Endocrine Disruptor Screening Program (EDSP); Draft Policies and Procedures for Initial Screening; Request for Comment, 70842-70862 [E7-24166]

Agencies

• ENVIRONMENTAL PROTECTION AGENCY

[Federal Register Volume 72, Number 239 (Thursday, December 13, 2007)]
[Notices]
[Pages 70842-70862]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-24166]


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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OPPT-2007-1080; FRL-8340-3]
RIN [2070-AD61]


Endocrine Disruptor Screening Program (EDSP); Draft Policies and 
Procedures for Initial Screening; Request for Comment

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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SUMMARY: This document announces the availability of and solicits 
public comment on EPA's draft policies and procedures for initial 
screening under the Agency's Endocrine Disruptor Screening Program 
(EDSP). The EDSP is established under section 408(p) of the Federal 
Food, Drug, and Cosmetic Act (FFDCA), which requires endocrine 
screening of all pesticide chemicals and was established in response to 
growing scientific evidence that humans, domestic animals, and fish and 
wildlife species have exhibited adverse health consequences from 
exposure to environmental chemicals that interact with their endocrine 
systems. This document provides specific details on the policies and 
the related procedures that EPA is considering adopting for initial 
screening under the EDSP. In general, the Agency has tried to develop 
policies that could be used in subsequent data collection efforts. 
However, EPA expects that these policies may be modified as a result of 
the Agency's experience applying them to the first chemicals to undergo 
testing. This document also discusses the statutory requirements 
associated with and format of the test orders, as well as EPA's 
procedures for fair and equitable sharing of test costs and data 
confidentiality. EPA will also be holding a public meeting to discuss 
these policies and procedures. A separate Federal Register document 
announced the details of the public meeting.

DATES: Comments must be received on or before February 11, 2008.

ADDRESSES: Submit your comments, identified by docket identification 
(ID) number EPA-HQ-OPPT-2007-1080, by one of the following methods:
     Federal e-Portal: https://www.regulations.gov. Follow the 
on-line instructions for submitting comments.
     Mail: Document Control Office (7407M), Office of Pollution 
Prevention and Toxics (OPPT), Environmental Protection Agency, 1200 
Pennsylvania Ave., NW., Washington, DC 20460-0001.

[[Page 70843]]

     Hand Delivery: OPPT Document Control Office (DCO), EPA 
East Bldg., Rm. 6428, 1201 Constitution Ave., NW., Washington, DC. 
Attention: Docket ID number EPA-HQ-OPPT-2007-1080. The DCO is open from 
8 a.m. to 4 p.m., Monday through Friday, excluding legal holidays. The 
telephone number for the DCO is (202) 564-8930. Such deliveries are 
only accepted during the DCO's normal hours of operation, and special 
arrangements should be made for deliveries of boxed information.
    Instructions: Direct your comments to docket ID number EPA-HQ-OPPT-
2007-1080. EPA's policy is that all comments received will be included 
in the docket without change and may be made available online at http:/
/www.regulations.gov, including any personal information provided, 
unless the comment includes information claimed to be Confidential 
Business Information (CBI) or other information whose disclosure is 
restricted by statute. Do not submit information that you consider to 
be CBI or otherwise protected through regulations.gov or e-mail. The 
regulations.gov website is an ``anonymous access'' system, which means 
EPA will not know your identity or contact information unless you 
provide it in the body of your comment. If you send an email comment 
directly to EPA without going through regulations.gov, your e-mail 
address will be automatically captured and included as part of the 
comment that is placed in the docket and made available on the 
Internet. If you submit an electronic comment, EPA recommends that you 
include your name and other contact information in the body of your 
comment and with any disk or CD-ROM you submit. If EPA cannot read your 
comment due to technical difficulties and cannot contact you for 
clarification, EPA may not be able to consider your comment. Electronic 
files should avoid the use of special characters, any form of 
encryption, and be free of any defects or viruses. For additional 
information about EPA's public docket, visit the EPA Docket Center 
homepage at https://www.epa.gov/epahome/dockets.htm.
    Docket: All documents in the docket are listed in the docket index 
available at https://www.regulations.gov. Follow the instructions on the 
regulations.gov website to view the docket index or access available 
documents. Although listed in the index, some information is not 
publicly available, e.g., CBI or other information whose disclosure is 
restricted by statute. Certain other material, such as copyrighted 
material, will be publicly available only in hard copy. Publicly 
available docket materials are available electronically at https://
www.regulations.gov, or, if only available in hard copy, at the OPPT 
Docket. The OPPT Docket is located in the EPA Docket Center (EPA/DC) at 
Rm. 3334, EPA West Bldg., 1301 Constitution Ave., NW., Washington, DC. 
The EPA/DC Public Reading Room hours of operation are 8:30 a.m. to 4:30 
p.m., Monday through Friday, excluding Federal holidays. The telephone 
number of the EPA/DC Public Reading Room is (202) 566-1744, and the 
telephone number for the OPPT Docket is (202) 566-0280. Docket visitors 
are required to show photographic identification, pass through a metal 
detector, and sign the EPA visitor log. All visitor bags are processed 
through an X-ray machine and subject to search. Visitors will be 
provided an EPA/DC badge that must be visible at all times in the 
building and returned upon departure.

FOR FURTHER INFORMATION CONTACT: William Wooge, Office of Science 
Coordination and Policy (OSCP), Mailcode 7201M, Environmental 
Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-
0001; telephone number: (202) 564-8476; fax number: (202) 564-8482; e-
mail address: wooge.william@epa.gov.

SUPPLEMENTARY INFORMATION:

I. General Information

A. Does this Action Apply to Me?

    You may be potentially affected by this action if you produce, 
manufacture, use, or import pesticide/agricultural chemicals and other 
chemical substances; or if you are or may otherwise be involved in the 
testing of chemical substances for potential endocrine effects. To 
determine whether you or your business may have an interest in this 
notice you should carefully examine section 408(p) of the Federal Food, 
Drug, and Cosmetic Act (FFDCA) (21 U.S.C. 346a(p)). Potentially 
affected entities and others may use the North American Industrial 
Classification System (NAICS) codes to assist in determining whether 
this action might apply an entity. Potentially affected entities may 
include, but are not limited to:
     Chemical manufacturers, importers and processors (NAICS 
code 325), e.g., persons who manufacture, import or process chemical 
substances.
     Pesticide, fertilizer, and other agricultural chemical 
manufacturing (NAICS code 3253), e.g., persons who manufacture, import 
or process pesticide, fertilizer and agricultural chemicals.
     Scientific research and development services (NAICS code 
5417), e.g., persons who conduct testing of chemical substances for 
endocrine effects.
    This listing is not intended to be exhaustive, but rather provides 
a guide for readers regarding entities likely to be affected by this 
action. Other types of entities not listed in this unit could also be 
affected. To determine whether you or your business may be affected by 
this action, you should carefully examine the applicability provisions 
in Unit IV.E. of this document, and examine section 408(p) of the 
FFDCA. If you have any questions regarding the applicability of this 
action to a particular entity, consult the person listed under FOR 
FURTHER INFORMATION CONTACT.

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

    1. Submitting CBI. Do not submit CBI to EPA through regulations.gov 
or e-mail. Clearly mark the part or all of the information that you 
claim to be CBI. For CBI information in a disk or CD ROM that you mail 
to EPA, mark the outside of the disk or CD ROM as CBI and then identify 
electronically within the disk or CD ROM the specific information that 
is claimed as CBI. In addition to one complete version of the comment 
that includes information claimed as CBI, a copy of the comment that 
does not contain the information claimed as CBI must be submitted for 
inclusion in the public docket. Information so marked will not be 
disclosed except in accordance with procedures set forth in 40 CFR part 
2.
    2. Tips for preparing your comments. When submitting comments, 
remember to:
    a. Identify the document by docket ID number and other identifying 
information (subject heading, Federal Register date and page number).
    b. Follow directions. The Agency may ask you to respond to specific 
questions or organize comments by referencing a Code of Federal 
Regulations (CFR) part or section number.
    c. Explain why you agree or disagree and suggest alternatives and 
substitute language for your requested changes.
    d. Describe any assumptions and provide any technical information 
and/or data that you used.
    e. If you estimate potential costs or burdens, explain how you 
arrived at your estimate in sufficient detail to allow for it to be 
reproduced.
    f. Provide specific examples to illustrate your concerns and 
suggest alternatives.
    g. Explain your views as clearly as possible, avoiding the use of 
profanity or personal threats.

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    h. Make sure to submit your comments by the comment period deadline 
identified.

C. Where Can I Access Information about the EDSP?

    In addition to accessing the public docket for this document 
through www.regulations.gov, you can access other information about the 
EDSP through the Agency's website at https://www.epa.gov/scipoly/
oscpendo/index.htm.

II. Overview

A. What Action is the Agency Taking?

    The Agency is announcing the availability of and seeking public 
comment on the draft policies and procedures that it is considering to 
issue test orders pursuant to the authority provided by section 
408(p)(5) of FFDCA. This document provides specific details on the 
requirements associated with section 408(p) of FFDCA, format of FFDCA 
section 408(p) test orders, and procedures. This document also 
describes the actions and/or procedures that EPA is considering to:
     Minimize duplicative testing (see Unit IV.C.).
     Promote fair and equitable sharing of test costs (see Unit 
IV.C.).
     Address issues surrounding data compensation (see Unit 
IV.C.) and confidentiality (see Unit IV.D.).
     Determine to whom orders will be issued (see Unit IV.E.).
     Identify how order recipients should respond to FFDCA 
section 408(p) test orders, including procedures for challenging the 
orders (see Unit IV.F. and H.).
     Ensure compliance with FFDCA section 408(p) test orders 
(see Unit IV.G.).
    EPA has also developed a template for the test order and an 
information collection request (ICR) to obtain the necessary clearances 
under the Paperwork Reduction Act (PRA). The templates for the test 
orders and the draft ICR are available in the docket associated with 
this Federal Register Notice. In addition, through a separate Federal 
Register document, EPA is seeking public comment on the draft ICR and 
draft templates.
    In addition, EPA will be holding a public meeting to discuss these 
draft policies and procedures. In the Federal Register of November 23, 
2007 (72 FR 65732) (FRL-8341-3), EPA announced the details of the 
public meeting, which is posted on the EDSP website atwww.epa.gov/
scipoly/oscpendo/meetings/mtg_121707.htm.
    This document is intended to describe the administrative policies 
and procedures that EPA is considering adopting as part of the 
Endocrine Disruptor Screening Program (EDSP). The policies and 
procedures presented in this document are not intended to be binding on 
either EPA or any outside parties, and EPA may depart from the policies 
and procedures presented in this document where circumstances warrant 
and without prior notice. The policies and procedures presented in this 
document may eventually be incorporated into an order issued pursuant 
to section 408(p) of FFDCA.
    This document only addresses the procedural framework applicable to 
EPA's implementation of FFDCA section 408(p)(5), and it does not 
address the tests or assays that are under development for use under 
the EDSP or the approach for selecting chemicals under the EDSP. In a 
September 27, 2005, Federal Register Notice (70 FR 56449) (FRL-7716-9), 
the Agency announced the approach that was used to identify chemicals 
for initial screening under EDSP. The draft list of 73 chemicals to 
undergo initial screening was published in a June 18, 2007 Federal 
Register Notice (72 FR 33486) (FRL-8129-3). In a separate public 
process, the Agency is coordinating the scientific validation and peer 
review of the assays, which includes the development of protocols for 
the assays. Additional information about all aspects of the EDSP, 
including current status of these related parallel activities, is 
available at https://www.epa.gov/scipoly/oscpendo/pubs/edspoverview/
index.htm.

B. What is the Endocrine Disruptor Screening Program (EDSP)?

    The EDSP was established in 1998 to carry out the mandate in 
section 408(p) of the Federal Food, Drug, and Cosmetic Act (FFDCA) [21 
U.S.C. 346aet. seq.], which directed EPA ``to develop a screening 
program . . . to determine whether certain substances may have an 
effect in humans that is similar to an effect produced by a naturally 
occurring estrogen, or such other endocrine effect as the Administrator 
may designate.'' If a substance is found to have an effect, FFDCA 
section 408(p)(6) directs the Administrator to take action under 
available statutory authority to ensure protection of public health. 
That is, the ultimate purpose of the EDSP is to provide information to 
the Agency that will allow the Agency to evaluate the risks associated 
with the use of a chemical and take appropriate steps to mitigate any 
risks (Ref. 1). The necessary information includes identifying any 
adverse effects that might result from the interaction of a substance 
with the endocrine system and establishing a dose-response curve (Ref. 
1). Section 1457 of the Safe Drinking Water Act (SDWA) also authorizes 
EPA to screen substances that may be found in sources of drinking 
water, and to which a substantial population may be exposed, for 
endocrine disruption potential. [42 U.S.C. 300j-17].
    The Agency first proposed the basic components of the EDSP on 
August 11, 1998 (63 FR 42852) (FRL-6021-3). After public comments, 
external consultations and peer review, EPA provided additional details 
on December 28, 1998 (63 FR 71542) (FRL-6052-9). The design of the EDSP 
was based on the recommendations of the Endocrine Disruptor Screening 
and Testing Advisory Committee (EDSTAC), which was chartered under the 
Federal Advisory Committee Act (FACA) [5 U.S.C. App.2, 9(c)]. The 
EDSTAC was comprised of members representing the commercial chemical 
and pesticides industries, Federal and State agencies, worker 
protection and labor organizations, environmental and public health 
groups, and research scientists.
    EDSTAC recommended that EPA's program address both potential human 
and ecological effects; examine effects on estrogen, androgen, and 
thyroid hormone-related processes; and include non-pesticide chemicals, 
contaminants, and mixtures in addition to pesticides (Ref. 1). Based on 
these recommendations, EPA developed a two-tiered approach, referred to 
as the EDSP. The purpose of Tier 1 screening (referred to as 
``screening'') is to identify substances that have the potential to 
interact with the estrogen, androgen, or thyroid hormone systems using 
a battery of assays. The fact that a substance may interact with a 
hormone system, however, does not mean that when the substance is used, 
it will cause adverse effects in humans or ecological systems. The 
purpose of Tier 2 testing (referred to as ``testing''), therefore, is 
to identify and establish a dose-response relationship for any adverse 
effects that might result from the interactions identified through the 
Tier 1 assays (Ref. 1). In addition, because of the large number of 
chemicals that might be included in the program, EDSTAC also 
recommended that EPA establish a priority-setting approach for choosing 
chemicals to undergo Tier 1 screening. The Science Advisory Board 
(SAB)/Scientific Advisory Panel (SAP) Subcommittee further recommended 
that initial screening be limited to 50 to 100 chemicals.
    EPA currently is implementing its EDSP in three major parts that 
are being

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developed in parallel, with substantial work on each well underway. 
This document deals only with the third component of the EDSP (i.e., 
policies and procedures related to the issuance of orders). The other 
aspects of the EDSP have been or will be addressed in separate 
documents published in the Federal Register. The three parts are 
briefly summarized as follows:
    1. Assay validation. Under FFDCA section 408(p), EPA is required to 
use ``appropriate validated test systems and other scientifically 
relevant information'' to determine whether substances may have 
estrogenic effects in humans. EPA is validating assays that are 
candidates for inclusion in the Tier 1 screening battery and Tier 2 
tests, and will select the appropriate screening assays for the Tier 1 
battery based on the validation data. Validation is defined as the 
process by which the reliability and relevance of test methods are 
evaluated for the purpose of supporting a specific use (Ref. 2). The 
status of each assay can be viewed on the EDSP website in the Assay 
Status table: https://www.epa.gov/scipoly/oscpendo/pubs/assayvalidation/
status.htm. In addition, on July 13, 2007, EPA published a Federal 
Register document that outlined the approach EPA intends to take for 
conducting the peer reviews of the Tier 1 screening assays and Tier 2 
testing assays and EPA's approach for conducting the peer review of the 
Tier 1 battery (72 FR 38577) (FRL-8138-4). EPA also announced the 
availability of a ``list server'' (Listserv) that will allow interested 
parties to sign up to receive e-mail notifications of EDSP peer review 
updates, including information on the availability of peer review 
materials to be posted on the EDSP website.
    2. Priority setting. EPA described its priority setting approach to 
select pesticide chemicals for initial screening on September 27, 2005 
(70 FR 567449), and announced the draft list of initial pesticide 
active ingredients and pesticide inerts to be considered for screening 
under FFDCA on June 18, 2007 (72 FR 33486). The Agency expects to 
publish a final list of chemicals that will be subject to initial 
screening before EPA begins issuing orders to require testing in 2008. 
More information on EPA's priority setting approach and the draft list 
of chemicals is available at https://www.epa.gov/scipoly/oscpendo/pubs/
prioritysetting. The first group of pesticide chemicals to undergo 
screening is also referred to as ``initial screening'' in this 
document.
    3. Procedures. The procedures are addressed by this document, which 
describes EPA's policies relating to:
     Procedures that EPA would use to issue orders.
     How joint data development, cost sharing, data 
compensation, and data protection would be addressed.
     Procedures that order recipients would use to respond to 
an order.
     Other related procedures or policies.

C. What Chemicals May Be Covered by the EDSP?

    FFDCA section 408(p)(3) specifically requires that EPA ``shall 
provide for the testing of all pesticide chemicals.'' Section 201 of 
FFDCA defines ``pesticide chemical'' as ``any substance that is a 
pesticide within the meaning of the Federal Insecticide, Fungicide, and 
Rodenticide Act (FIFRA), including all active and inert ingredients of 
such pesticide.'' [FFDCA section 201(q)(1), 21 U.S.C. 231(q)(1)]. 
Active ingredients are the substances that suppress, control or kill 
the target pests. Inert ingredients generally have no direct effect on 
the target pests although they may have some degree of toxicity. Inert 
ingredients may simply dilute the active ingredient or they may perform 
some function such as allowing the product to adhere better to leaves 
or other surfaces to improve contact with the pests. Inert ingredients 
also include fragrances, which may mask the smell of residential 
pesticides, and odorizers, which may act as warning agents. Many of 
these chemicals, including both active and inert ingredients, also have 
other, non-pesticidal uses.
    FFDCA also provides EPA with discretionary authority to ``provide 
for the testing of any other substance that may have an effect that is 
cumulative to an effect of a pesticide chemical if the Administrator 
determines that a substantial population may be exposed to such a 
substance.'' [21 U.S.C. 346a(p)(3)].
    In addition, EPA may provide for the testing of ``any other 
substance that may be found in sources of drinking water if the 
Administrator determines that a substantial population may be exposed 
to such substance.'' [SDWA 1457, 42 U.S.C. 300j-17].
    Lastly, it is important to clarify that the procedures and policies 
described in this document do not in any way limit the Agency's use of 
other authorities or procedures to require testing of chemicals for 
endocrine disruptor effects. For example, section 4 of the Toxic 
Substances Control Act (TSCA) provides EPA with the authority to 
require testing of TSCA chemical substances, provided that the Agency 
makes certain risk and/or exposure findings. [15 U.S.C. 2603]. 
Similarly, section 3(c)(2)(B) of the Federal Insecticide, Fungicide, 
and Rodenticide Act (FIFRA) grants EPA the authority to require 
pesticide registrants to submit additional data that EPA determines are 
necessary to maintain an existing registration. [7 U.S.C. 
346a(c)(2)(B)].
    As discussed in EPA's priority setting approach for the EDSP (70 FR 
56449, September 27, 2005), the Agency is initially focusing its 
chemical selection on pesticide chemicals, both active ingredients and 
high production volume chemicals used as an inert ingredient in 
pesticides. If chemicals identified for future screening and testing 
under the EDSP are not used in pesticides, the Agency will consider 
whether the policies and procedures identified in this document and 
used for pesticide chemicals would be appropriate for other categories 
of substances.

D. How Will EDSP Data be Used?

    In general, EPA will use data collected under the EDSP, along with 
other information, to determine if a pesticide chemical, or other 
substance that may be found in sources of drinking water, may pose a 
risk to human health or the environment due to disruption of the 
endocrine system. Under the tiered approach, Tier 1 screening data will 
be used to identify substances that have the potential to interact with 
the endocrine system. Chemicals that go through Tier 1 screening and 
are found to exhibit the potential to interact with the estrogen, 
androgen, or thyroid hormone systems will proceed to Tier 2 for 
testing. Tier 2 testing data will identify any adverse endocrine-
related effects caused by the substance, and establish a quantitative 
relationship between the dose and that adverse effect. As the EDSP 
screening and testing requirements mature into routine evaluations, the 
Agency intends to utilize the pesticide registration review process as 
the framework for managing its responsibilities regarding the endocrine 
screening of pesticides, and intends to eventually incorporate these 
requirements into the pesticide registration review process. At that 
point, EPA will regard the endocrine disruptor screening and testing 
required under FFDCA as part of the risk characterization of the 
pesticide that is intrinsic to the FIFRA decision. While EPA has 
discretionary authority to issue, at any time, testing orders requiring 
manufacturers to conduct Tier 1 assays, the Agency plans to assess the 
performance of the Tier 1 battery based on the test data received for 
the initial list of chemicals before beginning to routinely issue 
orders to test additional chemicals. If EDSP data exist at the time of 
a pesticide's registration review, the

[[Page 70846]]

Agency will consider the data when it makes its FIFRA (3)(c)(5) finding 
under registration review.

III. Authority

A. What is the Statutory Authority for the Policies Discussed in this 
Document?

    FFDCA section 408(p)(1) requires EPA ``to develop a screening 
program, using appropriate validated test systems and other 
scientifically relevant information to determine whether certain 
substances may have an effect in humans that is similar to an effect 
produced by a naturally occurring estrogen, or such other effects as 
[EPA] may designate.'' [21 U.S.C. 346a(p)].
    FFDCA section 408(p)(3) expressly requires that EPA ``shall provide 
for the testing of all pesticide chemicals.'' FFDCA section 201 defines 
``pesticide chemical'' as ``any substance that is a pesticide within 
the meaning of the Federal Insecticide, Fungicide, and Rodenticide Act 
(FIFRA), including all active and inert ingredients of such 
pesticide.'' [FFDCA section 201(q)(1), 21 U.S.C. 231(q)(1)]. The 
statute also provides EPA with discretionary authority to ``provide for 
the testing of any other substance that may have an effect that is 
cumulative to an effect of a pesticide chemical if the Administrator 
determines that a substantial population may be exposed to such a 
substance.'' [21 U.S.C. 346a(p)(3)].
    FFDCA section 408(p)(5)(A) provides that the Administrator ``shall 
issue an order to a registrant of a substance for which testing is 
required [under FFDCA section 408(p)], or to a person who manufactures 
or imports a substance for which testing is required [under FFDCA 
section 408(p)], to conduct testing in accordance with the screening 
program, and submit information obtained from the testing to the 
Administrator within a reasonable time period'' that the Agency 
determines is sufficient for the generation of the information.
    FFDCA section 408(p)(5)(B) requires that, ``to the extent 
practicable, the Administrator shall minimize duplicative testing of 
the same substance for the same endocrine effect, develop, as 
appropriate, procedures for fair and equitable sharing of test costs, 
and develop, as necessary, procedures for handling of confidential 
business information. . . .'' [21 U.S.C. 346a (p)(5)(B)].
    If a registrant fails to comply with a FFDCA section 408(p)(5) test 
order, the Administrator is required to issue ``a notice of intent to 
suspend the sale or distribution of the substance by the registrant. 
Any suspension proposed under this paragraph shall become final at the 
end of the 30-day period beginning on the date that the registrant 
receives the notice of intent to suspend, unless during that period, a 
person adversely affected by the notice requests a hearing or the 
Administrator determines that the registrant has complied fully with 
this paragraph.'' [21 U.S.C. 346a (p)(5)(C)]. Any hearing is required 
to be conducted in accordance with section 554 of the Administrative 
Procedures Act (APA). [5 U.S.C. 554]. FFDCA section 408(p) explicitly 
provides that ``the only matter for resolution at the hearing shall be 
whether the registrant has failed to comply with a test order under 
subparagraph (A) of this paragraph.'' [21 U.S.C. 346a (p)(5)(C)(ii)]. A 
decision by the Administrator after completion of a hearing is 
considered to be a final Agency action. [21 U.S.C. 346a (p)(5)(C)(ii)]. 
The Administrator shall terminate a suspension issued with respect to a 
registrant if the Administrator determines that the registrant has 
complied fully with FFDCA section 408(p)(5). [21 U.S.C. 346a 
(p)(5)(C)(iii)].
    FFDCA section 408(p)(5)(D) provides that any person (other than a 
registrant) who fails to comply with a FFDCA section 408(p)(5) test 
order shall be liable for the same penalties and sanctions as are 
provided under section 16 of the Toxic Substances Control Act (TSCA) 
[15 U.S.C. 2615] in the case of a violation referred to in that 
section. [21 U.S.C. 346a (p)(5)(D)]. Such penalties and sanctions shall 
be assessed and imposed in the same manner as provided in TSCA section 
16. Under section 16 of TSCA, civil penalties of up to $25,000 per day 
may be assessed, after notice and an administrative hearing held on the 
record in accordance with section 554 of the APA. [15 U.S.C. 
2615(a)(1)-(2)(A)].

B. Other Statutory Authorities Relevant to this Notice

    A number of other statutory provisions are discussed in this 
document, and consequently, are described below. This document does not 
affect the existing policies or related procedures that have been 
established under these other provisions. The following is a brief 
summary of these other relevant authorities.
    1. FIFRA. FIFRA section 3(c)(1)(F) provides certain protections for 
people who submit data to EPA in connection with decisions under EPA's 
pesticide regulatory program. Specifically, FIFRA section 3(c)(1)(F) 
confers ``exclusive use'' or ``data compensation'' rights on certain 
persons (``original data submitters'') who submit data (in which they 
have an ownership interest), in support of an application for 
registration, reregistration, or experimental use permit, or to 
maintain an existing registration. Applicants, who cite qualifying data 
previously submitted to the Agency by the original data submitter, must 
certify that the submitter has been granted permission to cite data or 
that an offer of compensation has been made to the original data 
submitter. In the case of ``exclusive use'' data, the applicant must 
obtain the permission of the original data submitter and certify to the 
Agency that the applicant has obtained written authorization from the 
original data submitter. (Data are entitled to ``exclusive use'' for 10 
years after the date of the initial registration of a pesticide product 
containing a new active ingredient.) If data are not subject to 
exclusive use but are compensable, an applicant may cite the data 
without the permission of the original data submitter, so long as the 
applicant offers to pay compensation for the right to rely on the data. 
(Data are ``compensable'' for 15 years after the date on which the data 
were originally submitted.) If an applicant and an original data 
submitter cannot agree on the appropriate amount of compensation, 
either may initiate binding arbitration to reach a determination. If an 
applicant fails to comply with either the statutory requirements or the 
provisions of a compensation agreement or an arbitration decision, the 
application or registration is subject to denial or cancellation. [See 
also 7 U.S.C. 136a (c)(1)(F)(ii)-(iii)].
    FIFRA section 3(c)(2)(B) provides that:
    . . .[i]f the Administrator determines that additional data are 
required to maintain in effect an existing registration of a 
pesticide, the Administrator shall notify all existing registrants 
of the pesticide to which the determination relates and provide a 
list of such registrants to any interested person.'' [7 U.S.C. 
136a(c)(2)(B)]. Continued registration of a pesticide requires that 
its use not result in ``unreasonable adverse effects on the 
environment'' (defined as ``any unreasonable risk to man or the 
environment, taking into account the economic, social, and 
environmental cost and benefits of the use of any pesticide, or a 
human dietary risk from residues that results from a use of a 
pesticide in or on any food inconsistent with the standard under 
section 408 of the [FFDCA].

    FIFRA section 3(c)(2)(B) explicitly directs EPA to send notices of 
data requirements (referred to as ``Data Call-In notices'' or ``DCI 
notices'') to all registrants affected by the data requirement. It also 
contains a

[[Page 70847]]

mechanism by which recipients of DCI notices may jointly develop data 
and provides that ``[a]ny registrant who offers to share in the cost of 
producing the data shall be entitled to examine and rely upon such data 
in support of maintenance of such registration.'' The section 
establishes procedures to allow registrants who received DCI notices to 
use binding arbitration to resolve disputes about each person's fair 
share of the testing costs.
    Further, FIFRA section 3(c)(1)(F) makes clear that data submitted 
under FIFRA section 3(c)(2)(B) are also ``compensable'' when cited in 
support of an application for a registration. In other words, a 
pesticide company that chooses to rely on such data rather than develop 
its own data must offer compensation to the data generator if the data 
are relevant to the company's product and the company applies to 
register its product after the required data have been submitted to 
EPA. Lastly, the Agency may suspend the registration of a pesticide if 
the registrant fails to provide data required under a DCI notice in a 
timely manner.
    Finally, FIFRA section 3(c)(2)(D) contains a provision, referred to 
as the ``formulator's exemption'' that is intended to simplify and 
promote equity in the implementation of the data compensation program 
under FIFRA section 3(c)(1)(F). The generic data exemption, in effect, 
relieves an applicant of the obligation to cite and obtain permission 
or offer to pay data compensation to cite the results of any study if 
the study is relevant to the safety assessment of a registered product 
that the applicant buys from another person and uses to make the 
applicant's product. Congress' rationale for this exemption is that the 
seller will recover any data generation costs associated with its 
product by charging buyers a higher purchase price. Thus, if a 
pesticide formulator applies to register a product containing an active 
ingredient that the formulator purchased from the basic manufacturer of 
the active ingredient, the formulator does not need to submit or cite 
and offer to pay compensation for any data specifically relevant to the 
purchased product. The Agency has extended the generic data exemption 
to data requirements under FIFRA section 3(c)(2)(B). Consequently, if 
the formulator received a DCI notice requiring data on the active 
ingredient, the formulator could comply by providing documentation that 
it bought the active ingredient from another registrant.
    2. SDWA. SDWA section 1457 provides EPA with discretionary 
authority to provide for testing, under the FFDCA section 408(p) 
screening program, ``of any other substances that may be found in 
sources of drinking water if the Administrator determines that a 
substantial population may be exposed to such substance.'' [42 U.S.C. 
300j-17]. Because SDWA section 1457 specifically mandates that EPA 
``may provide for testing. . . in accordance with the provisions of 
[FFDCA section 408(p)],'' EPA may rely on many of the procedures 
discussed in this document to require testing under SDWA section 1457.
    3. Other sections of FFDCA. FFDCA section 408(f) establishes 
procedures that the Agency ``shall use'' to require data to support the 
continuation of a tolerance or exemption that is in effect. The 
provision identifies three options:
     Issuance of a notice to the person holding a pesticide 
registration under FIFRA section 3(c)(2)(B) [FFDCA section 
408(f)(1)(A)].
     Issuance of a rule under section 4 of TSCA [FFDCA section 
408(f)(1)(B)].
     Publication of a notice in the Federal Register requiring 
submission, by certain dates, of a commitment to generate the data ``by 
one or more interested persons.'' [FFDCA section 408(f)(1)(C)].
    Before using the third option, however, EPA must demonstrate why 
the data ``could not be obtained'' using either of the first two 
options. FFDCA section 408(f)(1) expressly provides that EPA may use 
these procedures to ``require data or information pertaining to whether 
the pesticide chemical may have an effect in humans that is similar to 
an effect produced by a naturally occurring estrogen or other endocrine 
effects.'' Finally, FFDCA section 408(f)(1)(B) provides that, in the 
event of failure to comply with a rule under TSCA section 4 or an order 
under FFDCA section 408(f)(1)(C), EPA may, after notice and opportunity 
for public comment, modify or revoke any tolerance or exemption to 
which the data are relevant.
    In addition, FFDCA section 408(i) provides that ``[d]ata that are 
or have been submitted to the Administrator under this section or FFDCA 
section 409 in support of a tolerance or an exemption from a tolerance 
shall be entitled to confidential treatment for reasons of business 
confidentiality and to exclusive use and data compensation to the same 
extent provided by section 3 and section 10 of [FIFRA].''

IV. Policies and Procedures for the EDSP (Initial Screening)

    This Unit describes the policies and procedures that EPA is 
considering to adopt for the initial screening required under the 
program referred to above in Unit II.B. In general, the Agency has 
tried to develop policies that could be used in subsequent data 
collection efforts, including those under SDWA. However, the Agency 
expects that these policies may be modified as a result of the Agency's 
experience applying them to the first chemicals to undergo testing. A 
diagram that graphically presents the overall process is available in 
the docket.

A. Background

    On December 28, 1998 (63 FR 71542) (Ref. 1), EPA first discussed a 
number of the more complicated policy issues relating to the 
implementation of the screening program. These issues included:
     Under what authority EPA would require testing.
     How EPA would approach issues relating to minimizing 
duplicative testing; sharing of test costs; and appropriate 
compensation for the use or reliance on data submitted by a company 
(i.e., data compensation).
     EPA's approach to protecting CBI and trade secrets, and 
the public release of such information.
     Who would be required to conduct testing, including 
whether exemptions would be available. (Ref. 1).
    In this document, EPA is describing the policies and procedures 
that it intends to use for the initial EDSP screening of pesticide 
chemicals. For some of these issues, EPA now has a preferred policy 
approach; for other issues, EPA has laid out the various considerations 
for public comment.
    EPA is soliciting comment on all of the draft policies announced in 
this document. Prior to requiring screening and testing under the EDSP, 
EPA will publish in the Federal Register the announcement of the final 
policies and procedures it will adopt for initial screening. However, 
EPA anticipates that it may modify the policies and procedures for 
future EDSP screening efforts based on EPA's experience in applying 
these policies and procedures during initial screening.

B. How Will EPA Require Testing of Pesticide Chemicals Under the EDSP?

    For the initial screening, EPA intends to issue ``test orders'' 
pursuant to section 408(p)(5) of FFDCA. This is consistent with the 
December 1998 Notice, where EPA indicated that it intended to rely 
primarily on FFDCA and SDWA to require testing, and would ``use other 
testing authorities under FIFRA and TSCA to require the testing of 
those chemical substances that the FFDCA and SDWA do not cover.'' (Ref.

[[Page 70848]]

1). Because EPA is focusing on pesticide chemicals in registered 
pesticide products for initial screening, there is no need to rely on 
TSCA or SDWA. However, as discussed in Unit IV.C.-IV.D., in order to 
address some of the more complex issues surrounding joint data 
development and the availability of data compensation and data 
protection, EPA is proposing to issue some orders jointly under the 
authority of FFDCA section 408(p)(5) and FIFRA section 3(c)(2)(B).
    The Agency has drafted basic templates that would be used for such 
test orders. These templates, which reflect EPA's preferred approaches, 
differ according to whether the recipients are:
     Pesticide registrants, or
     Manufacturers and importers of inert ingredients.
    Finally, the test order templates may differ to accommodate 
differences in the Agency's procedures for data compensation, and for 
the minimization of duplicative data. Copies of the current draft test 
order templates are included in the Docket and the Agency welcomes your 
comments on the structure and clarity of these documents.
    There are some pesticide active and inert ingredients that are not 
registered in the U.S. but for which there are tolerances on foods 
imported from other countries. When these chemicals are to be tested in 
the future, EPA may rely on FFDCA 408(f)(1) to require ``interested 
persons'' to submit data for the EDSP.

C. What Can EPA Do To Minimize Duplicative Testing and Promote Cost 
Sharing and Data Compensation Under EDSP?

    One of the complex issues discussed in the December 1998 Notice 
related to joint data development, and how EPA would implement the 
FFDCA section 408(p)(5)(B) directive that ``[t]o the extent 
practicable, the Administrator shall minimize duplicative testing of 
the same substance for the same endocrine effect. . . .'' As noted in 
the December 1998 Notice (63 FR 71563), EPA also considered it 
appropriate to promote cost sharing and data compensation. EPA also 
originally contemplated that it would adopt new procedures unique to 
the EDSP. After considering all of the issues, EPA is currently 
considering adopting an approach that is similar to that announced in 
the December 1998 Notice, but with some significant distinctions which 
are discussed in more detail in this section.
    In summary, EPA's preferred approach to ``minimize duplicative 
testing of the same substance'' and to promote the ``fair and equitable 
sharing of test costs'' would be as follows:
     The companies, who are the basic producers of an active 
ingredient or inert ingredient at the time EPA issues a data 
requirements notice (FFDCA section 408(p) test order), would bear the 
costs of testing and would be informed of all other order recipients.
     The recipients of the FFDCA section 408(p) test orders 
would have strong incentives to work together to develop data jointly 
and to share test costs.
     Subsequent entrants into the marketplace would receive 
``catch-up'' FFDCA section 408(p) test orders making them subject to 
the same data requirements with the same provisions to comply with the 
requirement by making an appropriate offer to share the test costs that 
includes a reasonable process for resolving disputes.
     Customers who purchase an inert ingredient from a basic 
producer (who becomes/is an original data submitter) would not have to 
participate in joint development of, or offer to pay compensation for 
the right to rely on, required EDSP data.
    EPA believes its preferred approach would achieve for inert 
ingredients essentially the same outcome as the procedures under FIFRA 
section 3(c)(2)(B) and section 3(c)(1)(F) will produce for active 
ingredients.
    In summary, EPA is considering adopting a policy that encourages 
joint data developers to agree on how to share costs and also 
encourages companies that enter the marketplace after the data are 
developed to pay reasonable compensation to the data generators. EPA's 
policy will resemble the provisions and procedures of FIFRA to the 
extent allowed by FFDCA.
    1. Minimizing duplicative testing. As a point of clarification, a 
substantial amount of overlap exists between the goal of minimizing 
duplicative testing and the topic discussed in the next section, 
allowing parties to share the costs of conducting the testing. 
Consequently, some of the measures discussed in this section that EPA 
is considering adopting to try to minimize duplicative testing will 
have certain implications for the decisions pertaining to cost sharing, 
and vice versa.
    The Agency recognizes that, if EPA sends test orders under the EDSP 
screening program to multiple companies that produce the same substance 
and then each recipient of the test order conducts the required 
studies, there could be a great deal of duplicative testing. Although 
not discussed in the 1998 Notice, one way to avoid such duplicative 
testing is to send the test orders only to a single person who would be 
responsible for producing the required data. Unlike FIFRA section 
3(c)(2)(B), FFDCA section 408(p) does not specifically require that 
test orders be sent to all registrants of a particular pesticide. But, 
when there are multiple people that produce the substance to be tested, 
such an approach could potentially undercut the second goal mentioned 
in FFDCA section 408(p)(5)(B)--promoting ``fair and equitable sharing 
of test costs.'' Each company that manufactures a substance subject to 
EDSP screening would benefit from the production of the data, and under 
the most equitable approach, each should potentially pay a fair share 
of the cost of testing. As a practical matter, however, people would 
have little or no incentive to contribute to the cost of generating 
EDSP data unless they each received a test order. Therefore, when there 
are multiple producers of the substance, EPA believes that EDSP test 
orders should generally be issued to each producer, and not just to a 
single producer.
    The Agency originally anticipated relying on the authority of FFDCA 
section 408(p) to establish new procedures to promote joint development 
of data by recipients of FFDCA section 408(p) test orders (63 FR 
71563). Now, however, the Agency no longer believes that FFDCA section 
408(p)(5) provides the authority to create express requirements for 
joint data development. In EPA's view, FFDCA section 408(p)(5)(B) 
merely establishes a qualified direction that the Agency ``[t]o the 
extent practicable . . . minimize duplicative testing . . . .'' This, 
standing alone, does not create new authority to compel companies to 
use arbitration to resolve disputes arising from an effort to develop 
data jointly, nor does it even authorize EPA to impose a requirement 
for joint data development. Rather, EPA believes that this provision 
directs the Agency to create procedures that operate within the 
confines of existing statutory authorities.
    While FFDCA section 408(p) does not allow EPA to impose 
requirements identical to those authorized by FIFRA section 3 that 
would minimize duplicative testing, EPA has the authority under FFDCA 
section 408(p) to develop Agency procedures that achieve many of the 
same ends. Specifically, the Agency has discretion to determine what 
actions constitute compliance with a FFDCA section 408(p) test order, 
and EPA can apply this discretion in a manner that creates strong 
incentives for companies to voluntarily develop data jointly. While

[[Page 70849]]

there are good policy reasons not to require the same data from 
multiple entities, under FFDCA section 408(p), each recipient of a data 
requirements notice has a separate obligation to provide the required 
data. EPA thinks that FFDCA section 408(p) confers adequate discretion 
to consider that a recipient has fulfilled its obligation to provide 
data when:
     The recipient actually submits results from the required 
studies, or
     EPA judges that it would be equitable to allow the 
recipient to rely on, or cite, results of studies submitted by another 
person.
    The Agency believes that it would generally be equitable to allow a 
recipient of a FFDCA section 408(p) test order to rely on the results 
of studies submitted by another person where:
     The data generator has given permission to the recipient 
to cite the results, or
     Within a reasonable period after receiving the FFDCA 
section 408(p) test order, the recipient has made an offer to commence 
negotiations regarding the amount and terms of paying a reasonable 
share of the cost of testing, and has included an offer to submit to a 
neutral third party with authority to bind the parties, to resolve any 
dispute over the recipient's share of the test costs, (e.g., through 
binding arbitration or through a state or federal court action).
    The Agency believes this approach to minimizing duplicative 
testing, which parallels that used under FIFRA section 3(c)(2)(B), 
would adequately address any disincentives for the recipients of FFDCA 
section 408(p) test orders to develop data jointly. In the first 
instance, where the data generator had granted permission for another 
party to cite its data, the equities are clear, and EPA would have no 
reason for refusing to allow it. In the second instance, where the data 
generator received an offer to commence negotiations regarding the 
amount and terms of compensation and to go to a neutral decisionmaker 
with authority to bind the parties failing successful negotiations, EPA 
believes that the company has demonstrated a good faith effort to 
develop data jointly, and consequently would typically consider that 
the order recipient had complied with the order. Based on EPA's 
experience under FIFRA, there should be little or no reason for a data 
generator to decline such an offer. Moreover, if EPA did not adopt such 
an approach, the end result would effectively confer the sort of 
``exclusive use'' property rights established under FIFRA section 
3(c)(1)(F), on a broad category of data, and EPA does not believe that 
FFDCA section 408(p)(5) creates such rights, or provides EPA with the 
authority to create such rights.
    In addition to the specific procedures discussed in Unit IV.C.1., 
many of the procedures EPA is considering adopting to address cost 
sharing and data compensation will effectively function to minimize 
duplicative testing. Similarly, EPA has taken the directive to minimize 
duplicative testing to the extent practicable into account in 
determining who would receive FFDCA section 408(p) test orders. See 
Units IV.C.2. and IV.D. for further discussion of these topics.
    In summary, EPA currently intends that it will typically treat a 
suitably expressed offer to join in the development of a required study 
as sufficient to comply with a test order under FFDCA section 408(p).
    2. Promoting cost sharing and data compensation. As noted in Unit 
IV.C.1., FFDCA section 408(p)(5)(B) directs the Agency to ``develop, as 
appropriate, procedures for fair and equitable sharing of test costs.'' 
Informed by its experience under FIFRA, EPA sees this provision as 
containing two related directives:
     Promotion of the sharing of costs by companies that agree 
to develop data jointly (``cost sharing'').
     Payment of compensation to a data generator by a person 
whose activity subsequent to the submission of the required data would 
make such payment equitable (``data compensation'').
    The first directive relates to sharing the cost of developing data 
between parties on the market when a test order is issued. The second 
directive relates to the payment by a person (who was not part of a 
joint data development agreement) to those that originally generated 
and submitted data, in exchange for relying on the results of their 
previously submitted study. These mirror the data generation and data 
compensation processes that have been followed for years under FIFRA, 
and the Agency believes those processes are a good starting point for 
dealing with these issues in the context of 408(p)(5) orders. 
Consistent with section 408(p)(5)(B), EPA would, ``to the extent 
practicable,'' like to ``develop procedures for fair and equitable 
sharing of test costs'' not only by persons in business when the 
initial 408(p) test orders were issued, but also by persons who enter 
the marketplace after the data are submitted.
    FFDCA section 408(p)(5)(B) merely establishes a qualified direction 
that the Agency develop ``as appropriate, procedures for fair and 
equitable sharing of test costs.'' This, standing alone, does not 
create new data compensation rights, nor does it authorize EPA to 
create such rights. EPA has no inherent authority to create new rights 
to compensation; such rights are created only by Congress, and must be 
explicitly created by statute. FFDCA section 408(p)(5)(B) provides none 
of the indicia that Congress intended to expand the current expectation 
as to which data are compensable. For example, FFDCA section 
408(p)(5)(B) is silent on a reimbursement period, processes and 
acceptable arbitration organizations, EPA's role in the process, 
penalties for non-compliance, and exemptions. Not only does EPA believe 
that FFDCA section 408(p)(5) fails to provide EPA with the authority to 
establish unique procedures for the EDSP, but EPA believes that this 
provision does not authorize EPA to modify existing data compensation 
rights established under FIFRA section 3 or FFDCA section 408(i).
    By contrast, FIFRA, TSCA, and FFDCA section 408(i) all provide 
specific directions to the Agency on all of these issues. FIFRA section 
3(c)(1)(F) establishes an elaborate set of criteria and procedures 
governing the rights of data submitters to obtain either ``exclusive 
use'' over or data compensation for data they submit to EPA. TSCA 
section 4 has similarly detailed provisions. [See also 7 U.S.C. 136a 
(c)(1)(F)(ii)-(iii); 15 U.S.C. 2603(c)(3)-(4)]. Similarly, section 
408(i) of FFDCA, which extends FIFRA data compensation rights to data 
submitted ``in support of a tolerance or tolerance exemption,'' 
effectively provides guidance on all of these issues, providing that 
such data ``shall be entitled to. . .exclusive use and data 
compensation to the same extent provided by [section 3 of FIFRA].''
    In summary, EPA interprets FFDCA section 408(p)(5)(B)'s direction 
to require EPA to develop procedures that will promote cost sharing 
among test order recipients and to provide for compensation for data 
submitted pursuant to a FFDCA section 408(p) test order, but only to 
the extent either FIFRA section 3 or FFDCA section 408(i) provide for 
cost sharing or data compensation. As explained more fully in the 
remainder of this unit, however, EPA believes that its approach to 
minimizing duplicative testing will not only promote joint data 
development, but also encourage cost sharing among all test order 
recipients. In addition, EPA believes that most EDSP data developed in 
response to FFDCA section 408(p) test orders will be

[[Page 70850]]

compensable under FIFRA, or pursuant to FFDCA section 408(i).
    As discussed in Unit IV.C.1., EPA intends to adopt procedures 
implementing FFDCA section 408(p) screening that will minimize 
duplicative testing; these measures will also have the effect of 
substantially fostering cost sharing among those who receive the 
initial test order. By using an approach which parallels that used 
under FIFRA section 3(c)(2)(B), any disincentives for the recipients of 
FFDCA section 408(p) test orders to develop data jointly would be 
addressed. EPA's experience with FIFRA section 3(c)(2)(B) indicates 
that when multiple registrants receive DCI notices to produce the same 
data on the same active ingredient, they form consortia that work 
together to develop the required data. If manufacturers and importers 
receive FFDCA section 408(p) test orders containing the provisions 
previously discussed, EPA expects that they would behave in the same 
manner.
    a. What data are compensable under the EDSP? With respect to 
determining the extent to which compensation for previously submitted 
studies is warranted, the threshold issue is what EDSP data will be 
``compensable.'' Given EPA's belief that FFDCA section 408(p)(5)(B) 
does not give EPA the inherent authority to create new rights to 
compensation, the threshold for what is ``compensable'' requires 
consideration of existing statutory authority for compensation. To the 
extent the data are otherwise covered by any provision of FFDCA or 
FIFRA that requires a person to offer compensation for the right to 
cite or rely on data submitted by another person in connection with a 
pesticide regulatory matter, EPA must continue to enforce those 
provisions.
    FFDCA section 408(i) provides that data submitted under FFDCA 
section 408 ``in support of a tolerance or an exemption from a 
tolerance shall be entitled to . . . exclusive use and data 
compensation to the same extent provided by section 3 of [FIFRA].'' The 
Agency considers any data generated in response to requirements under 
FFDCA section 408(p) on a pesticide chemical for which there is an 
existing tolerance, tolerance exemption, or pending petition to 
establish a tolerance or an exemption to be data submitted in support 
of a tolerance or an exemption. In fact, FFDCA section 
408(b)(2)(D)(viii) explicitly requires EPA to consider ``such 
information as the Administrator may require on whether the pesticide 
chemical may have an effect in humans that is similar to an effect 
produced by a naturally occurring estrogen or other endocrine 
effects,'' as part of its determination that a substance meets the 
safety standard. [21 U.S.C. 136a(b)(2)(D)(viii)]. Thus, EDSP data on 
active and inert ingredients for which there is a tolerance or 
tolerance exemption will be compensable as outlined under FIFRA section 
3(c)(1)(F).
    Moreover, data establishing whether a pesticide chemical (either 
active or inert) has the potential to interact with the endocrine 
system would be relevant to a FIFRA registration decision. Under FIFRA, 
EPA has a continuing duty to ensure that a pesticide meets the 
registration standard; EPA must consider all available data relevant to 
this determination. [See 7 U.S.C. 136a (2)(bb) and 3(c)(5)]. In the 
terms of FIFRA section 3(c)(1)(F), such data ``support or maintain in 
effect an existing registration.'' Thus, data generated in response to 
a FFDCA section 408(p) test order would be compensable as outlined in 
FIFRA section 3(c)(1)(F) if the data are submitted by a pesticide 
registrant.
    In summary, most EDSP data will be compensable under FIFRA or FFDCA 
section 408(i). Data for active and inert ingredients that have a 
tolerance or tolerance exemption or are the subject of a pending 
petition will be compensable regardless of what companies submit the 
data. Other active ingredients will also be compensable as long as, in 
the case of a joint submission, at least one of the submitters is a 
pesticide registrant or applicant.
    While much EDSP data will be compensable under FIFRA or FFDCA 
section 408(i), some EDSP data will be generated by chemical 
manufacturers and importers of inert ingredients that have neither a 
tolerance nor tolerance exemption and are not the subject of a pending 
petition. (EPA refers to these substances as ``non-food use inerts.'') 
Because such EDSP data could not be considered ``data submitted in 
support of a tolerance or exemption,'' the data submitted on such 
substances in response to a FFDCA section 408(p) test order would not 
be entitled to compensation under FFDCA section 408(i). Moreover, since 
FIFRA section 3(c)(1)(F) establishes compensation rights only for data 
submitted by an applicant or a registrant, data submitted to EPA in 
response to a FFDCA section 408(p) order by a person who is neither a 
registrant nor an applicant would not become compensable under FIFRA. 
However, although data on a non-food use inert are not compensable when 
submitted by a non-registrant pursuant to FFDCA section 408(p), such 
data would become compensable when submitted jointly by a registrant to 
support continued registration of a pesticide product. In addition, EPA 
believes that the internal procedures it intends to adopt would 
effectively provide manufacturers and importers with the same 
opportunity for cost sharing/compensation available to all other order 
recipients.
    Given EPA's belief that FFDCA section 408(p)(5)(B) does not give 
EPA the authority to modify FIFRA data compensation rights, the fact 
that much EDSP data will also potentially be compensable under FIFRA 
raises questions about the interplay between the two statutes. For 
example, unlike FIFRA section 3(c)(2)(B), FFDCA section 408(p) does not 
give EPA the authority to enforce an offer to pay compensation. Thus, 
unless and until such data are used in support of a pesticide 
regulatory action under FIFRA, if a recipient of a test order made an 
offer but then refused to pay compensation or to participate in binding 
arbitration following the data submitters acceptance of that offer, the 
data generator's only recourse would be to seek any judicial remedies 
that may be available. Consequently, rather than leave recipients with 
any ambiguity, EPA is considering issuing orders to registrants to 
conduct EDSP testing pursuant to both FIFRA section 3(c)(2)(B) and 
FFDCA section 408(p).
    Although EPA believes there are ways to make all EDSP data 
generated on inert ingredients compensable, EPA must consider what 
procedures to use to ensure persons who did not share in the cost of 
testing, but who benefit from the existence of such data, actually pay 
compensation. Under FIFRA section 3(c)(1)(F), companies that apply for 
registrations of pesticide products after the data were submitted 
either would have to offer to pay compensation for the right to cite 
the data or would have to generate comparable data. Consequently, in 
the case of active ingredients, everyone who benefits from the 
existence of EDSP data on an active ingredient either shares the cost 
of the testing as part of the joint data development under FIFRA 
section 3(c)(2)(B) or offers to pay compensation to the original data 
submitter under FIFRA section 3(c)(1)(F).
    The same is not true for inert ingredients. There is no mechanism 
under either FIFRA or FFDCA for directly requiring payment of 
compensation by companies that start to manufacture or import an inert 
ingredient after an original data submitter has provided EDSP data on 
the inert ingredient. Such companies are not subject to FIFRA data 
compensation obligations because they are not registrants or applicants 
for registration.

[[Page 70851]]

Nonetheless, EPA believes that, by using its discretion under FFDCA 
section 408(p) to issue test orders to those manufacturers or importers 
of a substance for which EDSP data had previously been submitted who 
subsequently enter the market, EPA can achieve substantially the same 
ends.
    FFDCA section 408(p)(5) provides that ``[t]he Administrator shall 
issue an order to ``. . .a person who manufactures or imports a 
substance for which testing is required under this subsection, to 
conduct testing in accordance with the screening program . . . .'' 
Thus, under FFDCA section 408(p)(5), EPA may issue a test order to a 
manufacturer or importer who begins to sell an inert ingredient 
following the submission of required EDSP data on the ingredient by 
manufacturers or importers who were in the marketplace when the initial 
test orders were issued. The Agency refers to these as ``catch-up'' 
test orders. As with the initial FFDCA section 408(p) test order, 
recipients could fulfill the testing requirement either by submitting 
the results of a new study or by citing the data submitted by another 
person. In furtherance of the goal of ``fair and equitable sharing of 
test costs,'' the Agency would accept citation of existing data