Plant-Pesticides Subject to the Federal Insecticide, Fungicide, and Rodenticide Act; Proposed Rule

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 152 and 174

[OPP-300369; FRL-4755-3]

RIN 2070-AC02

Plant-Pesticides Subject to the Federal Insecticide, Fungicide,

and Rodenticide Act; Proposed Rule

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The substances plants produce to protect themselves against

pests and disease are considered to be pesticides under the Federal

Insecticide, Fungicide, and Rodenticide Act (FIFRA) definition of

``pesticide'' (i.e., if they are ``. . . intended for preventing,

destroying, repelling or mitigating any pest. . .''). These substances,

along with the genetic material necessary to produce them, are

designated ``plant-pesticides'' by EPA. EPA proposes to amend an

existing regulation and to create a new regulation to clarify the

relationship between plants and plant-pesticides and their regulatory

status under FIFRA. EPA also proposes to exempt from FIFRA requirements

classes of plant-pesticides that the Agency has determined pose low

probability of risk and are not likely to cause unreasonable adverse

affects on the environment. Recognizing the unique characteristics of

plant-pesticides, the Agency proposes to create a new part in the CFR

for regulations unique to plant-pesticides.

DATES: Comments identified by the docket control number [OPP-300369]

must be received on or before January 23, 1995.

ADDRESSES: Submit written comments by mail to: Program Resources

Section, Public Response and Program Resources Branch, Field Operations

Division (7506C), Environmental Protection Agency, 401 M St., SW.,

Washington, DC 20460. In person, bring comments to Rm. 1132, Crystal

Mall #2, 1921 Jefferson Davis Highway, Arlington, VA.

Information submitted as a comment concerning this document may be

claimed confidential by marking any part or all of that information as

``Confidential Business Information'' (CBI). Information so marked will

not be disclosed except in accordance with procedures set forth in 40

CFR part 2. A copy of the comment that does not contain CBI must be

submitted for inclusion in the public record. Information not marked

confidential may be disclosed publicly by EPA without prior notice. All

written comments will be available for public inspection in Rm. 1132 at

the Virginia address given above from 8 a.m. to 4 p.m., Monday through

Friday, excluding legal holidays.

FOR FURTHER INFORMATION CONTACT: By mail: Bernice Slutsky, Science and

Policy Staff, Office of Prevention, Pesticides and Toxic Substances

(7101), Environmental Protection Agency, 401 M St., SW., Washington, DC

20460, Telephone number: (202) 260-6900.

SUPPLEMENTARY INFORMATION:

I. Introduction

EPA proposes to clarify the regulatory status, under FIFRA, of

pesticidal substances produced in plants (plant-pesticides) and of

plants that produce pesticidal substances and act as biological control

agents. EPA defines a biological control agent as ``any living organism

applied to or introduced into the environment that is intended to

function as a pesticide against another organism declared to be a pest

by the Administrator'' (40 CFR 152.3). EPA also proposes to exempt from

FIFRA regulation certain types of pesticidal substances produced in

plants that EPA believes do not warrant regulation.

In the Federal Register of June 2, 1982 (47 FR 23928), EPA

promulgated a final regulation under FIFRA section 25(b) that exempted

all biological control agents, except for certain microorganisms, from

the requirements of FIFRA. This exemption was promulgated because EPA

found that the risks posed by biological control agents other than

microorganisms were adequately addressed by other Federal agencies such

as the U.S. Department of Agriculture's (USDA's) Animal and Plant

Health and Inspection Service (APHIS) and the U.S. Department of the

Interior. Although plants used as biological control agents were not

specifically addressed in 40 CFR 152.20 or in the June 2, 1982, Federal

Register document, EPA has considered these plants to be excluded from

regulation under FIFRA through this exemption. EPA continues to believe

that plants used as biological control agents are adequately regulated

by other Federal agencies. However, EPA believes that the status of

pesticidal substances produced in plants (i.e., plant-pesticides)

requires regulatory clarification.

Although plants used as biological control agents were exempted

from FIFRA regulation under 40 CFR 152.20, substances that are

extracted from plants and used as pesticides are not similarly

exempted. For example, chrysanthemums produce pyrethrum, a substance

that has insecticidal activity. Chrysanthemums that produce pyrethrum

are exempt from regulation when used as biological control agents

(i.e., living chrysanthemums), but pyrethrum itself, as the pesticide

substance, is not exempt when it is extracted from chrysanthemum plants

and applied to other plants as an insecticide.

This distinction is reasonable in light of the potential for

increased and unique exposures due to large-scale application of

extracted pyrethrum to plants that do not naturally produce it. The use

of extracted pyrethrum as an insecticide can involve exposure to the

pesticide over large acreages, whereas the exposure associated with

pyrethrum produced by living chrysanthemum plants would not be expected

to reach such proportions. In addition, application of pyrethrum beyond

the environment in which it is normally produced (i.e., beyond the

living chrysanthemum plant) could result in new or unique exposures of

nontarget organisms, including humans.

Although it has been EPA's policy under FIFRA to regulate

pesticidal substances that have been extracted from plants, to date the

Agency has not clearly stated its policies for regulation of pesticidal

substances that are produced in living plants and function in situ to

protect the plant from pests or disease (i.e., not extracted from the

plants). This proposed rule is designed to provide such clarification.

FIFRA section 2(u) defines ``pesticide'' as: ``(1) any substance or

mixture of substances intended for preventing, destroying, repelling,

or mitigating any pest, and (2) any substance or mixture of substances

intended for use as a plant regulator, defoliant, or desiccant. . . .''

The substances that are produced in plants to protect them against

pests and disease are considered to be pesticides under the definition

of FIFRA section 2, (i.e., if they are ``. . . .intended for

preventing, destroying, repelling, or mitigating any pest. . .'')

regardless of whether the pesticidal capabilities evolved in the plants

or were introduced by traditional breeding or through the techniques of

modern biotechnology. These substances, along with the genetic material

necessary to produce them, are designated ``plant-pesticides'' by the

Agency.

There are a number of types of substances produced in plants that

enable plants to resist pest attack and disease. These substances

include both those pesticidal substances that would be considered

normally a component of a plant and those that would be considered new

to a plant. Examples of plant-pesticides that would be considered

normally a component of a plant are phytoalexins (plant-produced

substances that act against phytopathogenic microorganisms). An example

of a plant-pesticide that would not be considered normally a component

of a plant is the insecticidal delta endotoxin that is produced in the

bacterium, Bacillus thuringiensis.

This proposal would clarify the relationship between plants and

plant-pesticides. It applies to all pesticidal substances produced in

living plants, including bryophytes such as mosses, seedless vascular

plants such as ferns, gymnosperms such as conifers, and angiosperms

such as most major crop plants. This proposal would reaffirm that

plants continue to be exempt under 40 CFR 152.20 and, under a new part

174 (in the 40 CFR) would codify which categories of plant-pesticides

would be exempt and which would be regulated by EPA under FIFRA.

Recognizing the unique characteristics of plant-pesticides, the Agency

will, in the future, include, in part 174, other regulations specific

to plant-pesticides.

As part of the effort to develop this proposal, EPA requested

advice from two scientific advisory committees at three meetings. On

December 18, 1992, a Subpanel of the FIFRA Scientific Advisory Panel

(SAP) was convened to review a draft proposed policy statement and to

answer a series of scientific questions concerned primarily with EPA's

proposed approach for plant-pesticides under FIFRA. On July 13, 1993, a

Subcommittee of the EPA Biotechnology Science Advisory Committee (BSAC)

was convened to address a series of scientific questions concerned

primarily with EPA's proposed approach for plant-pesticides under the

Federal Food, Drug, and Cosmetic Act (FFDCA). On January 21, 1994, a

joint BSAC/SAP Subpanel was convened to address a series of scientific

questions concerned with the scope of regulation under both FIFRA and

FFDCA and guidance for data needs for the evaluation of plant-

pesticides.

This proposed rule is one of several documents published in today's

issue of the Federal Register that address EPA's approach to regulating

plant-pesticides. The other documents are: (1) A proposed policy

statement that generally describes how EPA proposes to regulate plant-

pesticides under FIFRA and the FFDCA (``Plant-pesticides Subject to the

Federal Insecticide, Fungicide, and Rodenticide Act and the Federal

Food, Drug, and Cosmetic Act; Proposed Policy''; (2) a proposed

exemption from the requirement of a tolerance for categories of plant-

pesticides that do not result in significantly different dietary

exposures (``Plant-pesticides; Proposed Exemption from the Requirement

of a Tolerance Under the Federal Food, Drug, and Cosmetic Act''; (3) a

proposed exemption from the requirement of a tolerance for coat

proteins from plant viruses (``Plant-pesticides; Proposed Exemption

from the Requirement of a Tolerance Under the Federal Food, Drug, and

Cosmetic Act for Viral Coat Proteins Produced in Plants'' and (4) a

proposed exemption from the requirement of a tolerance for nucleic

acids produced in plants as part of a plant-pesticide (``Plant-

pesticides; Proposed Exemption from the Requirement of a Tolerance

Under the Federal Food, Drug, and Cosmetic Act for Nucleic Acids

Produced in Plants'').

II. Statutory Authority

This rule is being proposed under the authority of section 3 and

section 25(a) and (b) of the Federal Insecticide, Fungicide, and

Rodenticide Act (7 U.S.C. 136 et. seq.). FIFRA section 2(u) defines

``pesticide'' as: ``(1) any substance or mixture of substances intended

for preventing, destroying, repelling, or mitigating any pest, and (2)

any substance or mixture of substances intended for use as a plant

regulator, defoliant, or desiccant . . . ''

FIFRA section 3 provides that no person may distribute or sell in

the United States any pesticide that is not registered under the Act.

Before a product may be registered as a pesticide under FIFRA, it must

be shown that when used in accordance with widespread and commonly

recognized practice, it will not generally cause ``unreasonable adverse

effects on the environment.'' FIFRA section 2(bb) defines the term

``unreasonable adverse effects on the environment'' as any unreasonable

risk to humans or the environment, taking into account the economic,

social, and environmental costs and benefits of the use of any

pesticide. Thus, FIFRA involves a balancing of the risks presented by

the use of the pesticide against the benefits associated with the use

of that pesticide.

In addition, FIFRA section 3(a) provides that, to the extent

necessary to prevent unreasonable adverse effects on the environment,

the Administrator may by regulation limit the distribution, sale or use

of any pesticide that is not registered under FIFRA or subject to an

Experimental Use Permit under FIFRA section 5 or subject to an

emergency exemption under FIFRA section 18.

Under FIFRA section 25(b), EPA may exempt, by regulation, any

pesticide determined to be adequately regulated by another Federal

agency, or of a character which is unnecessary to be subject to the Act

in order to carry out the purposes of the Act.

III. 40 CFR Part 174

EPA is proposing to set forth, under FIFRA, a new part in 40 CFR

specifically for plant-pesticides regulated under FIFRA. In proposed

part 174, as well as at Sec. 152.20, EPA would clarify the regulatory

relationship between plants and plant-pesticides and, at Sec. 174.5,

EPA would define the scope of regulation for plant-pesticides under

FIFRA. Although EPA is not proposing in today's issue of the Federal

Register specific regulatory requirements for plant-pesticides in part

174 (e.g., labeling and Experimental Use Permit requirements), EPA

plans to propose such regulations in the future. In the interim period

before these additional regulatory amendments are proposed and

promulgated, EPA will use existing pesticide regulations (see 40 CFR

parts 152 to 173 and 40 CFR parts 177 to 186) for plant-pesticides

where applicable. However, these existing regulations were developed

generally for traditional, chemical pesticides. Because of the unique

characteristics of plant-pesticides, EPA recognizes that the existing

regulations may not always be appropriate for these products. The

characteristics of plant-pesticides such as both their production and

use in plants; their biological properties; and their potential ability

to spread and increase in quantity in the environment distinguishes

them from traditional, chemical pesticides. The Agency therefore

intends to apply the existing regulations to plant-pesticides in a

manner that addresses the unique issues associated with plants.

Producers are encouraged to consult with the Agency well in advance of

any proposed activities involving plant-pesticides. (Refer to the

Federal Register document entitled, ``Proposed Policy; Plant-pesticides

Subject to the Federal Insecticide, Fungicide, and Rodenticide Act and

the Federal Food, Drug, and Cosmetic Act.'')

IV. Definitions

Because of the unique nature of plant-pesticides, the Agency is

proposing certain definitions that will apply to plant-pesticides only.

These definitions are contained in the proposed regulatory text under

40 CFR 152.3, and in 40 CFR 174.3. The following unit describes the key

definitions for plant-pesticides under FIFRA and the rationales

underlying these definitions.

A. Definition of Plant-pesticide

EPA would define ``plant-pesticide'' under FIFRA as:

A pesticidal substance that is produced in a living plant and

the genetic material necessary for the production of the substance,

where the substance is intended for use in the living plant.

EPA is including the genetic material necessary to produce the

substance in the proposed definition of plant-pesticide for a number of

reasons. First, it is the genetic material that is introduced into the

plant with the intent that it will ultimately result in a pesticidal

effect. Additionally, EPA's regulation of pesticides is based on an

evaluation of the potential for unreasonable adverse effects associated

with the pesticidal substance, in this case, the pesticidal substance

produced in the plant. Regulation also includes risk management

considerations. A focus on the genetic material would permit the Agency

to address the potential for the spread of the pesticidal substance in

the environment through the spread of the genetic material necessary

for the production of the substance. Moreover, the amount of pesticidal

substance likely to be produced by the plant is also an important

consideration that the Agency may, in some circumstances, be able to

address through the inclusion of genetic material in the definition of

plant-pesticide. In addition, including the genetic material in the

definition of plant-pesticide would permit the Agency to address plant-

pesticides during stages of the plant's life cycle or in plant parts

where the pesticidal substance itself is not produced or is produced in

very small amounts (e.g., in pollen or seed). In these cases it is

technically easier to verify the presence of the genetic material than

the pesticidal substance.

B. Definition of Active and Inert Ingredients

The regulation of pesticides under FIFRA entails the

identification of ``active ingredients'' and ``inert ingredients.''

Under FIFRA section 2, the term active ingredient means ``. . . an

ingredient which will prevent, destroy, repel, or mitigate any pest. .

. [or acts as a plant regulator, defoliant or desiccant].'' The term

inert ingredient means ``. . . an ingredient which is not active.'' EPA

recognizes that plant-pesticides have certain characteristics that are

different from those of more traditional chemical pesticides. EPA

believes that the overall characteristics of plant-pesticides require

specifically tailored active and inert ingredient definitions.

In light of this consideration, EPA proposes to use the following

definitions for plant-pesticides.

Active ingredient, when referring to plant-pesticides only,

means a pesticidal substance that is produced in a living plant and

the genetic material necessary for the production of the substance,

where the substance is intended for use in the living plant.

Inert ingredient, when referring to plant-pesticides only, means

any substance, such as a selectable marker, other than the active

ingredient, and the genetic material necessary for the production of

the substance, that is intentionally introduced into a living plant

along with the active ingredient, where the substance is used to

confirm or ensure the presence of the active ingredient.

Note that the plant-pesticide active ingredient is the plant-

pesticide and therefore the proposed definition of active ingredient

for plant-pesticides is the same as the definition of plant-pesticide.

The plant-pesticide product includes both the active and inert

ingredients.

The definition of plant-pesticide and the active and inert

ingredient definitions would include all of the genetic material

``necessary for the production'' of the pesticidal and inert substance.

The following genetic regions are considered ``necessary for the

production'' of the plant-pesticide active and inert substances: (1)

The genetic material that encodes for the pesticidal substance or leads

to the production of the pesticidal substance, and (2) regulatory

regions such as promoters, enhancers, and terminators.

The genetic material can either directly encode for the pesticidal

substance or may encode for enzymes that lead to the production of a

pesticidal substance (e.g., phenylalanine ammonia-lyase (PAL) catalyzes

the first reaction in the synthesis of such phytoalexins as

pterocarpans in Leguminosae and furanocoumarins in Solanaceae and

Umbelliferae; Ref. 4). It might also include genetic regions encoding

for RNA that acts as the pesticidal substance or leads to the

production of the pesticidal substance (e.g., antisense mRNA). The

active and inert ingredients would also include any regulatory regions,

such as promoters, that control the expression of the genetic material

encoding for the pesticidal or inert substance or leading to the

production of the pesticidal or inert substance and are introduced into

the plant along with that gene. For example, a different regulatory

element could lead to the production of the pesticidal substance in new

plant parts or for new durations, resulting in new exposure scenarios.

The genetic material ``necessary for the production'' of the plant-

pesticide active and inert substances does not include genetic regions

that are not involved in DNA expression (i.e., noncoding, nonexpressed

sequences such as linkers, adapters, homopolymers, and sequences of

restriction enzyme recognition sites). However, the Agency would

require information concerning these sequences if it determines that

such information is necessary for the evaluation of the active or inert

ingredient.

There may be genetic material encoding other functions (e.g.,

genetic material intended to alter the amount of carbohydrate in the

plant) that are introduced into the plant along with the active and

inert ingredients. These activities would be subject to the Food and

Drug Administration (FDA) authorities.

V. Proposed Exemptions for Plant-pesticides

EPA has attempted to identify those types of plant-pesticides that

have greater potential for environmental and/or human health risks and

to focus its regulatory scrutiny on these plant-pesticides. To exempt

from regulation those plant-pesticides having low potential for risk,

EPA is proposing to employ its exemption authority under FIFRA section

25(b). FIFRA section 25(b)(2) allows the Agency to exempt a pesticide

from the requirements of FIFRA if it is of a character unnecessary to

be subject to the Act in order to carry out the purposes of the Act.

Through FIFRA section 25(b)(2), EPA proposes to exempt certain

categories of plant-pesticides that EPA believes pose low probability

of risk and are not likely to cause unreasonable adverse effects even

in the absence of any regulatory oversight under FIFRA and, thus, are

of a character unnecessary to be subject to the Act. Those plant-

pesticides not exempted would form the scope of EPA's regulatory

scrutiny under FIFRA.

EPA finds that the plant-pesticides it is proposing to exempt have

a low probability of risk and have potential benefits associated with

them (e.g., economic benefits to farmers and reducing the need for

chemical pesticides) that outweigh any potential risks associated with

them, and that the low probability of risk does not justify the cost of

regulation. Therefore, the Agency proposes under 40 CFR 174.5 to

exempt, from FIFRA regulation, the categories of plant-pesticides that

EPA has identified as those that are likely to pose little risk and are

not likely to cause unreasonable adverse effects on the environment

even in the absence of regulatory oversight.

While EPA's analysis of the potential risks and benefits of plant-

pesticides has led the Agency to the conclusion that some categories of

plant-pesticides warrant regulation while others do not, the Agency

cannot foresee all potential adverse effects to human health or the

environment which may potentially arise for testing and use of specific

plant-pesticides. Thus, in Sec. 174.7 EPA is proposing to require

reporting of information on adverse effects from the testing and use of

plant-pesticides that EPA is proposing to exempt in Sec. 174.5.

Proposed Sec. 174.7 is meant to address unforeseeable events resulting

from use of such pesticides. EPA believes that such events are likely

to be extremely rare; however, Sec. 174.7 is a means of ensuring that

any potential risk is addressed and that the Agency's data base is as

complete as possible. Information on potential unreasonable adverse

effects would be required to be reported if such information is

obtained, from any source, by any person who sells or distributes a

plant-pesticide. Failure to comply with Sec. 174.7 would be an unlawful

act under FIFRA section 12(a)(2)(S) and could result in an enforcement

action (for penalties) under FIFRA section 14. In addition, FIFRA

section 6(a)(2) applies to plant-pesticides that would not be exempt

under this proposed rule.

As with traditional pesticides, the underlying considerations in

analyzing risks posed by plant-pesticides are the potential for

exposure to the pesticidal substance and hazards of the pesticidal

substance to humans, other nontarget organisms, and the environment.

For plant-pesticides, exposure and hazard will be determined by the

chemical and toxicological properties of the pesticidal substance and

the biological characteristics of the plant that is producing the

substance.

The properties of the plant-pesticide, including the mechanism by

which it affects the target pest, will determine the potential for

hazards to nontarget organisms, including humans. The type of organism

exposed to the plant-pesticide will be determined by the characteristic

of the plants that produce the substance and the environment where the

plants are grown; e.g., whether the production of the substance is

limited to particular plant parts, the organisms that normally

associate with the plant, and the acreage and location planted. An

important consideration not seen with traditional pesticides is the

potential for spread of the plant's genetic material. Because plants

can reproduce sexually and/or asexually, the ability to produce the

plant-pesticide could spread through the agro- or natural ecosystems,

particularly if wild relatives acquire the ability to produce the

plant-pesticide through successful hybridization.

Such hazard and exposure considerations form the bases of the three

exemptions, discussed in Units V.A., V.B., and V.C. of this preamble,

that the Agency is proposing for plant-pesticides under FIFRA.

The benefits associated with use of some categories of plant-

pesticides include the economic benefit to farmers for use of plant-

pesticides in circumstances where traditional pesticides may not be as

effective (e.g., for some systemic plant pests) or may be more

expensive, thus increasing crop yield and/or reducing farmers' costs.

An additional benefit is the environmental benefit associated with

potential reduced use of pesticides that may be less environmentally

benign than these plant-pesticides.

A. Exemption of Plant-pesticides Derived from Closely Related Plants

A primary consideration in evaluating plant-pesticides is the

potential for new exposures of nontarget organisms to the pesticide. If

a plant normally produces a pesticidal substance, organisms that come

in contact with the plant have likely been exposed to that substance in

the past, perhaps over long periods of time. The potential for new

exposures to occur would be very low.

In contrast, if a plant-pesticide is not normally produced by a

plant, the organisms that come in contact with the plant may never have

been exposed to the substance. For instance, certain spiders produce a

toxin that is targeted for their insect prey. Plants are not known to

produce this toxin in nature or in cultivation. If this toxin were to

enter the gene pool of specific plants, organisms that had never

previously been exposed to the toxin could now be exposed. Prior to the

introduction of the toxin into these plants, only the insect prey of

the spider would potentially be exposed to the toxin. If plants could

now express the toxin, a different or larger group of organisms could

be exposed to it, possibly resulting in adverse effects to these

organisms. For instance, insects that feed on the plant could be

exposed to the toxin. If the toxin is found in pollen, pollinators

could also be exposed.

EPA is proposing to concentrate its regulatory efforts under FIFRA

on those plant-pesticides that are new to the plant and, thus, have the

greatest potential for exposing nontarget organisms to a new pesticidal

substance. The Agency is proposing to exempt from FIFRA regulation

those plant-pesticides that are normally a component of (not new to) a

plant. In defining, for regulatory purposes, those substances it

considers to be normally a component of a plant, the Agency is

presenting three approaches to the proposed exemption for public

comment. In selecting among these three options, the Agency will

consider how well each of the options: (1) Distinguishes, on a risk

basis, those plant-pesticides that would result in new environmental

exposures from those that would not; (2) provides a standard of

sufficient regulatory clarity so that the public, industry, and the

Agency can easily identify those plant-pesticides that would be subject

to regulation; (3) does not place an undo burden on producers/

developers; and (4) creates as similar a scope of regulation as

possible for this exemption under FIFRA as EPA is proposing under

FFDCA, given the differences in mandate and structure of the two

statutes. The three options are described below followed by a

description of terms used in the options in Unit V.A.4. of this

preamble and an analysis of the options in Unit V.A.5. of this

preamble. For the reasons discussed in Unit V.A.5. of this preamble,

EPA prefers Option 1 over Options 2 or 3.

1. Option 1: Plant-pesticides derived from sexually compatible

plants. This approach is based on the concept of sexual compatibility.

The Agency believes this concept describes a measure of relatedness

between plants and views plant-pesticides moved between sexually

compatible plants as not new to the plant. The use of the standard of

sexual compatibility is embodied in the following language from the

proposed regulatory text: [Plant-pesticides are exempt from FIFRA

requirements if:]

. . .The genetic material that encodes for a pesticidal

substance or leads to the production of a pesticidal substance is

derived from plants that are sexually compatible with the recipient

plant and has never been derived from a source that is not sexually

compatible with the recipient plant;. . .

2. Option 2: Plant-pesticides derived from plants within the same

genus. A second approach that EPA is considering for defining when a

plant-pesticide is new to the plant is a standard based on taxonomy.

Under this approach, the standard would rely on the taxonomic grouping

of genus; plant-pesticides moved between plants in the same genus would

be exempt. The assumption under this approach is that the genus

grouping correlates with a relatively high degree of relatedness among

plants even though not all plants in a genus are sexually compatible.

Similarity in traits ranging from flower morphology to the presence of

particular alkaloids and flavonoids, for example, have been used to

determine whether to classify a plant species in a particular genus and

these traits likely bespeak a high degree of relatedness. The language

defining this option would be as follows: [Plant-pesticides are exempt

from FIFRA requirements if:]

The genetic material that encodes for a pesticidal substance or

leads to the production of a pesticidal substance is derived from

plants that are within the same genus as the recipient plant

[regardless of sexual compatibility] and has never been derived from

a source outside of that genus;

3. Option 3: Plant-pesticides derived from plants within the same

genus or from sexually compatible plants. The third approach EPA is

considering combines the above two standards of taxonomy and sexual

compatibility. The standard under this option would rely primarily on

the taxonomic grouping of genus as a measure of relatedness.

Recognizing that some plants that are sexually compatible are

classified in different genera and assuming that sexual compatibility

bespeaks a high degree of relatedness, EPA also includes a provision

extending the exemption to include sexually compatible plants from any

genera. The language defining this option would be as follows: [Plant-

pesticides are exempt from FIFRA requirements if:]

The genetic material that encodes for a pesticidal substance or

leads to the production of a pesticidal substance:

(1) Is derived from plants that are within the same genus as the

recipient plant [regardless of sexual compatibility] or, is derived

from plants that are sexually compatible with the recipient plant;

and

(2) Has never been derived from a source outside the same genus

that is not sexually compatible with the recipient plant.

4. Terms used in the options. The phrase ``genetic material that

encodes for the pesticidal substance or leads to the production of the

pesticidal substance'' refers to genetic material that: (1) Directly

encodes for the pesticidal substance; (2) encodes for enzymes that lead

to the production of a pesticidal substance (as in the example of the

PAL gene discussed in Unit IV. of this preamble); or (3) encodes for

RNA that acts as a pesticide or leads to the production of a pesticidal

substance (e.g., antisense RNA).

For the purposes of the options for this exemption under FIFRA,

this phrase is not intended to include regulatory regions or noncoding,

nonexpressed nucleotide sequences when the genetic material encoding

for or leading to the production of the pesticidal substance would

otherwise be exempt. For this specific exemption, these regulatory

regions and noncoding, nonexpressed nucleotide sequences may be derived

from any source. For example, if a viral promoter attached to a corn

structural gene encoding a pesticidal substance is introduced into

another corn variety, the structural gene and the viral promotor

genetic construct would meet the criteria of the options for this

exemption.

Note that whereas regulatory elements are not, for the purposes of

the proposed exemptions, considered part of the genetic material ``that

encodes for a pesticidal substance or leads to the production'' of a

pesticidal substance, regulatory elements are considered part of the

genetic material ``necessary for the production'' of a pesticidal

substance under the definitions of the plant-pesticide active and inert

ingredients (see Unit IV. of this preamble).

The definition for ``sexually compatible'' means being capable of

forming a viable zygote through the fusion of two gametes and can

include the use of bridging crosses and wide cross breeding techniques

such as surgical alteration of the plant pistil, bud pollination,

mentor pollen, immunosuppressants, in vitro fertilization, pre- and

post-pollination hormone treatments, manipulation of chromosome

numbers, and embryo culture. It can also include, for the purposes of

this exemption, ovary and ovule cultures. EPA believes that the

production of viable zygotes through these techniques indicates a

sufficient level of relatedness between the parental plants involved to

be included under the rubric of ``sexually compatible.''

The phrase ``. . . has never been derived from a source that is not

sexually compatible with the recipient plant . . .'' is meant to

indicate in the proposed regulatory text that the genetic material

would not qualify for the exemption if it is introduced into a plant

from a sexually incompatible source and subsequently introduced into

other sexually compatible plants. An example of such a situation would

be if the Bacillus thuringiensis delta endotoxin is introduced into

wheat and the endotoxin producing wheat subsequently hybridized with

rye using wide cross techniques to produce triticale. The endotoxin

produced in the triticale would not be eligible for the exemption.

5. Analysis of options. EPA's goal in developing these options for

defining an exemption under FIFRA is to identify those plant-pesticides

with a higher potential for new environmental exposures to nontarget

organisms. Under Option 1, the Agency would consider plant-pesticides

produced in sexually compatible plants to be least likely to result in

these new exposures. Since traits can be passed through a plant

population by sexual recombination, it is reasonable to predict that,

in a sexually compatible population, new exposures of organisms that

associate with plants in the population to the pesticidal substance are

unlikely.

Sexually compatible plants are more apt to share traits than are

unrelated plants. It is a common expectation that similarity is

associated with the degree of relatedness. Natural hybridization and

selection have produced groups of plants which have a common gene pool.

Generations of artificial hybridization practiced to produce improved

crops for cultivation have tended to increase the extent of relatedness

among elements of a broader segment of agricultural plants.

The practice of saving seed from desirable plants has been going on

for thousands of years and controlled crosses to produce plant hybrids

have been documented since the eighteenth century. Since the

rediscovery of Mendel's work on the inheritance of traits, there is a

base of experience of 50 to 100 years of breeding for most major crops.

During that time, it has been common agricultural practice to cross

sexually compatible wild relatives with crop plants to develop crop

varieties with better pest resistance. Techniques such as genetic

mapping reveal the presence of genetic loci in cultivated plants that

previously were considered to be present only in the wild species.

Sexually compatible crop varieties are also crossed with each other to

achieve better pest resistance in their progeny. Because of these

common practices, the potential for significantly different

environmental exposures from current crop plants is likely to be low.

EPA proposes to extend the concept of sexual compatibility to

include wide crosses because wide crosses are commonly used to expand

the plant gene pool for varietal improvement, and EPA believes that a

fairly high degree of relatedness between the parental plants is

indicated when a wide cross produces a viable zygote. However, for

regulatory purposes it is somewhat difficult to define what constitutes

a wide cross since techniques may change over time. EPA is thus

proposing, for the purposes of this proposed rulemaking, a definition

of wide crosses that is based on existing techniques with a provision

to add new techniques if they meet the definition.

Options 2 and 3 both rely on taxonomy, and this standard may also

represent an acceptable degree of relatedness. Plant species within the

same genus may have become separated by geography, timing of

pollination, or other factors to form two distinct populations no

longer sexually compatible. Events such as mutation and environmental

selection can reinforce the isolation and uniqueness of the gene pools.

However, the ability to overcome these incompatibility barriers between

species in the same genera through human intervention (e.g., bridging

crosses and wide crosses) is evidence that such plants are fairly

closely related. The majority of successful wide crosses to date have

occurred between species within the same genus.

The second option is based solely on the taxonomic standard of

genus. Sexual compatibility (including the use of bridging crosses and

wide crosses) with the recipient plant would not be a criterion. The

third option relies primarily on taxonomy but also includes the

standard of sexual compatibility. Unlike Option 2, under this option,

plant-pesticides derived from a plant outside of the same genus as the

recipient plant could still be eligible for the exemption if sexual

compatibility between the source and the recipient plant is

demonstrated.

The use of a taxonomic standard may, from a regulatory perspective,

be somewhat clearer than a standard based solely on sexual

compatibility (including bridging and wide crosses). However, taxonomy

may be a more artificial standard than sexual compatibility as a

predictor of different environmental exposures of a plant-pesticide,

particularly for unmanaged or semi-managed plants. Isolation,

adaptation to unique environments, and low natural rates of gene flow

even between populations of the same species characterize many natural

populations. For these types of plants, the taxonomic standard used in

Options 2 and 3 may not be as appropriate as the sexual compatibility

standard used in Option 1 with regard to novel exposures to plant-

pesticides produced in unmanaged or semi-managed plants. In addition,

classification of plants in different genera is not fixed and could

change over time and between scientific authorities.

Option 1 is more compatible than either Option 2 or 3 with EPA's

preferred approach to plant-pesticides under FFDCA. Under FFDCA, EPA

sets tolerances for pesticide residues in foods. EPA may also exempt

pesticides from the requirement of a tolerance when such tolerance is

not needed to protect the public health. EPA is proposing to exempt

from FFDCA requirements certain plant-pesticides that would not result

in significantly new dietary exposures as it is proposing to exempt

plant-pesticides that would not result in new environmental exposures

from FIFRA requirements. Under both statutes, EPA's preferred approach

uses the standard of sexual compatibility presented in Option 1 in this

document. In addition, using a taxonomic standard alone (Option 2) is

not considered a viable option under FFDCA (see Federal Register

document entitled, ``Plant-pesticides; Proposed Exemption from the

Requirement of a Tolerance Under the Federal Food, Drug, and Cosmetic

Act.''

For some crop plant varieties, e.g., potatoes, vegetative

propagation is commonly used in addition to breeding. Since

vegetatively propagated plants have the same genetic makeup, EPA

intends that a plant-pesticide produced in a vegetatively propagated

plant would meet the criteria of Option 1 as long as the plant-

pesticide is either produced during vegetative propagation or, during

breeding, the original genetic source of the plant-pesticide is

sexually compatible with the recipient plant, as defined in the

proposed regulatory text. A plant-pesticide produced in vegetative

plants would meet the criteria of Option 2 and 3 as long as the plant-

pesticide is produced during vegetative propagation or the original

genetic source of the plant-pesticide is in the same genus as or, in

the case of Option 3, is sexually compatible with the recipient plant.

None of the options presented in this unit are intended to exempt

plant-pesticides which are significantly different in structure or

function from the plant-pesticide as it occurs in the source plant.

Such significantly modified plant-pesticides would not be eligible for

exemption under any of the options. Rearrangements or modifications of

the sequence encoding a plant-pesticide, for example, could result in

plant-pesticides with significantly different structures and/or

functions from those in the source plant and these would not be exempt.

If this type of modification were to occur, the potential for new and

different exposures in the environment could be significant.

Under all of the approaches discussed in this unit, the Agency has

evaluated whether changes in the levels of plant-pesticides that plants

normally produce would warrant regulation under FIFRA. (Ref. 1) The

Agency's analysis indicates that changes in the levels of such plant-

pesticides expressed by a plant could result in increased or decreased

exposures of nontarget organisms to a plant-pesticide. However, EPA

believes, for the reasons outlined below, that the potential for

unreasonable adverse effects from these exposures is low and these

types of plant-pesticides do not warrant regulation under FIFRA.

In deciding whether and how to regulate such plant-pesticides, EPA

first considered whether an increase in the levels of these plant-

pesticides is likely to exceed the ranges normally found within and

between plant varieties (both cultivated and uncultivated). EPA

believes that increases in the levels of such plant-pesticides are not

likely to result in overall significantly different exposures of

nontarget organisms to the pesticide. The level of production of such

pesticidal substances normally varies among related plants because of

differences in genetic makeup and environmental conditions. This

variation, in turn, results in natural variations in the levels of

exposure to the pesticide. Nontarget organisms that associate with the

plants, such as birds and insect pollinators, are exposed to a range of

such plant-pesticide levels in nature.

EPA also considered the extent to which any substance can be

increased in cultivated plants without unwanted effects on other,

desirable characteristics of the plant (e.g., yield or palatability of

fruit). In general, breeders balance all of these characteristics in

developing marketable plant varieties. Considerations of

characteristics such as yield could serve to mitigate against exceeding

certain ranges of pesticide levels. Agricultural crop plants, those

most likely to be grown in large acreages with concomitant large

exposures, are not likely to be in the higher portion of the expression

range because of these constraints and are not likely to produce as

broad a range of levels of plant-pesticides that plants normally

produce. EPA anticipates that the majority of agricultural crop plants

with modified levels of plant-pesticide expression will fall within

existing ranges of pesticide levels and does not anticipate that

increasing the level of a plant-pesticide that is normally a component

of a plant would lead to a signficantly different spectrum of exposure

to the plant-pesticide.

There are also difficulties in establishing what constitutes

``significantly higher levels'' for regulatory purposes. At the July

13, 1992 meeting, the BSAC Subcommittee was specifically asked and the

subcommittee extensively discussed approaches to determining what

constitutes significantly higher levels of a plant pesticide. During

discussion at the meeting, the BSAC Subcommittee indicated it would be

very difficult to establish standards for ``significantly higher

levels'' since no formal complete data base of plant constituents and

their concentration ranges exists. Because of these difficulties, the

BSAC Subcommittee final report did not suggest a scope criterion based

on ``significantly higher levels.'' For these reasons, EPA is not

proposing, under FIFRA, to regulate using a criterion based on

``significantly higher levels'' of a plant-pesticide.

Consistent with the Agency's proposed statement of policy on plant-

pesticides, EPA recognizes that plant defense compounds found in plants

that are not sexually compatible, or in other organisms such as

microorganisms, can be structurally and functionally equivalent to

compounds found in the recipient plant or in a plant sexually

compatible with the recipient plant. EPA is willing to consider, in the

future, exemptions for plant-pesticides (as are proposed for viral coat

proteins) if a producer can provide evidence that the plant-pesticide

is structurally and functionally equivalent to a plant-pesticide found

in the recipient plant or in a plant sexually compatible with the

recipient plant. Specifically, the Agency is willing to consider

development of procedures and criteria for these plant-pesticides.

Please see Request for Comment unit, Unit VII., of this preamble for a

fuller discussion of how such exemptions might be granted in future

rulemakings.

B. Exemption of Plant-pesticides That Act Primarily by Affecting the

Plant

One of EPA's primary goals in regulating pesticides is to control

the potential for adverse effects of pesticides on nontarget organisms.

An important component in the evaluation of this potential is the way

in which the pesticidal substance acts on the target pest since it

would also likely affect nontarget organisms through the same

mechanism. A pesticidal substance that acts directly on the target pest

through a toxic mechanism of action might also exert a similar effect

on other organisms. For example, a substance that acts by inhibiting

DNA synthesis of the pest could inhibit DNA synthesis in other

nontarget organisms.Toxic mechanisms of action include, but are not

limited to, those that affect: (i) Membrane permeability, (ii) cell

division, (iii) gene expression, (iv) DNA replication, or (v) other

metabolic functions (Ref. 3).

Pesticidal substances can also act through mechanisms that are less

likely to be directly toxic. Although it is possible for these

substances to adversely affect nontarget organisms, the Agency believes

that, in most cases, they pose significantly lower levels of

environmental risk than plant-pesticides with a generalized toxic

mechanism of action. Plant-pesticides that are less directly toxic

generally act primarily by affecting the plant so that the pest is

inhibited from attaching to the plant, penetrating the plant's surface

or invading the plant's tissue. For example, if a plant is modified so

that it can counter specific disease-producing compounds by

inactivating them, it is less likely that organisms that interact with

the plant in other, more beneficial ways will be affected. Similarly, a

plant may be modified to produce defense structures such as layers of

cork cells in response to infection by fungi or bacteria. These

structures form a barrier to further penetration by the pests and may

block the spread of any toxins. Other, nontarget organisms that do not

stimulate this response are not likely to be adversely affected. The

Agency believes that it would be appropriate to exempt from regulation,

under FIFRA, plant-pesticides that act through mechanisms such as

these. EPA believes that by focusing its regulatory attention on plant-

pesticides that act through toxic mechanisms, it will be able to focus

on those plant-pesticides presenting higher levels of risk potential.

The proposed regulatory text presents criteria to define mechanisms of

action that are not directly toxic to the target pest.

EPA proposes that producers would assess whether they meet the

criteria presented in the proposed regulatory text. Proving eligibility

would rest with the producer claiming the exemption and the producer

could meet this responsibility by producing documentation of their

determination should a question arise concerning their claim for

exemption. If the producer's assessment is incorrect and the plant-

pesticide does not qualify for the exemption, anyone selling or

distributing the plant-pesticide would be subject to enforcement

actions for selling or distributing an unregistered pesticide.

Producers would be encouraged to consult with the Agency with regard to

specific cases.

EPA is also considering whether to extend this exemption to include

substances such as plant hormones because they act by ``primarily

affecting the plant'' and do not act directly on a target pest (see

Unit VII.B. of this preamble and the proposed statement of policy

published elsewhere in today's issue of the Federal Register entitled

``Proposed Policy; Plant-pesticides Subject to the Federal Insecticide,

Fungicide, and Rodenticide Act and the Federal Food, Drug, and Cosmetic

Act'').

C. Exemption of Coat Proteins from Plant Viruses

Coat proteins are those substances that encapsulate and protect the

genetic material of certain viruses. In some cases, when the genetic

material encoding for the coat protein is introduced into a plant's

genome, the plant is able to resist subsequent infections by the same

virus or related strains (termed viral coat protein mediated resistance

or vcp-mediated resistance). The Agency is proposing to exempt the

genetic material encoding for the coat protein and the coat protein

itself when these are introduced into a plant to effectuate viral coat

protein mediated resistance.

The Agency's proposal is based on a number of considerations which,

when taken together, bring EPA to the conclusion that coat proteins

used in vcp-mediated resistance pose low probability of risk and would

not cause unreasonable adverse effects. These considerations include

the low potential for adverse affects to nontarget organisms and the

potential benefits (environmental and economic) of utilizing vcp-

mediated resistance.

To promote the fullest discussion of the issue possible, however,

the Agency is also offering for discussion an alternative, more limited

exemption. The two options are described below followed by an analysis

of the options in Unit V.C.3. of this document.

1. Option 1: Exemption of all coat proteins from plant viruses.

Under EPA's preferred option, all coat proteins from plant viruses

(vcp-mediated resistance coat protein) and the genetic material

encoding for the coat protein would be exempt from FIFRA requirements

when produced in plants for viral coat protein mediated resistance.

This exemption would include the regulatory regions and noncoding,

nonexpressed sequences needed to introduce the genetic material

encoding for the viral coat protein into the plant. This exemption is

embodied in the proposed regulatory text.

2. Option 2: Exemption of coat proteins from plant viruses produced

in plants with low potential for outcrossing to wild relatives. Under

this exemption, the Agency would limit its exemption of vcp-mediated

resistance coat proteins to those viral coat protein/plant combinations

that would have the least potential to confer selective advantage on

free-living wild relatives. The regulatory language defining these

viral coat protein/plant combinations would be as follows:

The pesticidal substance is a coat protein from a plant virus

and the genetic material necessary to produce the coat protein has

been introduced into a plant's genome, and the plant has at least

one of the following characteristics:

(1) The plant has no wild relatives in the United States with

which it can successfully exchange genetic material, i.e., corn,

tomato, potato, soybean, or any other plant species that EPA has

determined has no sexually compatible wild relatives in the United

States.

(2) It has been demonstrated to EPA that the plant is incapable

of successful genetic exchange with any existing wild relatives

(e.g., through male sterility, self-pollination).

(3) If the plant can successfully exchange genetic material with

wild relatives, it has been empirically demonstrated to EPA that

existing wild relatives are resistant or tolerant to the virus from

which the coat protein is derived or that no selective pressure is

exerted by the virus in natural populations.

For the purposes of this option, ``introduced into the plant's

genome'' would mean movement of nucleotide sequences into the genetic

material in a plant cell's nucleus, mitochondria, chloroplasts, and any

other plastids. ``Successfully exchange genetic material'' would mean

capable of forming zygotes viable in the laboratory and/or field

through the fusion of two gametes.

Under this option, if a plant is not on the list of plants with no

wild relatives in criterion (1), a producer would be required to submit

a written request for a determination by EPA as to whether their viral

coat protein/plant combination meets criterion (1), i.e., the Agency

would have to determine that this particular plant species has no wild

relatives in the United States. If criterion (1) could not be met, the

producer would have to submit information to the Agency to show that

criterion (2) is met or submit empirical evidence that criterion (3) is

met.

3. Analysis of options. The Agency's preferred option of exempting

all vcp-mediated resistance coat proteins is based on the limited

potential for adverse effects to nontarget organisms and/or new

exposures to the coat protein and the potential environmental and

economic benefits from using vcp-mediated resistance.

Environmental benefits associated with the use of viral coat

proteins include the reduction of the use of chemical pesticides for

viruses that are spread by vectors (usually insects). Chemical

pesticides are used for those crop plants where the most effective

method of protection against viral attack is by controlling the vector.

These pesticides may not be environmentally benign. The expression of

viral coat proteins by plants for protection from viral infection would

likely reduce the amount of chemical pesticide used to control the

vectors.

In addition to environmental benefits associated with the use of

viral coat proteins, an effective method for controlling virus

infection will have economic benefits. Plant viruses create economic

losses for a vast variety of crops by reducing yields and negatively

affecting the quality of the crop. Yield losses and quality effects for

a specific crop may vary depending on the host plant and strains of the

virus present, the incidence and activity of vectors, timing of the

infection, health and nutritional state of the plant, and weather (Ref.

5).

Presently, growers may need to use several control methods during a

crop season in an attempt to prevent viral infection and dissemination,

primarily by planting virus free material (for mechanically transmitted

viruses) and by controlling plant virus vectors, such as insect

populations (for vector transmitted viruses). Insecticides,

nematicides, and fungicides are all used for vector control with

varying success, depending upon the virus/vector relationship and

vector efficiency. Plants developed through conventional breeding

techniques offer some degree of virus resistance. Such resistance may

not be uniform or the virus may develop new strains. However, breeding

for resistance has not been successful for the majority of field crops

and, in particular, vegetable crops that are severely affected by

viruses (Ref. 6).

In enabling plants to resist viral attack, viral coat proteins act

in a very specific fashion, apparently adversely affecting only viruses

by blocking or limiting their ability to infect, replicate, and/or

translocate within the plant. This specificity minimizes the potential

for viral coat proteins produced in plants to adversely affect nonviral

organisms. In addition, plants in nature and in the agro-ecosystem

frequently exhibit viral infections; nontarget organisms, including

humans, have been and continue to be exposed to the viral coat proteins

with no observed adverse effects.

The possibility that environmental risk might be associated with

the use of vcp-mediated resistance was discussed at the December 18,

1992 FIFRA Scientific Advisory Panel (SAP) Subpanel meeting (see Unit

VI. of this preamble for a more thorough discussion of the issues

discussed by EPA's science advisory committees). EPA agrees with the

conclusions of the SAP Subpanel and in developing its proposal has

utilized the advice of the Subpanel to supplement EPA's own evaluation

of the scientific literature (Ref. 2). The considerations discussed by

the Subpanel included: (1) The potential for new viruses to be formed

through transcapsidation (also called heterologous encapsidation) and

recombination, (2) the potential for synergistic infections, (3) the

potential for seed transmission, and (4) the potential for the

development of selective advantage in wild relatives through successful

hybridization with the plant producing the viral coat protein. The SAP

Subpanel report offered advice on these potential risk considerations

and this advice is incorporated into the discussion below.

Most plant viruses are composed of genetic material enclosed in a

protein coat. For these viruses, the coat protein is the site of

interaction with the host plant at several stages of the viral cycle

(e.g., virus replication and movement within the plant). The coat

protein also plays an essential role in transmission by vectors such as

insects.

The issue of transcapsidation revolves around the question: if a

plant that produces a vcp-mediated resistance viral coat protein from

Virus A is infected by Virus B, can the Virus B genome be encapsidated

by the Virus A derived vcp-mediated resistance coat protein synthesized

by the plant? The consequence of such transcapsidation is the possible

extension of the host range of the virus through the possible

transmission of the Virus B genetic material by vectors that would not

normally transmit Virus B and possible infection of plants that would

not normally be exposed to and/or infected by virus B.

Heterologous encapsidation or transencapsidation has been observed

both in vitro and in vivo between coinfecting whole viruses. However,

transencapsidation between coinfecting viruses occurs more frequently

between related viruses than unrelated viruses. Although some

researchers have examined this question, there is no evidence that

transencapsidation involving vcp-mediated resistance coat proteins

produced in plants would occur at a higher frequency than has been

observed with coinfecting whole viruses.

With regard to transencapsidation involving vcp-mediated resistance

coat proteins and horizontal transmission, the SAP Subpanel concluded

that transencapsidation and transmission to other plants would most

likely occur at low levels or would not occur, depending on: (1) The

level of vcp-mediated resistance coat protein being produced by the

plant (larger concentrations of vcp-mediated resistance coat protein

would increase the probability of transcapsidation); (2) the efficiency

of transencapsidation (this varies for transencapsidation of whole

viruses); and (3) the efficiency of virus acquisition by the virus

vector. For viruses in which a specific protein-RNA-helper factor

complex is essential for transencapsidation or transmission to occur,

transmission is virtually impossible.

With regard to the potential for recombination between the plant-

encoded coat protein and coat protein from an infecting virus different

from the virus contributing the coat protein gene, the consequence of

such recombination is the potential for the formation of a new virus.

The December 18, 1992, SAP Subpanel concluded that recombination is not

a risk consideration meriting regulatory oversight. Most recombination

events demonstrated to date involve either a debilitated virus under

strong selection pressure for restoration of the wildtype virus, or the

exchange of terminal regulatory sequences. In both conditions,

recombination was only demonstrated between very similar or identical

viruses. New viruses are thus unlikely to arise through a

recombinational event involving substitution of the vcp-mediated

resistance coat protein genetic material for the coat protein genetic

material of the infecting virus. Should variants of a virus arise

through recombination, these variants would be subject to selection/

competitive pressures throughout the infection cycle as are variants

that arise from recombination between replicating viruses. In addition,

there is no evidence that recombination between plant-produced coat

proteins and an infecting virus would occur at greater frequencies than

currently occur in nature between replicating viruses.

Synergistic-infection occurs when two viruses infect the same

plant, causing more severe damage than would occur if either virus

alone infected the plant. With regard to the potential for synergistic-

infection, the SAP Subpanel stated that plants expressing Virus A vcp-

mediated resistance coat proteins do not express a synergistic response

when the plant is inoculated with Virus B that potentially could act

synergistically with Virus A, either because coat proteins are not

involved in synergy, or because the level of expression of the protein

is too low to potentiate the interaction.

In some species of plants, infecting viruses can be transmitted

vertically to progeny plants through seed. The question posed with vcp-

mediated coat proteins is whether their presence in the plant might

affect seed transmission of infecting viruses. With regard to the

possibility of coat protein modifications affecting the ability of seed

to transmit viruses, the SAP Subpanel report states that in two cases

where the viral genetics of seed transmission of viruses has been

analyzed, genes other than those encoding the coat protein genes are

involved in potentiating the transmission. There is no reason a priori

to believe that introduction into the plant of viral coat protein genes

would affect the level of vertical transmission of viruses through

seed.

The possibility that transfer of the vcp-mediated resistance coat

protein gene to a wild relative of the modified crop plant might bestow

a selective advantage on the wild relative has also been examined by

the SAP Subpanel and the Agency. The SAP Subpanel report indicates that

even if the low probability events of transfer and expression of the

coat protein gene from crop plant to wild relative occur, the wild

plant may not acquire a selective advantage. The Subpanel report noted,

however, that while the series of events that must occur for the wild

plant to acquire a selective advantage is rather improbable, such a

series of events is not impossible.

To address this possibility, the Agency is offering an alternative

option that is a more limited exemption of vcp-mediated resistance coat

proteins. For this alternative option, the Agency has defined a set of

criteria and a process that would be used to identify those viral coat

protein/plant combinations that have the greatest potential to outcross

to wild, free-living relatives and thus have the possibility to endow

these wild relatives with a competitive advantage. Viral coat proteins

that potentially could be outcrossed would be subject to regulation.

Those viral coat protein/plant combinations with a lesser or no

probability of outcrossing and thus having a lesser or no probability

of resulting in selective advantage would be exempt from regulation. An

example of the latter situation would occur when a plant has no wild

relatives in the United States or, if it has such relatives, cannot

exchange genetic material with any of them. Under such circumstances,

there is no opportunity for selective advantage through acquisition of

the gene encoding the viral coat protein to occur in the wild relative

since successful genetic exchange would not occur.

It should be noted that neither of the exemptions described by

Option 1 nor Option 2 for viral coat proteins extends to other methods

used to create viral resistance in plants, such as the introduction of

the gene encoding for RNA replicase or the introduction of genes

encoding for satellite RNA (supernumary RNA with essentially no

sequence similarity with the host virus) into plants. EPA does not

believe it should exempt satellite RNA since single nucleotide base

changes have been shown to significantly alter the characteristics of

satellite RNAs including turning a nonnecrogenic satellite into a

necrogenic satellite. At this point, the Agency is only proposing an

exemption for vcp-mediated resistance coat proteins from plant viruses.

EPA prefers Option 1 for a number of reasons. EPA believes that the

use of vcp-mediated resistance represents little potential for

adversely affecting nontarget organisms and has a low potential for

other environmental risks even in the absence of any regulatory

oversight under FIFRA. In addition, vcp-mediated resistance is

associated with potential environmental benefits such as decreased use

of chemical pesticides and economic benefits to farmers and society

because it represents a means of controlling losses to viral disease in

the absence of effective alternative methods to control viral

infection. Option 1 represents a clearer regulatory line than Option 2

in terms of which plant-pesticides will be regulated under FIFRA.

Option 1 is more consistent with the approach taken for plant-

pesticides under FFDCA. Option 1 allows the Agency to focus on plant-

pesticides posing higher potential risks. In addition, under the Plant

Pest Act, USDA/APHIS addresses the potential for selective advantage

among wild plants in its review of plants genetically engineered to

produce viral coat proteins.

At the January 21, 1994 joint SAP/Biotechnology Science Advisory

Committee (BSAC) meeting (see Unit VI of this preamble), the

alternative option (Option 2) for the exemption of viral coat proteins

was discussed. The joint Subpanel agreed that Option 2 created a

process to address the possibility of selective advantage being

acquired by a wild relative through outcrossing of the vcp-mediated

resistance coat protein gene from the modified crop plant. However, the

joint Subpanel did not believe that there was a high enough level of

concern to warrant the inclusion of this option.

The report of the January 21, 1994 meeting summarizes that: (1)

Wild relatives are not found growing near many of the important crop

plants grown in the United States; (2) criteria 2 and 3 of the

alternative option address extremely rare situations, the existence of

which would be very difficult to completely disprove; (3) the potential

for increasing the ability of wild relatives to resist viral infection

is likely to be beneficial because it could lead to a reduction of the

reservoir for plant viruses; and (4) the use of vcp-mediated resistance

is more ``environmentally friendly'' than the application of chemical

pesticides to control virus vectors.

The Agency's preferred option would be to completely exempt vcp-

mediated coat proteins from FIFRA regulation. Because of the potential

benefits and the low probability of risks from the use of vcp-mediated

resistance coat proteins in plants, EPA believes they warrant exemption

under FIFRA 25(b) as being ``of a character that is not necessary to be

subject to the Act.'' In addition, USDA/APHIS's review of field testing

of plants genetically engineered to produce vcp-mediated resistance

proteins addresses the possibility that the use of vcp-mediated coat

proteins may create some potential for a selective advantage to be

acquired by wild plants as well as the possibility of creating new

viruses through recombination and/or transencapsidation.

EPA is aware that, in addition to viral coat proteins, there are

viral components such as viral movement proteins and viral replicase

that are being tested for virus resistance strategies in plants. Many

of the risk issues considered by EPA for viral coat proteins may be

similar to those most likely to be addressed when examining the risks

that could potentially be associated with the use of other viral

components. USDA/APHIS's review of plants genetically engineered to

produce viral coat proteins addresses such potential risks. EPA is

committed to minimizing duplicative review of products between Federal

agencies and is also committed to developing an appropriate regulatory

approach for biologically-based pesticides in general, potentially

including pesticides based on viral components produced in plants. EPA

would tailor its regulatory procedures according to the biological

characteristics of these products. These procedures could, for example,

include expedited procedures for registration, the development of

performance-based criteria for exemptions, and specific product

exemptions. For example, the exemption of plant-pesticides that

``primarily affect the plant'' could be extended in the future, through

the inclusion of an additional criterion, to include viral components

that are used in viral resistance strategies in plants when they affect

the plant so that the viral pest cannot invade the plant.

VI. External Review

In developing its approach to regulating plant-pesticides, EPA has

requested the advice of two scientific advisory committees at three

meetings. On December 19, 1992, pursuant to section 25 of FIFRA, a

Subpanel of the FIFRA SAP was convened to review a draft policy

statement on plant-pesticides and respond to a series of scientific

questions posed by the Agency primarily on EPA's approach under FIFRA.

On July 13, 1993, a Subcommittee of the EPA BSAC was convened to

address a series of scientific questions primarily on EPA's approach

under FFDCA. On January 21, 1994, a joint meeting of a SAP/BSAC

Subpanel on plant-pesticides was held. The issues raised at these

meetings are discussed below, together with the Agency's response.

(Full reports from these meetings are available in the public docket.)

A. Substances New to the Plant

Questions on how best to describe ``substances that are new to the

plant'' were posed at all three science advisory meetings. At its

December 1992 meeting, the FIFRA SAP Subpanel was asked whether the

taxonomic demarcation of ``genus'' was appropriate, or whether some

other demarcation would be more appropriate. The Subpanel expressed

concern over an exemption based on a taxonomic definition and suggested

the Agency evaluate a series of considerations involving the potential

for quantitative and qualitative differences in exposure to a plant-

pesticide.

The SAP Subpanel suggested that the Agency would ``need to create a

workable balance between effective regulatory oversight and

encouragement of the development of plant-produced pesticides.''

At its July 13, 1993 meeting, the BSAC Subcommittee addressed a

related issue with regard to the regulation of plant-pesticides under

the FFDCA and human dietary exposures to plant pesticides.

Included in questions to the Subcommittee were queries on the

availability of information on current levels of exposure in the diet

to plant-pesticides in raw agricultural commodities and on which plant-

pesticides might be of concern should their levels be significantly

increased.

The BSAC Subcommittee in their report stated that no formal,

complete data base for such information exists. Rather most of this

knowledge is part of breeders' experience, with breeders depending

primarily on familiarity with food crops (e.g., knowledge of which crop

plants have the ability to produce which toxicants) to ensure consumers

are not exposed to deleterious levels of such substances. In general,

little information exists on the range of levels of plant-pesticides in

plants, including ranges within the most studied grouping, food plants.

The mechanisms through which plants display resistance to pests,

moreover, have not been well worked out. Based on experience, however,

the BSAC Subcommittee suggested EPA consider a scheme based on sexual

compatibility to identify those groupings wherein plant-pesticides

might present new and novel dietary exposures and those that would not.

The use of sexual compatibility and/or taxonomy as a standard for

the potential for significantly different environmental exposures was

discussed at the January 21, 1994, joint SAP/BSAC Subpanel meeting. The

panel members were supplied with the reports of the previous meetings

and drafts of proposals analyzing the strengths and weaknesses of

approaches based on sexual compatibility and/or taxonomy. In response

to the question of whether plants in a sexually compatible population

are likely to share substances or traits, the joint Subpanel agreed

that sexually compatible plants are more likely to have a common

constitution than unrelated plants and thus movement of genetic

material between sexually compatible plants is less likely to lead to

novel exposures. Natural hybridization and selection have produced

groups of plants which have a common gene pool. Generations of

artificial hybridization to produce improved cultivated plants have

tended to increase the extent of relatedness among elements of a

broader segment of the natural diversity. In addition, modern

techniques of genetic mapping have revealed the presence of genetic

loci in cultivated plants that previously were considered to be present

only in the wild species.

In regard to the correlation of the concept of ``genus'' with

significantly different environmental exposures, the panel noted that

the taxonomic classification of a genus and the measure of sexual

compatibility are closely interrelated. Sexual compatibility tends to

promote genetic interchange and this interchange leads to populations

of plants more like each other than like groups that have been sexually

isolated. Because plants in the same genus likely have common ancestors

that at some period in their evolution were sexually compatible, plants

in the same genus are more apt to be sexually compatible with each

other than with plants from other genera. Some barriers to sexual

compatibility exist between species in the same genus even though the

species are similar taxonomically. However, many of these sexual

barriers can be overcome through the use of wide cross techniques by

breeders.

The report of the January 21, 1994, joint SAP/BSAC Subpanel

meeting, indicates that the joint Subpanel agrees that basing an

exemption on both the concept of sexual compatibility and the concept

of taxonomy should restrict the occurrence of significantly different

exposures and finds that Option 3 is a reasonable approach for

agricultural plants. However, the joint Subpanel questioned whether an

assumption of low probability of novel exposures can be extended to

wild or semi-wild plants. For these types of plants, the genus standard

``in particular,'' may result in the exemption from regulation of

plant-pesticides that may present novel exposures.

The Agency also included a question, at the January 21, 1994, joint

BSAC/SAP meeting, concerning an approach using a criterion based on the

process used to modify the plant, e.g., recombinant DNA methodologies.

As described in the report of the joint BSAC/SAP Subpanel meeting, if

the Agency were to use this approach, it would first exempt plant-

pesticides developed through techniques other than those of modern

biotechnology from its regulatory scope. For those plant-pesticides

that are not exempted because they were developed through techniques of

modern biotechnology, the exemptions proposed by the Agency would apply

(i.e., the exemption based on plants' relatedness and the exemption of

plant-pesticides that act by ``primarily affecting the plant''; see

Units V.A. and V.B. of this preamble).

The joint Subpanel supported the inclusion of an option using a

criterion based on methodologies such as rDNA as a rational approach to

making the first cut as to which plant-pesticides would be regulated.

However, the joint Subpanel cautioned that further exemptions such as

those proposed by EPA should be used in conjunction with the criterion

based on methodology. In addition, the joint Subpanel recommended that

the Agency define methodologies in a way that clearly delineates to the

scientific community and the public what is and is not included in the

regulatory scope, based on current state-of-the science.

EPA Response: The Agency has chosen to propose to use under both

statutes, an approach based on sexual compatibility. First, this

approach would exempt under both FIFRA and FFDCA, plant-pesticides

having a high probability of being derived from plants having high

numbers of genes in common. Under such circumstances, the likelihood of

new or novel exposures both to the environment and in terms of human

consumption is low.

Second, use of the standard of sexual compatibility is the

preferred option under both FIFRA and FFDCA and would allow EPA to use

its authorities under FIFRA and FFDCA in concert to regulate plant-

pesticides, and thus to utilize, to the extent possible in light of the

different statutory standards, similar approaches to oversight under

each of the two statutes.

Third, the Agency believes that its proposed approach would be

consistent with the December 1992 SAP Supbanel's concern that EPA ``. .

. create a workable balance between effective regulatory oversight and

encouragement of the development of plant-produced pesticides.'' Under

the preferred approach, novel exposures are not likely to occur with

plant-pesticides exchanged between plants that are sexually compatible

(See also Unit V. of this preamble for additional discussion).

With regard to the advice of the January 21, 1994, joint SAP/BSAC

Subpanel concerning the use of a process-based criterion in the scope,

if the Agency were to use this approach, plant-pesticides developed

through techniques other than those involving in vitro manipulation of

genetic material would be exempt. In order to meet the recommendations

of the joint Subpanel, the Agency would define this category of plant-

pesticides in the following way: The genetic material that encodes for

the pesticidal substance or leads to the production of the pesticidal

substance is extracted from an organism and introduced into the genome

of the recipient plant or is synthesized in vitro and introduced into

the genome of the recipient plant. The exemptions proposed by the

Agency in Unit V. of this preamble would be used in concert with this

criterion. The Agency believes this approach would meet the

recommendations of the SAP/BSAC joint Subpanel. The Agency is

soliciting comment on this approach (see Unit VII.A. of this preamble).

B. Plant-pesticides That Act Primarily by Affecting the Plant

The SAP Subpanel at its December 1992 meeting considered whether

EPA's language clearly and sufficiently identified plant resistance

mechanisms that do not involve substances whose mode of action produces

a direct toxic effect on the pest. The SAP Subpanel stated that for the

most part the language EPA was proposing was clear and appropriately

identified plant resistance mechanisms whose mode of action was not

directly toxic. The Subpanel noted, however, that the issue of

resistance to toxins produced by the pests was not addressed by that

language. The Subpanel recommended insertion of the following statement

into EPA's proposed language: ``Acts in the host plant to produce

target(s) of the toxin that are resistant to the toxin's deleterious

action.''

EPA Response: EPA accepted this recommendation and modified the

language of its approach to incorporate the issue of resistance to

toxins.

C. Viral Coat Proteins

The December 18, 1992, SAP Subpanel meeting and the January 21,

1994, joint SAP/BSAC Subpanel meeting addressed the use of viral coat

protein genes to modify plants to protect the plant from damage from

viral infection. In the discussion at the December 18, 1992, SAP

Subpanel meeting, several risk considerations were identified and the

probability of occurrence of each addressed in the SAP Subpanel report.

The SAP Subpanel report stated that the probability of occurrence of

the risks examined is very low. The January 21, 1994, joint SAP/BSAC

Subpanel meeting discussed the alternative option for the exemption of

viral coat proteins from FIFRA regulation. The joint Subpanel did not

believe that the potential risks associated with the use of vcp-

mediated resistance coat proteins warranted inclusion of the

alternative option. Unit IV.C.3. of this document describes how the SAP

and joint SAP/BSAC discussion of vcp-mediated resistance viral coat

proteins supplements and influences EPA's analysis.

EPA Response: EPA agrees that the probability of risks from the

introduction of viral coat protein genes into plant genomes is low, and

as its preferred option proposes to exempt these plant-pesticides from

FIFRA oversight. Because of public comments received at the December

18, 1992, SAP Subpanel meeting and the January 21, 1994, joint SAP/BSAC

meeting, however, concerning viral coat protein and selective advantage

to wild relatives of managed plants, EPA is offering for comment in

this proposal the alternative approach to viral coat proteins to allow

the fullest discussion possible.

D. U.S. Congress and U.S. Department of Agriculture

In accordance with FIFRA section 25, a draft of this proposed

regulation and a draft of the statement of policy published elsewhere

in today's issue of the Federal Register entitled ``Proposed Policy;

Plant-pesticides Subject to the Federal Insecticide, Fungicide, and

Rodenticide Act and the Federal Food, Drug, and Cosmetic Act''

(proposed policy statement) was submitted in June 1994, to the U.S.

Congress and USDA. USDA provided written comments on these two drafts

on August 18, 1994. These comments are discussed below together with

EPA's response.

1. USDA suggests that the exemption EPA is proposing under FIFRA

for viral coat proteins should be extended to include all plant viral

proteins used in viral resistance strategies and the viral genetic

sequences that encode them (including antisense constructs).

EPA response: While EPA does not believe that, at this time, it can

exempt all viral components from regulation under FIFRA it has

requested comment on such an exemption. EPA is committed to minimizing

duplicative review and would develop a coordinated approach with USDA

for viral-based products other than viral coat proteins. As the

experience base grows for these products, the two agencies can develop

a regulatory course that is mutually acceptable. These procedures

could, for example, include expedited procedures for registration, the

development of performance-based criteria for exemptions, and specific

product exemptions.

2. USDA suggested that ambiguity exists in the use of the term

``user'' in the discussion on informational labeling for plant-

pesticides in the proposed policy statement.

EPA Response: EPA agrees that this discussion in the proposed

policy statement may be ambiguous and proposes to replace the term

``user'' with the term ``farmer and grower.''

3. USDA noted that EPA's exemption based on the premise that plant-

pesticides derived from sexually compatible plants would not result in

new environmental exposures does not take into account that similar or

equivalent genes can be found in plants that are not sexually

compatible.

EPA's Response: EPA recognizes that plant defense compounds found

in plants that are not sexually compatible, or in other organisms such

as microorganisms, can be structurally and functionally equivalent to

compounds found in the recipient plant or in a plant sexually

compatible with the recipient plant. The Agency is willing to consider

development of procedures and criteria for these plant-pesticides. A

discussion of these procedures and criteria can be found in the Request

for Comment unit, Unit VII., of this preamble.

4. Although not included in USDA's written comments, USDA

suggested, in a discussion at an August 18, 1994 meeting between USDA

and EPA representatives, some clarifications in the discussion on plant

regulators and plant hormones in the proposed policy statement. USDA

indicated that there was some ambiguity as to how EPA would regulate

plant hormones under FIFRA.

EPA Response: EPA agrees that the plant regulator discussion may

lead to some confusion as to how EPA would regulate plant hormones. EPA

has agreed to include a discussion in the section on plant regulators

in the proposed policy statement that would more fully describe the

status of these plant-pesticides in relation to the proposed exemption

of plant-pesticides derived from sexually compatible plants or under

the proposed exemption of plant-pesticides that ``. . .primarily affect

the plant. . .'' (see Unit IV.D.in the proposal published elsewhere in

today's issue of the Federal Register entitled ``Plant-pesticides

Subject to the Federal Insecticide, Fungicide, and Rodenticide Act;

Proposed Rule'').

VII. Request for Comment

The Agency requests comments on the proposed exemptions of plant-

pesticides under FIFRA.

A. Exemption of Plant-pesticides Derived from Closely Related Plants

1. Three options. EPA requests comment on whether the Agency has

appropriately identified in this proposed exemption (see Unit V.A. of

this preamble) those plant-pesticides that are not likely to result in

significantly different environmental exposures. EPA requests comment

on its three options, specifically as to whether the options

appropriately identify plant-pesticides that would not result in

significantly different exposures to nontarget organisms and whether

the language the Agency uses in the options clearly circumscribes the

appropriate groupings. EPA requests comments on which option is most

appropriate and why.

2. Criterion based on process. With regard to an exemption

criterion based on the process used to modify the plant, the Agency is

soliciting comment on the joint BSAC/SAP Subpanel advice and the

utility of an approach based on that advice (see Unit VI. of this

preamble). EPA also requests comment on whether the group of plant-

pesticides that would be regulated under this approach would be

equivalent to the group of plant-pesticides that would be regulated

under Options 1, 2, or 3.

3. Equivalent plant-pesticides. As described in Unit V.A.6. of this

preamble, EPA is considering the development of procedures and criteria

for how EPA can exempt a plant-pesticide if a producer can provide

evidence that the plant-pesticide is structurally and functionally

equivalent to a plant-pesticide found in a recipient plant or in a

plant sexually compatible with the recipient plant. To effect such

rulemaking, the Agency would need to meet statutory standards under

FIFRA. In the instance of plant-pesticides, EPA would need, for

example, to determine whether a plant-pesticide is indeed structurally

and functionally equivalent to a plant-pesticide that has been

exempted.

Under such a rulemaking effort, a producer would provide

information to the Agency showing that a plant-pesticide meets the

standard for exemption under FIFRA. The Agency would respond, within a

limited period of time, to the producer as to whether the plant-

pesticide meets that standard. The Agency envisions that producers

would have a fairly high degree of latitude in types of specific data

that could be used to demonstrate that a plant-pesticide meets the

standard for exemption.

The Agency is requesting comment on this framework for the

exemption rulemakings. In particular, the Agency is soliciting comment

and information on whether to incorporate specific data requirements/

methodologies into exemption criteria and on appropriate time-frames

for the Agency determinations.

The main challenge for EPA in engaging in such future rulemakings

will be to develop criteria that can be used to create a standard for

what constitutes equivalency. There are a number of different

approaches that EPA believes it could utilize. The following discussion

describes these approaches and some of the strengths and weaknesses of

these options. The Agency requests comment on these approaches and

solicits suggestions on additional factors that the Agency should weigh

in the development of criteria for equivalency.

In developing criteria for exempting a plant-pesticide from FIFRA,

the first consideration for EPA is what parameters, in general, are

good measurements for equivalency of function. The next consideration

for the Agency in the development of criteria for creating exemptions

is to examine these parameters in light of what is known concerning the

characteristics of plant defense mechanisms.

Turning first to the general parameters, some examples of the types

of parameters that the Agency could use in developing criteria for

proteinaceous substances are amino acid sequence homology,

posttranslational processing, structure, stability, receptor/ligand

specificity, and substrate specificity. For nonproteinaceous

substances, equivalence in chemical composition and structure are

additional examples of parameters that could be used as the basis for

developing criteria.

Any measures of equivalence that the Agency chooses to adopt should

be applicable to particular plant-pesticides that may operate by a

variety of mechanisms. The Agency requests comment on how evidence of

structurally homology for proteinaceous defense compounds could be used

in the future as reliable predictors of functional homology. Would it

be more appropriate to develop an approach that does not rely soley on

percent amino acid sequence homology but also incorporates the

identification of conserved and variable amino acid sequences? For

example, it is postulated that some disease resistance genes encode

transmembrane receptors. Might sequences such as those involved in

transmembrane interactions then be identified to provide additional

assessment of equivalent function?

A number of enzymes such as glucanase, chitinase, and proteinase

inhibitors are also thought to be involved in plant defense responses.

The question then arises as to whether a chitinase from, for example,

tobacco or a microorganism is equivalent to a chitinase found in a

plant sexually compatible with the recipient plant. As in the previous

example, amino acid sequence homology could also assist in establishing

equivalency for these enzymes. However, as with the previous example,

the question of how much homology is sufficient remains. Would a better

measurement be to use stability, substrate specificity, Km, and

Vmax? Should these parameters be used in conjunction with

homology?

Nonproteinaceous compounds such as phenolics and phytoalexins are

another class of plant defense compounds. For nonproteinaceous

compounds structure/activity comparisons can be used to determine

functional equivalence. For example, the presence of specific side

chains could be used to establish equivalence. Other parameters such as

stability could also be used. The question for the Agency is what

amount/combinations of information would be necessary to use as a

measure of equivalence..

B. Exemption of Plant-pesticides that Act Primarily by Affecting the

Plant

With regard to its exemption from FIFRA requirements of ``plant-

pesticides that act primarily by affecting the plant,'' EPA requests

comment on whether this exemption appropriately focuses the Agency's

regulatory attention on the plant-pesticides likely to present higher

levels of hazard. The Agency also requests comment on whether the

language defining this exemption is sufficiently clear and inclusive to

identify plant-pesticides that act through nontoxic modes of action.

The Agency is considering whether to extend this exemption to

include substances such as plant hormones because they primarily affect

the plant and do not have a directly toxic mechanism of action toward

the target pest. The Agency is requesting comment as to whether it

would be more appropriate to specifically exempt plant hormones as a

category or to include in this exemption a performance-based criterion

based on a description of the characteristics and/or mechanism of

action of hormones (see Unit V.B. of this preamble).

C. Exemption of Coat Proteins from Plant Viruses

EPA is also proposing to exempt from FIFRA regulation, coat

proteins from plant viruses when the coat proteins are produced in

plants. EPA has proposed two options for this exemption with Option 1

presented in the proposed regulatory text. EPA is requesting comment on

the appropriateness and clarity of the two options presented in this

proposal. EPA is also requesting comment on: (1) The potential for the

recipient crop plant producing the viral coat protein to become a weed;

(2) the potential for increased competitive advantage of wild relatives

in their native habitat after cross hybridization with a crop plant

producing a viral coat protein; and (3) the potential for a viral coat

protein gene to recombine with infecting viruses to extend host range

or create new virus diseases.

EPA is considering whether to propose in the future, an exemption

of viral components, other than viral coat proteins, used in viral

resistance strategies in plants. This exemption would include

performance-based criteria that would be used by EPA to determine if a

viral component would be exempt from regulation. EPA is requesting

comment on whether such an exemption would be appropriate and is

requesting comment on criteria that could be used to construct this

exemption.

D. Substantiation of Claims for Confidential Information

EPA requests comment on the proposed requirement (Sec. 174.9 of the

regulatory text) that any claim of confidentiality must be

substantiated at the time the claim is made. Specifically, EPA seeks

comment on how to achieve the best balance between the burden on

industry to provide substantiation before public disclosure becomes an

active issue (e.g., in preparation for FIFRA Science Advisory Panel

meetings) and the regulated community's desire to receive timely

responses on submissions. This balance must take into consideration the

needs of pesticide developers to protect information they believe to be

critical to maintaining their competitiveness and the public's need for

access to information related to potential environmental or human

health effects early enough in the review process to provide informed

comment before EPA makes a decision. EPA encourages the development of

reduced risk pesticides and believes that, given the Agency's

procedural requirements for CBI determinations, without up front

substantiation, timely responses to subsmissions would be difficult

when it becomes necessary to resolve the issue of CBI before a decision

can be made.

VIII. Economic Analysis

The regulatory impact analysis (RIA) evaluates the costs and

benefits of amending EPA's regulations to allow for the regulation or

exemption of specific types of plant-pesticides under FIFRA (40 CFR

152.20 and 40 CFR part 174) and is intended to meet the requirements

for a RIA as established by Executive Order No. 12866, the Regulatory

Flexibility Act, and section 25 of FIFRA.

The RIA presents the alternative regulatory options and the costs

that were considered by the Agency including two options that were

considered by the Agency but not included in this proposal. Four

possible approaches to the regulation of plant-pesticides under FIFRA

were evaluated in the RIA that allowed for varying degrees of

regulatory coverage. RIA Option 1 is the most limited alternative in

regulatory scope. RIA Option 2 represents EPA's proposed, and

preferred, regulatory scope and is broader in coverage than RIA Option

1. In addition to those plant-pesticides regulated under RIA Option 2,

RIA Option 3's scope would include viral coat proteins used as plant-

pesticides. Finally, under RIA Option 4, all plant-pesticides,

including those that result from traditional plant breeding, would be

subject to the requirements of FIFRA. The costs of implementing the

four options presented in Unit IV.A. of this preamble are comparable to

each other and correspond to RIA Option 2. The costs for any of the

four options presented in Unit IV.A. are substantially lower than RIA

Option 4.

Generally, costs will depend on whether the Agency exempts a plant-

pesticide or whether it requires a registration. The costs of

regulating plant-pesticides are dependent upon the data needed for the

registration of the particular types of plant-pesticides. Data needs

are irrelevant for exempted plant-pesticides. For regulated plant-

pesticides, data needs will vary according to the gene product of the

plant-pesticide and the recipient crop.

Aggregate incremental compliance costs to the industry over a 10-

year period under regulatory (RIA) Option 1 are estimated to range from

$53,700 in the first year of implementation to $2.6 million in the 10th

year of implementation, with an average annual revenue requirement

(ARR) of $1.2 million. Under EPA's proposed scope (RIA Option 2),

aggregate incremental compliance costs are predicted to range from

$53,700 in year 1 to $3.1 million in year 10, with an ARR of $1.6

million. Aggregate incremental compliance costs for RIA Option 3 are

estimated at nearly $741,100 in the first year of implementation and

$5.1 million in the 10th year, with an ARR of $2.9 million. Finally,

under RIA Option 4's broad regulatory scope, aggregate incremental

compliance costs are projected to range from $76.6 million in year 1 to

$81 million in year 10, with an ARR of $79 million.

Costs were also estimated for the labor burden that would result

from EPA staff preforming various activities associated with the

registration of plant-pesticides. Some of these activities may include

the establishment of the docket, internal reviews, requests for

additional information, and consultations with applicants. The cost for

the Agency to perform these activities under RIA Option 1 is estimated

to range from nearly $40,000 in year 1 to approximately $259,000 in

year 10. Under EPA's proposed regulatory scope, RIA Option 2, annual

labor burden costs range from approximately $40,000 in the first year

to $391,000 10 years after a final rule is promulgated. For RIA Option

3, EPA costs are estimated to range between $123,000 in year 1 to

$640,000 in year 10. Under the broad regulatory scope of RIA Option 4,

EPA's labor costs are predicted to range between $14.7 million in year

1 to $15.2 million in year 10. Labor burden cost estimates vary by

year, due to the number and type of plant-pesticide submissions the

Agency is predicted to receive.

The aggregate cost to society of the proposed plant-pesticide

regulation is the sum of the total costs to industry, plus the total

costs to the Agency to implement the proposed rule. After calculating

aggregate societal costs, they were discounted to allow for the time

value of money and to determine a constant level annual cost. The

annual societal revenue requirement over the 10-year period of analysis

was estimated at nearly $1.4 million under RIA Option 1, $1.8 million

under RIA Option 2, $3.3 million under RIA Option 3, and $93.7 million

under RIA Option 4.

Primarily affected by this proposed regulation will be those

companies involved with agricultural biotechnology that have been

identified as presently developing and testing plant-pesticides. While

agricultural biotechnology is currently in its infancy with 1993 sales

estimated at less than 2 percent of total biotechnology sales, future

sales are forecasted to grow at an average annual rate of 33 percent to

the year 2003. Firms developing biotechnology products are quite

diverse and include large, multinational corporations, biotechnology

companies (both large and very small), chemical companies, and seed

companies. The impacts of EPA regulation of plant-pesticides to this

growing market sector will not be all negative. Companies involved with

agricultural biotechnology have asked for plant-pesticide regulations

and they stand to benefit tremendously from this proposed regulation.

The proposed rule will generate a wide range of benefits for the

public, the firms involved with agricultural biotechnology, the

environment, nontarget organisms, and states. Registrants of plant-

pesticides should benefit from the resolution of uncertainty regarding

regulatory issues. With the promulgation of the proposed regulation,

firms developing and testing plant-pesticides can plan ahead for timely

product development and commercialization which should, in turn,

attract investors to the agricultural biotechnology sector. The

environment will benefit from safety measures that will protect against

unintended environmental effects of accidental and deliberate releases

of genetically engineered organisms. Nontarget organisms, including

endangered species, will benefit from a registration process that will

carefully consider the potential effects that certain plant-pesticides

may have upon them. Finally, states will benefit by having a set of

standardized Federal regulations that will be more easily conveyed,

interpreted, and enforced. Many states may also benefit by not having

to establish their own set of agricultural biotechnology regulations.

Adverse economic impacts from the implementation of the proposed

plant-pesticide regulation are not expected under EPA's proposed scope

(RIA Option 2). Due to the lack of detailed financial information on

those firms that are currently developing and testing plant-pesticides,

the conclusion of ``no adverse economic impacts'' was based on public

and proprietary information provided to EPA by industry financial

advisory groups, biotechnology associations, university biotechnology

specialists, and small biotechnology firms.

IX. Public Record

EPA has established a public record for this rulemaking (docket

control number OPP-300369). The record includes all information

considered by EPA in developing this proposed rule. The record now

includes the following items:

1. Reports of all SAP and BSAC meeting pertaining to this proposed

rule.

2. Support documents and reports, including:

(a) EPA issue paper. FIFRA: Benefit and environmental risk

considerations for inherent plant-pesticides.

(b) EPA issue paper. Issues associated with the regulation of viral

coat proteins under FIFRA and FFDCA.

3. Published literature that is cited in this document.

4. The Regulatory Impact Analysis for this rule.

5. Records of communications between EPA personnel and persons

outside EPA pertaining to the development of this proposed rule. (This

does not include any inter- or intra-agency memoranda, unless

specifically noted in the Index of this docket.)

X. References

(1) EPA issue paper. FIFRA: Benefit and environmental risk

considerations for inherent plant-pesticides.

(2) EPA issue paper. Issues associated with the regulation of viral

coat proteins under FIFRA and FFDCA.

(3) Klaasen, C.D., M.O. Amdur, and J.D. Doull. 1986. Casarett and

Doull's Toxicology: The Basic Science of Poisons. Chapter 2. Third

Edition. Macmillan Publishing Company, New York.

(4) Lamb, C.J., J.A. Ryals, E.R. Ward, and R.A. Dixon. 1992.

Emerging strategies for enhancing crop resistance to microbial

pathogens. Bio/Technology. 10:1436-1445.

(5) Matthews, R.E.F. 1981. Plant Virology. Chap. 17. Second

edition, Academic Press, New York.

(6) Tolin, S.A. 1991. Persistence, establishment, and mitigation of

phytopathogenic viruses. In: Risk Assessment in Genetic Engineering.

Edited by M.A. Levin and H.S. Strauss. McGraw Hill, Inc., New York. pp.

140-161.

XI. Regulatory Assessment Requirements

A. Executive Order 12866

Under Executive Order 12866 (58 FR 51735, October 4, 1993), the

Agency must determine whether the proposed regulatory action is

``significant'' and therefore subject to review by the Office of

Management and Budget (OMB) and the requirements of the Executive

Order. Under section 3(f), the Order defines a ``significant regulatory

action'' as an action that is likely to result in a rule (1) Having an

annual effect on the economy of $100 million or more, or adversely and

materially affecting a sector of the economy, productivity,

competition, jobs, the environment, public health or safety, or State,

local, or tribal governments or communities (also referred to as

``economically significant''); (2) creating serious inconsistency or

otherwise interfering with an action taken or planned by another

agency; (3) materially altering the budgetary impacts of entitlement,

grants, user fees, or loan programs or the rights and obligations of

recipients thereof; or (4) raising novel legal or policy issues arising

out of legal mandates, the President's priorities, or the principles

set forth in this Executive Order.

Pursuant to the terms of this Executive Order, EPA has determined

that this proposed rule is a ``significant regulatory action'' because

it raises novel policy issues arising out of FIFRA legal mandates.

Thus, this proposal will be submitted to OMB for review, and any

comments or changes made in response to OMB suggestions or

recommendations, are documented in the public record.

B. Regulatory Flexibility Act

This proposed rule was reviewed under the provisions of section

3(a) Regulatory Flexibility Act (RFA) [5 U.S.C. 605(b)]. The RFA

requires that agencies take special note of the impact of proposed

regulations on small entities. Analysis requirements under the RFA can

and should be combined with the analysis required under Executive Order

12866.

The regulatory flexibility analysis of this proposed regulation for

plant-pesticides on small entities is demonstrated within the

structuring of the four regulatory options proposed. These options were

considered after extensive evaluations of the benefit/risk tradeoffs

between option cost and risk reduction provided. The Agency has

structured the resulting options from a narrow regulatory scope (RIA

Option 1) to a broad regulatory scope (RIA Option 4) and, as such, has

conducted an ``inherent'' sensitivity analysis for small firms likely

to be affected by this proposed regulation. The Agency has determined

that the tradeoffs between the benefits and risks of the proposed

regulation are optimized under RIA Option 2, EPA's proposed scope.

C. Paperwork Reduction Act Paperwork Reduction Act

The information collection requirements in this proposed rule have

been submitted for approval to the Office of Management and Budget

(OMB) under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. An

Information Collection Request document has been prepared by EPA (ICR

No. 1693.01) and a copy may be obtained from Sandy Farmer, Information

Policy Branch, (Mail Code 2136), Environmental Protection Agency, 401 M

St., SW., Washington, DC 20460, or by calling (202) 260-2740.

This collection of information has an estimated reporting burden

averaging 1,143 hours per response and an estimated annual

recordkeeping burden averaging 74 hours per respondent. These estimates

include time for reviewing instructions, searching existing data

sources, gathering and maintaining the data needed, and completing and

reviewing the collection of information.

Send comments regarding the burden estimate or any other aspect of

this collection of information, including suggestions for reducing this

burden to Chief, Information Policy Branch, (Mail Code 2136),

Environmental Protection Agency, 401 M St., SW., Washington, DC 20460;

and to the Office of Information and Regulatory Affairs, Office of

Management and Budget, Washington, DC 20503, marked ``Attention: Desk

Officer for EPA.'' The final rule will respond to any OMB or public

comments on the information collection requirements contained in this

proposal.

List of Subjects in Parts 152 and 174

Environmental protection, Biotechnology pesticides, Pesticides and

pests, Plants, Plant-pesticides, Reporting and recordkeeping

requirements.

Dated: November 15, 1994.

Carol M. Browner,

Administrator.

Therefore, it is proposed that 40 CFR Chapter I be amended as

follows:

PART 152--[AMENDED]

1. In part 152:

a. The authority citation for part 152 would continue to read as

follows:

Authority: 7 U.S.C. 136-136y; subpart U is also issued under 31

U.S.C. 9701.

b. In Sec. 152.1, by designating existing text as introductory text

and adding paragraphs (a) and (b) to read as follows:

Sec. 152.1 Scope.

* * * * *

(a) For procedures, requirements and criteria applicable to plant-

pesticides, refer to part 174 of this chapter.

(b) [Reserved]

c. In Sec. 152.3, by removing all alphabetic paragraph designations

and alphabetically inserting the following definitions to read as

follows:

Sec. 152.3 Definitions.

* * * * *

Genetic material necessary for the production means:

(1) Genetic material that encodes for a pesticidal substance or

leads to the production of a pesticidal substance.

(2) Regulatory regions.

It does not include noncoding, nonexpressed nucleotide sequences.

* * * * *

Living plant means a plant that is alive, including periods of

dormancy, and all viable plant parts/organs involved in the plant's

life cycle.

* * * * *

Noncoding, nonexpressed nucleotide sequences means the nucleotide

sequences are not transcribed and are not involved in gene expression.

Examples of noncoding, nonexpressed nucleotide sequences include

linkers, adapters, homopolymers, and sequences of restriction enzyme

recognition sites.

* * * * *

Plant-pesticide means a pesticidal substance that is produced in a

living plant and the genetic material necessary for the production of

the substance, where the substance is intended for use in the living

plant.

Regulatory region means genetic material that controls the

expression of the genetic material that encodes for a pesticidal

substance or leads to the production of a pesticidal substance.

Examples of regulatory regions include promoters, enhancers, and

terminators.

* * * * *

d. In Sec. 152.20, by revising paragraph (a)(1) and adding

paragraph (a)(4) to read as follows:

Sec. 152.20 Exemptions for pesticides regulated by another Federal

agency.

* * * * *

(a) * * *

(1) Except as provided by paragraphs (a)(3) and (a)(4) of this

section, all biological control agents are exempt from FIFRA

requirements.

* * * * *

(4) All plants intended for use as biological control agents and

any portion thereof, except plant-pesticides, are exempt from the

requirements of FIFRA. Plant-pesticides are addressed in part 174,

subpart A, of this chapter.

* * * * *

2. By adding part 174 to read as follows:

PART 174--PROCEDURES AND REQUIREMENTS FOR PLANT-PESTICIDES

Subpart A--General Provisions

Sec.

174.1 Scope and purpose.

174.3 Definitions.

174.5 Scope of coverage.

174.7 Submission of information regarding potential unreasonable

adverse effects.

174.9 Confidential business information claims for plant-

pesticide submissions.

Subpart B--[Reserved]

Authority: 7 U.S.C. 136-136y and 21 U.S.C. 346a and 371.

Subpart A--General Provisions

Sec. 174.1 Scope and purpose.

Pesticidal substances produced in plants are pesticides as defined

in FIFRA section 2. The characteristics of these pesticides such as

their production and use in plants, their biological properties, and

their ability to spread and increase in quantity in the environment

distinguishes them from traditional, chemical pesticides. Therefore,

plant-pesticides are subject to different regulatory requirements and

procedures than traditional, chemical pesticides. This part 174 sets

forth regulatory requirements, criteria, and procedures applicable to

plant-pesticides under FIFRA and FFDCA. Unless otherwise provided by

this part, the regulations in parts 152 through 173 and parts 177

through 186 of this chapter, where applicable, apply to plant-

pesticides. EPA recognizes the unique nature of plant-pesticides

necessitates flexibility in the application of regulations designed for

traditional pesticides to plant-pesticides.

Sec. 174.3 Definitions.

Terms used in this part have the same meaning as in FIFRA. In

addition, the following terms have the meaning set forth in this

section.

Active ingredient, when referring to plant-pesticides only, means a

pesticidal substance that is produced in a living plant and the genetic

material necessary for the production of the substance, where the

substance is intended for use in the living plant.

Administrator means the Administrator of the United States

Environmental Protection Agency or his/her delegate.

Biological control agent means any living organism applied to or

introduced into the environment that is intended to function as a

pesticide against another organism declared to be a pest by the

Administrator.

Bridging crosses between plants means the utilization of an

intermediate plant in a cross to produce a viable zygote between the

intermediate plant and a first plant, in order to cross the plant

resulting from that zygote with a third plant that would not otherwise

be able to produce viable zygotes from the fusion of its gametes with

those of the first plant. The result of the bridging cross is the

mixing of genetic material of the first and third plant through the

formation of an intermediate zygote.

EPA means the United States Environmental Protection Agency unless

otherwise specified.

FFDCA means the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321

et seq.)

FIFRA means the Federal Insecticide, Fungicide, and Rodenticide

Act, as amended (7 U.S.C. 136-136y).

Genetic material necessary for the production means:

(1) Genetic material that encodes for a pesticidal substance or

leads to the production of a pesticidal substance.

(2) Regulatory regions.

It does not include noncoding, nonexpressed nucleotide sequences.

Genetic material that encodes for a pesticidal substance or leads

to the production of a pesticidal substance does not include regulatory

regions or noncoding, nonexpressed nucleotide sequences.

Inert ingredient, when referring to plant-pesticides only, means

any substance, such as a selectable marker, other than the active

ingredient, and the genetic material necessary for the production of

the substance, that is intentionally introduced into a living plant

along with the active ingredient, where the substance is used to

confirm or ensure the presence of the active ingredient.

Living plant means a plant that is alive, including periods of

dormancy, and all viable plant parts/organs involved in the plant's

life cycle.

Noncoding, nonexpressed nucleotide sequences means the nucleotide

sequences are not transcribed and are not involved in gene expression.

Examples of noncoding, nonexpressed nucleotide sequences include

linkers, adapters, homopolymers, and sequences of restriction enzyme

recognition sites.

Pesticide means any substance or mixture of substances intended for

preventing, destroying, repelling, or mitigating any pest, or intended

for use as a plant regulator, defoliant, or desiccant, other than any

article that:

(1) Is a new animal drug under FFDCA section 201 (w); or

(2) Is an animal drug that has been determined by regulation of the

Secretary of Health and Human Services not to be a new animal drug; or

(3) Is an animal feed under FFDCA section 201(x) that bears or

contains any substances described by Sec. 152.3(s)(1) or (2) of this

chapter.

Plant-pesticide means a pesticidal substance that is produced in a

living plant and the genetic material necessary for the production of

the substance, where the substance is intended for use in the living

plant.

Recipient plant means the plant into which the plant-pesticide is

introduced and in which the plant-pesticide is produced.

Regulatory region means genetic material that controls the

expression of the genetic material that encodes for a pesticidal

substance or leads to the production of a pesticidal substance.

Examples of regulatory regions include promoters, enhancers, and

terminators.

Sexually compatible, when referring to plants, means capable of

forming a viable zygote through the fusion of two gametes, including

the use of bridging crosses or wide crosses between plants.

Source means the donor of the genetic material that encodes for a

pesticidal substance or leads to the production of a pesticidal

substance.

Wide crosses between plants means to facilitate the formation of

viable zygotes through the use of surgical alteration of the plant

pistil, bud pollination, mentor pollen, immunosuppressants, in vitro

fertilization, pre- and post-pollination hormone treatments,

manipulation of chromosome numbers, embryo culture, or ovary and ovule

cultures or any other technique that the Administrator determines meets

this definition.

Sec. 174.5 Scope of coverage.

(a) Plant-pesticides not exempt from the requirements of FIFRA

under paragraph (b) of this section are subject to the requirements of

FIFRA.

(b) All plant-pesticides (both the pesticidal substance and the

genetic material necessary for its production) meeting at least one of

the following criteria are exempt from the requirements of FIFRA:

(1) The genetic material that encodes for a pesticidal substance or

leads to the production of a pesticidal substance is derived from

plants that are sexually compatible with the recipient plant and has

never been derived from a source that is not sexually compatible with

the recipient plant.

(2) The pesticidal substance acts primarily by affecting the plant

so that the target pest is inhibited from attaching to the plant,

penetrating the plant, or invading the plant's tissue in at least one

of the following ways:

(i) The pesticidal substance acts as a structural barrier to

attachment of the pest to the host plant, a structural barrier to

penetration of the pest into the host plant, or a structural barrier to

spread of the pest in the host plant, for example, through the

production of wax or lignin, or length of trichomes (plant hairs).

(ii) The pesticidal substance acts in the host plant to inactivate

or resist toxins or other disease-causing substances produced by the

target pest.

(iii) The pesticidal substance acts by creating a deficiency of a

plant nutrient or chemical component essential for pest growth on/in

the host plant.

(3) The pesticidal substance is a coat protein from a plant virus.

Sec. 174.7 Submission of information regarding potential unreasonable

adverse effects.

Any person who sells or distributes any plant-pesticide exempt

under Sec. 174.5 who obtains any information regarding potential

unreasonable adverse effects on human health or the environment must

within 30 days of receipt of such information submit the information to

EPA, unless the person has actual knowledge that EPA has been

adequately informed of such information.

Sec. 174.9 Confidential business information claims for plant-

pesticide submissions.

Although it is strongly recommended that the submitter minimize the

amount of data and other information claimed as CBI, a submitter may

assert a claim of confidentiality for all or part of the information

submitted to EPA in a submission for a plant-pesticide. (See part 2,

subpart B, of this chapter.) To assert such a claim, the submitter must

comply with the following procedures:

(a) Any claim of confidentiality must accompany the information at

the time the information is submitted to EPA. Failure to assert a claim

at that time will be considered a waiver of confidentiality for the

information submitted, and the information may be made available to the

public, subject to section 10(g) of FIFRA, with no further notice to

the submitter.

(b) Any claim of confidentiality must be accompanied, at the time

the claim is made, by comments substantiating the claim and explaining

why the submitter believes that the information should not be

disclosed. The submitter should refer to Sec. 2.205(e)(4) of this

chapter for points to address in the substantiation. If such comments

are marked confidential when submitted to EPA, they will be treated as

such in accordance with Sec. 2.205(c) of this chapter. EPA will

consider incomplete all plant-pesticide submissions containing

information claimed as CBI that are not accompanied by substantiation,

and will suspend the review period of such submissions until the

required substantiation is provided.

Subpart B--[Reserved]

[FR Doc. 94-28822 Filed 11-22-94; 8:45 am]

BILLING CODE 6560-50-F