Pesticides; Tolerance Processing Fees

SUMMARY: The Food Quality Protection Act of 1996, by providing

increased protection from the risks of pesticides especially to infants

and children, has changed the number of regulatory actions that now

fall under the heading of ``tolerance processing'' along with the

responsibilities associated with reviewing tolerance petitions and

other tolerance actions. In addition, over the last 15 years, factors

such as expanded data requirements, changes in risk assessment methods,

improvements in data base management and tracking systems, and the

increasing complexity of scientific review of petitions have resulted

in costs substantially exceeding the fees currently charged. Today, the

difference between costs for processing tolerance actions and fees

collected is substantial. This proposal, when promulgated, will make

the tolerance processing system self-supporting. It would revise the

fees charged for processing tolerance actions for pesticides under the

Federal Food, Drug, and Cosmetic Act. The statute requires EPA to

collect fees that will, in the aggregate, be sufficient to cover the

costs of evaluating tolerances for pesticide products. Once in place,

the financial burden to process tolerance actions would be borne

primarily by those constituencies who directly benefit, rather than by

the taxpayer.

DATES: Written comments, identified by the docket control number [OPP-

30115], must be received on or before September 7, 1999.

ADDRESSES: Comments must be submitted by regular mail, electronically

or in person. Please follow the detailed instructions for each method

as provided in Unit I of the SUPPLEMENTARY INFORMATION section of this

document.

FOR FURTHER INFORMATION CONTACT: Carol Peterson, Office of Pesticide

Programs (7506C), U.S. Environmental Protection Agency, 401 M St., SW.,

Washington, DC 20460; telephone: (703) 305-6598; e-mail:

[email protected].

SUPPLEMENTARY INFORMATION:

I. General Information

A. Does this Notice Apply to Me?

This proposed rule may directly affect any person who might

petition the Agency for new tolerances, hold a pesticide registration

with existing tolerances, or anyone who is interested in obtaining or

retaining a tolerance in the absence of a registration. This group can

include pesticide manufacturers or formulators, companies that

manufacture inert ingredients, importers of food, grower groups, or any

person who seeks a tolerance. Federal, State, local, territorial, or

tribal government agencies that petition for, or hold, emergency

exemption tolerances are exempt from this rule. The vast majority of

potentially affected categories and entities may include, but are not

limited to:

------------------------------------------------------------------------

Examples of

Category NAICS SIC Potentially

Affected Entities

------------------------------------------------------------------------

Chemical Industry................ 325320 0286 Pesticide chemical

manufacturers,

formulators

............................... 115112 0287 Chemical

manufacturers of

inert ingredients

------------------------------------------------------------------------

This listing is not intended to be exhaustive, but rather provides

a guide for readers regarding entities likely to be regulated by this

action. Other types of entities not listed above could also be

regulated. If available, the four-digit Standard Industrial

Classification (SIC) codes or the six-digit North American Industrial

Classification System (NAICS) codes have been provided to assist you

and others in determining whether or not this notice applies to certain

entities. To determine whether you or your business is regulated by

this action, you should carefully examine the applicability provisions

in the rule (see Unit V of this preamble). If you have any questions

regarding the applicability of this action to a particular entity,

consult the person listed in the ``FOR FURTHER INFORMATION CONTACT''

section.

B. How Can I Get Additional Information or Copies of this Document or

Other Documents?

1. Electronically. You may obtain electronic copies of this

document and various support documents from the EPA internet Home Page

at http://www.epa.gov/. On the Home Page select ``Laws and

Regulations'' and then look up the entry for this document under the

``Federal Register - Environmental Documents.'' You can also go

directly to the ``Federal Register'' listings at http://www.epa.gov/

homepage/fedrgstr/.

2. Fax on demand. You may request to receive a faxed copy of this

document, as well as some supporting information, if available, by

using a faxphone to call (202) 401-0527 and selecting item 6037, the

economic analysis and item 6038 ICR form 1915.01. You may also follow

the automated menu.

3. In person. If you have any questions or need additional

information about this action, you may contact the technical person

identified in the ``FOR FURTHER INFORMATION CONTACT'' section. In

addition, the official record for this notice, including the public

version, has been established under docket control number OPP-30115

(including comments and data submitted electronically as described

below). A public version of this record, including printed, paper

versions of any electronic comments, which does not include any

information claimed as CBI, is available for inspection in Rm. 119,

Crystal Mall #2, 1921 Jefferson Davis Highway, Arlington, VA, from 8:30

a.m. to 4 p.m., Monday through Friday, excluding legal holidays. The

Public Information and Records Integrity Branch telephone number is

703-305-5805.

C. How and to Whom Do I Submit Comments

You may submit comments through the mail, in person, or

electronically. Be sure to identify the appropriate docket number

(i.e., ``OPP-30115'') in your correspondence.

1. By mail. Submit written comments to: Public Information and

Records Integrity Branch, Information Resources and Services Division

(7502C), Office of Pesticide Programs, Environmental Protection Agency,

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

2. In person or by courier. Deliver written comments to: Public

Information and Records Integrity Branch, Information Resources and

Services Division (7502C), Office of Pesticide Programs, Environmental

Protection Agency, Rm. 119, Crystal Mall #2, 1921 Jefferson Davis

Highway, Arlington, VA.

3. Electronically. Submit your comments and/or data electronically

by e-mail to: [email protected]. Do not submit any information

electronically that you consider to be Confidential Business

Information (CBI). Submit electronic comments as an ASCII file,

avoiding the use of special characters and any form of encryption.

Comment and data will also be accepted

[[Page 31041]]

on standard computer disks in WordPerfect 5.1/6.1 or ASCII file format.

All comments and data in electronic form must be identified by the

docket control number [OPP-30115]. Electronic comments on this notice

may also be filed online at many Federal Depository Libraries.

D. How Should I Handle CBI Information That I Want to Submit to the

Agency?

You may claim information that you submit in response to this

document as CBI by marking any part or all of that information as CBI.

Information so marked will not be disclosed except in accordance with

procedures set forth in 40 CFR part 2. A copy of the comment that does

not contain CBI must be submitted for inclusion in the public record.

Information not marked confidential will be included in the public

docket by EPA without prior notice. If you have any questions about CBI

or the procedures for claiming CBI, please consult with the technical

person identified in the ``FOR FURTHER INFORMATION CONTACT'' section.

E. What Should I Consider as I Prepare My Comments for EPA?

We invite you to provide your views on the various options we

propose, new approaches we haven't considered, the potential impacts of

the various options (including possible unintended consequences), and

any data or information that you would like the Agency to consider

during the development of the final action. You may find the following

suggestions helpful for preparing your comments:

Explain your views as clearly as possible.

Describe any assumptions that you used.

Provide solid technical information and/or data to support

your views.

If you estimate potential burden or costs, explain how you

arrived at the estimate.

Tell us what you support, as well as what you disagree

with.

Provide specific examples to illustrate your concerns.

Offer alternative ways to improve the rule or collection

activity.

Make sure to submit your comments by the deadline in this

notice.

At the beginning of your comments (e.g., as part of the

``Subject'' heading), be sure to properly identify the document you are

commenting on. You can do this by providing the docket number assigned

to the notice, along with the name, date, and Federal Register

citation.

II. Authority

Prior to being amended by the Food Quality Protection Act (FQPA),

the Federal Food, Drug, and Cosmetic Act (FFDCA) (21 U.S.C. 321 et

seq.) required EPA to collect fees to support the processing of

petitions for tolerances (maximum allowable pesticide residue level) on

raw agricultural commodities. FFDCA required EPA to collect such fees

that will, in the aggregate, be sufficient to cover the costs of

processing petitions, so that the tolerance program is as self-

supporting as possible. FFDCA section 408(m)(1), as amended by FQPA,

states that the Agency shall collect tolerance fees that, in the

aggregate, will cover all costs associated with processing tolerance

actions, including filing a tolerance petition and establishing,

modifying, leaving in effect, or revoking a tolerance or tolerance

exemption. These FQPA provisions also added to the types of regulatory

actions that now fall under the heading of tolerance activities along

with the responsibilities associated with reviewing tolerance petitions

and other tolerance actions. EPA maintains the authority under section

408(m)(1)(D) to waive or refund part or all of the required fee when,

in its judgement, the waiver or refund is equitable and not contrary to

the purposes of the fee requirement.

III. Background

A. Regulatory History

Regulations governing the Agency's fee schedule were revised in

1972 and again in 1986 (40 CFR 180.33). In 1986, EPA used data from a

1983 Tolerance Cost Analysis to set tolerance petition fees ``based on

the actual cost of providing services.'' The 1986 Federal Register

Notice also stated fees were set at ``a level to recover through fees

all costs of tolerance setting activity, less specifically waived or

excluded activities.''

Cost data for each type of tolerance action were developed using

employee time accounting information, along with data on the number of

completed actions for tolerance petitions, the frequency of actions,

and processing costs by fee categories. Fiscal year (FY) 1982 was the

base year used to gather data for direct costs and completions by fee

category. Using the figure of $38,900 as the average salary and

expenses for a full-time EPA employee, per tolerance category, the

total annual cost of the tolerance program (in FY82) per tolerance type

was calculated.

Over the years, tolerance fees have been increased only to reflect

annual increases in Federal salaries. For instance, in 1986, the fee

for a petition to establish a new tolerance, or to increase the level

of an established tolerance was set at $44,100, and the fee for a

petition for an exemption from the requirement of a tolerance was set

at $8,100. As a result of these annual incremental payroll increases,

the 1998 fees for these actions are $65,600 and $12,100, respectively.

B. Revenues

In fiscal years 1986 through 1996, tolerance fee collections ranged

from $1.1 to $2.5 million and averaged $1.8 million annually. During

fiscal years 1994-1996, EPA waived and/or refunded fees that amounted

to $329,000 annually: an average of $91,000 annually based on those

found to be in the public interest or on economic hardship plus an

average of $238,000 annually from petitions submitted by the U.S.

Department of Agriculture's Interregional Research Project No. 4 (IR-

4)1.

---------------------------------------------------------------------------

1U.S. Department of Agriculture's Interregional Research Project

No. 4 (IR-4) is a program that supports the registration of minor

crop use pesticides by performing crop field trial studies and

generating pesticide residue data.

---------------------------------------------------------------------------

In addition to tolerance fee revenues, other sources of revenue

contribute in part to tolerance activities. Product maintenance fees

are currently assessed on all registered products. These fees are used

to support the reregistration program. Of the total $16 million

collected annually, the Agency estimates that approximately $6.72

million in revenues goes to reassessing tolerances.

Registration fees were imposed in 1988 to cover most types of

registration actions. Later that same year, FIFRA was amended and these

fees were temporarily suspended. FQPA extended the suspension until

September 2001. However, as part of the FY 2000 budget, the

administration proposes to reinstate pesticide registration fees in FY

2000. An estimated 0.38 million to be collected from the registration

fee will support analyses that are needed for both general registration

program activities and for tolerance setting activities. Whether it

occurs in FY 2000 or in FY 2002, the costs for these analyses are not

included in this tolerance fee proposal.

IV. 1997 Cost Estimates

A. Factors

Since the 1983 cost analysis, factors such as expanded data

requirements, changes in risk assessment methods, improvements in data

base management and tracking systems, the increasing

[[Page 31042]]

complexity of scientific review, and the provisions of FQPA have

resulted in costs substantially exceeding the revenues from current

fees.

The new FFDCA section 408(m) states that EPA must collect fees

sufficient in the aggregate over a reasonable term to cover the costs

incurred in processing tolerance actions. However, under the new

legislation, more tolerance actions and more types of tolerance actions

are required. For example, because all tolerances now are set under

section 408, EPA has the authority to collect monies to cover the costs

incurred for processed food tolerances or tolerances for processed

foods for residues that occur following the treatment of a raw

agricultural commodity. In addition, because FQPA includes other

ingredients in its definition of a pesticide chemical, other tolerances

are subject to fees. Similarly, section 18 emergency exemptions now

require tolerances and also are subject to fees.

In addition, FQPA increases the Agency's responsibilities

associated with evaluating each tolerance petition. More analyses must

be performed prior to the establishment of a tolerance. EPA must now

consider aggregate risk, which includes drinking water and non-

occupational exposure, common mechanism of toxicity, and other factors

in its tolerance reviews. The Agency must also make a specific finding

that the tolerances are protective with respect to infants and

children. FQPA also requires that all existing tolerances (over 9,700)

be reassessed within 10 years.

All of these factors--more tolerances required, more extensive and

resource intensive evaluations, and comprehensive reassessments on a

short time frame--mean that the difference between costs for processing

tolerance actions and fees collected is substantial.

B. Cost Analysis

Using methods similar to those used in 1983, the Agency estimated

the average cost of processing tolerance actions today. It found that

from fiscal year prior to the enactment of FQPA, the unit cost (that

is, the cost to process one new chemical tolerance petition) was

$282,600. This cost rose to $376,900 per new chemical petition after

FQPA. These figures show that FQPA mandates increased tolerance

processing costs for a new chemical by 33 percent. In the first 21

months since FQPA, the Agency's total costs for processing petitioned

tolerances was estimated to be $7.7 million annually.

FQPA's mandate that EPA reassess all existing tolerances within a

10-year period also adds a substantial cost to the program--

approximately $20.1 million annually. Many tolerances are currently

being reassessed as part of the Agency's reregistration efforts on all

pesticide chemicals registered prior to 1984. For these chemicals, the

Agency estimates that additional analyses required by FQPA will cost

about $1.7 million annually for those chemicals for which a

reregistration eligibility decision has been made, and about $10.2

million annually for those pre-1984 chemicals for which a risk

assessment has not yet been completed. Some examples of new program

costs for which fees may be charged include the reassessment of

tolerances established after 1984 and all tolerances on other

chemicals. Annual costs for these two categories will amount to about

$2.0 million and $4.7 million, respectively.

The overall total for processing tolerance actions for registration

and reassessment activities is estimated to be $27.8 million annually.

Since $7.10 million will be collected through other fees, the total

annual additional amount that the Agency needs to recoup for all

tolerance activities is $20.7 million. Copies of the Agency's

``Tolerance Fee Economic Analysis'' and supplementary materials are

available in the public docket at the address given above in ADDRESSES.

C. Future Costs

EPA anticipates additional costs for processing tolerance actions

in the near future. The costs will be incurred upon the implementation

of FFDCA section 408(b)(2)(E) ``Data and Information Regarding

Anticipated and Actual Residue Levels,'' section 408(b)(2)(F) ``Percent

of Food Actually Treated,'' and section 408(f) ``Special Data

Requirements.'' Under these sections, whenever the Agency uses or has

used anticipated or actual residue levels from field monitoring, in the

evaluation of a new or existing tolerance, it must call-in additional

data within 5 years to ensure that the residue levels (and associated

risks) of those of the crops have not increased unacceptably. EPA is in

the process of developing workplans and estimating resource needs for

implementing these sections of the law in the hope of finalizing a

policy by the end of 1999. Rather than delay today's proposal, the

Agency hopes to issue an amendment to the Final Rule on Tolerance Fees

sometime in the later part of the year 2000 to include these costs in

the fee schedules.

Additional costs relating to tolerances also will stem from

analyses such as, special subpopulations susceptibilities, common

mechanisms of toxicity from similar substances, and endocrine effects

(FFDCA sections 408(b)(2)(C) ``Exposure of Infants and Children'' and

408(p) ``Estrogenic Substances Screening Program''). The current state

of scientific knowledge does not lend itself to the development and

implementation of standardized guidelines in these areas. Determining

and quantifying appropriate endpoints and incorporating these endpoints

into risk assessments is still very much under debate. EPA is currently

working with the scientific community to determine the proper course of

action and establish appropriate protocols. Once policies are made in

these areas and guidelines are established, the resources required to

review the data and perform the analyses will be estimated and the

tolerance fee schedule will be amended to include the additional costs.

V. New Tolerance Fee System

The goal of designing and updating a new tolerance fee system is to

develop a truly self-supporting tolerance program, as required by

Congress. The criteria that were used in considering various approaches

was a system that would be reasonable, uncomplicated, fair and

equitable. Moreover, the new fee system must be fully accountable. EPA

is committed to subject whatever approach is finally adopted to an

annual independent audit. This will ensure the resulting tolerance fee

system is adequately covering our needs and, at the same time, not

overcharging those required to pay.

A. Possible Approaches

Once the total costs of the tolerance programs were determined, the

question that remained was how to devise a system to recoup the money--

not only who should pay, but what basis should be used to determine the

fee amounts. Various approaches were considered. Each was based on a

specific parameter, or factor, that would promote the Agency's goal of

reducing the risks associated with pesticides.

For example, tolerance fees could be based on a sliding scale.

Differential fees could be risk-based or set according to the toxicity

of a chemical. The more toxic a chemical, the higher the tolerance fee

would be. Biopesticides in general, reduced-risk chemicals, or

candidates for FIFRA 25(b) exempted chemicals would pay the lowest

fees. Another approach discussed was setting tolerance fees based on

chemical use and/or usage. Similar to this approach is a fee based on

sales. The underlying concept in these examples is that the more widely

used chemicals usually generate the most sales for a company,

[[Page 31043]]

thus putting it in a better position to absorb an increased fee.

Products with niche markets, or those used on minor uses would incur a

much lower fee.

B. Proposed Approach

While the above approaches, and many others considered, have merit,

they were dismissed for not meeting one or more of the accepted

criteria. In many cases, some sort of evaluation had to be performed in

order to determine the appropriate fee. Chemicals could not be easily

classified until the end of our review and additional fees would have

to be collected or fees rebated. Some fee structures considered were

too costly to administer, required intricate screening procedures or

complicated tracking systems, or were beyond our legislative authority.

The Agency opted to propose tolerance fees based on the resource

needs required to review a specific type of tolerance action. Even

within this approach, there were several different ways to identify the

tolerance categories and assess the appropriate fee amounts. The Agency

considered: (1) Continuing the practice of charging by petition, (2)

charge by crop, use, or chemical, or (3) charge by tolerance. Each of

the first two had significant problems. Moreover, since the Agency is

shifting toward a more systematic and consistent way of tracking its

actions by tolerance, it sought to design the new tolerance fee system

on a per tolerance basis. The following is a detailed description of

its preferred approach for a new tolerance fee system.

1. Petitioned tolerance actions. The Agency proposes to set new

tolerance fees based on resource needs for each type of tolerance

action. This means that the Agency would charge a significantly larger

amount for the first tolerance of a chemical, whether it be a new or

registered chemical, since this would require the most work to process.

Subsequent tolerances for the same crop or tolerances for additional

crops within the same petition would be charged considerably less. In

contrast, a separate new food use tolerance petition submitted at a

later date, would be charged a slightly higher fee per tolerance than

if the use was included in the original petition because processing it

would require some amount of rework. This means that, resources are

used to review the existing file and apply the new information to the

previous assessments. A single tolerance fee was set for this category

because historically, petitioners have submitted one crop per new use

petition. If this practice is likely to change, (for example a

petitioner would choose to add several crops to its label), the Agency

could consider an incremental fee structure similar to a first food use

petition. Tolerances for antimicrobial pesticides would be charged a

different fee because these types of pesticides require a different set

of data that must be submitted. Fees for temporary tolerances for

experimental use permits, and tolerance exemptions also reflect the

reduced data sets, and thus reduced review resources, that are

required.

Fees will be imposed for any crop and/or use that ultimately

results in the establishment of a tolerance or exemption from the

requirement of a tolerance. This includes direct application to an

agricultural plant or crop, preplant uses in the soil, or indirect uses

that may result in inadvertent residues in a raw agricultural

commodity. Some examples of when a tolerance fee would be imposed, in

addition to direct agricultural crop uses, are for pesticide residues

that indirectly occur in food or feed as a result of aquatic weed

control in irrigation ditches, mosquito control use, bulk storage

fumigation use, as a bird repellent, or for residues that could occur

in rotated crops. Dermal applications to livestock, use in ponds or

reservoirs for weed control or disease control of fish, shellfish,

oysters etc., forestry uses (for residues in maple sap), and use in or

around apiaries (residues in honey or beeswax) are all subject to

tolerance fees. Similarly, uses of pesticides in food or feed handling

establishments, such as restaurants, breweries, supermarkets,

processing plants, dairies, or canneries, are subject to tolerance fees

should residues occur.

For the purposes of assessing a fee, an import tolerance (a

pesticide tolerance with no current U.S. uses or registrations) would

be treated as if there was a U.S. registration for the chemical. The

party wishing to obtain or retain a tolerance for import purposes would

be responsible for the payment of the fee. Further, under this revised

fee system, the tolerance modification category includes renewals,

extensions, and conversions of a temporary tolerance or time-limited

(non-section 18) tolerance as well as all amendments to existing

tolerances.

i. Counting tolerances. The new fee would be based on the number of

individual tolerances required rather than on a petition basis.

(Currently, one petition may include up to nine crops for one base

fee.) This means that every food or feed item for which a tolerance is

either established or exempted, that is, every line item listed in

Title 40 of the Code of Federal Regulations (CFR) is counted as one

tolerance. A crop group tolerance (a single tolerance which is

applicable to a group of similar crops) would be considered one

tolerance action. An exemption from the requirement of a tolerance for

``all food commodities'' would be considered one tolerance action,

whereas a tolerance exemption request for a chemical on barley and corn

would be considered two tolerance actions.

A separate fee would be imposed for each raw and processed

commodity that would require a tolerance or exemption. If residues are

found to concentrate in processed commodities or are found in livestock

tissue, separate tolerances would be required. A chemical used on

almonds therefore would be charged for a minimum of two tolerances--on

the raw commodities nutmeats and hulls, whereas a chemical used on

oranges would require one tolerance for the fruit (the raw commodity),

and if residues were found to concentrate in the dry pulp, peel, oil,

molasses, or juice, additional tolerances would be needed and fees

charged. In addition, if the almond hulls or the orange pulp or

molasses were to be used as feed and livestock feeding studies are

required, then a fee for each tolerance required on meat, fat, meat by

products, milk, poultry and eggs would be charged.

An example of how this scheme would work is if a company wished to

register a new active ingredient on cotton. The company would petition

the Agency for tolerances on the raw commodities cottonseed and forage

(two tolerances). Processing studies reveal that the chemical

concentrates in the meal, crude oil, and refined oil (three tolerances)

and livestock feeding studies show that hulls fed to cattle result in

residues in the meat, fat and milk (three tolerances). Using the table

in Unit V.B.1.iii. of this preamble, the registrant would be charged a

total of $537,300 in tolerance fees ($504,400 for the first tolerance

of a new active ingredient, plus $4,700 for each of the seven

additional tolerances). If however, in a subsequent petition, this

company wished to add cotton to an existing food-use product label, it

would be charged $135,200 ($16,900 for each of the eight new use

tolerances) because the review costs are substantially less than for a

new active ingredient.

ii. Deficient petitions. The Agency would not process a petition

that is deficient. Administrative deficiencies that may be easily

corrected, such as improper formatting, illegible pages, etc., would

not incur any penalty if the error can be corrected within 14 calendar

days. If the petitioner believes that the correction cannot be made

[[Page 31044]]

within this time frame, it must notify the Agency. If, after 14 days

the petitioner has not responded, the petition would be treated as if

it has been withdrawn and the original fee, less $7,500 for handling

and initial review, would be returned.

Once the Agency has initiated its scientific review, a resubmission

fee would be imposed for substantially flawed petitions that require

one or more resubmissions of data or other required information.

Defective studies cost the Agency a tremendous amount of resources and

delay the review of the petition considerably. Resources are wasted

reviewing an unacceptable study and, in many cases, more times and

effort is spent working with the affected petitioner to generate useful

data. For this reason, EPA is instituting an admittedly large penalty

for ineffective and/or poorly conducted studies. We hope that this will

serve as an incentive to submit only quality data and information for

review.

Petitioners would have up to 75 calendar days from the date of EPA

notification to correct the deficiency without penalty, after which an

additional 35 percent of the original fee would be charged. The

resubmission fee would be required at the time the requested studies

and/or other material are submitted. If the correction cannot be made

within this time frame, the petitioner must notify the Agency, as soon

as possible within the 75 days, of the circumstances surrounding the

delay. If, after 75 days the petitioner has not responded, or

subsequently fails to submit the required material within the

negotiated time frame, the petition would be treated as if it had been

withdrawn in the manner consistent with 40 CFR 152.105, and the

original fee would not be returned. A deficiency that would warrant the

resubmission fee would include a study that is not fully acceptable and

must be repeated in its entirety or in parts (e.g., a toxicology study

that is categorized as ``non-upgradable''), or any other significant

issue that prevents the continuation of the science review or the

Agency from reaching a regulatory decision.

iii. Fee schedule. Using this scheme, EPA proposes the following

fee schedule for petitioned tolerance actions.

------------------------------------------------------------------------

Petitioned action Fee

------------------------------------------------------------------------

First Food-use Petition for a New Active (1st tol.) = $504,400

Ingredient\1\................................. (add'l tol.) = 4,700

First Food-use Petition for a Registered Non- (1st tol.) = 468,800

Food Active Ingredient\1\..................... (add'l tol.) = 4,700

New Use Tolerance or Exemption for an Active or 16,900

Other Ingredient..............................

Temporary Tolerance or Exemption for an 51,200

Experimental Use Permit.......................

Time-limited Tolerance for an Emergency 0

Exemption.....................................

Exemption from the Requirement of a Tolerance 145,400

for an Active Ingredient\1\...................

Tolerance Modification for an Active or Other 4,400

Ingredient....................................

Tolerance for an Other Ingredient.............. 62,300

Exemption from the Requirement of a Tolerance 59,300

for an Other Ingredient.......................

Tolerance or Exemption for an Antimicrobial 68,200

Active Ingredient.............................

Request for Fee Waiver or Refund\2\............ 7,500

------------------------------------------------------------------------

\1\ Excluding antimicrobial active ingredients.

\2\ Fee will be returned if waiver or refund is warranted.

2. Reassessed tolerances. As with petitioned tolerances, EPA

proposes to set fees for reassessing tolerances based on estimated

resource needs for each type of reassessment. Different fee amounts

would be charged for a pre-1984 chemical for which a Reregistration

Eligibility Decision document (RED) has been completed, a pre-1984

chemical that is currently in the reregistration queue, or a chemical

for which tolerances were set after 1984. Differences would take into

account the amount of review that has already taken place (i.e.,

whether the chemical has or will go through, or is even subject to, the

reregistration process), and the additional analyses that must be

performed due to FQPA provisions.

For tolerances that were reassessed as part of a reregistration

eligibility decision that has already been made, the basic science

evaluation has already occurred. For these chemicals, the Agency must

go back and perform the FQPA analyses, such as a drinking water

exposure assessment, the aggregate risk assessment, and the special

finding for infants and children. The Agency, however, must perform a

complete risk assessment, including the FQPA requirements, for

chemicals that had not gone through reregistration at the time FQPA was

passed, or are not subject to reregistration, i.e., those chemicals

registered between November 1984 and August 1996. The fee proposed for

the chemicals subject to reregistration but for which a RED is issued

after the enactment of FQPA does not reflect the actual amount of

resources needed to review these tolerances because credit is given for

product maintenance fees that have already been paid. Moreover, for the

tolerances of chemicals that were registered after November 1984 and as

such are not subject to reregistration, the Agency must reevaluate all

existing data and perform a complete risk assessment.

i. Counting tolerances. For the group of chemicals that are already

registered, tolerances have been added over the lifetime of the

registration (some older chemicals have over 100 tolerances). The

amount a registrant would pay for tolerance reassessment would depend

on the total number of tolerances to be reassessed. The Agency would

charge one amount for the first tolerance and a lesser amount for

additional tolerances. As with petitioned tolerance actions, a crop

group tolerance would be considered one tolerance action. Similarly, an

exemption from the requirement of a tolerance for ``all food

commodities'' would be considered one tolerance action. A chemical with

tolerances on corn (fresh, grain, and forage) would be considered three

tolerance actions. A tolerance exemption for a chemical on barley and

corn would be considered two tolerance actions.

ii. Fee schedule. Using this scheme, the Agency proposes the

following fee schedule for tolerance reassessments.

------------------------------------------------------------------------

Tolerance reassessment Fee

------------------------------------------------------------------------

Tolerance for an Active Ingredient for which a $12,500

Reregistration Eligibility Document was issued

before August 1996............................

[[Page 31045]]

Tolerance for an Active Ingredient for which a (1st tol) = 227,700

Reregistration Eligibility Document is issued (add'l tol) = 500

after August 1996\1\..........................

Tolerance for an Active Ingredient First (1st tol) = 289,800

Registered between November 1984 and August (add'l tol) = 1,700

1996..........................................

Active Ingredient Tolerance Exemption.......... 20,600

Other Ingredient Tolerance..................... 201,400

Other Ingredient Tolerance Exemption........... 79,300

Request for Fee Waiver or Refund\2\............ 7,500

------------------------------------------------------------------------

\1\ The calculated tolerance fees for the chemicals in reregistration

are offset by monies received via product maintenance fees.

\2\ Fee will be returned if waiver or refund is warranted.

iii. Payment schedule. Fees generally would be collected prior to

the commencement of the reassessment and would be independent of the

resulting tolerance decision. Itemized payment statements would be sent

to the registrant(s) of a technical active ingredient (or chemical

case) at the beginning of the fiscal year that the tolerance

reassessment is scheduled. The registrant(s) would have 90 days to

remit the appropriate amount. Registrants who share the responsibility

for a single active ingredient or chemical case will be encouraged to

work together to determine how the fee will be paid. The Agency will

include in its reassessment only those tolerances for which it receives

payment. For those chemicals whose tolerance reassessments have

commenced prior to the promulgation of this rule, a bill will be sent

to affected parties for work performed. A tolerance reassessment will

not become final until the required fee is submitted. EPA will revoke

any existing tolerance for non-payment of the fee.

3. Tolerance fee waivers. As part of the new fee structure, the

Agency proposes to grant routine fee waivers for certain tolerance

actions. Fee waivers are proposed for:

i. Petitions submitted by IR-4. U.S. Department of Agriculture's

Interregional Research Project No. 4 (IR-4) is a program that supports

the registration of minor crop use pesticides by performing crop field

trial studies and generating pesticide residue data. Since this program

is supported by taxpayer dollars, charging a fee would be contrary to

the purposes of this proposal.

ii. Minor use tolerances actions, except when the minor use

constitutes the first food use or the sole use(s) of an existing

chemical. Traditionally, minor use pesticides are produced for niche

markets with often low profit margins. Because of this, many minor use

crop farmers do not have a wide selection of pest control products and

an increase in fees may jeopardize the continued registrations. FQPA

has essentially put into law the Agency's long standing policies to aid

the registration and retention of pesticides used on minor crops.

Granting an automatic fee waiver for tolerance actions for minor use

crops is consistent with Agency policy and Congressional intent. For

the purposes of this proposal, EPA is defining a minor use as any crop

use other than that on alfalfa, almonds, apples, barley, beans (dry and

snap), canola, corn (field, sweet, and pop), cottonseed, grapes, hay,

pecans, potatoes, rice, rye, sorghum, soybeans, sugarbeets, sugarcane,

sunflower, oats, oranges, peanuts, tomatoes, or wheat.

Fees for pesticide chemicals used solely on minor uses, however,

cannot be automatically exempt from the proposed fees because of the

large amount of resources required to process or reassess the

tolerances. While the submission of a new chemical registration for

strictly minor uses is extremely rare, there are a handful of existing

pesticide chemicals that are registered for use only on minor crops. To

establish or reassess the tolerances the Agency must still review a

full set of data and conduct a complete risk evaluation. For all minor

use only chemicals, the Agency proposes to impose a fee equivalent to a

single, first tolerance, temporary tolerance or tolerance exemption.

For example, if a registrant is applying for a new chemical

registration and has submitted a tolerance petition for use on garden

beets, onions, and turnips, the fee would be $504,400, regardless of

how many individual tolerances were established. Similarly, if an

existing chemical was registered in 1985 for use on garden beets,

onions, and turnips and tolerances were established for beet roots,

beet greens, onion bulbs, turnip roots, turnip tops, and several

livestock commodities, the registrant would be charged a tolerance

reassessment fee of $289,800.

iii. Time-limited tolerances for emergency exemptions. If, in a

single year, there occurs a severe pest infestation for which there is

no registered pesticide available, EPA may grant an emergency exemption

from FIFRA requirements for that pesticide. And because an emergency

situation is occurring, the Agency must respond quickly. The passage of

FQPA now requires the Agency to set time limited tolerances for these

emergency uses. The States submit the exemption requests and

accompanying tolerance petitions on behalf of their growers. Due to the

urgent nature of these types of tolerance actions, and given that the

state governments would be paying the fees with taxpayer dollars,

charging a fee would be contrary to the purposes of this proposal.

iv. Petitions to revoke a tolerance and tolerance revocations.

Imposing a fee for these types of tolerance actions would be

impractical.

v. Biopesticide tolerance actions, except plant-pesticides.

Biopesticides usually affect a single pest and, similar to minor use

pesticides, often have low profit margins. Because these pesticides are

by and large less risky than conventional, synthetic pesticide

chemicals, EPA has adopted a number of policies to encourage their

development and registration. The assessment of biopesticides requires

a different and abbreviated set of data for registration and any

associated tolerance actions, therefore less resources are generally

required to reach a regulatory decision. Waiving the tolerance fee is

consistent with existing policies. The tolerance review for plant-

pesticides, however, cannot be waived at this time. Although the Agency

also believes that plant-pesticides are inherently lower risk, the fees

cannot be routinely waived because of the large amount of resources are

necessary to process or reassess the tolerances. Moreover, these

products often become profitable soon after introduction.

vi. Other ingredients generally regarded as safe (List 4A inerts).

Tolerance reassessment fees would not be required for other ingredients

the Agency has declared as minimal risk and generally regarded as safe,

that is, those currently on List 4A. Fees for petitioned tolerance

exemptions for

[[Page 31046]]

other ingredients to be added to List 4A would be refunded once it was

determined that the List 4A designation was warranted. The most current

listing of the List 4A inerts can be found posted on the Internet on

EPA's home page at http://www.epa.gov/opprd001/inerts/lists.html, or by

writing Registration Support Branch (Inerts), Registration Division

(Mail Code 7505C), Office of Pesticide Programs, Environmental

Protection Agency, 401 M St., SW., Washington, DC 20460.

vii. Tolerance exemptions for chemicals exempted from FIFRA

regulations under section 25(b). Similarly, tolerance reassessment fees

would not be required for active ingredients that have been exempted

from FIFRA regulation under section 25(b). These chemicals have been

declared by the Agency to be of a character which is unnecessary to be

subject to the Act in order to carry out its purposes. Fees for

petitioned tolerance exemptions for active ingredients to be added to

this list would be refunded once it was determined that the 25(b)

designation was warranted. The list of FIFRA exempted substances can be

found in 40 CFR part 152.25.

EPA believes that the above waivers are equitable and not contrary

to the purposes of the fee requirement, yet invites the public to

comment on this issue. Other views have been raised. For example,

although it is the Agency's policy to promote the development and use

of biopesticides, some companies engaged in the registration of these

types of pesticides are large and can afford to pay a fee. The Agency

recognizes that there are other ways to champion these products without

granting a full fee waiver. One way is to grant fee waivers via the

submission of a small business waiver request (see below). Similarly

the minor use fee waiver would also apply to many biological pesticide

petitions. Another option is to set fees for biologicals based on the

percentage of the fee imposed for a conventional chemical. In

deliberations for this fee proposal, the Agency found administrative

costs and complexity argued against a case-by-case analysis for these

categories. However, EPA would like to hear differing views.

The Agency estimates that revenues waived from these waived actions

will be $2.5 million annually for petitioned tolerance actions and $2.4

million annually for tolerance reassessments. Because EPA must collect

fees ``in the aggregate'' to cover its costs, all of the calculated

fees for each category must be adjusted upwards in order to recover the

$4.9 million annual revenue shortfall. Accordingly, the Agency raised

the fees by 48 percent for the petitioned tolerance categories and 23

percent for reassessed tolerance categories.

EPA also will continue the practice of granting fee waivers on a

case-by-case basis when warranted, and when requested in writing by the

petitioner or registrant. For these requests, OPP has revised and

expanded the current criteria for granting fee waivers for safer

products, products that are in the public interest, and to those

registrants who demonstrate an economic hardship. An updated Pesticide

Registration Notice will be made available in draft form for public

comment. A fee of $7,500 shall accompany every waiver or refund

request. The fee will be returned if the request is granted.

Conversely, the fee will be forfeited if the request is denied.

4. Implementation. Petitioners would continue following the

established procedures outlined in the current regulations. When

applying for a tolerance or tolerance exemption, petitioners would send

EPA their remittance, data, and supporting materials. The cover letter,

application or petition, data, and all supporting materials would

continue to be sent to EPA's Office of Pesticide Programs in

Washington, DC. The payments themselves would continue to be sent to

EPA's Financial Management Division (FMD) in Pittsburgh, Pennsylvania.

The Agency would not begin processing the petition until it had been

notified by FMD that the check had cleared.

For tolerances that are to be reassessed, the Agency would send

affected registrants a bill at the beginning of each fiscal year for

those chemicals that are scheduled to be reevaluated during that year.

Registrants would be sent a pre-printed form listing their chemical and

all the associated tolerances. On the form, they would be asked to

verify the list, identify those tolerances they wish to support, and

calculate the appropriate fee amount. The Agency will use the

information on the response forms and include only those tolerances for

which the fee has been paid in its risk assessment. Multiple

registrants of the same active ingredient would be given 90 days to

coordinate their response and jointly pay the required fee for that

chemical. If no registrant comes forth to pay for a particular

tolerance, the Agency will publish a notice in the Federal Register

which will alert other potential impacted parties and provide them with

the opportunity to support the reassessment of that tolerance.

Tolerances will be revoked for non-payment of fees.

i. Annual adjustments. EPA proposes to continue the practice of

raising fees annually to reflect inflation. Currently these annual fee

adjustments are based on the total percentage change in basic pay in

Federal employee salaries, that is, the Cost of Living Adjustment, or

COLA. The Agency has looked at the issue of adjusting fees over time

and proposes to continue to link the increases to the COLA. Other

approaches that were suggested were tying the annual adjustment to the

total percentage change that occurred during the previous year in the

Consumer Price Index (CPI), or perhaps base the adjustment on the

greater of either the COLA or the CPI. EPA invites comment on this

issue. In addition to annual adjustments to the fee scale, the Agency

intends to evaluate the tolerance fee system periodically to determine

if revenues are adequately covering costs and whether fees should be

adjusted accordingly.

ii. Transition. For the purposes of FFDCA section 408(m), a

tolerance or exemption will not be considered officially granted or

reassessed until the appropriate fee is paid. Registrants of chemicals

for which a tolerance action has begun and not yet granted or declared

reassessed prior to the finalization of this rule would be required to

pay the revised fee. Petitioners or registrants that are in the

tolerance review queue upon publication of this proposal would be

subject to retroactive billing.

Because this document is a proposal, it is important to note that

the individual fee amounts proposed may change upon promulgation due to

the comments received. Affected parties must keep in mind that, since

the Agency must collect fees to cover its costs ``in the aggregate,'' a

decrease in one fee will result in the increase of another.

VI. Regulatory Assessment Requirements

A. Executive Order 12866

Under Executive Order 12866, entitled Regulatory Planning and

Review (58 FR 51735, October 4, 1993), the Office of Management and

Budget (OMB) determined that this proposed rule is not a ``significant

regulatory action.'' The Agency determined that this rule, when

promulgated, is estimated to impose an aggregate regulatory burden of

$20.7 million annually and therefore is unlikely to have a major

economic impact on pesticide registrants. Promulgation of

[[Page 31047]]

this proposed rule will have no impact on any other sector of the

economy, or on any other government entities, programs or policies. In

addition, the proposed rule is consistent with the purposes of FFDCA,

and does not conflict with any other statutory mandate or with the

principles of the Executive Order.

B. Regulatory Flexibility Act

Pursuant to section 605(b) of the Regulatory Flexibility Act (5

U.S.C. 601 et seq.), the Agency hereby certifies that this action will

not have a significant economic impact on a substantial number of small

entities. This determination is based on the Agency's 1997 Cost

Analysis which is available in the OPP public docket for this

rulemaking. In addition, for those small businesses that are affected

by this action, EPA has provided the opportunity to request fee waivers

and has set forth criteria based on economic hardship. Tolerance fee

waivers will be granted on a case-by-case basis for petitioners or

registrants who cannot pay.

For this analysis, we have adopted the definition of small

businesses from FIFRA section 4(i)(5)(E)(ii)(I): Entities with 150 or

fewer employees and an average annual gross revenue of $40 million over

a 3-year period. This definition differs from the standard definition

applied under the Regulatory Flexibility Act (RFA). According to

section 601(3) of the RFA, agencies must use the definition of ``small

business'' that is provided under the Small Business Act, 15 U.S.C.

section 631 et seq., unless it establishes an alternative definition.

The agency may use the alternative definition for RFA purposes only

after it has consulted with the Office of Advocacy of the Small

Business Administration (SBA) and provided an opportunity for public

comment.

According to SBA, small entities vary by Standard Identification

Code (SIC), and, for chemical manufacturers, are based solely on the

number of employees. Most establishments producing organic chemicals

are defined as small if they have fewer than 500 employees. For

chemical manufacturing, however, the number of employees may not be

closely related to the total annual sales of a company. Since chemical

testing primarily requires a financial outlay, EPA believes that the

number of employees is a less reliable measure of a company's ability

to pay applicable fees than is a company's total annual sales.

Therefore, in this proposed rulemaking, the Agency is proposing to use

the FIFRA definition of ``small business'' for RFA purposes. This

definition is discussed in the document that gives additional

information on small entity impacts.

EPA is hereby seeking comment on the use of the Agency's definition

of ``small business,'' as well as on the ``Small Entity Impacts of the

Economic Analysis of Proposed Tolerance Fee Schedule'' document. EPA is

also consulting with the Office of Advocacy of the SBA concerning the

Agency's use of the EPA definition. Any comments regarding the impacts

that this action may impose on small entities should be submitted to

the Agency in the manner specified in Unit I of this preamble.

C. Unfunded Mandates Reform Act

Under Title II of the Unfunded Mandates Reform Act of 1995 (UMRA)

(Pub.L. 104-4), EPA has determined that this action does not contain a

Federal mandate that may result in expenditures of $100 million or more

for State, local, and tribal governments, in the aggregate, or the

private sector in any one year. The cost associated with this action

are described in the Executive Order 12866 section above. Therefore,

this action is not subject to the requirements of sections 202 and 205

of the UMRA.

D. Consultation and Coordination with Indian Tribal Governments

Under Executive Order 13084, entitled Consultation and Coordination

with Indian Tribal Governments (63 FR 27655, May 19,1998), EPA may not

issue a regulation that is not required by statute, that significantly

or uniquely affects the communities of Indian tribal governments, and

that imposes substantial direct compliance costs on those communities,

unless the Federal government provides the funds necessary to pay the

direct compliance costs incurred by the tribal governments. Today's

proposal would implement requirements specifically set forth by the

Congress in FFDCA without the exercise of any discretion by EPA. The

proposal does not significantly or uniquely affect the communities of

Indian tribal governments. Tribal governments would not be subject to

the requirements of today's proposal. Accordingly, the requirements of

section 3(b) of Executive Order 13084 do not apply to this proposal.

E. Enhancing Intergovernmental Partnerships

Under Executive Order 12875, entitled Enhancing Intergovernmental

Partnerships (58 FR 58093, October 28, 1993), EPA may not issue a

regulation that is not required by statute and that creates a mandate

upon a State, local or tribal government, unless the Federal government

provides the funds necessary to pay the direct compliance costs

incurred by those governments. Today's proposal would implement

requirements specifically set forth by the Congress in FFDCA without

the exercise of any discretion by EPA. It would not create a mandate on

State, local or tribal governments. The proposal would not impose any

enforceable duties on these entities. Accordingly, the requirements of

section 1(a) of Executive Order 12875 do not apply to this proposal.

F. Children's Health Protection

This proposed rule is not subject to Executive Order 13045,

entitled Protection of Children from Environmental Health Risks and

Safety Risks (62 FR 19885, April 23, 1997), because this is not an

economically significant regulatory action as defined by Executive

Order 12866 (see Unit VI.A. above). In addition, this proposed rule is

procedural in nature and does not involve decisions on environmental

health risks or safety risks that may disproportionately affect

children.

G. National Technology Transfer and Advancement Act

This proposed regulation does not involve technical standards. As

such, the requirement in section 12(d) of the National Technology

Transfer and Advancement Act of 1995 (NTTAA), (15 U.S.C. 272 note)

which directs EPA to use voluntary consensus standards in its

regulatory activities unless to do so would be inconsistent with

applicable law or impractical, does not apply to this action. Voluntary

consensus standards are technical standards (e.g., materials

specifications, test methods, sampling procedures, business practices,

etc.) that are developed or adopted by voluntary consensus standards

bodies. EPA invites public comment on this conclusion.

H. Environmental Justice

This proposed rule does not directly affect minority populations or

low-income groups. Therefore, under Executive Order 12898, entitled

Federal Actions to Address Environmental Justice in Minority

Populations and Low-Income Populations (59 FR 7629, February 16, 1994),

the Agency does not need to consider environmental justice-related

issues regarding the environmental and health conditions in low-income

and minority communities.

I. Paperwork Reduction Act

The new information collection requirements contained in this

proposed

[[Page 31048]]

rule have been submitted to the Office of Management and Budget (OMB)

under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq, and in

accordance with the procedures at 5 CFR 1320.11. An Information

Collection Request (ICR) document has been prepared by EPA (EPA ICR No.

1915.01) and a copy may be obtained from Sandy Farmer, OP Regulatory

Information Division; U.S. Environmental Protection Agency (2137); 401

M St., S.W.; Washington, DC 20460, by calling (202) 260-2740, or

electronically by sending an e-mail message to

``[email protected].'' An electronic copy has also been posted with

the Federal Register notice on EPA's homepage with other information

related to this action.

The information collection requirements related to the tolerance

petition process are already approved under OMB control number 2070-

0024 (EPA ICR #597), and this proposed rule does not affect that

activity. However, this proposed rule does contain two minor

information collection activities that are not currently approved,

including the requirements related to the identification of the

tolerances that the Agency should include in the reassessment of the

chemical, and the process for requesting a fee waiver or refund. These

new activities are discussed in the ICR document, and are not effective

until EPA issues a final rule and until OMB has approved the

information collection under the Paperwork Reduction Act (PRA) and

assigned an OMB control number to that approval. An Agency may not

conduct or sponsor, and a person is not required to respond to a

collection of information subject to OMB approval under the PRA unless

it displays a currently valid OMB control number. The OMB control

numbers for EPA's regulations, after initial publication in the Federal

Register, are maintained in a list at 40 CFR part 9.

The annual burden for the proposed information collection

activities contained in this proposed rule are estimated to be 2.3

hours for each submission of the tolerance reassessment form, 2 hours

for each fee waiver or refund request submitted, and 0.3 hours to

maintain records. These estimates include the time needed to become

familiar with the requirements (first year implementation is an

additional 1 hour per registrant), review the instruction, complete the

form, and transmit or otherwise disclose the information. Under the

PRA, ``burden'' means the total time, effort, or financial resources

expended by persons to generate, maintain, retain, or disclose or

provide information to or for a Federal agency. This includes the time

needed to review instructions; develop, acquire, install, and utilize

technology and systems for the purposes of collecting, validating, and

verifying information, processing and maintaining information, and

disclosing and providing information; adjust the existing ways to

comply with any previously applicable instructions and requirements;

train personnel to be able to respond to a collection of information;

search data sources; complete and review the collection of information;

and transmit or otherwise disclose the information

Any comments regarding the burden estimate or any other aspect of

this collection of information, including suggestions for reducing this

burden, increasing electronic submissions, etc. may be sent to EPA at

the address provided in Unit I of this preamble. Please include the

docket number and ICR number in any correspondence related to the

information collection components of this proposed rule. The final rule

will respond to any comments received on the information collection

requirements contained in this proposal.

List of Subjects in 40 CFR Part 180

Administrative practice and procedure, Agricultural commodities,

Pesticides and pests, Reporting and recordkeeping requirements

Dated: May 28, 1999.

Carol M. Browner,

Administrator.

Therefore, 40 CFR part 180 is proposed to be amended as follows:

PART 180--[AMENDED]

1. The authority citation for part 180 would continue to read as

follows:

Authority: 21 U.S.C. 321(q), 346a, 371.

2. Section 180.33 would be revised to read as follows:

Sec. 180.33 Fees.

(a) Fees for petitioned tolerance actions. (1) Each petition to

establish, modify, or leave in effect a tolerance or exemption from the

requirement of a tolerance must be accompanied by the appropriate fee

as listed in the following table unless such fee is waived according to

paragraph (e) of this section.

------------------------------------------------------------------------

Petitioned action Fee

------------------------------------------------------------------------

First Food-use Petition for a New Active (1st tol.) = $504,400

Ingredient\1\................................. (add'l tol.) = 4,700

First Food-use Petition for a Registered Non- (1st tol.) = 468,800

Food Active Ingredient\1\..................... (add'l tol.) = 4,700

New Use Tolerance or Exemption for an Active or 16,900

Other Ingredient..............................

Temporary Tolerance or Exemption for an 51,200

Experimental Use Permit.......................

Time-limited Tolerance for an Emergency 0

Exemption.....................................

Exemption from the Requirement of a Tolerance 145,400

for an Active Ingredient\1\...................

Tolerance Modification for an Active or Other 4,400

Ingredient....................................

Tolerance for an Other Ingredient.............. 62,300

Exemption from the Requirement of a Tolerance 59,300

for an Other Ingredient.......................

Tolerance or Exemption for an Antimicrobial 68,200

Active Ingredient.............................

Request for Fee Waiver or Refund \2\........... 7,500

------------------------------------------------------------------------

\1\ Excluding antimicrobial active ingredients.

\2\ Fee will be returned if waiver or refund is warranted.

(2) A petitioner must remit a fee for each tolerance requested for

a pesticide chemical residue. A tolerance fee is required for each food

or feed item that requires a tolerance or exemption from the

requirement of a tolerance. Similarly, a tolerance fee is required for

each processed food or feed item and each livestock food or feed item

that requires a tolerance be established. A tolerance fee is required

for residues that occur in or on individual food or feed items as a

result of indirect pesticide use.

(3)(i) A crop group tolerance petition, for the purposes of

assessing a tolerance fee under this paragraph, will be

[[Page 31049]]

considered a request for a single tolerance action.

(ii) A request for an exemption from the requirement of a tolerance

on all food commodities, for the purposes of assessing a tolerance fee

under this paragraph, will be considered a request for a single

tolerance action.

(iii) A modification to a tolerance includes renewals, conversions

of a temporary tolerance or time-limited tolerance as well as all

amendments to existing permanent or temporary tolerances or tolerance

exemptions.

(iv) For new chemical or first food-use tolerance petitions

submitted for minor uses only, a fee equivalent to a single, first

tolerance, temporary tolerance or tolerance exemption is required.

(4) A petition will not be accepted for processing and the Agency

will take no regulatory action until the required fee is submitted.

(5) For the purposes of section 408(m) of the Federal Food, Drug,

and Cosmetic Act, a tolerance or tolerance exemption will not be

granted until the appropriate fee has been received.

(b) Fees for reassessed tolerances. (1)(i) Applicable fees are

required for each Agency action to modify or leave in effect an

existing tolerance or exemption from the requirement of a tolerance

that results from an Agency-initiated tolerance reassessment activity.

The fee listed in the following table must be paid prior to the

reassessment of the established tolerances of a particular chemical

upon notice from the Agency. Such notice shall be sent to each producer

of the particular pesticide chemical.

------------------------------------------------------------------------

Tolerance reassessment type Fee

------------------------------------------------------------------------

Tolerance for an Active Ingredient for which a $12,500

Reregistration Eligibility Document was issued

before August 1996............................

Tolerance for an Active Ingredient for which a (1st tol) = 227,700

Reregistration Eligibility Document is issued (add'l tol) = 500

after August 1996\1\..........................

Tolerance for an Active Ingredient First (1st tol) = 289,800

Registered between November 1984 and August (add'l tol) = 1,700

1996..........................................

Active Ingredient Tolerance Exemption.......... 20,600

Other Ingredient Tolerance..................... 201,400

Other Ingredient Tolerance Exemption........... 79,300

Request for Fee Waiver or Refund \2\........... 7,500

------------------------------------------------------------------------

\1\ The calculated fee is offset by monies received via product

maintenance fees.

\2\ Fee will be returned if waiver or refund is warranted.

(ii) Where a chemical has no registered uses in the United States,

or where no registrant pays the applicable fee to support a particular

tolerance to be reassessed for a chemical, a notice shall be published

in the Federal Register to provide other potentially impacted parties

the opportunity to support the retention of that tolerance by

petitioning the Agency.

(2) A single tolerance fee is required for every tolerance

established or exemption from the requirement of a tolerance per raw

agricultural commodity. Similarly a single tolerance fee is required

for each processed commodity and each livestock commodity with an

established tolerance. A tolerance fee is required for residues that

occur in or on individual food or feed items as a result of indirect

pesticide use.

(3)(i) An established crop group tolerance, or an existing

exemption from the requirement of a tolerance on all food commodities,

for the purposes of assessing a tolerance reassessment fee under this

paragraph, will be considered a single tolerance action.

(ii) An existing exemption from the requirement of a tolerance on

all food commodities, for the purposes of assessing a tolerance

reassessment fee under this paragraph, will be considered a single

tolerance action.

(4) For the purposes of section 408(m) of the Federal Food, Drug,

and Cosmetic Act, a tolerance reassessment will not become final until

the required fee is submitted.

(5) The Administrator shall revoke a tolerance or exemption from

the requirement of a tolerance for non-payment of the applicable fee.

(c) Withdrawal of a petition. If a petition is withdrawn by the

petitioner before significant Agency scientific review has begun, the

fee, less $7,500 for handling and initial review, shall be returned. No

fee will be returned after the commencement of scientific review. If a

withdrawn petition is resubmitted, it must be accompanied by the fee

required in paragraph (a) of this section for a new submission.

(d) Deficient petitions. (1) If a petition is not accepted for

processing because it is administratively incomplete, and the

petitioner rectifies the problem within 14 calendar days, no

resubmission fee will be imposed. If the petitioner believes that the

correction cannot be made within this time frame, it must notify the

Agency. If, after 14 days the petitioner has not responded, the

petition will be treated as if it has been withdrawn and the original

fee, less $7,500 for handling and initial review, would be returned.

(2)(i) If, after the Agency's scientific review has begun and a

submission has been determined to be scientifically deficient, such

that additional data are required or any other significant issue arises

that prevents the continuation of the scientific review or the Agency

from making a regulatory decision, a resubmission fee shall be imposed.

Petitioners have up to 75 calendar days from the date of EPA

notification to correct the deficiency without penalty, after which an

additional 35 percent of the original fee will be charged. The

resubmission fee would be required at the time the requested studies

and/or other material is submitted. If the petitioner believes that the

correction cannot be made within this time frame, it must notify the

Agency. If, after 75 days the petitioner has not responded, or

subsequently fails to submit the required material within the

negotiated time frame, the petition will be treated as if it has been

withdrawn. The original fee will not be returned.

(ii) A deficiency that would warrant the resubmission fee would

include a study that is not fully acceptable and must be repeated in

whole or in part (e.g., a toxicology study that is categorized as

``non-upgradable''), or any other significant issue that prevents the

continuation of the scientific review or the Agency from reaching a

regulatory decision.

(e) Fee waivers. (1) No fee under this section will be imposed for

any of the following actions:

(i) A petition submitted by the Inter-Regional Research Project

Number 4 (IR-4 Program).

(ii) A minor use tolerance action, except when the minor use

constitutes the first food use or the sole use of an existing chemical.

(iii) A biopesticide tolerance action, except for a plant-

pesticide.

[[Page 31050]]

(iv) A petition for an emergency exemption tolerance under FFDCA

section 408(l)(6).

(v) A petition to revoke a tolerance or a tolerance revocation.

(vi) Other ingredients generally regarded as safe (List 4A inerts).

(vii) Tolerance exemptions for chemicals exempted from regulation

under section 25(b) of FIFRA.

(2) The Administrator may waive or refund part or all of any fee

required by this section if the Administrator determines in his or her

sole discretion that such a waiver or refund will promote the public

interest, or that payment of the fee would result in an unreasonable

economic hardship on the person required to remit the fee.

(i) A request for a fee waiver or refund must be submitted to the

Agency in writing and must adhere to Agency criteria for tolerance fee

waiver or refund requests. A fee of $7,500 shall accompany every waiver

or refund request. The fee will be returned if the request is granted.

Conversely, the fee will be forfeited if the request is denied.

(ii) A petition or tolerance reassessment action for which a waiver

of the fee has been requested will not be acted upon until the fee has

been waived, or if the waiver has been denied, the proper fee is

submitted. A request for a refund will not be accepted after scientific

review has begun.

(3) For the purposes of this section, EPA defines a minor use as

any crop use other than that on alfalfa, almonds, apples, barley, beans

(dry and snap), canola, corn (field, sweet, or pop), cottonseed,

grapes, hay, pecans, potatoes, rice, rye, sorghum, soybeans,

sugarbeets, sugarcane, sunflower, oats, oranges, peanuts, tomatoes, or

wheat.

(4)(i) Fees for petitioned tolerance exemptions for other

ingredients to be added to List 4A are to be refunded when it is

determined by the Agency that the List 4A designation is warranted.

(ii) The most current listing of List 4A inerts can be found posted

on the Internet on EPA's home page at http://www.epa.gov/opprd001/

inerts/lists.html, or by writing Registration Support Branch (Inerts),

Registration Division (Mail Code 7505C), Office of Pesticide Programs,

Environmental Protection Agency, 401 M St., SW., Washington, DC 20460.

(5) Fees for petitioned tolerance exemptions for active ingredients

to be added to the list of chemicals exempted from regulation under

FIFRA section 25(b) will be refunded when it is determined by the

Agency that the 25(b) designation is warranted. The list of FIFRA

exempted substances can be found in 40 CFR 152.25.

(f) Objections, hearings, or requests for administrative review.

(1) Objections, hearings, or requests for administrative review filed

under section 408(g) of the Federal Food, Drug and Cosmetic Act must be

accompanied by a fee of $15,500.

(2) A person who files a requests for judicial review of an order

under section 408(h) of the Federal Food, Drug and Cosmetic Act must

pay the costs of preparing the record on which the order is based.

(3) A person may file a written request for a waiver of the

objection fee in lieu of the objection fee. A waiver fee of $7,500

shall accompany the request only if the person has a financial interest

in the matter. This waiver fee is not required to be remitted if the

person does not have a financial interest in the matter.

(g) Method of payment. All deposit and fee payments required under

this section must be paid by money order, bank draft, or certified

check drawn to the order of the Environmental Protection Agency. All

remittances must be sent to the U.S. Environmental Protection Agency,

Office of Pesticide Programs, P.O. Box 360277M, Pittsburgh, PA 15251.

Both the envelope and the payment must be specifically labeled

``Tolerance Fees'' and should include only a copy of the letter or

petition requesting the tolerance or the tolerance reassessment filing

form. The actual letter, petition, or form, along with supporting data

must be forwarded within 30 days of payment to the Agency at its

headquarters address in Washington, DC.

(h) Changes to fee schedule. (1) This fee schedule will be

increased annually to reflect the annual increase in Federal salaries.

When such changes are made based on the Federal General Schedule (GS)

pay scale, the new fee schedule will be published in the Federal

Register as a Final Rule to become effective 30 days or more after

publication, as specified in the rule.

(2) Agency tolerance processing costs and existing fee amounts will

be reviewed periodically to ensure that revenues collected are

adequately covering the costs incurred. If, as a result of this review,

adjustments in the fee schedule are warranted, the changes will be

subject to public notice and comment procedures.

[FR Doc. 99-14477 Filed 6-8-99; 8:45 am]

BILLING CODE 6560-50-F