; develop, acquire, install, and utilize 
technology and systems for the purposes of collecting, validating, and 
verifying information, processing and maintaining information, and 
disclosing and providing information; adjust the existing ways to 
comply with any previously applicable instructions and requirements; 
train personnel to be able to respond to a collection of information; 
search data sources; complete and review the collection of information; 
and transmit or otherwise disclose the information.
    An Agency may not conduct or sponsor, and a person is not required 
to respond to a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations are listed in 40 CFR part 9 and 48 CFR chapter 15.

D. Executive Order 13084: Consultation and Coordination with Indian 
Tribal Governments

    Under Executive Order 13084, EPA may not issue a regulation that is 
not required by statute, that significantly or uniquely affects the 
communities of Indian tribal governments, and that imposes substantial 
direct compliance costs on those communities, unless the Federal 
government provides the funds necessary to pay the direct compliance 
costs incurred by the tribal governments, or EPA consults with those 
governments. If EPA complies by consulting, Executive Order 13084 
requires EPA to provide to the Office of Management and Budget, in a 
separately identified section of the preamble to the rule, a 
description of the extent of EPA's prior consultation with 
representatives of affected tribal governments, a summary of the nature 
of their concerns, and a statement supporting the need to issue the 
regulation. In addition, Executive Order 13084 requires EPA to develop 
an effective process permitting elected officials and other 
representatives of Indian tribal governments to provide meaningful and 
timely input in the development of regulatory policies on matters that 
significantly or uniquely affect their communities.'' Today's rule does 
not significantly or uniquely affect the communities of Indian tribal 
governments. Accordingly, the requirements of section 3(b) of Executive 
Order 13084 do not apply to this rule.

E. Regulatory Flexibility

    After considering the economic impacts of today's proposed rule on 
small entities, EPA has determined that it is not necessary to prepare 
a regulatory flexibility analysis in connection with this rule. EPA has 
also determined that this action will not have a significant economic 
impact on a substantial number of small entities. This rule does not 
have a significant impact on a substantial number of small entities. 
There are only ten entities that are affected by this rulemaking (see 
table I above). This rule does not have an adverse economic impact on 
any entity because it grants exceptions to a pre-existing ban.

F. Applicability of Executive Order 13045: Protection of Children from 
Environmental Health Risks and Safety Risks

    Executive Order 13045: ``Protection of Children from Environmental 
Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997) applies 
to any rule that (1) Is determined to be ``economically significant'' 
as defined under Executive Order 12866, and (2) concerns an 
environmental health and safety risk that EPA has reason to believe may 
have a disproportionate effect on children. If the regulatory action 
meets both criteria, the Agency must evaluate the environmental health 
or safety effects of the planned rule on children, and explain why the 
planned regulation is preferable to other potentially effective and 
reasonably feasible alternatives considered by the Agency. EPA 
interprets Executive Order 13045 as applying only to those regulatory 
actions that are based on health or safety risks, such that the 
analysis required under section 5-501 of the Order has the potential to 
influence the regulation. This rule is not subject to Executive Order 
13045 because it implements the phase-out schedule and exemptions 
established by Congress in title VI of the Clean Air Act.

G. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law 104-113, section 12(d) (15 U.S.C. 
272 note) directs EPA to use voluntary consensus standards in this 
regulatory activities unless to do so would be inconsistent with 
applicable law or otherwise impractical. Voluntary consensus standards 
are technical standards (e.g., materials specifications, test methods, 
sampling procedures, and business practices) that are developed or 
adopted by voluntary consensus standards bodies. The NTTAA directs EPA 
to provide Congress, through OMB, explanations when the Agency decides 
not to use available and applicable voluntary consensus standards. This 
final rule does not involve technical standards. Therefore, EPA did not

[[Page 1470]]

consider the use of any voluntary consensus standards.

H. Executive Order 13132 (Federalism)

    Executive Order 13132, entitled ``Federalism'' (64 FR 432255, 
August 10, 1999), requires EPA to develop an accountable process to 
ensure ``meaningful and timely input by State and local officials in 
the development of regulatory policies that have federalism 
implications.'' ``Policies that have federalism implications'' is 
defined in the Executive Order to include regulations that have 
``substantial direct effects on the States, on the relationship between 
the national government and the States, or on the distribution of power 
and responsibilities among the various levels of government.'' Under 
Executive Order 13132, EPA may not issue a regulation that has 
federalism implications, that imposes substantial direct compliance 
costs, and that is not required by State and local governments, or EPA 
consults with State and local officials early in the process of 
developing the proposed regulation. EPA also may not issue a regulation 
that has federalism implications and that preempts State law unless the 
Agency consults with State and local officials early in the process of 
developing the proposed regulation.
    If EPA complies by consulting, Executive Order 13132 requires EPA 
to provide the Office of Management and Budget, in a separately 
identified section of the preamble to the rule, a federalism summary 
impact statement (FSIS). The FSIS must include a description of the 
extent of EPA's prior consultation with State and local officials, a 
summary of the nature of their concerns and the agency's position 
supporting the need to issue the regulation, and a statement of the 
extent to which the concerns of State and local officials have been 
met. Also, when EPA transmits a draft final rule with federalism 
implications to OMB for review pursuant to Executive Order 12866, EPA 
must include a certification from the agency's Federalism Official 
stating that EPA has met the requirements of Executive Order 13132 in a 
meaningful and timely manner. This rule will not have substantial 
direct effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government, as specified 
in Executive Order 13132. This rule will affect only the ability of 
private entities and the national government to request production of 
controlled ozone-depleting substances. Thus, the requirements of 
section 6 of the Executive Order to not apply to this rule.

VI. Judicial Review

    Under section 307(b)(1) of the Act, EPA finds that these 
regulations are of national applicability. Accordingly, judicial review 
of the action is available only by the filing of a petition for review 
in the United States Court of Appeals for the District of Columbia 
Circuit within sixty days of publication of the action in the Federal 
Register. Under section 307(b)(2), the requirements of this rule may 
not be challenged later in the judicial proceedings brought to enforce 
those requirements.

VII. Submittal to Congress and the General Accounting Office

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. Therefore, EPA will submit a report containing this rule 
and other required information to the U.S. Senate, the U.S. House of 
Representatives, and the Comptroller General of the United States prior 
to publication of the rule in the Federal Register. This rule is not a 
``major rule'' as defined by 5 U.S.C. 804(2). This rule will be 
effective January 8, 2001.

List of Subjects in 40 CFR Part 82

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Chemicals, Exports, Imports, Reporting and 
recordkeeping requirements.

    Dated: December 28, 2000.
Carol M. Browner,
 Administrator.
    40 CFR Part 82 is amended as follows:

PART 82--PROTECTION OF STRATOSPHERIC OZONE

    1. The authority citation for part 82 continues to read as follows:

    Authority: 42 U.S.C. 7414, 7601, 7671-7671q.

Subpart A--Production and Consumption Controls

    2. Section 82.4 is amended by revising the table in paragraph 
(t)(2) to read as follows:


Sec. 82.4  Prohibitions.

* * * * *
    (t) * * *
    (2) * * *

                            Table I.--Essential use Allocation for Calendar Year 2001
----------------------------------------------------------------------------------------------------------------
                                                                                                     Quantity
                         Company                                          Chemical                 (metric tons)
----------------------------------------------------------------------------------------------------------------
    (i) Metered Dose Inhalers (for oral inhalation) for Treatment of Asthma and Chronic Obstructive Pulmonary
                                            Disease (in metric tons)
----------------------------------------------------------------------------------------------------------------
Medeva Americas, Inc.....................................  CFC-11 or CFC-12 or CFC-114..........          189.00
Boehringer Ingelheim.....................................  CFC-11 or CFC-12 or CFC-114..........          338.36
Glaxo Wellcome...........................................  CFC-11 or CFC-12 or CFC-114..........          858.10
Aventis..................................................  CFC-11 or CFC-12 or CFC-114..........          190.00
3M Pharmaceuticals.......................................  CFC-11 or CFC-12 or CFC-114..........          304.51
Sidmak Laboratories, Inc.................................  CFC-11 or CFC-12 or CFC-114..........          192.20
Schering Corporation.....................................  CFC-11 or CFC-12 or CFC-114..........         1025.20
Sciarra Laboratories, Inc................................  CFC-11 or CFC-12 or CFC-114..........            1.3
----------------------------------------------------------------------------------------------------------------
   (ii) Cleaning, Bonding and Surface Activation Applications for the Space Shuttle Rockets and Titan Rockets
----------------------------------------------------------------------------------------------------------------
National Aeronautics and Space Administration (NASA)/      Methyl Chloroform....................           56.7
 Thiokol Rocket.
United States Air Force/Titan Rocket.....................  Methyl Chloroform....................            3.4
----------------------------------------------------------------------------------------------------------------


[[Page 1471]]

* * * * *

    3. Section 82.12 is amended by revising paragraphs (a)(1) 
introductory text, (a)(1)(i)(H), (a)(1)(ii) introductory text, 
(a)(1)(ii)(A), and (a)(1)(iii) to read as follows:


Sec. 82.12  Transfers.

    (a) * * *
    (1) Until January 1, 1996, for all class I controlled substances, 
except for Group VI, and until January 1, 2001, for Group VI, any 
person (``transferor'') may transfer to any other person 
(``transferee'') any amount of the transferor's consumption allowances 
or production allowances, and effective January 1, 1995, for all class 
I controlled substances any person (``transferor'') may transfer to any 
other person (``transferee'') any amount of the transferor's Article 5 
allowances, and after January 1, 2001 any essential use allowance 
holder (``transferor'') may transfer essential use allowances for CFCs 
to any other essential use allowance holder for CFCs (``transferee'') 
solely for the production of essential products (defined at 21 CFR 
2.125) as follows:
    (i) * * *
    (H) The amount of the one percent offset applied to the unweighted 
amount traded that will be deducted from the transferor's production or 
consumption allowance balance (except for trades from transformers and 
destroyers to producers or importers for the purpose of allowance 
reimbursement). In the case of transferring essential use allowances, 
the amount of one tenth of one percent of the amount traded will be 
deducted from the transferor's allowance balance.
    (ii) The Administrator will determine whether the records 
maintained by EPA, taking into account any previous transfers and any 
production, allowable imports and exports of controlled substances 
reported by the transferor, indicate that the transferor possesses, as 
of the date the transfer claim is processed, unexpended allowances 
sufficient to cover the transfer claim (i.e., the amount to be 
transferred plus, in the case of transferors of essential use 
allowances, one tenth of one percent of the transferred amount, and in 
the case of transferors of production or consumption allowances, one 
percent of the transferred amount). Within three working days of 
receiving a complete transfer claim, the Administrator will take action 
to notify the transferor and transferee as follows:
    (A) If EPA's records show that the transferor has sufficient 
unexpended allowances to cover the transfer claim, the Administrator 
will issue a notice indicating that EPA does not object to the transfer 
and will reduce the transferor's balance of unexpended allowances by 
the amount to be transferred plus, in the case of transfers of 
production or consumption allowances, one percent of that amount, or in 
the case of transfers of essential use allowances, one tenth of one 
percent of that amount. When EPA issues a no objection notice, the 
transferor and the transferee may proceed with the transfer. However, 
if EPA ultimately finds that the transferor did not have sufficient 
unexpended allowances to cover the claim, the transferor and transferee 
will be held liable for any violations of the regulations of this 
subpart that occur as a result of, or in conjunction with, the improper 
transfer.
* * * * *
    (iii) In the event that the Administrator does not respond to a 
transfer claim within the three working days specified in paragraph 
(a)(1)(ii) of this section, the transferor and transferee may proceed 
with the transfer. EPA will reduce the transferor's balance of 
unexpended allowances by the amount to be transferred plus, in the case 
of transfers of production or consumption allowances, one percent of 
that amount, and in the case of essential use allowances, one tenth of 
one percent of that amount. However if EPA ultimately finds that the 
transferor did not have sufficient unexpended allowances to cover the 
claim, the transferor and transferee will be held liable for any 
violations of the regulations of this subpart that occur as a result 
of, or in conjunction with, the improper transfer.
* * * * *
[FR Doc. 01-463 Filed 1-5-01; 8:45 am]
BILLING CODE 6560-50-U


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