[Federal Register Volume 60, Number 60 (Wednesday, March 29, 1995)]
[Rules and Regulations]
[Pages 16336-16351]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 95-7711]



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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 723

[OPTS-50596B; FRL-4923-1]
RIN 2070-AC14


Premanufacture Notification Exemption; Revision of Exemption for 
Chemical Substances Manufactured in Small Quantities; Low Release and 
Exposure Exemption; Final Rule

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: Section 5(a)(1) of the Toxic Substances Control Act (TSCA) 
requires that persons notify EPA before they manufacture or import a 
new chemical substance for commercial purposes. Section 5(h)(4) of TSCA 
authorizes EPA, upon application and by rule to exempt the manufacturer 
or importer of any new chemical substance from some or all of the 
provisions of section 5 if the Agency determines that the manufacture, 
processing, distribution in commerce, use, or disposal of the substance 
will not present an unreasonable risk of injury to health or the 
environment. EPA is amending the current TSCA section 5(h)(4) limited 
exemption defined at 40 CFR 723.50 for persons who manufacture certain 
chemical substances in quantities of 1,000 kilograms or less per year. 
This amendment will increase the volume limit to 10,000 kilograms or 
less a year. Also, this amendment adds a new section 5(h)(4) exemption 
category for certain chemical substances with low environmental 
releases and human exposures. This amendment will significantly reduce 
administrative burdens on EPA and industry and will expedite the Agency 
review process so that lower risk chemical substances may be marketed 
more quickly. To ensure that these chemical substances will not present 
an unreasonable risk, EPA has included procedural safeguards, including 
a 30-day review, and other conditions in the exemption.
DATES: This rule is effective May 30, 1995. This rule shall be 
promulgated for purposes of judicial review at 1 p.m. eastern time, on 
April 12, 1995.

FOR FURTHER INFORMATION CONTACT: Susan B. Hazen, Director, 
Environmental Assistance Division (7408), Office of Pollution 
Prevention and Toxics, Environmental Protection Agency, 401 M St., SW., 
Washington, DC 20460, Telephone: (202) 554-1404, TDD: (202) 554-0551.

SUPPLEMENTARY INFORMATION: The original exemption for chemical 
substances manufactured in quantities of 1,000 kilograms or less per 
year became effective on August 26, 1985. The supporting rationale and 
background for that exemption were published at 50 FR 16477 on April 
26, 1985 and 47 FR 33896, August 4, 1982. This rule was proposed in the 
Federal Register on February 8, 1993 (58 FR 7646). Public hearings on 
this and related PMN exemptions were held in Washington, DC. on April 
26-28, 1993. While general background information is presented here, 
readers should also consult the preambles for those notices for further 
information on the objectives and rationale for the rule and the basis 
for finding under TSCA section 5(h)(4) that activities involving the 
exempt chemical substances will not present an unreasonable risk of 
injury to human health or the environment.

I. Background

    Section 5(a)(1) of TSCA (15 U.S.C. 2604 (a)(1)) requires any person 
who intends to manufacture or import a new chemical substance to notify 
EPA 90 days before manufacture or importation begins. Section 5(h)(4) 
of TSCA (15 U.S.C. 2604(h)(4)) allows the EPA, by rule, to grant an 
exemption from any or all of the requirements of section 5 if EPA 
determines that the manufacture, processing, distribution in commerce, 
use, or disposal of a substance will not present an unreasonable risk 
of injury to health or the environment.

II. Final Exemption

A. Summary of the Rule

    1. Chemical substances manufactured at 10,000 kg or less per year. 
Manufacturers of all new chemical substances manufactured in quantities 
of 10,000 kilograms or less per year are eligible to apply for a new 
category of exemption. (Note that throughout 40 CFR parts 720, 721, and 
723, the term ``manufacturer'' is defined in TSCA section 3(8), 15 
U.S.C. 2602(8), to include persons who import the specified chemical 
substance; the term ``manufacture'' is defined to include importation.) 
Upon approval, manufacturers will be permitted to manufacture up to 
10,000 kilograms of the new chemical substance during 
[[Page 16337]] every 12 month period following the date of review 
period expiration without submitting a full premanufacture notice 
(``PMN'') under section 5(a)(1) of TSCA.
    As with the prior exemption for new chemical substances produced at 
1,000 kg or less, new chemical substances will not be approved under 
the new exemption if the Agency believes that they or their reasonably 
anticipated metabolites, environmental transformation products, 
byproducts, or impurities raise a concern for serious acute or chronic 
human health effects or significant environmental effects under 
reasonably anticipated conditions of manufacture, processing, 
distribution in commerce, use, or disposal. Any exemption application 
will be denied if the Agency is unable to affirmatively find that 
manufacture, processing, distribution in commerce, use, and disposal of 
the exempted substance pursuant to the exemption will not present an 
unreasonable risk of injury to human health or the environment.
    Manufacturers requesting this exemption must submit notices 30 days 
prior to commencement of manufacture or import. As with the prior 
exemption, where manufacturers provide information on human exposure 
controls or environmental release controls to support the exemption 
notice, the manufacturers must maintain those controls throughout the 
duration of the exemption. If EPA identifies a potential risk from a 
new chemical substance, but believes that the risk may be sufficiently 
mitigated through pollution prevention techniques and/or exposure and 
release controls, the Agency may conditionally approve the exemption 
pending the manufacturer's submission of an amended exemption notice 
which includes those or equivalent techniques or controls. If there is 
insufficient time remaining in the review period to provide the amended 
information, manufacturers may request a temporary suspension of the 
review period under 40 CFR 720.75(b). All amended pages of the 
exception notice must be received by the Agency prior to the expiration 
of the exemption review period.
    Manufacturers are similarly bound to the uses described in their 
exemption notices and may not change the manufacturing sites identified 
in their notices unless they either meet the conditions specified in 
paragraph (j)(6) of the exemption or submit a new exemption notice.
    In accordance with practice under the superseded 1,000 kilogram 
exemption, the Agency will generally perform the risk assessment under 
the new exemption as if the total amount permissible under the 
exemption (10,000 kilograms) were being produced. However, submitters 
wishing their exemptions to be reviewed based upon annual production 
volumes lower than 10,000 kilograms may so indicate in their exemption 
notice by marking the binding box adjacent to the production volume 
space on the form. Submitters who so elect, however, are bound by their 
election. Submitters who subsequently wish to increase their maximum 
production volume under the exemption must submit a new exemption 
notice cross-referencing the original exemption number on the cover of 
the notice. If the new exemption is granted, it will supersede the 
previous exemption.
    As of the effective date of this rule, the existing 1,000 kilogram 
exemption category will no longer be available for new exemptions. All 
exemptions previously granted under the 1,000 kilogram exemption will 
remain binding and effective under the superseded provisions of 40 CFR 
723.50 even though such provisions will no longer be contained in the 
Code of Federal Regulations. Any modification of the terms of a 
previously granted exemption must be requested via a new exemption 
notice. For example, a manufacturer or importer who was granted an 
exemption under the prior 1,000 kilogram per year or less exemption may 
submit a new exemption notice to increase the production volume up to 
10,000 kilograms per year for the same chemical substance. If such 
manufacturer does apply for the 10,000 kilogram exemption, its notice 
will be reviewed for unreasonable risk at the increased production 
volume. A new risk assessment will be performed based on the 
information submitted in the new notice. A submitter of a subsequent 
10,000 kilogram exemption may continue to manufacture under the terms 
of the 1,000 kilogram exemption until a regulatory decision is made on 
the new exemption notice. If the new notice is granted, it will 
supersede the 1,000 kilogram exemption.
    2. Low release and exposure chemicals. In connection with the 
Agency's overall pollution prevention strategy, EPA is adding a new 
exemption category for chemical substances with low environmental 
releases and low human exposures during their manufacture, distribution 
in commerce, processing, use, and disposal. All manufacturers and 
importers of new chemical substances subject to PMN requirements 
meeting the stated release and exposure criteria are eligible to apply 
for this low release and exposure (LoREX) exemption, regardless of 
production volume. The LoREX exemption is intended to encourage 
companies to develop manufacturing, processing, use, and disposal 
techniques which minimize exposures to workers, consumers, the general 
public, and the environment.
    As with the low volume exemption, the uses of the new chemical 
substance are restricted to those approved in the exemption notice, and 
submitters must maintain any exposure or release controls throughout 
the period of the exemption. Manufacturing sites identified in the 
exemption notice are binding unless specified conditions are satisfied. 
(See Comment 3, unit II.B. of this preamble). EPA believes that these 
binding provisions of the LoREX exemption will, in many instances, 
prove to be an effective substitute to regulation under section 5(e) of 
TSCA. Thus, EPA expects this new exemption category to significantly 
reduce the administrative costs presently devoted to section 5(e) 
consent order development and review, and to permit manufacturers to 
commence commercial production of their new products more quickly, 
while ensuring against unreasonable risk of injury to human health or 
the environment.
    Prospective submitters should be mindful that the principal focus 
of the LoREX exemption is on release and exposure, not toxicity. Except 
where specifically noted in paragraph (c) of the regulation, EPA will 
generally be unable to conduct a thorough review of any submitted test 
data within the allotted review period and may request a temporary 
suspension of the review period if data are submitted. Although the 
Agency encourages data development for new chemical substances, 
manufacturers with submissions which involve extensive data reviews 
may, in some cases, be better served under a PMN review. Such 
manufacturers are envouraged to contact the Pre Notice Communications 
Staff for guidance prior to notice submission. To the extent that the 
Agency must undertake extensive detailed examination of the inherent 
toxicity of a given chemical substance, submission of a PMN may be more 
appropriate. (Of course, any toxicity data on the new chemical 
substance in the possession or control of the manufacturer must 
accompany the submission whether necessary for exemption approval or 
not).
    To satisfy the required section 5(h)(4) findings of no unreasonable 
risk, the exemption notice submitter must first meet the eligibility 
criteria listed in paragraph (c) of the rule indicating that exposure 
to the new substance, and [[Page 16338]] hence the risk presented by 
the substance, is low. Except as provided under the surface water and 
ambient air criteria, the human exposure side of the eligibility 
criteria requires the submitter to show that there are no exposures to 
consumers or the general public inherent in the proposed manufacturing, 
processing, or uses of the substance, and that any worker exposure 
which is likely to occur will be adequately controlled through use of 
engineering controls, work practices, and/or personal protective 
equipment.
    In terms of environmental releases, LoREX eligibility criteria for 
releases to three environmental media are listed. In assessing the 
potential for environmental release, the submitter is required to 
consider all routine releases from manufacture, processing, and use, 
including releases associated with cleaning of equipment and from 
disposal or cleaning of containers and packaging. For ambient surface 
water, submitters must either (1) prevent all direct and indirect 
releases of the exempted substance to surface waters; or (2) 
demonstrate that any releases to water that may occur will result in 
surface water concentrations of the substance that are no greater than 
1 part per billion (ppb) using the surface water concentration 
calculation method described in 40 CFR 721.90 and 721.91.
    As stated in paragraph (c)(2)(iii) of the rule, the Agency may 
approve of a surface water concentration level above 1 ppb for a new 
chemical substance if the manufacturer supports a request for a higher 
concentration with relevant and scientifically valid data on the new 
chemical substance or a close structural analogue of the substance 
which demonstrates that the new substance will not present an 
unreasonable risk of injury to aquatic species or human health at the 
higher concentration. When such data is submitted, the Agency may 
request the manufacturer to temporarily suspend the review period to 
permit adequate time to review the data.
    Based on the Agency's conservative assumptions for drinking water 
exposure estimates, surface water concentrations of 1 ppb will result 
in human drinking water exposures at or below the 1 mg/year LoREX 
drinking water criteria in nearly every case; therefore, compliance 
with the drinking water exposure criteria will be presumed from 
compliance with the 1 ppb surface water level. The Agency reserves the 
right, however, to require lower surface water concentrations on a 
case-by-case basis when concerns for carcinogenicity, neurotoxicity, or 
other serious chronic effects are raised, or under conditions where 
actual drinking water exposures are likely to significantly exceed the 
1 mg/yr dosage if the Agency makes the findings in Sec. 723.50(d).
    The LoREX eligibility criterion for maximum annual average ambient 
air release concentration from incineration is 1 g/m3. 
This level was derived from air exposure modeling estimates of maximum 
ground level concentrations from incinerator stacks, using worst case 
meteorological data sets. To determine whether a particular substance 
meets the criterion, submitters must calculate exposure levels using 
the method described in Sec. 723.50(c)(2). As with drinking water 
exposures, the Agency may require lower air release levels in 
individual cases as the Agency makes the finding in Sec. 723.50(d).
    For land/groundwater disposal, LoREX substances must not be 
disposed of by landfill or other land disposal methods unless the 
submitter demonstrates that the groundwater migration potential of the 
new substance is negligible. To make such a demonstration, a submitter 
must provide (1) data on the biodegradation and leaching potential of 
the new substance or a close analogue of the substance, (2) data on the 
inherent physical or chemical properties of the new substance (e.g., 
solubility in water), or (3) other data which clearly establishes that 
significant releases to groundwater will not occur. To fulfill this 
requirement, EPA suggests the following core set of tests to establish 
groundwater migration potential: (a) An inherent biodegradability in 
soil test (40 CFR 796.3400); (b) an anaerobic biodegradability of 
organic chemicals test (40 CFR 796.3140); and (c) depending on the 
substance's chemical properties, either a sediment and soil adsorption 
isotherm test (40 CFR 796.2750) or a soil thin layer chromatography 
test (40 CFR 796.2700). Although the Agency prefers test data on the 
specific new chemical substance, it will consider submitted data on 
close structural analogues to the new chemical substance. EPA strongly 
suggests that submitters contact the TSCA Prenotice Coordinator for 
guidance prior to commencement of the above testing.
    Although it is difficult to state in advance precisely what 
combinations of results from the above testing would clearly establish 
that the groundwater migration potential of a chemical substance is 
``negligible'', some broad parameters may be given. For example, 
manufacturers who perform soil adsorption testing that result in values 
for the logarithm of the soil adsorption coefficient (``log KOC'') of 
their new chemical substances of 4.5 or greater will generally be found 
to have satisfied the ``negligible groundwater migration potential'' 
standard, unless there is reason to believe that the substance is 
extremely persistent in the environment. Similarly, biodegradation test 
data demonstrating half-lives of chemical substances of under 1 week, 
or complete degradation in under 2 weeks, would satisfy the LoREX 
criterion in most instances. Hydrolysis data showing that a new 
chemical substance hydrolyses at a rapid rate would also generally be 
accepted by the Agency. Chemical substances which do not show either a 
4.5 or greater Log KOC value alone or a half-life of under 1 week alone 
may nonetheless qualify for the LoREX exemption if the two values in 
combination, or together with other relevant data, support a conclusion 
that significant amounts of the substances will not reach aquifers.
    The Agency encourages potential submitters to consult with the 
Agency prior to the initiation of any testing. Such consultation 
frequently results in more relevant data and can often lower the 
submitters' test costs.
    Upon approval of a LoREX exemption, the submitter is bound to the 
uses and the exposure and release controls described in the approved 
exemption. The submitter is also bound to the listed manufacturing 
sites unless the conditions described in paragraph (j)(6) are met. The 
Agency will deny an exemption application despite satisfaction of the 
LoREX exemption criteria if EPA makes the findings in Sec. 723.50(d) or 
if there are issues concerning exposure or toxicity that require 
further review beyond 30 days under Sec. 723.50(h)(1).

B. Discussion of the Public Comments and the Final Rule

    This unit of the preamble summarizes the major public comments 
received, clarifies several areas of confusion identified by the public 
comments, and discusses the differences between the final rule and the 
proposal. Readers are also encouraged to consult the preamble of the 
proposed rule (58 FR 7646) for further explanation of these provisions.
    Comment 1--Information reporting burden. Several commenters 
suggested that the information reporting requirements for both proposed 
exemption categories are overly burdensome and would discourage use of 
those exemptions; they believed that, because of this burden, many 
potential applicants would choose to submit full PMNs rather than use 
either of these two exemptions. [[Page 16339]] 
    Response. The Agency reviewed the proposed information reporting 
requirements and has, to lesson that burden, revised those requirements 
in several areas, as described below. However, after close examination, 
EPA concluded that, in the context of these two exemption categories, 
some additional reporting burden is inevitable if the exemptions are to 
be practicable. This conclusion was based upon several factors. First, 
EPA believes that more information is necessary to support the TSCA 
section 5(h)(4) ``will not present an unreasonable risk'' finding for 
the higher production volume chemical substances likely to be reviewed 
under both the expanded low volume exemption, and for the new LoREX 
exemption category which does not contain any production volume 
limitations for eligibility. Second, in the Agency's experience under 
the prior low volume exemption (LVE), resolution of many exemption 
applications has been significantly delayed because additional 
information was needed to make regulatory decisions. Between June 1992 
and January 1993, for example, over 12 percent of the LVE submissions 
were suspended during the review period pending receipt of additional 
human exposure, environmental release, worker protection, and/or 
environmental release control information necessary for the Agency's 
risk assessment. The percentage of submissions delayed for additional 
information would likely be significantly higher for the new higher-
volume exemptions without some augmentation of the reporting 
requirements. Such delays would be very costly to both industry, 
through lost sales, and to EPA, through higher administrative 
expenditures.
    One reporting area which several commenters identified as being 
particularly burdensome on manufacturers was human exposure/
environmental release estimates, especially estimates for processing 
and use sites controlled by others. This burden was asserted to be 
especially acute on manufacturers of small volume specialty chemical 
products.
    Upon review of these comments, EPA believes that, if provided with 
basic process descriptions for the proposed manufacturing, processing, 
and use operations of a new chemical substance, EPA can generate 
adequate exposure and release estimates for most types of new chemical 
substances which may be manufactured under the new low volume 
exemption. This belief is based on the experience gained from reviewing 
TSCA section 5 submissions for over 25,000 new chemical substances over 
the past 16 years. Therefore, the final rule has been amended to make 
information on human exposures and environmental releases for low 
volume exemption applicants optional if that information is not known 
by or readily available to the manufacturer. Manufacturers should be 
aware, however, that EPA-generated exposure and release estimates will 
generally be very conservative due to the uncertainties over the actual 
operating conditions which will be present at the manufacturing, 
processing, and use sites. Therefore, it will generally be in the 
applicants' interest to supply exposure and release data wherever 
possible. To assist in reporting such data under both the low volume 
and LoREX exemptions, the Agency has prepared a draft guidance 
document: Guidance for Reporting Occupational Exposure and 
Environmental Release Information under 40 CFR 723.50. This document 
may be obtained through the TSCA Assistance Information Service at 
(202) 554-1404; TDD (202) 554-0551; online service modem (202) 554-
5603.
    Comment 2-- Customer noncompliance reporting provisions. Several 
companies expressed concern over the provisions in the proposal which 
would require exemption holders to immediately cease distribution of 
the exempted substance to any downstream recipient the holder learns is 
processing or using the exempt substance in violation of use, 
environmental release, worker exposure, or other restrictions of the 
exemption, and to report such violations to the Agency. It was 
suggested that the Agency adopt the alternative procedures for dealing 
with customer noncompliance now used by the Agency in its TSCA section 
5(e) consent orders.
    Response. The provisions in the proposal for customer notification 
of exemption restrictions and for reporting customer noncompliance and 
ceasing distribution pending EPA's investigation into deviations from 
exemption conditions are not new; they were retained from the prior low 
volume exemption regulation. (See existing 40 CFR 723.50(j)). The 
Agency has serious concerns over the environmental and human health 
risks which may result from any failures by downstream recipients to 
comply with the requirements of an approved exemption. Nevertheless, 
the Agency appreciates the difficulties which may flow from a 
requirement to immediately cease distribution to noncomplying 
customers, regardless of the gravity of the violation, and believes 
that the procedures developed in the section 5 consent order context 
would be appropriate in this exemption also. Therefore, the final rule 
has been modified as follows: If a manufacturer holding an exemption 
learns that a direct or indirect customer is processing or using the 
exempt substance in violation of any provisions of the exemption, the 
manufacturer must cease distribution of the substance to the customer 
or the customer's supplier immediately unless the manufacturer is able 
to document each of the following: (1) That the manufacturer has, 
within 5 working days, notified the customer in writing that the 
customer has failed to comply with the conditions specified in 
Sec. 723.50 and the exemption notice; and (2) that, within 15 working 
days of notifying the customer of the noncompliance, the manufacturer 
received from the customer, in writing, a statement of assurance that 
the customer is aware of the terms of Sec. 723.50 and the exemption 
notice and will comply with those terms. If, after receiving a 
statement of assurance from a customer, the manufacturer obtains 
knowledge that the customer has failed to comply with any of the 
conditions specified in the Sec. 723.50 and the exemption notice, the 
manufacturer must immediately cease supplying the exempted substance to 
that customer and must report the failure to comply to EPA within 15 
days of obtaining this knowledge. Within 30 days of its receipt of the 
report, EPA will notify the manufacturer whether, and under what 
conditions, distribution of the new chemical substance to the customer 
may resume.
    Comment 3-- Changes in manufacturing site. Several commenters 
requested that the Agency consider providing greater flexibility 
regarding changes in manufacturing sites for both categories of 
exemptions. They stated that such unanticipated changes as a sudden 
increase in demand or equipment failure at the original site can 
quickly create a need to employ an alternative manufacturing site on 
short notice. In such cases, the proposed process of obtaining approval 
for a new site may preclude the start up of another manufacturing 
operation in a timely fashion.
    Response. In response to these comments, the Agency has added a new 
provision to the final rule which permits applicants to change 
manufacturing sites under the following conditions: First, where the 
magnitude, frequency, and duration of exposure of workers to the 
chemical substance at the new manufacturing site is equal to, or less 
than, the magnitude, frequency, and duration of worker exposures to the 
[[Page 16340]] chemical substance at the manufacturing sites for which 
the Agency performed its risk-assessment pursuant to the original 
exemption notice; and second, where either (1) at the new manufacturing 
site, the manufacturer does not release to surface waters any of the 
chemical substance, or any waste streams containing the chemical 
substance; or (2) at the new manufacturing site, the manufacturer 
maintains surface water concentrations of the chemical substance, 
resulting from direct or indirect discharges from the manufacturing 
site, at or below 1 ppb, or at or below an alternative concentration 
level approved by the Agency in writing or under the procedures 
described at 40 CFR 723.50(c)(2)(iii) of the rule. The surface water 
concentrations shall be calculated using the method described at 40 CFR 
721.91 and 721.92.
    To meet the first condition described above regarding worker 
exposure, a manufacturer need only maintain records showing that the 
new manufacturing site is employing the same basic manufacturing 
technology as that described in its initial exemption notice, such that 
there is not an appreciable difference in worker exposures during 
operations at the new site compared to the original sites. 
Alternatively, a manufacturer could show that the technology at the new 
site, though different, actually decreases worker exposure levels 
because of improved containment equipment, mechanization of 
manufacturing processes, or similar improvements.
    The water release conditions may be satisfied simply by calculating 
the surface water concentrations using the method described at 40 CFR 
721.90 and 721.91 and maintaining records of the calculations. For 
chemical substances regulated under either LoREX or the low volume 
exemption, the surface water concentrations must be at or below 1 ppb. 
If the Agency has approved a higher concentration level for a 
particular LoREX chemical substance under the procedures described at 
40 CFR 723.50(c)(2)(iii), the water concentration must be at or below 
that higher level. The Agency will, upon request, provide LVE holders 
with the water concentration of concern (``COC'') used by the Agency in 
its risk assessment for the new chemical substance. LVE holders 
changing manufacturing sites must maintain surface water concentration 
levels at or below 1 ppb or the Agency-prescribed COC, whichever is 
greater.
    All manufacturers who change or add manufacturing sites pursuant to 
these procedures must inform the Agency of the address of the new sites 
no later than 30 days after the commencement of manufacture at each new 
site. All other terms and conditions of the original exemption will 
continue in effect.
    Comment 4--LoREX eligibility criteria. Several commenters suggested 
that the proposed LoREX eligibility criteria were too stringent, that 
very few chemical substances could meet the eligibility requirements, 
and that the Agency would achieve its streamlining objectives more 
directly by establishing an exemption for site-limited intermediates.
    Response. The Agency largely disagrees with these comments. As 
explained in unit II. A. 2. of this preamble, EPA believes that the 
performance-based eligibility criteria for the LoREX exemption will be 
achievable for a significant number of new chemical substances, and 
that, once manufacturers become more familiar with the criteria, they 
will find it to be much more versatile than a site-limited intermediate 
exemption.
    As discussed above in this preamble, the Agency has prepared a 
draft guidance document to assist manufacturers in reporting exposure 
and release information under this exemption. The draft document, 
entitled Guidelines for Reporting Occupational Exposure and 
Environmental Release Information under 40 CFR 723.50, explains in 
detail the type of information EPA will need to assess the potential 
risks of new chemical substances manufactured under the LoREX and low 
volume exemptions, and the type of documentation the Agency believes is 
adequate to support an exemption. The document may be obtained through 
the TSCA Assistance Information Service at (202) 554-1404; TDD (202) 
554-0551; online service modem (202) 554-5603.
    As stated throughout the proposal, the Agency was very interested 
in considering any alternative LoREX criteria which commenters might 
suggest. Despite those invitations, very little comment was offered on 
the specific proposed criteria itself. Nevertheless, the Agency 
reexamined the proposed criteria and has decided that the ambient 
surface water criteria could be amended to permit higher water 
concentrations in certain cases. Specifically, EPA determined that it 
could permit surface water concentrations above the standard 1 ppb if 
the higher level is supported by relevant and scientifically valid data 
on the new chemical substance or on a close structural analogue to the 
new chemical substance which adequately demonstrates that the new 
chemical substance will not present an unreasonable risk of injury to 
aquatic species or human health at the higher surface water 
concentration. Because scientific review of submitted test data will 
often require more than the normal 30-day review period, the Agency 
may, on a case-by-case basis, request manufacturers to temporarily 
suspend the review period pending data review.
    Comment 5--Revocation provisions. Several commenters objected to 
the proposed provisions regarding revocation of exemptions after 
expiration of the review period. Under the proposal, the Agency could, 
based on new information, notify an exemption holder that EPA had 
determined that the new chemical substance did not meet the terms of 
the exemption and, after providing an opportunity for the holder to 
submit objections, could issue a final determination revoking the 
exemption if it disagreed with the exemption holder's objections. 
Numerous commenters were very concerned over the potential for business 
interruptions and loss of credibility with customers, and predicted 
that many prospective exemption applicants would choose submission of a 
full premanufacture notification rather than risk revocation of an 
exemption under the proposed provisions. Many suggested that the Agency 
reinstate the original notice of ineligibility provisions contained in 
the prior low volume exemption regulations.
    Response. The Agency believes that manufacturers' concerns over 
unwarranted revocations overstate the potential for commercial harm 
coming to them as a result of these provisions. In fact, as the Agency 
stated during public hearings on the exemption, in the 9 years that the 
low volume exemption has been in effect, EPA has yet to invoke the 
post-review period revocation provisions in a single instance. 
Moreover, the Agency believes that the type of information which would 
convince it to invoke the revocation provisions would also convince 
most exemption holders to voluntarily withdraw their exemptions or 
undertake appropriate measures to mitigate the potential risk posed by 
the new chemical substance. Nevertheless, the Agency understands that a 
perceived risk of sudden business interruptions by prospective 
applicants and their customers may greatly discourage utilization of 
the exemption. In the final rule, therefore, EPA has reinstated the 
post-review period notice of ineligibility provisions as they were 
promulgated in the original low volume exemption. Those provisions 
differ from the [[Page 16341]] proposed provisions in 2 principal 
respects: first, the decision to invoke the provisions must be made by 
the Assistant Administrator for the Office of Prevention, Pesticides, 
and Toxic Substances; and second, if the Assistant Administrator 
determines, after a final determination that the substance does not 
meet the terms of the exemption, that the exemption holder acted with 
due diligence and in good faith to meet the terms of the exemption, the 
exemption holder may, if it submits a PMN for the new chemical 
substance, continue to manufacture, process, use, and distribute the 
new chemical substance unless EPA subsequently takes action under 
section 5(e) or 5(f) of TSCA.
    Comment 6--User fees. Most commenters stated that, because 
exemption applications are less burdensome upon the Agency than a full 
PMN submissions, the proposed $2,500 user fee for the exemptions should 
be lowered to reflect this savings.
    Response. Although the applications submitted under these two 
exemptions will be less costly, on average, for the Agency to review 
than PMN submissions, the average cost to the Agency of reviewing an 
exemption will still exceed $2,500; however, as a further incentive for 
manufacturers to utilize these exemptions wherever possible, the Agency 
has at this time decided not to impose a user fee requirement for these 
exemptions.

III. Rationale for Expanding the Low Volume Exemption Category

A. Chemical Substances Manufactured at 10,000 Kilograms or Less Per 
Year

    The basic rationale for expanding the low volume exemption category 
from 1,000 kilograms per year to 10,000 kilograms per year is the same 
as that for proposing the exemption initially: chemical substances 
produced in lower quantities generally involve correspondingly lower 
human exposures and environmental releases, and thus generally present 
less risk than high volume substances. In the Agency's experience 
reviewing PMN substances in the 1,000 to 10,000 annual production 
range, very few of these substances present risks of injury to human 
health or the environment significantly greater than the substances 
produced under the existing low volume exemption. Additionally, the 
Agency believes that the low volume exemption has been a very 
successful regulatory mechanism as measured by the level of EPA 
administrative resources needed to implement it and the relative burden 
it places on manufacturers. Because of this success, EPA believes that 
both its interests and the interests of industry will be served by 
enlarging the portion of new chemical substances which may be 
manufactured under the exemption.

B. Low Release and Exposure (LoREX) Chemical Substances

    In addition to the production volume-based category described 
above, EPA is promulgating a new TSCA section 5(h)(4) exemption 
category based on low levels of environmental release of and human 
exposure to the new chemical substance. Eligibility is independent of 
production volume level.
    The Agency believes that the concept of basing an exemption on low 
release and exposure offers several potential advantages over a more 
broad volume-based exemption. First, an exposure-driven exemption 
generally provides a more direct gauge of the magnitude of risk 
presented by a given new chemical substance. Production volume alone is 
only an indirect indicator of exposures and releases. Secondly, EPA 
believes that the existence of a LoREX exemption will encourage 
pollution prevention techniques by rewarding manufacturers able to meet 
the low release and exposure criteria with more timely regulatory 
decisions, and in many cases, with less burdensome regulatory controls. 
Such a result would entail substantial time and resource savings for 
both EPA and industry.
    1. LoREX criteria. EPA has decided to set general performance 
standards for the LoREX exemption. Persons applying for exemptions are 
responsible for complying with these performance standards. Section 
723.50(c) sets out the performance standards as ``criteria.'' Some are 
absolute, e.g., no releases to surface waters resulting in water 
concentrations above 1 ppb. Others set a goal but allow compliance to 
be achieved without an absolute guarantee (e.g., no dermal or 
inhalation worker exposure) but this result is assumed to occur if 
``adequate'' controls are used. In others, a general standard is set, 
but EPA can approve a different level for a specific new chemical 
substance (e.g., no surface water releases resulting in surface water 
concentrations above 1 ppb unless a higher concentration is approved 
based on data provided by the applicant in the notice). In all cases, 
EPA does not specify how the exemption applicant is to achieve the 
performance standard. In its exemption notice, the applicant will 
describe how it limits exposure with respect to all the criteria in the 
exemption. EPA will evaluate whether these meet the criteria in 
Sec. 723.50(c)(2). If they do, EPA will grant the exemption. If the 
exemption is granted by EPA, the exemption holder is responsible for 
complying with the standards throughout the period of the exemption and 
with any controls or limitations specified in its exemption notice.
    a. Human exposure. In determining the appropriate criteria for 
defining the types and/or levels of exposure which should constitute 
``low exposure'' to humans, EPA considered three distinct populations: 
workers, consumers, and the general population. EPA believes that, for 
purposes of this exposure-based exemption, any direct exposures to 
consumers and the general population would be, in the context of an 
abbreviated review period, inconsistent with the Agency's statutory 
obligation under section 5(h)(4) to affirmatively find that the 
exempted substances will not present an unreasonable risk of injury to 
human health. Therefore, the Agency believes that any consumer and/or 
general population exposures (other than the negligible drinking water 
and ambient air exposures discussed later in this preamble) should 
automatically disqualify new chemical substances from LoREX exemption 
eligibility.
    Exposures to workers may be more readily monitored and controlled 
through engineering controls, workplace practices, and/or protective 
equipment requirements. Therefore, the Agency believes that it may, 
consistent with its section 5(h)(4) obligation, approve a high 
percentage of LoREX exemption notices where appropriate control 
measures are instituted in the workplace.
    Workplace exposures may occur through inhalation or dermal contact. 
For dermal exposures, the Agency believes that the general dermal 
exposure requirements used in section 5(e) consent orders and 
significant new use rules (SNURs) generally provide ``adequate dermal 
exposure controls.'' These include that all workers reasonably likely 
to be exposed to LoREX substances be provided with, and required to 
wear, chemical protective equipment which provides a barrier to prevent 
all dermal exposure to the substance. Chemical protective clothing used 
to provide this barrier is demonstrated to be impervious to the 
substance under the expected conditions of use and duration of 
exposure. Such demonstration could be accomplished under the procedures 
described at 40 CFR 721.63(a)(3)(i) - (ii) of the SNUR provisions by 
actually testing the material used to make the chemical protective 
clothing and/or by evaluating the specifications from the 
[[Page 16342]] manufacturer or supplier of the chemical protective 
clothing to establish that it will be impervious to the exempted 
substance alone and in likely combination with other chemical 
substances in the work area.
    To provide ``adequate inhalation exposure controls,'' submitters of 
LoREX exemption notices will (i) identify the workplace operations 
where inhalation exposure is likely to occur; (2) assess the magnitude, 
frequency, and duration of potential exposure; (3) assess the 
effectiveness of the various exposure controls; and (4) select the 
method or combination of methods that will provide workers with the 
appropriate protection for the given workplace. While the Agency 
strongly encourages submitters to reduce workplace exposures at their 
source, where feasible, submitters could also ``provide adequate 
inhalation exposure controls'' based on the use of appropriate 
respiratory protection equipment. To achieve adequate controls, the 
Agency believes it most appropriate for a submitter to comply with the 
general requirements regarding respiratory protection used in TSCA 
section 5(e) consent orders and SNURS. These requirements stipulate the 
use of respiratory protection in accordance with the National Institute 
of Occupational Safety and Health (NIOSH) regulations at 30 CFR part 
11, and the Occupational Safety and Health Administration (OSHA) 
regulations at 29 CFR 1910.134. (See generally 40 CFR 721.63). 
Similarly, the inherent physical or chemical properties of the 
substance submitted for an exemption may form the basis for a 
conclusion of adequate exposure controls, as in a nonvolatile dye 
manufactured, processed, and used only in solution, such that 
inhalation of particulates will not occur.
    b. Environmental release-- i. Water releases. The LoREX water 
release eligibility criterion of <1 ppb surface water concentration was 
established on the basis of EPA's experience in conducting 
environmental risk assessments on PMN substances. The concentration 
level must be calculated by the submitter using the method described in 
40 CFR 721.90 and 721.91. Based on EPA's PMN experience, aquatic 
toxicity concern levels have only very rarely been established at 
levels below 1 ppb. Thus, EPA is confident that the vast majority of 
LoREX exemption notices satisfying this criterion will not present an 
unreasonable risk of acute or chronic aquatic toxicity, and that the 
Agency's risk assessment capabilities will identify those few 
exemptions which may require more strict concentration levels to 
protect against potential aquatic risks during the 30-day notice 
period.
    ii. Air releases from incineration. The LoREX incineration air 
release eligibility criterion of < 1 g/m3, like the 
ambient surface water criterion, was selected on the basis of 
experience gained in conducting risk assessments on over 25,000 new 
chemical substances since 1979. At this maximum annual average 
concentration, EPA believes that, using worst case estimates, the 
maximum human exposures downwind from incinerators will be 
toxicologically insignificant for most of the chemical substances it is 
likely to review under the LoREX exemption. As noted above, however, 
the Agency may require individual submitters to adhere to lower 
incineration release levels for substances for which chronic toxicity 
concerns are raised during the risk assessment.
    The methodology for calculating maximum annual average 
concentration (see subparagraph (c)(2)(iv) of the rule) was based on 
computer modeling similar to that used by the Agency in the PMN review 
process. Those interested in more detail on this methodology should 
consult the docket established for this rulemaking.
    Submitters should also be aware that, although the final rule has 
not established generic eligibility criteria for fugitive air emissions 
unrelated to incineration, the Agency will review the potential for 
such emissions on a case-by-case basis, and will deny exemptions if the 
air emissions reach such levels as to undermine the Agency's ability to 
conclude that the substances in question will not present an 
unreasonable risk. Based on EPA's PMN experience, chemical substances 
with fugitive air emissions under 23 kilograms per site per year are 
seldom found to present an unreasonable risk of injury to the general 
population. Therefore, manufacturers submitting a LoREX exemption 
notice for substances with fugitive air emissions below that level are 
unlikely to be denied an exemption on that basis.
    iii. Land/groundwater releases. The final rule excludes from 
eligibility all chemical substances which will be disposed of via 
landfill unless the submitter demonstrates to EPA in the notice that 
the exempted substance has negligible ground-water migration potential. 
This standard was deemed most appropriate for this purpose because the 
Agency was unable to develop a broadly applicable method for estimating 
groundwater concentrations of chemical substances based on landfill 
disposal volume that would allow development of a generic criterion. 
Given the many variables involved in making such estimates (e.g., 
migration rates, biodegradation rates, sediment/soil adsorption rates), 
EPA does not believe it will be possible to develop a generic model for 
estimating groundwater concentrations for a significant number of 
substances with sufficient reliability to support the requisite ``will 
not present an unreasonable risk'' finding. Consequently, the Agency 
believes that, in the context of an abbreviated review period in which 
in-depth case-by-case assessments of groundwater leaching potential are 
infeasible, prudence dictates that negligible release be the primary 
standard.
    However, potential LoREX exemption submitters with no viable 
alternatives to landfill disposal have the option of demonstrating to 
the Agency's satisfaction that their substance will not migrate to 
groundwater. A list of suggested tests to establish groundwater 
migration potential is contained in Units II.A.2. of this preamble. If 
such a demonstration is made, a submitter would be permitted to 
landfill excess quantities of the exempted substance up to the amounts 
approved in its exemption notice. In all cases, however, the Agency 
strongly encourages submitters to strive for total elimination of 
releases through employment of the best available pollution prevention 
techniques. (See Unit II.A.2. of this preamble for further guidance on 
this criterion).

IV. Regulatory Analysis

A. Summary of Risk Assessment

    1. 10,000 kilogram/year chemical substances. To assess the risk 
associated with raising the ceiling for new chemical substances 
eligible for the low volume exemption from 1,000 kilograms/year to 
10,000 kilograms/year, the Agency relied primarily upon the risk 
assessment developed to support the 1985 final low volume rule, along 
with the earlier version used to support the 1982 proposed low volume 
and site-limited intermediate rules.
    a. Exposure assessment. The exposure assessment illustrates that, 
while low production volume in itself limits potential for exposure and 
environmental release, manufacture, processing, and use of new chemical 
substances can in some circumstances result in significant exposures at 
both the 1,000 and 10,000 kilogram annual production levels.
    i. Occupational exposure. Based on PMN data, the number of workers 
exposed during manufacturing ranged from an average of about four for 
new [[Page 16343]] chemical substances manufactured in quantities of 
1,000 kilograms or less per year to an average of about eight for new 
chemical substances manufactured in quantities of 10,000 kilograms or 
less per year. Duration of exposure associated with manufacture 
averaged about 5 hours per day at both production levels, and the 
average number of days of production per year was 62.
    Only a limited number of PMNs included estimates of workplace 
concentration. The average concentrations associated with manufacture 
were most often in the ranges of 0 to 1 and 1 to 10 mg/m3 for 
airborne solids and in the 1 to 10 ppm range for vapors. EPA's 
evaluation of OSHA data (USEPA, OTS ``Site-Limited Intermediate 
Exemption: Occupational Exposure and Environmental Release 
Assessment.'' March 19, 1982) indicated a time weighted average (TWA) 
of 6 ppm, with a maximum value of 72 ppm for vapors. EPA believes that 
data obtained from OSHA monitoring activities provides more reliable 
estimates of workplace concentrations.
    EPA's analysis of processing and use of low volume chemicals 
indicated that the wide variety of possible processing and use 
operations can result in a wider range and higher level of exposures 
than is typically associated with manufacturing operations. The average 
number of workers exposed during processing and use operations exceeded 
the average numbers typically exposed during manufacturing. The number 
ranged from an average of 12 workers for a chemical processed in 
quantities of 1,000 kilograms or less per year to an average of 141 
workers for chemicals processed or used in quantities of 10,000 
kilograms or less per year.
    ii. Consumer exposure. Consumer exposures were assessed for five 
use scenarios: photographic chemicals used in home darkrooms; spray 
adhesives; paints; dyes; and fragrances used in detergents. The use 
scenarios, which reflected actual uses reported in PMNs, were selected 
to represent divergent and potentially significant exposure situations. 
In these scenarios, the individual lifetime average daily exposures 
were estimated to range from 0.0016 mg/kg/day for a fragrance in soap 
to negligible levels for dyed fabrics.
    According to EPA's analysis, many of the consumer use scenarios 
could result in relatively large numbers of consumers exposed. The 
numbers of consumers potentially exposed at the 10,000 kilogram 
production level ranged from 76,000,000 for a fragrance in shampoo to 
98,000 for a spray adhesive. Because the concentration of a new 
chemical substance in a final product remains constant, the production 
volume is likely to affect only the number of consumers exposed, not 
the exposure level to each individual. Therefore, the number of 
consumers exposed at the 10,000 kilogram production limit is about 10 
times the number that would be exposed at the 1,000 kilogram limit.
    b. Environmental release. The Agency used data derived from PMN 
submissions for estimating the likely magnitude, duration, and 
frequency of environmental releases from manufacturing chemical 
substances under the new low volume exemption. The exposure analysis 
indicated that the average quantity released to water is 0.08 percent 
of the production volume, with an upper bound of 0.4 percent. Amounts 
released to air average 0.03 percent of production volume, with a 0.2 
percent upper bound. However, some processing and industrial uses 
result in more substantial release rates, with a range from 0.3 to 25 
percent of the production volume released to water. Discharges of a new 
low volume chemical substance from a single site processing 10,000 
kilograms of the substance were estimated to produce environmental 
concentrations ranging from less than 0.0005 to 5.2 ppm in a receiving 
stream whose stream dilution factor was equal to the national median 
for streams receiving effluent from industrial facilities.
    In some cases, such as detergent additives, environmental releases 
from consumer uses equaled the total production volume; however, the 
actual magnitude of environmental exposure was determined to be 
insignificant due to the low production volume, the wide distribution 
of release, and the small amount of new chemical substance typically 
contained in each consumer product.
    c. Risk under exemption conditions. There are several elements of 
the exemption amendment that will significantly reduce risks to human 
health and the environment.
    Chemical substances with carcinogenic, teratogenic, neurotoxic, and 
other chronic effects appear to present the greatest risks even at 
relatively low exposures. The Agency will deny exemptions for new 
substances which may cause such effects under anticipated conditions of 
manufacture, processing, distribution in commerce, use, or disposal. 
These denials will significantly reduce the likelihood that chemicals 
that present such risks would be manufactured under the amended 
exemption. If the exemptions for such substances are denied, or if 
their submitters are required to resubmit their exemption notices to 
provide for more stringent release and exposure controls prior to 
approval, the range of potential risks would be substantially below the 
high end of EPA's estimates.
    In addition, under the amended regulation, EPA would continue to 
review all exemption notices during the 30-day review period. This 
review will help ensure that manufacturers choose appropriate 
safeguards to control risks, as well as provide a screen to identify 
substances that do not qualify for the exemption.
    2. Low exposure/release chemical substances. The risk associated 
with a given substance is a function of both the inherent toxicity 
(hazard) of the substance and the exposure of the relevant organism to 
the substance. Therefore, to the extent that releases and exposures are 
maintained below certain critical levels, potential risks presented by 
the substance are minimal. To assess the potential risk associated with 
the LoREX exemption, the Agency evaluated the exposure and release 
criteria in the context of its experience conducting risk assessments 
on over 25,000 new chemical substances in the PMN program over the last 
16 years. Based on this experience, EPA tailored its LoREX exemption 
criteria in a manner to exclude from eligibility virtually all of the 
new chemical substances which the Agency believes could present 
potentially significant human or environmental exposures under 
conditions of manufacturing, processing, and use. For those substances 
which meet the eligibility criteria but may nevertheless present 
significant risks due to unusually high known or predicted toxicity 
levels, the Agency will either deny the exemptions or condition 
approval upon satisfaction of stricter exposure and release 
requirements.
    a. Human exposure. Due to the wide range of possible consumer and 
general population exposures from the universe of new chemical 
substances, the Agency concluded that it could not develop any 
meaningful consumer or general population exposure criteria which would 
consistently screen out those substances which would present 
unreasonable risks from direct dermal or inhalation exposures. 
Consequently, EPA has excluded from LoREX exemption eligibility all new 
chemical substances which entail any direct consumer or general 
population exposure (except for negligible drinking water and ambient 
air exposures discussed in Unit IV.A.2.b. of this preamble). New 
chemical substances [[Page 16344]] intended for use in consumer paints, 
detergents, dyes, and other consumer products, therefore, would have to 
be reviewed by the Agency in a full PMN or under one of the other 
applicable PMN exemptions, unless the chemical substance is completely 
reacted, encapsulated in a polymer matrix, or otherwise not 
bioavailable in the final product.
    EPA has substantial experience with controlling worker exposure to 
new chemical substances from reviewing notices for over 25,000 new 
substances under section 5 of TSCA and issuing several hundred section 
5(e) consent orders and SNURs with worker protection requirements. EPA 
believes that worker exposure to new chemical substances can be 
controlled adequately through the use of appropriate engineering/
process controls and, if such controls cannot be used, through use of 
appropriate personal protective equipment. EPA has prescribed such 
controls and personal protective equipment in several hundred section 
5(e) consent orders and believes that their proper use reduces worker 
dermal and inhalation exposure to new chemical substances to minimal 
levels. Thus, EPA concluded that for workers, who can be protected 
adequately from exposure to new chemical substances, it would set a 
goal of no dermal or inhalation exposure and allow persons applying for 
LoREX exemptions to meet those goals by using ``adequate'' controls and 
personal protective equipment modelled on the sorts of controls EPA has 
employed in the section 5(e) context.
    b. Environmental releases. In terms of environmental releases, 
there are LoREX eligibility criteria for releases to three 
environmental media. For ambient surface water, the Agency is requiring 
that submitters either (i) prevent all direct and indirect releases of 
the exempted substance to surface waters; or (ii) demonstrate that any 
releases to surface water that may occur will result in surface water 
concentrations of the substance that are no greater than 1 part per 
billion (ppb) using the surface water concentration calculation method 
described in 40 CFR 721.90 and 721.91. Based on Agency worst case 
assumptions for drinking water exposure estimates, surface water 
concentrations of 1 ppb will result in human drinking water exposures 
at or below the 1 mg/year LoREX drinking water criterion in nearly 
every case; therefore, compliance with the drinking water exposure 
criterion will be presumed from compliance with the 1 ppb surface water 
level. The Agency retains the authority, however, to require lower 
surface water concentrations on a case-by-case basis when concerns for 
carcinogenicity, neurotoxicity, or other serious effects are raised, or 
under conditions where projected drinking water exposures are likely to 
significantly exceed the 1 mg/yr dosage.
    The LoREX eligibility criterion for maximum annual average ambient 
air release concentrations from incineration of the new chemical 
substance is 1 g/m3. This level was derived from air 
exposure modeling estimates of maximum ground level concentrations from 
incinerator stacks, using worst case meteorological data sets. To 
determine whether a particular substance meets the criteria, submitters 
would calculate exposure levels using the method described in 
Sec. 723.50(c)(2)(iv). As with drinking water exposures, the Agency may 
require lower air release levels in individual cases if concerns for 
significant health effects are raised for the new substance.
    For land/groundwater disposal, EPA is requiring that a LoREX 
substance not be disposed of by landfill or other land disposal methods 
unless the submitter demonstrates that the substance will not migrate 
to groundwater. (Consult unit II.A.2. of this preamble for further 
information on this criterion.)
    Upon approval of a LoREX exemption, the submitter is bound to the 
continuous use of the exposure and release controls described in the 
approved exemption notice, as well as the listed uses and, unless 
specified conditions are met, manufacturing sites. The Agency will deny 
an exemption notice notwithstanding satisfaction of the exposure-based 
exemption criteria if EPA determines that the new substance may cause 
serious acute or chronic effects or significant environmental effects 
under anticipated conditions of manufacture, processing, distribution 
in commerce, use, and disposal.

V. Economic Impact

    The regulatory impact analysis estimates the costs and benefits 
attributable to the regulation. In this case, the analysis also 
contains estimates for the three additional amendments to EPA's TSCA 
section 5 regulations, namely the Polymer Amendment, the Procedural 
Amendment, and the Non-5(e) Significant New Use Rule Amendment, also 
published today. Because these regulations are amendments to current 
regulations, the costs and benefits are incremental, estimating the 
effect of the amendment with respect to the current regulation.
    The costs and benefits associated with this amendment are partially 
quantified; many of the benefits are unquantified but are expected to 
be of significant importance. Considering only the quantified costs and 
benefits, there is a cost savings in most instances. Assuming either 
1,000, 2,000, or 3,000 annual section 5 submissions, the savings as 
compared to the current regulation are estimated to be:

------------------------------------------------------------------------
                                 Annual Cost Savings ($ Million)        
    Annual Number of    ------------------------------------------------
      Submissions                Industry               Government      
------------------------------------------------------------------------
1000...................         0.2 - 0.4                1.3 - 1.5      
2000...................         0.4 - 0.7                2.5 - 3.1      
3000...................         0.5 - 1.1                3.8 - 4.6      
------------------------------------------------------------------------

    This amendment expands the low volume exemption and establishes the 
LoREX exemption. Industry costs associated with the amendment to the 
low volume exemption are reporting costs and delay costs. Per 
submission reporting costs are increased due to the more comprehensive 
submission requirements. Delay costs for those substances which qualify 
for the current exemption are slightly higher, while delay costs are 
significantly reduced for those substances which currently must submit 
a full PMN submission but would qualify for the new exemption. Delay 
costs are the costs associated with the delayed introduction of the 
substance into the market due to section 5 regulations.
    Industry costs associated with the LoREX exemption are also 
reporting costs and delay costs. Because this would be a new exemption, 
all of the submitters would have originally been required to submit a 
full PMN submission and would be required to pay a user fee. Also, the 
reporting requirements are only slightly more than current 
requirements.
    Unquantified benefits associated with this amendment include (1) 
increased use of pollution prevention practices by submitters; (2) a 
greater emphasis on the use of low risk chemicals; and (3) bringing 
LoREX substance and new substances manufactured between 1,000 and 
10,000 kg per year to market more quickly. Regarding the third benefit, 
most chemical substances eligible for the exemption will clear review 
at least 60 days more quickly than if they had been submitted under a 
PMN; those substances that would have been regulated under section 5(e) 
will clear review, on average, 90 to 150 days sooner.
    The Agency's complete economic analysis is available in the public 
record for this rule (OPPTS-50596B). [[Page 16345]] 

VI. Finding of No Unreasonable Risk

    1. Statutory background. Under section 5(h)(4) of TSCA, EPA is 
authorized to exempt the manufacturer of any new chemical substance 
from all or part of the requirements of section 5 if EPA determines 
that the manufacture, processing, distribution in commerce, use, and 
disposal of the substance will not present an unreasonable risk of 
injury to human health or the environment. Section 26(c) of TSCA 
provides that any action authorized under TSCA for an individual 
chemical substance may be taken for a category of such substances. 
Under this regulation, EPA is exempting two categories of chemical 
substances: those with production volumes less than or equal to 10,000 
kilograms/year, and those with low human exposure and low release to 
the environment. EPA has determined that these are appropriate 
categories under TSCA sections 6(c) and 5(h)(4). For each of these 
categories, as discussed below, EPA has made a finding that new 
chemical substances eligible for the exemptions will not present an 
unreasonable risk of injury to human health or the environment when 
manufactured, processed, used, distributed in commerce, or disposed of 
under the terms of the exemptions, including EPA's 30-day review.
    The term ``unreasonable risk'' is not defined in TSCA. The 
legislative history, however, indicates that unreasonable risk involves 
the balancing of the probability that harm will occur and the magnitude 
and severity of that harm against the effect of the proposed regulatory 
action on the availability to society of the benefits of the chemical 
substance.
    2. Risks. In making the ``will not present an unreasonable risk'' 
finding under TSCA section 5(h)(4), EPA first considered the risk posed 
by granting each of the exemptions. Risk is the combination of the 
hazard presented by a chemical substance or category of chemical 
substances and the exposure of humans or the environment to the 
substances or category. EPA's determination of the reasonableness of 
risk involves a consideration of factors such as environmental effects, 
distribution, and fate of the chemical substance in the environment, 
disposal methods, waste water treatment, use of protective equipment 
and engineering controls, use patterns, and market potential of the 
chemical substance. These variables are difficult to quantify and 
standardize, thus EPA must supplement the available data with its 
professional judgment.
    EPA's determination that manufacture, processing, use, distribution 
in commerce, and disposal of these two categories of substances under 
the terms of these exemptions will not present an unreasonable risk of 
injury to human health or the environment is based on consideration of 
(i) the limitations on risk that would result from the safeguards built 
into the rule, including Agency review; (ii) the limitations on risk 
resulting from the restriction of the exemptions to the chemical 
substances manufactured at volumes of 10,000 kg/yr or less and to low 
release/low exposure chemical substances; (iii) the benefits to 
industry and the public provided by new chemical substances 
manufactured under the exemption; and (iv) the benefits to the public 
and the Agency from the Agency's enhanced ability to utilize its 
limited resources on reviewing new chemical substances and uses of 
higher risk and concern. EPA recognizes that, even with the safeguards 
imposed by this rule, it is not ensuring that there will be no risk 
from new chemical substances manufactured under the exemption. The 
statute does not require zero risk. Rather, it defines unreasonable 
risk as a balancing of risk and benefit. Because of the safeguards in 
the amended regulation, the requirement that the provisions of the 
approved exemption are binding on the submitter, and the restricted 
nature of the exemption categories, EPA believes that risks are not 
likely to be any greater than if the full PMN process were completed. 
Furthermore, the new chemical substances provide benefits to industry 
and to the public. These benefits are an important element in the 
finding that these substances will not present an unreasonable risk.
    The conditions of these exemptions are designed to mitigate risk, 
largely by the use of: (i) the reviews conducted by the Agency to 
assess whether the new chemical substances may cause chronic or acute 
human health or environmental effects; and (ii) the binding nature of 
the provisions of exemption notices, including the controls placed on 
exposure through worker protection requirements. For the low volume 
exemption, EPA determined that risks would generally be low because low 
production volume substances typically are not expected to result in 
high exposure to humans or the environment. Similarly, the eligibility 
criteria for the LoREX exemption directly limit permissible releases of 
and exposures to the exempted substances. In addition to the general 
finding of low release/low exposure, and therefore low risk for these 
categories, the restrictions and safeguards built into the exemptions 
will ensure that the risks presented by the exempt substances are low. 
For example, worker protection requirements and release restrictions 
imposed by the terms of the exemptions will minimize exposure, and 
therefore, risk.
    a. EPA review. Within the 30-day review period, EPA is confident 
that it can identify the few new chemical substances under these 
exemptions that will pose potential risks which require more detailed 
and comprehensive review. EPA's abbreviated review plays an important 
role in the two exemptions and in the unreasonable risk finding. EPA 
has lengthened the review period from 21 to 30 days to ensure that 
staff resources will be sufficient to review the exemption notices 
under the amended rule. Information to be reviewed include production 
volume, hazard information, descriptions of the manufacturing, 
processing, and uses, exposure controls, releases to the environment, 
and certain physical/chemical data which EPA will assess in making a 
determination of risk. During this period, the Agency will have 
sufficient time to identify any issues or problems that will require 
more careful analysis, such as that available in a full PMN review. If 
EPA determines that a new chemical substance is not eligible for an 
exemption, manufacture will not begin. The manufacturer would then be 
required to comply with TSCA section 5(a)(1) before the substance could 
be manufactured for commercial purposes by submitting a full PMN to the 
Agency.
    Despite the low risk generally associated with low volume and low 
release/low exposure substances, EPA recognizes that some substances 
that meet the general requirements for these exemptions, may present 
risks that are not appropriate for an exemption, thus EPA performs a 
30-day review of each exemption notice and can deny individual 
exemptions. For example, a highly toxic chemical substance may present 
an unreasonable risk even if exposure to the substance is low. 
Likewise, a low production volume chemical substance may present an 
unreasonable risk if it is hazardous and is manufactured or processed 
in a manner that would result in high human exposure or high release to 
the environment. Thus, although EPA is making a general finding that 
these categories of new chemical substances will not present an 
unreasonable risk under the terms of the exemptions, EPA will continue 
to evaluate exemption notices on a case-by-case basis to determine if 
individual substances [[Page 16346]] should be denied an exemption 
based on the potential risks presented by those substances. For a 
further discussion of how EPA will determine when to deny an exemption, 
see Unit III. of this notice.
    b. New information and EPA revocation. In addition to these 
safeguards, the rule contains several other provisions that further 
limit the possibility that exempted substances may present unreasonable 
risks. Most important, the rule establishes procedures for revocation 
of the exemption if EPA later determines that the substance may cause 
serious acute or chronic human effects or environmental effects. In 
addition, EPA has the authority to require documents relevant to an 
exemption from the manufacturer (in addition to the information 
provided in the exemption notice), and the manufacturer would be 
required to submit promptly to EPA any new data indicating that a 
substance is ineligible. These provisions will ensure that eligibility 
for and continuation of the exemption will be determined on the basis 
of the best available information, regardless of when the information 
becomes available.
    3. Benefits. EPA believes that these exemptions will allow many 
manufacturers to introduce new chemical substances in commerce much 
more rapidly than via the PMN process. The time and resource savings 
will also benefit EPA which will, by utilizing its limited assets more 
efficiently, be able to apply more staff time to reviewing higher risk 
chemical substances and uses.
    4. Pollution prevention considerations. The LoREX exemption is 
expected to further the Agency's pollution prevention efforts by 
encouraging development of manufacturing processes and technologies 
which reduce chemical releases and exposures at their source. Such 
reductions not only limit potential risks to people and the 
environment, but may also produce significant long-term cost savings to 
industry through the recapture and reuse of substances which would 
otherwise have been released into workplaces or the environment.
    5. Risk/benefit balance. As discussed above, EPA has determined 
that the risk presented by exempting these two categories of new 
chemical substances is low. At the same time, there are significant 
benefits to be achieved by the exemptions, which encourage innovation 
and permit manufacturers to introduce new chemical substances into 
commerce more rapidly. Thus, EPA has determined that, under the terms 
of this rule, the risks associated with low volume substances and low 
release/low exposure substances are outweighed by the benefits to 
society of exempting these substances from full PMN review.

VII. Rulemaking Record

    EPA has established a record for this rulemaking (docket control 
number OPPTS-50596B). The record includes basic information considered 
by the Agency in developing this rule. A public version of the record 
is available in the TSCA Nonconfidential Information Center from 12 
noon to 4 p.m., Monday through Friday, except legal holidays. The TSCA 
Nonconfidential Information Center is located in Rm. NE-B607 (Northeast 
Mall), 401 M St., SW., Washington, DC.

VIII. Regulatory Assessment Requirements

A. Executive Order 12866

    Under Executive Order 12866 (58 FR 51835, October 4, 1993), the 
Agency must determine whether the regulatory action is ``significant'' 
and therefore subject to review by the Office of Management and Budget 
(OMB) and the requirements of the Executive Order. Under section 3(f), 
the Order defines a ``significant regulatory action'' as an action that 
is likely to (1) have an annual effect on the economy of $100 million 
or more, or adversely and materially affect a sector of the economy, 
productivity, competition, jobs, the environment, public health or 
safety, or State, local or tribal governments or communities (also 
referred to as ``economically significant'') (2) create serious 
inconsistency or otherwise interfere with an action taken or planned by 
another agency; (3) materially alter the budgetary impacts of 
entitlement, grants, user fees, or loan programs or the rights and 
obligations of recipients thereof; or (4) raise novel legal or policy 
issues arising out of legal mandates, the President's priorities, or 
the principles set forth in this Executive Order.
    Pursuant to Executive Order 12866, it has been determined that this 
rule is not ``a significant regulatory action'' under section 3(f) of 
the Order. This action is therefore not subject to OMB review.

B. Regulatory Flexibility Act

    Pursuant to the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), 
the Agency has determined that this regulatory action will not impose 
any adverse economic impacts on small entities. EPA believes that, even 
if all of the notice submitters were small firms, the number of small 
businesses affected by this action will not be substantial. In 
addition, since this action will generally reduce the existing burden 
and cost imposed on notice submitters, the impact of this action on 
small entities should be an overall positive one.

C. Paperwork Reduction Act

    The information collection requirements in this rule have been 
approved by the Office of Management and Budget under the provisions of 
the Paperwork Reduction Act, 44 U.S.C. 3502 et. seq. and have been 
assigned OMB control number 2070-0012. The public reporting burden for 
this collection of information is estimated to vary from 96 to 116 
hours per response, with an average of 106 hours per response, 
including time for reviewing instructions, searching existing data 
sources, gathering and maintaining the data needed, and completing and 
reviewing the collection of information.

List of Subjects in 40 CFR Part 723

    Chemicals, Environmental protection, Premanufacture notification, 
Hazardous materials, Reporting and recordkeeping requirements.

Dated: March 21, 1995.

Carol M. Browner,
Administrator.

    Therefore, 40 CFR chapter I, part 723 is amended as follows:

PART 723 -- [AMENDED]

    1. The authority citation for part 723 continues to read as 
follows:

    Authority: 15 U.S.C. 2604.

    2. By revising Sec. 723.50 to read as follows:


Sec. 723.50  Chemical substances manufactured in quantities of 10,000 
kilograms or less per year, and chemical substances with low 
environmental releases and human exposures.

    (a) Purpose and scope. (1) This section grants an exemption from 
the premanufacture notice requirements of section 5(a)(1)(A) of the 
Toxic Substances Control Act (15 U.S.C. 2604(a)(1)(A)) for the 
manufacture of:
    (i) Chemical substances manufactured in quantities of 10,000 
kilograms or less per year.
    (ii) Chemical substances with low environmental releases and human 
exposures.
    (2) To manufacture a new chemical substance under the terms of this 
exemption a manufacturer must:
    (i) Submit a notice of intent to manufacture 30 days before 
manufacture begins, as required under paragraph (e) of this 
section. [[Page 16347]] 
    (ii) Comply with all other provisions of this section.
    (b) Definitions. The following definitions apply to this subpart.
    (1) Act means the Toxic Substances Control Act (15 U.S.C. 2601 et 
seq).
    (2) Consumer means a private individual who uses a chemical 
substance or any product containing the chemical substance in or around 
a permanent or temporary household or residence, during recreation, or 
for any personal use or enjoyment.
    (3) Environment has the same meaning as in section 3 of the Act (15 
U.S.C. 2602).
    (4) Environmental transformation product means any chemical 
substance resulting from the action of environmental processes on a 
parent compound that changes the molecular identity of the parent 
compound.
    (5) Metabolite means a chemical entity produced by one or more 
enzymatic or nonenzymatic reactions as a result of exposure of an 
organism to a chemical substance.
    (6) Serious acute effects means human disease processes or other 
adverse effects that have short latency periods for development, result 
from short-term exposure, or are a combination of these factors and 
that are likely to result in death, severe or prolonged incapacitation, 
disfigurement, or severe or prolonged loss of the ability to use a 
normal bodily or intellectual function with a consequent impairment of 
normal activities.
    (7) Serious chronic effects means human disease processes or other 
adverse effects that have long latency periods for development, result 
from long-term exposure, are long-term illnesses, or are a combination 
of these factors and that are likely to result in death, severe or 
prolonged incapacitation, disfigurement, or severe or prolonged loss of 
the ability to use a normal bodily or intellectual function with a 
consequent impairment of normal activities.
    (8) Significant environmental effects means:
    (i) Any irreversible damage to biological, commercial, or 
agricultural resources of importance to society;
    (ii) Any reversible damage to biological, commercial, or 
agricultural resources of importance to society if the damage persists 
beyond a single generation of the damaged resource or beyond a single 
year; or
    (iii) Any known or reasonably anticipated loss of members of an 
endangered or threatened species. Endangered or threatened species are 
those species identified as such by the Secretary of the Interior in 
accordance with the Endangered Species Act, as amended (16 U.S.C. 
1531).
    (9) Site means a contiguous property unit. Property divided only by 
a public right-of-way is one site. There may be more than one 
manufacturing plant on a single site.
    (10) The terms byproduct, EPA, importer, impurity, known to or 
reasonably ascertainable, manufacture, manufacturer, new chemical 
substance, person, possession or control, and test data have the same 
meanings as in Sec. 720.3 of this chapter.
    (c) Exemption categories. Except as provided in paragraph (d) of 
this section, this exemption applies to:
    (1) Any manufacturer of a new chemical substance manufactured in 
quantities of 10,000 kilograms or less per year under the terms of this 
exemption.
    (2) Any manufacturer of a new chemical substance satisfying all of 
the following low environmental release and low human exposure 
eligibility criteria:
    (i) Consumers and the general population. For exposure of consumers 
and the general population to the new chemical substance during all 
manufacturing, processing, distribution in commerce, use, and disposal 
of the substance:
    (A) No dermal exposure.
    (B) No inhalation exposure (except as described in paragraph 
(c)(2)(iv) of this section.
    (C) Exposure in drinking water no greater than a 1 milligram per 
year (estimated average dosage resulting from drinking water exposure 
in streams from the maximum allowable concentration level from ambient 
surface water releases established under paragraph (c)(2)(iii) of this 
section or a higher concentration authorized by EPA under paragraph 
(c)(2)(iii) of this section).
    (ii) Workers. For exposure of workers to the new chemical substance 
during all manufacturing, processing, distribution in commerce, use and 
disposal of the substance:
    (A) No dermal exposure (this criterion is met if adequate dermal 
exposure controls are used in accordance with applicable EPA guidance).
    (B) No inhalation exposure (this criterion is considered to be met 
if adequate inhalation exposure controls are used in accordance with 
applicable EPA guidance).
    (iii) Ambient surface water. For ambient surface water releases, no 
releases resulting in surface water concentrations above 1 part per 
billion, calculated using the methods prescribed in Secs. 721.90 and 
721.91, unless EPA has approved a higher surface water concentration 
supported by relevant and scientifically valid data submitted to EPA in 
a notice under paragraph (e) of this section on the substance or a 
close structural analogue of the substance which demonstrates that the 
new substance will not present an unreasonable risk of injury to 
aquatic species or human health at the higher concentration.
    (iv) Incineration. For ambient air releases from incineration, no 
releases of the new chemical substance above 1 microgram per cubic 
meter maximum annual average concentration, calculated using the 
formula:
    (kg/day of release after treatment) multiplied by (number of 
release days per year) multiplied by (9.68  x  10-6) micrograms 
per cubic meter.


    (v) Land or groundwater. For releases to land or groundwater, no 
releases to groundwater, to land, or to a landfill unless the 
manufacturer has demonstrated to EPA's satisfaction in a notice under 
paragraph (e) of this section that the new substance has negligible 
groundwater migration potential.
    (d)  Chemical substances that cannot be manufactured under this 
exemption. A new chemical substance cannot be manufactured under this 
section, notwithstanding satisfaction of the criterion of paragraphs 
(c)(1) or (c)(2) of this section, if EPA determines, in accordance with 
paragraph (g) of this section, that the substance, any reasonably 
anticipated metabolites, environmental transformation products, or 
byproducts of the substance, or any reasonably anticipated impurities 
in the substance may cause, under anticipated conditions of 
manufacture, processing, distribution in commerce, use, or disposal of 
the new chemical substance:
    (1) Serious acute (lethal or sublethal) effects.
    (2) Serious chronic (including carcinogenic and teratogenic) 
effects.
    (3) Significant environmental effects.
    (e) Exemption notice. (1) A manufacturer applying for an exemption 
under either paragraph (c)(1) or (c)(2) of this section must submit an 
exemption notice to the EPA at least 30 days before manufacture of the 
new chemical substance begins. The notice must be sent in writing to: 
TSCA Document Control Officer, (7407), Office of Pollution Prevention 
and Toxics, Environmental Protection Agency, 401 M St., SW., 
Washington, DC 20460. The date of submission will be the date on which 
the notice is received by the TSCA Document Control Officer. EPA will 
acknowledge the receipt of the notice by letter. The letter will 
identify [[Page 16348]] the date on which the review period begins. The 
notice shall be submitted using EPA Form No. 7710-25 (``the PMN 
form''), which may be obtained from EPA by writing the Environmental 
Assistance Division, (7408), Office of Pollution Prevention and Toxics, 
Environmental Protection Agency, 401 M St., SW., Washington, DC. 20460, 
or by calling the TSCA Assistance Information Service at (202) 554-
1404; TDD (202) 554-0551; online service modem (202) 554-5603.
    (2) The notice shall contain the information described below, 
pursuant to the referenced provisions of Sec. 720.45.
    (i) Manufacturer identity.
    (ii) Chemical identity (Sec. 720.45(a)).
    (iii) Impurities (Sec. 720.45(b)).
    (iv) Known synonyms or trade names (Sec. 720.45(c)).
    (v) Byproducts (Sec. 720.45(d)).
    (vi) Production volume (Sec. 720.45(e)). (A) Manufacturers 
submitting an exemption application under paragraph (c)(1) of this 
section will be assumed to be manufacturing at an annual production 
volume of 10,000 kilograms. Manufacturers who intend to manufacture an 
exempted substance at annual volumes of less than 10,000 kilograms and 
wish EPA to conduct its risk assessment based upon such lesser annual 
production level rather than a 10,000-kilograms level, may so specify 
by writing the lesser annual production volume in the appropriate box 
on the PMN form and marking the adjacent binding option box. 
Manufacturers who opt to specify annual production levels below 10,000 
kilograms and who mark the production volume binding option box shall 
not manufacture more than the specific annual amount of the exempted 
substance unless a new exemption notice for a higher (up to 10,000 kgs) 
manufacturing volume is submitted and approved pursuant to this 
section.
    (B) Manufacturers submitting an exemption under paragraph (c)(2) of 
this section shall list the estimated maximum amount to be manufactured 
during the first year of production and the estimated maximum amount to 
be manufactured during any 12-month period during the first 3 years of 
production.
    (vii) Description of intended categories of use. (Sec. 720.45(f)).
    (viii) For manufacturer-controlled sites, the manufacturer shall 
supply identity of manufacturing sites, process descriptions, and 
worker exposure and environmental release information (Sec. 720.45(g)); 
for sites not controlled by the manufacturer, processing and use 
operation descriptions, estimated number of processing and use sites, 
and worker exposure/environmental release information (Sec. 720.45(h)). 
A manufacturer applying for an exemption under paragraph (c)(1) of this 
section need not provide information on worker exposure and 
environmental release referenced in paragraphs (e)(2)(viii) of this 
section if such information is not known or not readily available to 
the manufacturer. To assist in reporting this information, 
manufacturers may obtain a copy of EPA's Guidance for Reporting 
Occupational Exposure and Environmental Release Information under 40 
CFR 723.50, available from the Environmental Assistance Division at the 
address listed in paragraph (e)(1) of this section. Where worker 
exposure and environmental release information is not supplied by the 
manufacturer, EPA will generally apply ``bounding estimates'' (i.e., 
exposure estimates higher than those incurred by persons in the 
population with the highest exposure) to account for uncertainties in 
actual exposure and release scenarios.
    (ix) Type and category of notice. The manufacturer must clearly 
indicate on the first page of the PMN form that the submission is a 
``TSCA section 5(h)(4) exemption notice,'' and must indicate whether 
the notice is being submitted under paragraph (c)(1) or (c)(2) of this 
section. Manufacturers of chemical substances that qualify for an 
exemption under both paragraph (c)(1) and (c)(2) of this section may 
apply for either exemption, but not both.
    (x) Test data (Sec. 720.50).
    (xi) Certification. In addition to the certifications required in 
EPA form 7710-25, the following certifications shall be included in 
notices under this section. The manufacturer must certify that:
    (A) The manufacturer intends to manufacture or import the new 
chemical substance for commercial purposes, other than in small 
quantities solely for research and development, under the terms of this 
section.
    (B) The manufacturer is familiar with the terms of this section and 
will comply with those terms.
    (C) The new chemical substance for which the notice is submitted 
meets all applicable exemption conditions.
    (D) For substances manufactured under paragraph (c)(1) of this 
section, the manufacturer intends to commence manufacture of the 
exempted substance for commercial purposes within 1 year of the date of 
the expiration of the 30-day review period.
    (xii) Sanitized copy of notice. (A) The manufacturer must make all 
claims of confidentiality in accordance with paragraph (l) of this 
section. If any information is claimed confidential, the manufacturer 
must submit a second copy of the notice, with all information claimed 
as confidential deleted, in accordance with paragraph (l)(3) of this 
section.
    (B) If the manufacturer does not provide the second copy, the 
submission will be considered incomplete.
    (3) Incomplete notices. If EPA receives a submission which does not 
include all of the information required under this paragraph (e) of 
this section, the submission will be determined to be incomplete by 
EPA. When a submission for a new chemical substance has been determined 
to be incomplete, a manufacturer reapplying for an exemption for the 
new chemical substance must submit a new exemption notice containing 
all the information required under this paragraph (e) of this section 
including a certification page containing an original dated signature; 
partial submissions sent to EPA to supplement notices declared 
incomplete will not be accepted. Photocopied pages from previously 
submitted exemption forms will be accepted provided that the 
certifications page contains an original dated signature.
    (f) Multiple exemption holders. (1) A manufacturer who intends to 
manufacture a substance for which an exemption under this section was 
previously approved may apply for an exemption under paragraph (c)(1) 
or (c)(2) of this section; however, EPA will not approve any subsequent 
exemption application under paragraph (c)(1) of this section unless it 
can determine that the potential human exposure to, and environmental 
release of, the new chemical substance at the higher aggregate 
production volume will not present an unreasonable risk of injury to 
human health or the environment.
    (2)(i) If EPA proposes to deny an exemption application for a 
substance for which another manufacturer currently holds an exemption, 
and that proposed denial is based exclusively on the cumulative human 
exposure or environmental release of the substance which precludes the 
EPA from determining that the subsequent applicant's activities will 
not present an unreasonable risk of injury to human health or the 
environment, the EPA will notify the first exemption holder that it 
must, within 21 days of its receipt of EPA's notice, either:
    (A) Provide a new certification that it has commenced, or that it 
will commence, manufacture of the new chemical substance under this 
section within 1 year of the expiration of its exemption review period; 
or
    (B) Withdraw its exemption for the new chemical 
substance. [[Page 16349]] 
    (ii) If the first exemption holder does not respond to the EPA's 
notice under paragraph (f)(2)(i) of this section within the prescribed 
time period, EPA shall issue a notice of ineligibility to the first 
exemption holder under the provisions of paragraph (h)(2) of this 
section.
    (g) Review period. (1) EPA will review the notice submitted under 
paragraph (e) of this section to determine whether manufacture of the 
new chemical substance is eligible for the exemption. The review period 
will end 30 days after receipt of the notice by the TSCA Document 
Control Officer. To provide additional time to address any unresolved 
issues concerning an exemption application, the exemption applicant 
may, at any time during the review period, request a suspension of the 
review period pursuant to the provisions of Sec. 720.75(b) of this 
chapter.
    (2) Upon expiration of the 30-day review period, if EPA has taken 
no action, the manufacturer may consider its exemption approved and 
begin to manufacture the new chemical substance under the terms 
described in its notice and in this section.
    (h) Notice of ineligibility--(1) During the review period. If the 
EPA determines during the review period that manufacture of the new 
chemical substance does not meet the terms of this section or that 
there are issues concerning toxicity or exposure that require further 
review which cannot be accomplished within the 30-day review period, 
EPA will notify the manufacturer by telephone that the substance is not 
eligible. This telephone notification will subsequently be confirmed by 
certified letter that identifies the reasons for the ineligibility 
determination. The manufacturer may not begin manufacture of the new 
chemical substance without complying with section 5(a)(1) of the Act or 
submitting a new notice under paragraph (e) of this section that 
satisfies EPA's concerns.
    (2) After the review period. (i)(A) If at any time after the review 
period specified in paragraph (g) of this section the Assistant 
Administrator for the Office of Prevention, Pesticides, and Toxic 
Substances (``the Assistant Administrator'') makes a preliminary 
determination that manufacture of the new chemical substance does not 
meet the terms of this section, the Assistant Administrator will notify 
the manufacturer by certified letter that EPA believes that the new 
chemical substance does not meet the terms of the section.
    (B) The manufacturer may continue to manufacture, process, 
distribute in commerce, and use the substance after receiving the 
notice under paragraph (h)(2)(i)(A) of this section if the manufacturer 
was manufacturing, processing, distributing in commerce, or using the 
substance at the time of the notification and if the manufacturer 
submits objections or an explanation under paragraph (h)(2)(ii) of this 
section. Manufacturers not manufacturing, processing, distributing in 
commerce, or using the substance at the time of the notification may 
not begin manufacture until EPA makes its final determination under 
paragraph (h)(2)(iii) of this section.
    (ii) A manufacturer who has received notice under paragraph 
(h)(2)(i)(A) of this section may submit, within 15 days of receipt of 
written notification, detailed objections to the determination or an 
explanation of its diligence and good faith efforts in attempting to 
comply with the terms of this section.
    (iii) The Assistant Administrator will consider any objections or 
explanation submitted under paragraph (h)(2)(ii) of this section and 
will make a final determination. The Assistant Administrator will 
notify the manufacturer of the final determination by telephone within 
15 days of receipt of the objections or explanation, and subsequently 
by certified letter.
    (iv) If the Assistant Administrator determines that manufacture of 
the new chemical substance meets the terms of this section, the 
manufacturer may continue or resume manufacture, processing, 
distribution in commerce, and use in accordance with the terms of this 
section.
    (v) If the Assistant Administrator determines that manufacture of 
the new chemical substance does not meet the terms of this section and 
that the manufacturer did not act with due diligence and in good faith 
to meet the terms of this section, the manufacturer must cease any 
continuing manufacture, processing, distribution in commerce, and use 
of the new chemical substance within 7 days of the written notification 
under paragraph (h)(2)(iii) of this section. The manufacturer may not 
resume manufacture, processing, distribution in commerce, and use of 
the new chemical substance until it submits a notice under section 
5(a)(1) of the Act and part 720 of this chapter and the notice review 
period has ended.
    (vi) If the Assistant Administrator determines that manufacture of 
the new chemical substance does not meet the terms of this section and 
that the manufacturer acted with due diligence and in good faith to 
meet the terms of this section, the manufacturer may continue 
manufacture, processing, distribution in commerce, and use of the new 
chemical substance if:
    (A) It was actually manufacturing, processing, distributing in 
commerce, or using the chemical substance at the time it received the 
notification specified in paragraph (h)(2)(i)(A) of this section.
    (B) It submits a notice on the new chemical substance under section 
5(a)(1) of the Act and part 720 of this chapter within 15 days of 
receipt of the written notification under paragraph (h)(2)(iii) of this 
section. Such manufacture, processing, distribution in commerce, and 
use may continue unless EPA takes action under section 5(e) or 5(f) of 
the Act.
    (3) Action under this paragraph does not preclude action under 
sections 7, 15, 16, or 17 of the Act.
    (i) Additional information. If the manufacturer of a new chemical 
substance under the terms of this exemption obtains test data or other 
information indicating that the new chemical substance may not qualify 
under terms of this section, the manufacturer must submit these data or 
information to EPA within 15 working days of receipt of the 
information. If, during the notice review period specified in paragraph 
(g) of this section, the submitter obtains possession, control, or 
knowledge of new information that materially adds to, changes, or 
otherwise makes significantly more complete the information included in 
the notice, the submitter must send that information to the address 
listed on the notice form within 10 days of receiving the new 
information, but no later than 5 days before the end of the notice 
review period. The new submission must clearly identify the submitter 
and the exemption notice to which the new information is related. If 
the new information becomes available during the last 5 days of the 
notice review period, the submitter must immediately inform its EPA 
contact for that notice by telephone.
    (j) Changes in manufacturing site, use, human exposure and 
environmental release controls, and certain manufacturing volumes. (1) 
Except as provided in paragraph (j)(6) of this section, chemical 
substances manufactured under this section must be manufactured at the 
site or sites described, for the uses described, and under the human 
exposure and environmental release controls described in the exemption 
notice under paragraph (e) of this section.
    (2) Where the manufacturer lists a specific physical form in which 
the new chemical substance will be manufactured, processed, and/or 
used, [[Page 16350]] the manufacturer must continue manufacturing, 
processing, and/or using the new chemical substance in either the same 
physical form described in the notice under paragraph (e), or in a 
physical form which will not increase the human exposure to or 
environmental release of the new chemical substance over those 
exposures or releases resulting from the specified physical form (e.g., 
a manufacturer which specifies that the new chemical substance will be 
produced in a non-volatile liquid form generally may not change to a 
respirable powder form).
    (3) The annual production volume of chemical substances 
manufactured under paragraph (c)(1) of this section for which the 
manufacturer designated a binding annual production volume pursuant to 
paragraph (e)(2)(vi) of this section must not exceed that designated 
volume.
    (4) Any person who manufactures a new chemical substance under 
paragraph (c)(1) or (c)(2) of this section must comply with the 
provisions of this section, including submission of a new notice under 
paragraph (e) of this section, before:
    (i) Manufacturing the new chemical substance at a site that was not 
approved in a previous exemption notice for the substance, except as 
provided in paragraph (j)(6) of this section.
    (ii) Manufacturing the new chemical substance for a use that was 
not approved in a previous exemption notice for the substance.
    (iii) Manufacturing the new chemical substance without employing 
the human exposure and environmental release controls approved in a 
previous exemption notice for the substance.
    (iv) Manufacturing the new chemical substance in a physical form 
different than that physical form approved in a previous exemption 
notice for the substance and which form may increase the human exposure 
to, or environmental release of, the new chemical substance over those 
exposures or releases resulting from the physical form approved in the 
previous notice.
    (v) Manufacturing the chemical substance in annual production 
volumes above any volume designated by the manufacturer as binding 
under paragraph (e)(2)(vi) of this section in a previous exemption 
notice for the substance.
    (5) In an exemption notice informing EPA of a change in site, use, 
or worker protection, or environmental release controls, the 
manufacturer is not required to provide all of the same information 
submitted to EPA in a previous exemption notice for that chemical 
substance. The new exemption notice, however, must indicate the 
identity of the new chemical substance; the manufacturer's name; the 
name and telephone number of a technical contact; and location of the 
new site, new worker protection or environmental release controls, and 
new use information. The notice must also include the EPA-designated 
exemption number assigned to the previous notice and a new 
certification by the manufacturer, as described in paragraph (e)(2)(xi) 
of this section.
    (6)(i) A manufacturer may, without submitting a new notice, 
manufacture the new chemical substance at a site not listed in its 
exemption application under the following conditions:
    (A) the magnitude, frequency, and duration of exposure of 
individual workers to the new chemical substance at the new 
manufacturing site is equal to, or less than, the magnitude, frequency, 
and duration of exposure of the individual workers to the new chemical 
substance at the manufacturing site for which the EPA performed its 
original risk-assessment pursuant to the original exemption notice; and
    (B) Either (1) at the new manufacturing site, the manufacturer does 
not release to surface waters any of the new chemical substance, or any 
waste streams containing the new chemical substance; or (2) at the new 
manufacturing site, the manufacturer maintains surface water 
concentrations of the chemical substance, resulting from direct or 
indirect discharges from the manufacturing site, at or below 1 part per 
billion, or at or below an alternative concentration level approved by 
the Agency in writing or under the procedures described in paragraph 
(c)(2)(iii) of this section, using the water concentration calculation 
method described at Secs. 721.90 and 721.91.
    (ii) The manufacturer shall notify EPA of any new manufacturing 
site no later than 30 days after the commencement of manufacture of the 
new chemical substance under the exemption at the new manufacturing 
site as follows:
    (A) The notification must contain the EPA-designated exemption 
number to which the notification applies, manufacturer identity, the 
street address of the new manufacturing site, the date on which 
manufacture commenced at the new site, the name and telephone number of 
a technical contact at the new site, any claim of confidentiality, and 
a statement that the notification is an amendment to the original 
exemption application under the terms of this section.
    (B) The notification may be submitted on EPA form 7710-56 ``Notice 
of Commencement of Manufacture;'' however, the manufacturer must add 
the statement required under paragraph (j)(6)(ii)(A) of this section 
that the notification is an amendment to the original exemption.
    (C) The notification must contain an original signature of an 
authorized official of the manufacturer.
    (k) Customer notification. (1) Manufacturers of new chemical 
substances described in paragraphs (c)(1) and (c)(2) of this section 
must notify processors and industrial users that the substance can be 
used only for the uses specified in the exemption notice at paragraph 
(e) of this section. The manufacturer must also inform processors and 
industrial users of any controls specified in the exemption notice. The 
manufacturer may notify processors and industrial users by means of a 
container labeling system, written notification, or any other method 
that adequately informs them of use restrictions or controls.
    (2) A manufacturer of a new chemical substance described in 
paragraph (c)(2) of this section may distribute the chemical substance 
only to other persons who agree in writing to not further distribute 
the substance until it has been reacted, incorporated into an article, 
or otherwise rendered into a physical form or state in which 
environmental releases and human exposures above the eligibility 
criteria in paragraph (c)(2) of this section are not likely to occur.
    (3) If the manufacturer learns that a direct or indirect customer 
is processing or using the new substance in violation of use 
restrictions or without imposing prescribed worker protection or 
environmental release controls, the manufacturer must cease 
distribution of the substance to the customer or the customer's 
supplier immediately unless the manufacturer is able to document each 
of the following:
    (i) That the manufacturer has, within 5 working days, notified the 
customer in writing that the customer has failed to comply with the 
conditions specified in this section and the exemption notice under 
paragraph (e) of this section.
    (ii) That, within 15 working days of notifying the customer of the 
noncompliance, the manufacturer received from the customer, in writing, 
a statement of assurance that the customer is aware of the terms of 
this section and the exemption notice and will comply with those terms. 
[[Page 16351]] 
    (4) If, after receiving a statement of assurance from a customer 
under paragraph (k)(3)(ii) of this section, the manufacturer obtains 
knowledge that the customer has again failed to comply with any of the 
conditions specified in this section or the exemption notice, the 
manufacturer shall cease supplying the new chemical substance to that 
customer and shall report the failure to comply to EPA within 15 days 
of obtaining this knowledge. Within 30 days of its receipt of the 
report, EPA will notify the manufacturer whether, and under what 
conditions, distribution of the chemical substance to the customer may 
resume.
    (l) Confidentiality. (1) If the manufacturer submits information to 
EPA under this section which the manufacturer claims to be confidential 
business information, the manufacturer must clearly identify the 
information at the time of submission to EPA by bracketing, circling, 
or underlining it and stamping it with ``CONFIDENTIAL'' or some other 
appropriate designation. Any information so identified will be treated 
in accordance with the procedures in part 2 of this chapter. Any 
information not claimed confidential at the time of submission may be 
made available to the public without further notice.
    (2)(i) Any person who asserts a claim of confidentiality for 
chemical identity under this paragraph (l) must provide a generic 
chemical name that is only as generic as necessary to protect the 
confidential chemical identity of the particular chemical substance. 
The name should reveal the specific chemical identity to the maximum 
extent possible.
    (ii) The generic name provided by the manufacturer will be subject 
to EPA review and approval in accordance with the procedures specified 
in Sec. 720.85(b)(6) of this chapter. The generic name provided by the 
submitter or an alternative selected by EPA under these procedures will 
be placed on a public list of substances exempt under this section.
    (3) If any information is claimed confidential, the manufacturer 
must submit a second copy of the notice with all information claimed as 
confidential deleted. EPA will place the second copy in the public 
file.
    (m) Exemptions granted under superseded regulations. Manufacturers 
holding exemptions granted under the superseded requirements of this 
section (as in effect on May 26, 1995) shall either continue to comply 
with those requirements (including the production volume limit) or 
apply for a new exemption pursuant to this section. EPA will not accept 
requests to amend exemptions granted under the superseded requirements; 
manufacturers wishing to amend such exemptions must submit a new 
exemption under paragraph (e) of this section. If a new exemption for a 
new chemical substance is granted under this exemption to the 
manufacturer holding an exemption under the superseded requirements, 
the exemption under the superseded requirements for such substance 
shall be void.
    (n) Recordkeeping. (1) A manufacturer of a new chemical substance 
under paragraph (c) of this section must maintain the records described 
in this paragraph at the manufacturing site or site of importation for 
a period of 5 years after date of their preparation.
    (2) The records must include the following to demonstrate 
compliance with this section:
    (i) Records of annual production volume and import volume;
    (ii) Records documenting complaince with the applicable 
requirements and restrictions of paragraphs (c), (e), (f), (h), (i), 
(j), and (k) of this section.
    (3) Any person who manufactures a new chemical substance under the 
terms of this section must, upon request of a duly designated 
representative of EPA, permit such person at all reasonable times to 
have access to and to copy records kept under paragraph (n)(2) of this 
section.
    (4) The manufacturer must submit the records listed in paragraph 
(n)(2) of this section to EPA upon written request. Manufacturers must 
provide these records within 15 working days of receipt of such 
request.
    (o)  Compliance . (1) Failure to comply with any provision of this 
section is a violation of section 15 of the Act (15 U.S.C. 2614).
    (2) Submitting materially misleading or false information in 
connection with the requirements of any provision of this section is a 
violation of this section and therefore a violation of section 15 of 
the Act (15 U.S.C. 2614).
    (3) Violators may be subject to the civil and criminal penalties in 
section 16 of the Act (15 U.S.C. 2615) for each violation.
    (4) EPA may seek to enjoin the manufacture or processing of a 
chemical substance in violation of this section, or act to seize any 
chemical substance manufactured or processed in violation of this 
section, or take other action under the authority of section 7 of the 
Act (15 U.S.C. 2606) or section 17 of the Act (15 U.S.C. 1616).

[FR Doc. 95-7711 Filed 3-24-95; 3:32 pm]
BILLING CODE 6560-50-F