[Federal Register Volume 63, Number 90 (Monday, May 11, 1998)]
[Rules and Regulations]
[Pages 25764-25769]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 98-12381]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

21 CFR Part 165

[Docket No. 98N-0294]


Beverages: Bottled Water

AGENCY: Food and Drug Administration, HHS.

ACTION: Direct final rule.

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

SUMMARY: The Food and Drug Administration (FDA) is amending its 
regulations to lift the stay of the effective date for the allowable 
levels in the bottled water quality standard for nine chemical 
contaminants, i.e., antimony, beryllium, cyanide, nickel, thallium, 
diquat, endothall, glyphosate, and 2,3,7,8-TCDD (dioxin), that was 
imposed in a final rule published on March 26, 1996. By lifting the 
stay of the effective date, bottled water manufacturers will be 
required to monitor source waters and finished bottled water products 
at least once a year for these nine chemical contaminants under the 
current good manufacturing practice (CGMP) regulations for bottled 
water. FDA is required to issue monitoring requirements for the nine 
chemical contaminants under the Safe Drinking Water Act Amendments of 
1996 (SDWA Amendments). FDA is using direct final rulemaking for this 
action because the agency expects that there will be no significant 
adverse comment on the rule. Elsewhere in this issue of the Federal 
Register, FDA is publishing a companion proposed rule under FDA's usual 
procedure for notice-and-comment rulemaking to provide a procedural 
framework to finalize the rule in the event the agency receives 
significant adverse comments and withdraws this direct final rule. The 
companion proposed rule and direct final rule are substantively 
identical.

DATES: The regulation is effective November 9, 1998. Submit written 
comments by July 27, 1998. If no timely significant adverse comments 
are received, the agency will publish a notice in the Federal Register 
no later than August 6, 1998, confirming the effective date of the 
direct final rule. If timely significant adverse comments are received, 
the agency will publish a notice of significant adverse comment in the 
Federal Register withdrawing this direct final rule no later than 
August 6, 1998.

ADDRESSES: Submit written comments to the Dockets Management Branch 
(HFA-305), Food and Drug Administration, 12420 Parklawn Dr., rm. 1-23, 
Rockville, MD 20857.

FOR FURTHER INFORMATION CONTACT: Henry Kim, Center for Food Safety and 
Applied Nutrition (HFS-306), Food and Drug Administration, 200 C St. 
SW., Washington, DC 20204, 202-260-0631.
SUPPLEMENTARY INFORMATION:

I. Background

    Before the enactment of the SDWA Amendments on August 6, 1996, 
section 410 of the Federal Food, Drug, and Cosmetic Act (the act) (21 
U.S.C. 349) required that, whenever the Environmental Protection Agency 
(EPA) prescribed interim or revised National Primary Drinking Water 
Regulations (NPDWR's) under section 1412 of the Public Health Service 
Act (SDWA) (42 U.S.C. 300f through 300j-9)), FDA consult with EPA and 
either amend its regulations for bottled drinking water in Sec. 165.110 
(21 CFR 165.110) or publish in the Federal Register its reasons for not 
making such amendments.
    In accordance with section 410 of the act, FDA published in the 
Federal Register of March 26, 1996 (61 FR 13258), a final rule 
(hereinafter ``the March 1996 final rule'') that amended the quality 
standard for bottled water by establishing or revising the allowable 
levels for 5 inorganic chemicals (IOC's) and 17 synthetic organic 
chemicals (SOC's), including 3 synthetic volatile organic chemicals 
(VOC's), 9 pesticide chemicals, and 5 nonpesticide chemicals. This 
action was in response to EPA's issuance of NPDWR's consisting of 
maximum contaminant levels (MCL's) for the same 5 IOC's and 17 SOC's in 
public drinking water (see 57 FR 31776, July 17, 1992).
    However, in the March 1996 final rule, FDA stayed the effective 
date for the allowable levels for the five IOC's (antimony, beryllium, 
cyanide, nickel, and thallium) and four of the SOC's (diquat, 
endothall, glyphosate, and dioxin). This action was in response to 
bottled water industry comments (responding to the August 4, 1993, 
proposal (58 FR 41612)) which asserted that additional monitoring for 
these nine chemicals required under the bottled water CGMP regulations 
would pose an undue economic burden on bottlers. If the agency had not 
stayed the effective date for the allowable levels,

[[Page 25765]]

the bottled water CGMP regulations under part 129 (21 CFR part 129) 
would have been in effect for these nine chemical contaminants. The 
bottled water CGMP regulations require a minimum yearly monitoring of 
source water and finished bottled water products for chemical 
contaminants for which allowable levels have been established in the 
bottled water quality standard. The comments requested that FDA adopt 
reduced frequency monitoring requirements for chemical contaminants 
that are not likely to be present in the source water for bottling or 
in the finished bottled water products. The comments submitted data 
that supported the request that FDA reconsider the current monitoring 
frequency requirements for chemical contaminants in the bottled water 
CGMP regulations.
    Based on the information submitted by the comments, FDA stated in 
the March 1996 final rule (61 FR 13258 at 13261) that the matter of 
reduced frequency of monitoring (less frequently than once per year) 
requirements for chemical contaminants that are not likely to be found 
in bottled water merited consideration by the agency. FDA also stated, 
however, that any revision of the monitoring requirements for chemical 
contaminants in bottled water would require an amendment of the bottled 
water CGMP regulations (part 129). FDA stated that it intended to 
initiate, considering its resources and competing priorities, a 
separate rulemaking to address the issue of circumstances in which 
reduced frequency of monitoring requirements for chemical contaminants 
in bottled water products may be appropriate.
    Therefore, FDA stayed the effective date for the nine chemical 
contaminants pending completion of a rulemaking to address the issue of 
reduced frequency monitoring for chemical contaminants in bottled 
water. Although the effect of the stay does not require bottled water 
manufacturers to monitor source waters and finished bottled water 
products annually for the nine chemical contaminants, FDA advised water 
bottlers to ensure, through appropriate manufacturing techniques and 
sufficient quality control procedures, that their bottled water 
products are safe with respect to levels of these nine chemical 
contaminants.

II. Direct Final Rulemaking

    FDA has determined that the subjects of this rulemaking are 
suitable for a direct final rule. The actions taken should be 
noncontroversial and the agency does not anticipate receiving any 
significant adverse comments.
    FDA is lifting the stay for the nine chemical contaminants for 
which the agency stayed the effective date in the March 1996 final 
rule. By lifting the stay, the bottled water CGMP requirements for 
annual testing for the nine chemical contaminants will become 
effective. This action will meet the statutory mandate provided in the 
SDWA Amendments that requires the agency to issue monitoring 
requirements for the nine chemical contaminants by August 6, 1998.
    If FDA does not receive significant adverse comment on or before 
July 27, 1998, the agency will publish a notice in the Federal Register 
no later than August 6, 1998, confirming the effective date of the 
direct final rule. The agency intends to make the direct final rule 
effective 180 days after publication of the confirmation notice in the 
Federal Register.
    A significant adverse comment is one that explains why the rule 
would be inappropriate, including challenges to the rule's underlying 
premise or approach, or would be ineffective or unacceptable without a 
change. In determining whether a significant adverse comment is 
sufficient to terminate a direct final rulemaking, FDA will consider 
whether the comment raises an issue serious enough to warrant a 
substantive response in a notice-and-comment process. Comments that are 
frivolous, insubstantial, or outside the scope of the rule will not be 
considered adverse under this procedure. A comment recommending a rule 
change in addition to the rule will not be considered a significant 
adverse comment, unless the comment states why this rule would be 
ineffective without the additional change. In addition, if a 
significant adverse comment applies to part of a rule and that part can 
be severed from the remainder of the rule, FDA may adopt as final those 
parts of the rule that are not the subject of a significant adverse 
comment. If timely significant adverse comments are received, the 
agency will publish a notice of significant adverse comment in the 
Federal Register withdrawing this direct final rule no later than 
August 6, 1998.
    The companion proposed rule, which is substantively identical to 
the direct final rule, provides a procedural framework within which the 
rule may be finalized in the event the direct final rule is withdrawn 
because of significant adverse comment. The comment period for the 
direct final rule runs concurrently with that of the companion proposed 
rule. Any comments received under the companion proposed rule will be 
treated as comments regarding the direct final rule. Likewise, 
significant adverse comments submitted to the direct final rule will be 
considered as comments to the companion proposed rule and the agency 
will consider such comments in developing a final rule. FDA will not 
provide additional opportunity for comment on the companion proposed 
rule. A full description of FDA's policy on direct final rule 
procedures may be found in a guidance document published in the Federal 
Register of November 21, 1997 (62 FR 62466).

III. Action to Lift the Stay

    Subsequent to the March 1996 final rule, on August 6, 1996, the 
SDWA Amendments were enacted. Section 305 of the SDWA Amendments 
requires that, for contaminants covered by a standard of quality 
regulation issued by FDA before the enactment of the SDWA Amendments 
for which an effective date had not been established, FDA issue 
monitoring requirements for such contaminants (e.g., the nine chemical 
contaminants: Antimony, beryllium, cyanide, nickel, thallium, diquat, 
endothall, glyphosate, and dioxin) not later than 2 years after the 
date of enactment of the SDWA Amendments. Under this mandate, FDA is 
required to issue monitoring requirements for the nine chemical 
contaminants for which it stayed the effective date in the March 1996 
final rule by August 6, 1998, with an effective date of February 6, 
1999. If FDA does not meet this statutory time period, the NPDWR's for 
the nine chemical contaminants become applicable to bottled water.
    For the reasons set forth in this document, FDA is lifting the stay 
of the effective date for the allowable levels for the nine chemical 
contaminants (antimony, beryllium, cyanide, nickel, thallium, diquat, 
endothall, glyphosate, and dioxin). First, the agency's CGMP 
regulations for bottled water, which require that source waters and 
finished bottled water products be tested for these nine contaminants 
at least once a year, are protective of the public health. The agency 
considers at least annual testing, as set forth in its CGMP regulations 
in part 129 to be of sufficient frequency, absent circumstances that 
may warrant more frequent testing, to ensure that bottled water has 
been prepared, packed or held under sanitary conditions. Second, 
Congress mandated, under the SDWA Amendments, that the agency issue 
monitoring requirements for the nine chemical contaminants by August 6, 
1998. The agency's action to lift the stay is consistent with this 
mandate. By lifting the stay of the effective date for the allowable 
levels for

[[Page 25766]]

the nine chemical contaminants in the bottled water quality standard, 
bottled water manufacturers will be required to monitor source waters 
and finished bottled water products at least once a year for these nine 
chemical contaminants under the CGMP provisions in part 129. Third, in 
the March 1996 final rule, FDA stated that it intended to initiate 
rulemaking to address the issue of whether there are circumstances in 
which reduced frequency of monitoring for contaminants is appropriate. 
However, such rulemaking would require consideration of all chemical 
contaminants, not just the nine chemical contaminants that are the 
subject of the stay. FDA is only addressing, in this rulemaking, the 
frequency of monitoring for the nine chemical contaminants that are the 
subject of the stay. FDA may consider, in a future rulemaking, the 
issue of reduced frequency of monitoring in the context of all chemical 
contaminants in bottled water subject to the bottled water CGMP 
regulations (part 129). Therefore, the agency is, at this time, 
electing to lift the stay of the effective date for the allowable 
levels in the bottled water quality standard for the nine chemical 
contaminants, i.e., antimony, beryllium, cyanide, nickel, thallium, 
diquat, endothall, glyphosate, and dioxin, and thereby require annual 
testing for these nine contaminants, consistent with the CGMP 
requirements for bottled water.

IV. Environmental Impact

    The agency has determined under 21 CFR 25.32(a) that this action is 
of a type that does not individually or cumulatively have a significant 
effect on the human environment. Therefore, neither an environmental 
assessment nor an environmental impact statement is required.

V. Analysis of Economic Impacts

A. Benefit-Cost Analysis

    FDA has examined the impacts of this direct final rule under 
Executive Order 12866. Executive Order 12866 directs agencies to assess 
all costs and benefits of available regulatory alternatives and, when 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety, and other advantages; distributive impacts; and 
equity). According to Executive Order 12866, a regulatory action is 
``significant'' if it meets any one of a number of specified 
conditions, including having an annual effect on the economy of $100 
million, adversely affecting in a material way a sector of the economy, 
competition, or jobs, or if it raises novel legal or policy issues. FDA 
finds that this direct final rule is not a significant regulatory 
action as defined by Executive Order 12866. In addition, it has been 
determined that this direct final rule is not a major rule for the 
purpose of Congressional review. For the purpose of Congressional 
review, a major rule is one which is likely to cause an annual effect 
on the economy of $100 million; a major increase in costs or prices; 
significant effects on competition, employment, productivity, or 
innovation; or significant effects on the ability of U.S.-based 
enterprises to compete with foreign-based enterprises in domestic or 
export markets.

B. Final Regulatory Flexibility Analysis

    FDA has examined the impact of the rule as required by the 
Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612). If a rule has a 
significant economic impact on a substantial number of small entities, 
the RFA requires agencies to analyze options that would minimize the 
economic impact of that rule on small entities. The agency acknowledges 
that the direct final rule may have a significant economic impact on a 
substantial number of small entities. The agency is not, in this 
analysis, addressing comments received in response to an initial 
regulatory flexibility analysis. The nature of the direct final rule 
provides for a companion proposed rule published at the same time as 
the direct final rule. An initial regulatory flexibility analysis is 
contained in the companion proposed rule. The agency is publishing the 
direct final rule because the agency does not anticipate any 
significant adverse comment. Should the agency receive any significant 
adverse comment in response to the direct final rule, the agency will 
withdraw the direct final rule and use the companion proposed rule in 
developing a final rule.
1. Objectives
    The RFA requires a succinct statement of the purpose and objectives 
of any rule that may have a significant economic impact on a 
substantial number of small entities. The agency is taking this action 
to lift the stay for nine chemical contaminants under a Congressional 
mandate, under the SDWA Amendments, that FDA issue monitoring 
requirements for these nine chemical contaminants in bottled water. 
Lifting the stay of the effective date for the allowable levels in the 
bottled water quality standard for the nine chemical contaminants 
(antimony, beryllium, cyanide, nickel, thallium, diquat, endothall, 
glyphosate, and dioxin) protects the public health. By lifting the 
stay, bottled water manufacturers will be required to monitor source 
waters and finished bottled water products at least once a year for the 
nine chemical contaminants under the bottled water CGMP regulations in 
part 129. The agency considers at least annual testing, as set forth in 
its CGMP regulations, to be of sufficient frequency, absent 
circumstances that may warrant more frequent testing, to ensure that 
bottled water has been prepared, packed, or held under sanitary 
conditions.
2. Description of Small Business and the Number of Small Businesses 
Affected
    The RFA requires a description of small businesses used in the 
analysis and an estimate of the number of small businesses affected, if 
such estimate is available. Table 1 of this document describes small 
businesses affected and estimates the number of small businesses 
affected by the rule. The agency combined the Small Business 
Administration (SBA) definition of a small business as an upper bound 
of the total number in the analysis with data from Duns Market 
Identifiers (DMI) on the number of plants using SIC 2086. FDA has used 
the International Bottled Water Association (IBWA) estimate as a lower 
bound of the number of small entities in the industry. According to 
DMI, there are a total of 1,567 establishments in the industry group of 
which 66 percent of the entities (1,028 firms) have fewer than 500 
employees. According to IBWA, there are approximately 560 member firms, 
of which 50 percent or 280 firms have annual sales below $1 million.

                                           Table 1.--Approximate Number of Small Entities Covered by this Rule                                          
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                        Standard Industry          Classification of Small       Percentage of Category      No. of Small Establishments
      Type of Establishment           Classification Codes                Entities               Defined as Small by SBA         Covered by the Rule    
--------------------------------------------------------------------------------------------------------------------------------------------------------
IBWA                                                        NA  Annual Sales below $1million                           50%                           280

[[Page 25767]]

                                                                                                                                                        
DMI                                                      2,086       Less than 500 employees                           66%                         1,028
--------------------------------------------------------------------------------------------------------------------------------------------------------

3. Description of the Economic Impact on Small Entities
    a. Estimated costs for testing source waters. The estimated costs 
for testing source waters are the estimated total additional costs the 
small entity would incur to monitor source waters for the nine chemical 
contaminants annually. Table 2 of this document summarizes the expected 
additional costs. As discussed in the March 1996 final rule (61 FR 
13258 at 13263), additional cost per sample is estimated to be $1,290, 
and an estimated 50 percent of source waters are from municipal sources 
that do not require testing.

                          Table 2.--Estimated Subtotal Costs for Testing Source Waters                          
----------------------------------------------------------------------------------------------------------------
                                                                          Percent Water from                    
   No. of Small Establishments Covered by the Rule      Cost per Sample      Nonmunicipal       Subtotal Annual 
                                                                                Sources              Cost       
----------------------------------------------------------------------------------------------------------------
Lower Bound-280                                            $1,290                 50%            $180,600       
Upper Bound-1028                                           $1,290                 50%            $663,060       
----------------------------------------------------------------------------------------------------------------

    b. Estimated costs for testing finished bottled water products. The 
estimated costs for testing are the estimated total additional costs 
the small entity would incur to monitor finished bottled water products 
for the nine chemical contaminants annually. Table 3 of this document 
summarizes the expected costs. As discussed in the March 1996 final 
rule (61 FR 13258 at 13263), additional cost per sample is estimated to 
be $1,290.

                 Table 3.--Estimated Subtotal Costs for Testing Finished Bottled Water Products                 
----------------------------------------------------------------------------------------------------------------
                                                                           Average Number of    Subtotal Annual 
   No. of Small Establishments Covered by the Rule      Cost per Sample        Products              Cost       
----------------------------------------------------------------------------------------------------------------
Lower Bound-280                                            $1,290                   2            $722,400       
Upper Bound-1028                                           $1,290                   2          $2,652,240       
----------------------------------------------------------------------------------------------------------------

    c. Estimated total costs for testing source waters and finished 
bottled water products. The estimated total testing costs are the sum 
of estimated costs to monitor source waters and finished bottled water 
products. The agency estimates that the lower bound cost is $900,000 
and the upper bound cost is $3 million. Table 4 of this document 
summarizes the expected additional costs.

                                         Table 4.--Estimated Total Costs                                        
----------------------------------------------------------------------------------------------------------------
                                                                          Subtotal Costs for                    
                                                      Subtotal Costs for   Testing Finished      Total Testing  
   No. of Small Establishments Covered by the Rule      Testing Source       Bottled Water         Costs\1\     
                                                            Waters             Products                         
----------------------------------------------------------------------------------------------------------------
Lower Bound-280                                          $180,600            $722,400            $900,000       
Upper Bound-1028                                         $660,060          $2,652,240          $3,000,000       
----------------------------------------------------------------------------------------------------------------
\1\Total Testing Costs are rounded to the nearest significant digit.                                            

    d. Professional skills required for compliance. The RFA requires a 
description of the professional skills necessary for the preparation of 
a report or record. This rule does not require professional skills for 
the preparation of a report or record. Any sampling of source water or 
finished bottled water product for analysis of chemical contaminants 
can be carried out by trained plant personnel who can ship such samples 
to a testing laboratory for analysis. Other trained skills would also 
include recording and maintaining the test result records at the plant 
for a minimum of 2 years.
    e. Recordkeeping requirements. The RFA requires a description of 
the recordkeeping requirements of the rule. Table 5 of this document 
shows the provisions for making and maintaining records by small 
businesses, the number of small businesses affected, the annual 
frequency of making each record, the amount of time needed for making 
each record, and the total number of hours for each provision in the 
first year and then in subsequent years.

[[Page 25768]]



                               Table 5.--Small Business Recordkeeping Requirements                              
----------------------------------------------------------------------------------------------------------------
                 No. of Small                                                                                   
  Provision    Entities Keeping    Annual Frequency    Hours per Record   Total Hours, First     Total Hours,   
                    Records                            per Small Entity          Year          Subsequent Years 
----------------------------------------------------------------------------------------------------------------
Monitoring                                                                                                      
 SOP                  280                   1                  10               2,800               2,800       
Monitoring                                                                                                      
 SOP                1,028                   1                  10              10,280              10,280       
Validation            280                   1                   5               1,400               1,400       
Validation           1028                   1                   5               5,140               5,140       
Record                                                                                                          
 Maintenance          280                   1                   5               1,400               1,400       
Record                                                                                                          
 Maintenance        1,028                   1                   5               5,140               5,140       
Totals-Lower                                                                                                    
 Bound                280                   1                  20               5,600               5,600       
Totals-Upper                                                                                                    
 Bound              1,028                   1                  20              20,560              20,560       
----------------------------------------------------------------------------------------------------------------

4. Minimizing the Burden to Small Entities
    The RFA requires an evaluation of any regulatory alternatives that 
would minimize the costs to small entities. There are four alternatives 
that the agency has considered to provide regulatory relief for small 
entities. First, FDA considered the option of not lifting the stay of 
the effective date for the allowable levels in the bottled water 
quality standard for the nine chemical contaminants. Second, FDA 
considered the option of exempting small entities from the requirements 
of this rule. Third, FDA considered lengthening the compliance period 
for small entities. Fourth, FDA considered reducing the testing 
frequency.
    a. Not lifting the stay. By convention, the option of taking no 
action is the baseline in comparison with the evaluation of the other 
options. Taking no action in this case means not lifting the stay of 
the effective date for the allowable levels in the bottled water 
quality standard for the nine chemical contaminants. By not lifting the 
stay, FDA would not meet the statutory mandate provided in the SDWA 
Amendments that requires the agency to issue monitoring requirements 
for the nine chemical contaminants by August 6, 1998. If FDA does not 
issue monitoring requirements by August 6, 1998, the NPDWR's for public 
drinking water for these nine contaminants would be considered to be 
the standard of quality regulations for bottled water under 
Sec. 165.110. Under the NPDWR's, EPA's base monitoring requirements for 
ground water testing are once every 3 years for testing inorganic 
chemicals (e.g., antimony, beryllium, cyanide, nickel, and thallium), 
and four successive quarters every 3 years for ground water testing for 
synthetic organic chemicals (e.g., diquat, endothall, glyphosate, and 
dioxin). Under part 129, FDA requires at least annual testing for both 
the inorganic and synthetic organic chemicals. Therefore, the frequency 
of testing requirements under EPA's NPDWR's for public drinking water 
and FDA's frequency of testing requirements for bottled water differ.
    Moreover, the regulatory scheme under EPA regulations for public 
drinking water contemplates State coordination, including the use of 
State-issued waivers in certain situations. EPA regulations address 
treated ground and surface water testing, whereas FDA regulations 
address source water (which in most cases involves testing of untreated 
ground water) and finished bottled water product testing. Source water 
testing provides a preliminary review of the safety and quality of the 
water source that a water bottler intends to manufacture into a bottled 
water product. FDA considers source water testing to be as important as 
finished bottled water product testing because the safety and quality 
of the source water, determined by source water testing, will affect 
the treatment necessary to produce a finished bottled water product 
that complies with the bottled water quality standard. However, if 
EPA's regulatory scheme for public drinking water would need to be 
considered for the nine chemical contaminants that are the subject of 
this rule for bottled water, it is unclear whether only finished 
bottled water product testing for these nine chemical contaminants, 
without source water testing, would be applicable.
    Furthermore, EPA's monitoring requirements are designed to address 
water that is provided to customers through municipal water 
distribution systems while FDA's requirements address water that is 
produced to be sold to consumers in discrete units. Some differences 
between these two sets of monitoring requirements exist (e.g., criteria 
for determining when a system (or bottler) is not in compliance), 
because they address two fundamentally different production 
circumstances. FDA believes that its regulations for bottled water, 
which are designed to ensure that bottled water is prepared, packed, or 
held under sanitary conditions, should apply to the testing for these 
nine chemical contaminants in bottled water rather than having such 
contaminants subject to a regulatory scheme established for public 
drinking water.
    Furthermore, the extent to which FDA would consider certain aspects 
of EPA's regulatory scheme for public drinking water as ``monitoring 
requirements'' is not clear. FDA has not had to apply EPA's regulations 
for public drinking water to bottled water under the bottled water 
quality standard regulations. Therefore, if FDA did not lift the stay 
and issue monitoring requirements under the agency's CGMP requirements 
in part 129 for these nine chemical contaminants, the application of 
section 410(b)(4)(A) of the act would create uncertainty for industry 
and regulators. The practical effect of the application of section 
410(b)(4)(A) of the act may be additional burdens on small businesses 
if such businesses must adhere to two regulatory schemes for testing of 
their bottled water products rather than one comprehensive scheme for 
all bottled water testing. As stated earlier, FDA's CGMP requirements 
are protective of the public health and the application of these CGMP 
requirements to all bottled water would not result in uncertainty to 
industry and regulators. As discussed below in section V.B.3.d of this 
document, FDA believes that retaining the applicability of its CGMP 
requirements to all bottled water, with further evaluation of reduced 
frequency of testing in the context of all chemical contaminants in a 
future rulemaking, would be less confusing to small entities. 
Therefore, FDA believes that lifting the stay would be beneficial to 
the public.
    b. Exempt small entities. One alternative for alleviating the 
burden for small entities would be to exempt them from the testing 
requirements of this rule. Although, this option would eliminate the 
cost of testing on small firms, it may also result in a decrease in the 
potential public health benefits of the rule. Small entities comprise a 
large part of the affected industry and

[[Page 25769]]

exempting them would affect the testing requirements for a large 
segment of the bottled water products on the market. Such products 
would not be subject to a certain frequency of testing that provides 
adequate assurance that such products manufactured by small businesses 
are as protective of the public health as those that have undergone the 
testing requirements for these nine contaminants under part 129. 
Therefore, exempting small businesses would reduce the potential public 
health benefits of lifting the stay.
    c. Extend compliance period. FDA considered an extended compliance 
period. Lengthening the compliance period would provide regulatory 
relief to small entities because it would reduce the present value of 
the costs of testing. However, as stated in section V.B.4.b of this 
document, because small entities comprise a large part of the affected 
industry, longer compliance periods would delay any potential public 
health benefits of the rule. For example, if a small business had an 
excess level of one of the nine chemical contaminants in its bottled 
water product, it would not be aware of the potential public health 
problem as a result of the specific contaminant because the small 
business would not be testing during the longer compliance period. 
Therefore, the agency has concluded that lifting the stay is more 
protective of the public health.
    d. Reduced testing frequency. Another alternative for alleviating 
the burden for small entities would be to reduce the testing frequency 
for certain chemical contaminants, including the nine chemical 
contaminants that are the subject of this rule. The agency believes 
that, in considering the issue of reduced frequency of testing, it 
needs to do so in the context of all chemical contaminants, not just 
the nine that are the subject of this rule. Reduced frequency of 
testing may include an entirely different scheme that may include 
waivers for certain chemical contaminants. The contemplation of such a 
scheme is better addressed in a context that includes consideration of 
all chemical contaminants, rather than considering and implementing a 
different regulatory scheme for only the nine chemical contaminants. 
Moreover, Congress mandated that the agency issue monitoring 
requirements for these nine chemical contaminants by August 6, 1998. 
Because the scope of this rule is limited to these nine chemical 
contaminants, and the agency does not have sufficient time to enlarge 
the scope of this rulemaking to the issue of reduced frequency of 
testing for all chemical contaminants, the agency is not pursuing this 
alternative in this rulemaking. However, the agency plans to consider 
the issue of reduced frequency of monitoring for all chemical 
contaminants in bottled water in a future rule.
5. Summary
    FDA has examined the impact of the direct final rule on small 
businesses in accordance with RFA. This analysis, together with the 
preamble, constitutes RFA.

C. Unfunded Mandates Reform Act of 1995

    FDA has examined the impacts of this direct final rule under the 
Unfunded Mandates Reform Act of 1995 (UMRA) (Pub. L. 104-4). This rule 
does not require a written statement under section 202(a) of the UMRA 
because it does not impose a mandate that results in an expenditure of 
$100 million (adjusted annually for inflation) or more by State, local, 
and tribal governments in the aggregate, or by the private sector, in 
any one year.

VI. Paperwork Reduction Act of 1995

    FDA concludes that this direct final rule contains no collections 
of information. Therefore, clearance by the Office of Management and 
Budget under the Paperwork Reduction Act of 1995 is not required.

VII. Comments

    Interested persons may, on or before July 27, 1998, submit to the 
Dockets Management Branch (address above) written comments regarding 
this direct final rule. Two copies of any comments are to be submitted, 
except that individuals may submit one copy. Comments are to be 
identified with the docket number found in brackets in the heading of 
this document. Received comments may be seen in the office above 
between 9 a.m. and 4 p.m., Monday through Friday.

VIII. Effective Date

    The agency intends to make the direct final rule effective 180 days 
after the publication of the confirmation notice in the Federal 
Register. The agency is providing a 180 day effective date to permit 
affected firms adequate time to take appropriate steps to bring their 
product into compliance with the standard imposed by the new rule.

List of Subjects in 21 CFR Part 165

    Beverages, Bottled water, Food grades and standards, Incorporation 
by reference.
    Therefore, under the Federal Food, Drug, and Cosmetic Act and under 
authority delegated to the Commissioner of Food and Drugs, 21 CFR part 
165 is amended as follows:

PART 165--BEVERAGES

    1. The authority citation for 21 CFR part 165 continues to read as 
follows:

    Authority: 21 U.S.C. 321, 341, 343, 343-1, 348, 349, 371, 379e.

Sec. 165.110  [Amended]

    2. Section 165.110 Bottled water is amended in the table in 
paragraph (b)(4)(iii)(A) by removing the superscript ``1'' after the 
entries for ``Antimony,'' ``Beryllium,'' ``Cyanide,'' ``Nickel,'' and 
``Thallium,'' and by removing the footnote to the table; in the table 
in paragraph (b)(4)(iii)(C) by removing the superscript ``1'' after the 
entries for ``Diquat,'' ``Endothall,'' ``Glyphosate,'' and ``2,3,7,8-
TCDD (Dioxin),'' and by removing the footnote to the table; and by 
removing the note that follows paragraph (b)(4)(iii)(G)(3)(iv).

    Dated: May 5, 1998.
William K. Hubbard,
Associate Commissioner for Policy Coordination.
[FR Doc. 98-12381 Filed 5-6-98; 3:57 pm]
BILLING CODE 4160-01-F