ENVIRONMENTAL
PROTECTION
AGENCY
40
CFR
Part
82
[
FRL_]

RIN
2060­
AM50
Protection
of
Stratospheric
Ozone:
Allocation
of
Essential
Use
Allowances
for
Calendar
Year
2005.

AGENCY:
Environmental
Protection
Agency
(
EPA).

ACTION:
Final
rule.

SUMMARY:
With
this
action,
EPA
is
allocating
essential
use
allowances
for
import
and
production
of
class
I
stratospheric
ozone
depleting
substances
(
ODSs)
for
calendar
year
2005.

Essential
use
allowances
enable
a
person
to
obtain
controlled
class
I
ODSs
as
an
exemption
to
the
regulatory
ban
of
production
and
import
of
these
chemicals,
which
became
effective
on
January
1,
1996.
EPA
allocates
essential
use
allowances
for
exempted
production
or
import
of
a
specific
quantity
of
class
I
ODS
solely
for
the
designated
essential
purpose.
The
allocations
total
1,820.48
metric
tons
of
chlorofluorocarbons
for
use
in
metered
dose
inhalers.

DATES:
This
final
rule
is
effective
[
insert
date
of
publication
in
FR].

ADDRESSES:
Materials
related
to
this
rulemaking
are
contained
in
EPA
Air
Docket
OAR­
2004­
0063.
The
EPA
Air
Docket
is
located
at
EPA
West
Building,
Room
B102,
1301
Constitution
Avenue,
NW,

Washington,
D.
C.,
20460.
The
Air
Docket
is
open
from
8:
30
a.
m.

until
4:
30
p.
m.
Monday
through
Friday.
Materials
related
to
previous
EPA
actions
on
the
essential
use
program
are
contained
in
EPA
Air
Docket
No.
A­
93­
39.

FOR
FURTHER
INFORMATION
CONTACT:
Scott
Monroe,
Essential
Use
Program
Manager,
by
regular
mail:
U.
S.
Environmental
Protection
Agency,
Stratospheric
Protection
Division
(
6205J),
1200
Pennsylvania
Avenue,
NW,
Washington,
DC,
20460;
by
telephone:

202­
343­
9712;
by
fax:
202­
343­
2363;
or
by
email:

monroe.
scott@
epa.
gov.

SUPPLEMENTARY
INFORMATION:

Table
of
Contents
I.
General
Information
A.
How
can
I
get
copies
of
related
information?

II.
Basis
for
Allocating
Essential
Use
Allowances
A.
What
are
essential
use
allowances?

B.
Under
what
authority
does
EPA
allocate
essential
use
allowances?

C.
What
is
the
process
for
allocating
essential
use
allowances?

III.
Response
to
Comments
IV.
Allocation
of
Essential
Use
Allowances
for
Calendar
Year
2005
V.
Statutory
and
Executive
Order
Reviews
A.
Executive
Order
12866:
Regulatory
Planning
and
Review
B.
Paperwork
Reduction
C.
Regulatory
Flexibility
D.
Unfunded
Mandates
Reform
Act
E.
Executive
Order
13132:
Federalism
F.
Executive
Order
13175:
Consultation
and
Coordination
with
Indian
Tribal
Governments
G.
Executive
Order
13045:
Protection
of
Children
from
Environmental
Health
Risks
and
Safety
Risks
H.
Executive
Order
13211:
Actions
that
Significantly
Affect
Energy
Supply,
Distribution,

or
Use
I.
National
Technology
Transfer
and
Advancement
Act
J.
Congressional
Review
Act
VI.
Judicial
Review
VII.
Effective
Date
of
this
Final
Rule
I.
General
Information
A.
How
can
I
get
copies
of
related
information?

1.
Docket
EPA
has
established
an
official
public
docket
for
this
action
at
Air
Docket
ID
No.
OAR­
2004­
0063.
The
official
public
docket
consists
of
the
documents
specifically
referenced
in
this
action
and
other
information
related
to
this
action.
Hard
copies
of
documents
related
to
previous
essential
use
allocation
rulemakings
and
other
actions
may
be
found
in
EPA
Air
Docket
ID
No.
A­
93­
39.
The
public
docket
does
not
include
Confidential
Business
Information
(
CBI)
or
other
information
whose
disclosure
is
restricted
by
statute.
The
public
docket
is
available
for
viewing
at
the
Air
and
Radiation
Docket
in
the
EPA
Docket
Center,

(
EPA/
DC)
EPA
West,
Room
B102,
1301
Constitution
Ave.,
NW,

Washington,
DC.
The
EPA
Docket
Center
Public
Reading
Room
is
open
from
8:
30
a.
m.
to
4:
30
p.
m.,
Monday
through
Friday,

excluding
legal
holidays.
The
telephone
number
for
the
Reading
Room
is
(
202)
566­
1741,
and
the
telephone
number
for
the
Air
and
Radiation
Docket
is
(
202)
566­
1742.
EPA
may
charge
a
reasonable
fee
for
copying
docket
materials.

2.
Electronic
Access
An
electronic
version
of
the
public
docket
is
available
through
EPA's
electronic
public
docket
and
comment
system,
"
EPA
Dockets."
You
may
use
EPA
Dockets
at
http://
www.
epa.
gov/
edocket/
to
view
public
comments,
access
the
index
listing
of
the
contents
of
the
official
public
docket,
and
to
access
those
documents
in
the
public
docket
that
are
available
electronically.
Once
in
the
system,
select
"
search,"
then
key
in
the
appropriate
docket
identification
number.

II.
Basis
for
Allocating
Essential
Use
Allowances
A.
What
are
essential
use
allowances?

Essential
use
allowances
are
allowances
to
produce
or
import
certain
ozone­
depleting
chemicals
in
the
U.
S.
for
purposes
that
have
been
deemed
"
essential"
by
the
Parties
to
the
Montreal
Protocol
and
the
U.
S.
Government.

The
Montreal
Protocol
on
Substances
that
Deplete
the
Ozone
Layer
(
Protocol)
is
an
international
agreement
aimed
at
reducing
and
eliminating
the
production
and
consumption1
of
stratospheric
ozone
depleting
substances
(
ODSs).
The
elimination
of
production
and
consumption
of
class
I
ODSs
is
accomplished
through
adherence
to
phaseout
schedules
for
specific
class
I
ODSs2,
including:
chlorofluorocarbons
(
CFCs),
halons,
carbon
tetrachloride,
and
methyl
chloroform.
As
of
January
1,
1996,
production
and
import
of
most
class
I
ODSs
were
phased
out
in
developed
countries,
including
the
United
States.

1
"
Consumption"
is
defined
as
the
amount
of
a
substance
produced
in
the
United
States,
plus
the
amount
imported
into
the
United
States,
minus
the
amount
exported
to
Parties
to
the
Montreal
Protocol
(
see
Section
601(
6)
of
the
Clean
Air
Act).
2
Class
I
ozone
depleting
substances
are
listed
at
40
CFR
Part
82
subpart
A,
appendix
A.
However,
the
Protocol
and
the
Clean
Air
Act
(
Act)

provide
exemptions
that
allow
for
the
continued
import
and/
or
production
of
class
I
ODS
for
specific
uses.
Under
the
Protocol,
exemptions
may
be
granted
for
uses
that
are
determined
by
the
Parties
to
be
"
essential."
Decision
IV/
25,
taken
by
the
Parties
to
the
Protocol
in
1992,

established
criteria
for
determining
whether
a
specific
use
should
be
approved
as
essential,
and
set
forth
the
international
process
for
making
determinations
of
essentiality.
The
criteria
for
an
essential
use,
as
set
forth
in
paragraph
1
of
Decision
IV/
25,
are
the
following:

"(
a)
that
a
use
of
a
controlled
substance
should
qualify
as
`
essential'
only
if:

(
i)
it
is
necessary
for
the
health,
safety
or
is
critical
for
the
functioning
of
society
(
encompassing
cultural
and
intellectual
aspects);
and
(
ii)
there
are
no
available
technically
and
economically
feasible
alternatives
or
substitutes
that
are
acceptable
from
the
standpoint
of
environment
and
health;

(
b)
that
production
and
consumption,
if
any,
of
a
controlled
substance
for
essential
uses
should
be
permitted
only
if:
(
i)
all
economically
feasible
steps
have
been
taken
to
minimize
the
essential
use
and
any
associated
emission
of
the
controlled
substance;
and
(
ii)
the
controlled
substance
is
not
available
in
sufficient
quantity
and
quality
from
existing
stocks
of
banked
or
recycled
controlled
substances,
also
bearing
in
mind
the
developing
countries'
need
for
controlled
substances."

B.
Under
what
authority
does
EPA
allocate
essential
use
allowances?

Title
VI
of
the
Act
implements
the
Protocol
for
the
United
States.
3
Section
604(
d)
of
the
Act
authorizes
EPA
to
allow
the
production
of
limited
quantities
of
class
I
ODSs
after
the
phase
out
date
for
the
following
essential
uses:

(
1)
Methyl
Chloroform,
"
solely
for
use
in
essential
applications
(
such
as
nondestructive
testing
for
metal
fatigue
and
corrosion
of
existing
airplane
engines
and
airplane
parts
susceptible
to
metal
fatigue)
for
which
no
3
According
to
Section
614(
b)
of
the
Act,
Title
VI
"
shall
be
construed,
interpreted,
and
applied
as
a
supplement
to
the
terms
and
conditions
of
the
Montreal
Protocol
.
.
.
and
shall
not
be
construed,
interpreted,
or
applied
to
abrogate
the
responsibilities
or
obligations
of
the
United
States
to
implement
fully
the
provisions
of
the
Montreal
Protocol.
In
the
case
of
conflict
between
any
provision
of
this
title
and
any
provision
of
the
Montreal
Protocol,
the
more
stringent
provision
shall
govern."
EPA's
regulations
implementing
the
essential
use
provisions
of
the
Act
and
the
Protocol
are
located
in
40
CFR
part
82.
safe
and
effective
substitute
is
available."
Under
the
Act,
this
exemption
was
available
only
until
January
1,

2005.
Prior
to
that
date,
EPA
issued
methyl
chloroform
allowances
to
the
U.
S.
Space
Shuttle
and
Titan
Rocket
programs.

(
2)
Medical
Devices
(
as
defined
in
section
601(
8)
of
the
Act),
"
if
such
authorization
is
determined
by
the
Commissioner
[
of
the
Food
and
Drug
Administration],
in
consultation
with
the
Administrator
[
of
EPA]
to
be
necessary
for
use
in
medical
devices."
EPA
issues
allowances
to
manufacturers
of
metered­
dose
inhalers
(
MDIs),
which
use
CFCs
as
propellant
for
the
treatment
of
asthma
and
chronic
obstructive
pulmonary
diseases.

(
3)
Aviation
Safety,
for
which
limited
quantities
of
halon­
1211,
halon­
1301,
and
halon
2402
may
be
produced
"
if
the
Administrator
of
the
Federal
Aviation
Administration,

in
consultation
with
the
Administrator
[
of
EPA]
determines
that
no
safe
and
effective
substitute
has
been
developed
and
that
such
authorization
is
necessary
for
aviation
safety
purposes."
Neither
EPA
nor
the
Parties
have
ever
granted
a
request
for
essential
use
allowances
for
halon,

because
in
most
cases
alternatives
are
available
and
because
existing
quantities
of
this
substance
are
large
enough
to
provide
for
any
needs
for
which
alternatives
have
not
yet
been
developed.

The
Protocol,
under
Decision
XV/
8,
additionally
allows
a
general
exemption
for
laboratory
and
analytical
uses
through
December
31,
2007.
This
exemption
is
reflected
in
EPA's
regulations
at
40
CFR
part
82,
subpart
A.
While
the
Act
does
not
specifically
provide
for
this
exemption,
EPA
has
determined
that
an
allowance
for
essential
laboratory
and
analytical
uses
is
allowable
under
the
Act
as
a
de
minimis
exemption.
The
de
minimis
exemption
is
addressed
in
EPA's
final
rule
of
March
13,

2001
(
66
FR
14760­
14770).
The
Parties
to
the
Protocol
subsequently
agreed
(
Decision
XI/
15)
that
the
general
exemption
does
not
apply
to
the
following
uses:
testing
of
oil
and
grease,
and
total
petroleum
hydrocarbons
in
water;

testing
of
tar
in
road­
paving
materials;
and
forensic
finger­
printing.
EPA
incorporated
this
exclusion
at
Appendix
G
to
Subpart
A
of
40
CFR
part
82
on
February
11,

2002
(
67
FR
6352).

C.
What
is
the
process
for
allocating
essential
use
allowances?

Before
EPA
will
allocate
essential
use
allowances,
the
Parties
to
the
Protocol
must
first
approve
the
United
States'
request
to
produce
or
import
essential
class
I
ODSs.
The
procedure
set
out
by
Decision
IV/
25
calls
for
individual
Parties
to
nominate
essential
uses
and
the
total
amount
of
ODSs
needed
for
those
essential
uses
on
an
annual
basis.
The
Protocol's
Technology
and
Economic
Assessment
Panel
(
TEAP)
evaluates
the
nominated
essential
uses
and
makes
recommendations
to
the
Protocol
Parties.
The
Parties
make
the
final
decisions
on
whether
to
approve
a
Party's
essential
use
nomination
at
their
annual
meeting.
This
nomination
cycle
occurs
approximately
two
years
before
the
year
in
which
the
allowances
would
be
in
effect.
The
allowances
allocated
through
today's
action
were
first
nominated
by
the
United
States
in
January
2003.

Once
the
U.
S.
nomination
is
approved
by
the
Parties,

EPA
allocates
essential
use
exemptions
to
specific
entities
through
notice­
and­
comment
rulemaking
in
a
manner
consistent
with
the
Act.
For
MDIs,
EPA
requests
information
from
manufacturers
about
the
number
and
type
of
MDIs
they
plan
to
produce,
as
well
as
the
amount
of
CFCs
necessary
for
production.
EPA
then
forwards
the
information
to
the
Food
and
Drug
Administration
(
FDA),

which
determines
the
amount
of
CFCs
necessary
for
MDIs
in
the
coming
calendar
year.
Based
on
FDA's
determination,

EPA
proposes
allocations
to
each
eligible
entity.
Under
the
Act
and
the
Protocol,
EPA
may
allocate
essential
use
allowances
in
quantities
that
together
are
below
or
equal
to
the
total
amount
approved
by
the
Parties.
EPA
will
not
allocate
essential
use
allowances
in
amounts
higher
than
the
total
approved
by
the
Parties.
For
2005,
the
Parties
authorized
the
United
States
to
allocate
up
to
1,902
metric
tons
of
CFCs
for
essential
uses.

EPA
published
a
proposed
rule
on
December
22,
2004
(
69
FR
76655)
that
would
have
allocated
a
total
of
1,524.58
metric
tons
of
allowances.
EPA
subsequently
determined
that
the
amount
proposed
to
be
allocated
to
one
company,

Armstrong
Pharmaceuticals,
was
incorrect.
Specifically,

EPA
had
proposed
to
allocate
to
Armstrong
29
metric
tons,

but
the
amount
should
have
been
270.90
metric
tons.
EPA
published
a
supplemental
proposal
on
February
23,
2005
(
70
FR
8753)
to
correct
the
error,
which
increased
the
total
amount
of
proposed
allowances
to
1,766.48
metric
tons.

Today's
rule
finalizes
both
the
proposed
rule
and
the
supplemental
proposed
rule.

III.
Response
to
Comments
EPA
received
eight
sets
of
comments
from
six
individual
commenters
on
the
proposed
rule
and
the
supplemental
proposed
rule,
four
of
which
were
late
comments.
One
commenter
objected
to
the
granting
of
essential
use
status
generally.
One
commenter
requested
additional
allowances
for
2005.
The
other
four
commenters
presented
arguments
related
to
EPA's
obligations
under
the
Montreal
Protocol
and
the
Clean
Air
Act
with
respect
to
the
proposed
allocations.
The
comments
are
addressed
in
more
detail
below.

A.
EPA
should
not
allocate
essential
use
allowances
generally.

One
commenter
opposed
exempting
Class
I
substances
for
any
purpose,
including
asthma
medication,
because
non­
ozone
depleting
alternatives
have
been
developed
(
OAR­
2004­
0063­

0006).
EPA
disagrees
with
this
comment.
Section
604
of
the
Act
directs
EPA
to
authorize
production
of
CFCs
for
essential
MDIs
if
FDA,
in
consultation
with
EPA,
determines
such
production
to
be
necessary.
FDA
has
found
the
use
of
ozone­
depleting
substances
to
be
essential
in
certain
metered
dose
inhalers
for
the
treatment
of
asthma
and
chronic
pulmonary
disease
(
see
21
CFR
2.125(
e)).
As
established
by
final
rule
on
July
24,
2002
(
67
FR
48370),

FDA
will
determine
through
rulemaking
when
an
MDI
is
no
longer
essential
due
to
the
availability
of
safe
and
effective
alternatives.

The
same
commenter
also
stated,
"[
A]
ll
of
the
information
these
polluting
companies
submit
should
be
open
to
the
public."
The
information
submitted
was
claimed
as
confidential.
That
information
is
being
treated
in
accordance
with
EPA's
regulations
on
confidential
business
information
at
40
CFR
§
§
2.201
to
2.311.

B.
EPA
should
not
allocate
essential
use
allowances
for
production
of
albuterol
MDIs.

One
commenter
wrote
that
EPA
should
not
allocate
essential
use
allowances
for
use
in
CFC
albuterol
MDIs
because
they
are
"
non­
essential"
and
the
allocations
would
be
"
inconsistent
with
Decisions
of
the
Parties
to
the
Montreal
Protocol"
(
OAR­
2004­
0063­
0012).
The
commenter
referenced
a
letter
sent
by
the
Natural
Resources
Defense
Council
(
NRDC)
to
EPA
on
May
13,
2004,
that
addressed
the
inclusion
of
CFCs
for
albuterol
MDIs
in
the
United
States'

2006
essential
use
nomination.
EPA
responded
with
a
letter
dated
July
12,
2004,
in
which
we
said,
"
Until
FDA
issues
a
final
rule
to
delist
albuterol
MDIs
(
with
an
identified
effective
date)
in
accordance
with
its
own
regulations
and
the
Administrative
Procedures
Act,
it
is
premature
and
contrary
to
law
for
EPA
unilaterally
to
conclude
that
CFC
albuterol
MDIs
are
in
fact
no
longer
essential
in
the
United
States
and
to
remove
this
essential
use
from
the
U.
S.
nomination
for
2006."
These
letters
have
been
placed
in
EPA
Docket
no.
OAR­
2004­
0063.
FDA
since
announced
its
decision
that
CFC
albuterol
MDIs
will
no
longer
be
essential
after
December
31,
2008
(
70
FR
17168,
April
4,

2005).
Thus,
FDA
continues
to
regard
CFC
albuterol
MDIs
as
essential
for
the
current
control
period.
EPA
is
therefore
allocating
essential
use
allowances
for
CFC
albuterol
MDIs
in
this
final
rule.

C.
Aventis
Pharmaceuticals
requested
additional
CFCs
for
2005.

Aventis
Pharmaceuticals
submitted
to
the
docket
a
request
for
additional
allowances
in
the
amount
of
60
metric
tons,
which
if
allocated
would
bring
the
company's
total
allocation
for
2005
to
117
metric
tons.
A
portion
of
the
additional
CFCs
would
be
used
for
products
exported
outside
the
United
States.
EPA
and
FDA
considered
this
request
and
determined
to
grant
additional
allowances
for
MDI
products
marketed
in
the
United
States;
the
relevant
correspondence
has
been
placed
in
EPA
Docket
no.
OAR­
2004­

0063.

EPA
is
not
granting
additional
allowances
to
Aventis
for
production
of
CFC
MDIs
that
would
be
sold
outside
the
United
States.
Under
Section
604(
d)(
2)
of
the
Act,
EPA
authorizes
production
of
class
I
substances
"
if
such
authorization
is
determined
by
the
Commissioner
in
consultation
with
the
Administrator,
to
be
necessary
for
use
in
medical
devices."
EPA
and
FDA
lack
sufficient
information
on
whether
the
MDIs
in
question
have
been
declared
essential
in
those
counties
by
their
public
health
authority,
whether
they
could
otherwise
be
considered
essential,
or
whether
production
of
CFCs
for
these
MDIs
is
necessary.
FDA
is
thus
unable
to
render
a
determination
on
those
issues.
Without
such
determinations,
EPA
is
not
authorized
under
the
Act
to
allocate
allowances
for
those
MDIs.

Following
publication
of
the
proposed
rule
in
the
Federal
Register
and
the
request
by
Aventis
for
increased
allowances,
EPA
was
notified
that
Aventis
sold
certain
of
its
assets
related
to
MDI
production
to
Inyx
USA.

Therefore,
today's
action
assigns
the
allowances
proposed
for
Aventis,
including
the
additional
allowances,
to
Inyx.

EPA
received
separate
but
similar
sets
of
comments
from
the
International
Pharmaceutical
Aerosol
Consortium
(
IPAC),
NRDC,
the
US
Stakeholders
Group
on
MDI
Transition,

and
GlaxoSmithKline
(
GSK),
a
pharmaceutical
company
and
member
of
IPAC.
EPA's
responses
to
these
comments
are
grouped
below
in
accordance
with
the
major
points
made
by
the
commenters.
In
many
instances
EPA
references
the
GSK
comments
because
they
were
both
representative
of
and
more
detailed
than
other
comments.
D.
Effect
of
Montreal
Protocol
Decisions
GSK
commented
that
"
EPA's
statutory
obligation
to
fully
implement
the
provisions
of
the
Montreal
Protocol
includes
decisions
by
the
Parties
to
the
Protocol"
(
OAR­

2004­
0063­
0008,
p.
2).
EPA's
explanation
of
the
extent
to
which
EPA
takes
into
account
Decisions
of
the
Parties
that
interpret
the
Protocol
is
set
forth
at
69
FR
76984­
76985.

Today's
action
is
consistent
with
relevant
Decisions
that
address
the
interpretation
and
application
of
the
Protocol's
essential
use
provisions.

E.
EPA
must
reevaluate
FDA's
determinations
regarding
essential
use
allowance
volumes.

GSK
argued
that
EPA
must
adhere
to
Montreal
Protocol
Decisions
and
commented,
"
The
fact
that
FDA
has
recommended
[
certain
allocation]
levels
does
not
absolve
EPA
from
evaluating
consistency
with
Protocol
decisions
at
the
time
it
makes*
*
*
allocations"
(
OAR­
2004­
0063­
0008,
p.
3).
GSK
also
argued
that
EPA
may
not
rely
on
the
levels
authorized
by
the
Parties
to
the
Protocol,
but
must
reapply
relevant
Decisions
in
its
rulemaking
process
to
ensure
consistency
with
the
Protocol.

EPA
understands
today's
rulemaking
to
be
fully
consistent
with
the
relevant
Protocol
Decisions
and
with
its
obligations
under
the
Protocol
and
Federal
law.
As
explained
elsewhere
in
this
section
of
the
preamble,
most
of
the
Decisions
cited
by
GSK
specifically
reference
the
nomination
process,
not
the
allocation
process.
EPA
accordingly
reviews
those
Decisions
in
preparing
the
nomination.

F.
EPA
may
not
allocate
allowances
to
companies
that
fail
to
demonstrate
research
and
development
of
alternatives.

GSK
argued
that
Decisions
VIII/
10,
XV/
5,
and
IV/
25
require
EPA
to
deny
allowances
to
companies
that
did
not
submit
research
and
development
information.
GSK
stated
that
it
is
"
highly
likely"
that
not
all
companies
that
requested
allowances
have
submitted
such
information,
and
suggested
that
the
U.
S.
nomination
may
have
been
nonresponsive
on
this
point
(
OAR­
2004­
0063­
0008,
p.
8).

EPA
disagrees
with
the
commenter's
interpretation
of
Decision
VIII/
10
and
its
effort
to
establish
links
between
this
Decision
and
others.
Decision
VIII/
10
provides
that
Parties
"
will
request
companies
applying
for
MDI
essentialuse
exemptions
to
demonstrate
ongoing
research
and
development
of
alternatives
to
CFC
MDIs
with
all
due
diligence"
as
well
as
to
report
in
confidence
on
resources
and
progress
in
alternatives
development.
In
accordance
with
this
Decision,
since
1997
EPA
has
requested
applicants
to
provide
this
information
when
submitting
requests
for
CFC
essential
use
nominations.
(
67
FR
66148,
October
30,

2002).
Thus,
EPA
has
acted
consistently
with
this
Decision.

Contrary
to
GSK's
suggestion,
Decision
VIII/
10
does
not
require
any
action
to
be
taken
at
the
allocation
stage.

Instead,
it
states
only
that
Parties
"
will
request"

information
on
research
and
development
from
companies.
In
addition,
Decision
VIII/
10
does
not
state
how
to
use
the
information.
It
does
not
require
the
United
States
to
report
to
the
Parties
on
research
and
development,
either
in
connection
with
essential
use
nominations
or
otherwise.

Nor
does
it
serve
as
a
basis
for
denying
an
essential
use
allowance
request.
See,
for
example,
67
FR
6355,
February
11,
2002.

GSK
commented
that
EPA
should
not
allocate
allowances
to
companies
that
do
not
plan
to
replace
their
CFC
MDI
product
with
a
non­
CFC
alternative
and
are
not
conducting
research
to
develop
new
products
(
OAR­
2004­
0063­
0008,
p.

9).
Decision
VIII/
10,
however,
does
not
say
that
all
applicants
must
demonstrate
ongoing
research
and
development,
regardless
of
the
circumstances.
EPA
interprets
the
Parties'
intent
in
taking
Decision
VIII/
10
to
be,
as
stated
on
its
face,
"
to
promote
industry's
participation
on
a
smooth
and
efficient
transition
away
from
CFC
based
MDIs"
generally.
Granting
allowances
for
a
CFC
MDI
product,
if
the
product
is
listed
as
essential
and
production
of
CFCs
is
determined
by
the
Commissioner
of
FDA
to
be
necessary
under
Section
604(
d)(
2)
of
the
Act,
allows
industry
and
patients
to
continue
to
make
and
use
needed
products
while
non­
CFC
alternatives
are
developed.
This
is
consistent
with
the
Decision
VIII/
10
standard
of
"
due
diligence."

Companies
may
elect
to
drop
their
CFC
products
and
withdraw
from
the
essential
use
program
over
time
in
accordance
with
their
business
plans.
EPA
has
seen
at
least
two
instances
in
which
companies
 
Sciarra
Laboratories
and
PLIVA
 
withdrew
from
the
essential
use
program
(
by
no
longer
requesting
essential
use
allowances)

without
ultimately
reformulating
their
products
in
a
non­

CFC
version,
leaving
the
need
for
their
products
to
be
filled
by
other
essential
MDIs
or
alternatives.
This
process
is
consistent
with
the
goal
of
promoting
a
"
smooth
and
efficient
transition."
EPA
has
placed
in
Docket
no.

OAR­
2004­
0063
Federal
Register
notices
from
2001
and
2002
indicating
Sciarra's
withdrawal
from
the
program,
as
well
as
the
Federal
Register
notice
from
2004
indicating
the
last
year
in
which
PLIVA
received
allowances
(
PLIVA
is
not
included
in
today's
rule).
Additionally,
EPA
has
docketed
the
U.
S.
response
to
Decision
XIV/
5,
sent
to
the
Ozone
Secretariat
on
February
23,
2005,
in
which
the
U.
S.

identified
all
CFC
and
non­
CFC
inhalers
sold
domestically.

GSK
stated
that
"
it
is
not
reasonable
to
conclude
that
because
a
parent
company
has
presented
information
to
demonstrate
its
compliance
with
Decision
VIII/
10,
that
such
compliance
automatically
applies
to
that
company's
subsidiaries*
*
*.
EPA
has
not
provided
any
information
by
which
the
public
can
reasonably
conclude
that
Schering­

Plough
has
shared
the
fruits
of
[
its]
collaboration
with
its
subsidiary,
Warrick
Pharmaceuticals"
(
OAR­
2004­
0063­

0008,
p.
11).
GSK
also
stated
that
EPA
must
deny
allocations
to
Schering
for
Warrick's
product
based
on
Schering's
alleged
failure
to
submit
information
on
Warrick's
research
and
development
efforts.
However,

Decision
VIII/
10
does
not
indicate
whether
the
Parties
envisioned
that
a
subsidiary
must
perform
research
and
development
if
its
parent
was
engaged
in
such
efforts,
or
whether
the
Parties
had
any
specific
intent
regarding
parent­
subsidiary
collaborations.
Given
the
underlying
purpose
of
the
Decision
to
encourage
research
and
development
by
the
industry
as
a
whole
and
the
lack
of
formal
corporate
distinctions
in
the
Protocol,
EPA
disagrees
with
GSK's
construction.
GSK
also
incorrectly
interpreted
Decision
XV/
5
as
establishing
that
"
EPA*
*
*
allocations
must
be
assessed
for
each
active
ingredient
and
each
intended
market"
(
OAR­

2004­
0063­
0008,
p.
10).
In
Decision
XV/
5,
the
Parties
agreed:
"
To
request
that
Parties*
*
*
when
submitting
their
nominations
for
essential­
use
exemptions
for
CFCs
for
metered­
dose
inhalers,
specify,
for
each
nominated
use,
the
active
ingredients,
the
intended
market
for
sale
or
distribution
and
the
quantity
of
CFCs
required."
Decision
XV/
5(
2).
This
Decision
refers
specifically
to
the
nomination
process.
It
does
not
address
research
and
development
reporting,
nor
does
it
affect
EPA's
authority
with
regard
to
the
granting
of
essential
use
allowances
on
that
ground.

Finally,
GSK's
citation
of
Decision
IV/
25
is
also
inapposite.
GSK
stated
that
if
a
company's
efforts
to
research
and
develop
alternatives,
to
collaborate
with
others,
and
to
share
such
information
with
its
subsidiaries
are
"
insufficient,"
then
it
has
not
taken
"
all
economically
feasible
steps*
*
*
to
minimize
the
essential
use"
in
accordance
with
Decision
IV/
25(
1)(
b)(
i)
(
OAR­
2004­
0063­

0008,
pp.
10­
11).
EPA
disagrees
with
the
commenter's
suggestion
of
a
direct
relationship
between
Decisions
IV/
25
and
VIII/
10.
Decision
VIII/
10
does
not
make
reference
to
Decision
IV/
25.
Also,
GSK's
proposed
construction
is
unreasonable
due
to
the
practical
difficulties
associated
with
determining
whether
an
individual
company's
research
and
development
efforts
constitute
"
all
economically
feasible
steps"
for
that
company.
Such
a
determination
could
require
detailed
knowledge
of
the
company's
financial
status
and
business
plans,
as
well
as
an
understanding
of
the
economic
importance
of
the
company's
MDI
products
relative
to
other
products
manufactured
by
the
company.

Moreover,
Paragraph
1(
b)(
i)
of
Decision
IV/
25
speaks
to
minimization
of
particular
essential
uses,
not
to
general
research
and
development.
EPA
has
received
information
from
applicants
regarding
their
efforts
to
minimize
the
essential
use
and
associated
emissions.
The
United
States
reports
to
the
Parties
on
these
efforts
in
the
annual
essential
use
nomination.
The
essential
use
nomination
for
2005
(
pp.
12­
13),
for
example,
listed
several
waste
minimization
strategies
employed
in
the
manufacture
of
MDIs
(
see
Docket
OAR­
2004­
0063).

Information
submitted
by
individual
companies
in
connection
with
annual
essential
use
nominations
has
been
claimed
as
confidential
and
is
being
treated
in
accordance
with
EPA's
regulations
on
confidential
business
information
at
40
CFR
§
§
2.201
to
2.311.
G.
EPA
must
reduce
allocations
of
essential
use
allowances
by
the
amount
that
CFC
stockpiles
exceed
a
one­
year
supply.

Commenters
argued
that
because
Decision
XVI/
12
states
that
countries
should
pursue
"
the
objective
of
maintaining
no
more
than
one
year's
operational
supply
[
of
CFCs],"
and
because
Decision
IV/
25
states
that
production
and
consumption
should
be
permitted
only
if
"
the
controlled
substance
is
not
available
in
sufficient
quantity
and
quality
from
existing
stocks,"
that
EPA
must
reduce
allocations
if
stockpiles
of
CFCs
amount
to
more
than
a
one­
year
supply.
GSK
also
argued
that
Section
604(
d)(
2)
of
the
Clean
Air
Act
reinforces
this
requirement
by
allowing
the
Administrator
to
authorize
new
production
of
class
I
substances
for
medical
devices
only
if
"
such
action
is
consistent
with
the
Montreal
Protocol"
(
OAR­
2004­
0063­
0008,

p.
13).

EPA
believes
that
this
argument
misreads
the
Decisions
in
question
and
that
today's
action
is
fully
consistent
with
those
Decisions
and
the
Protocol.
At
the
last
Meeting
of
the
Parties
in
November
2004,
the
Parties
specifically
negotiated
and
addressed
in
text
the
issue
of
stockpiles
for
CFC
MDIs.
They
concluded
in
Decision
XVI/
12
that
"
Parties,
when
preparing
essential
use
nominations
for
CFCs,
should
give
due
consideration
to
existing
stocks*
*
*
with
the
objective
of
maintaining
no
more
than
one
year's
operational
supply."
First,
by
its
very
terms,
the
Decision
only
applies
prospectively,
when
countries
make
a
nomination,
not
during
any
later
domestic
allocation
process.

Second,
Decision
XVI/
12
did
not
exist
at
the
time
of
the
2005
U.
S.
nomination.
The
first
nomination
subject
to
Decision
XVI/
12,
which
the
United
States
delivered
to
the
Parties
on
February
2,
2005,
stated,
"
The
USEPA
monitors
reserves
through
information
provided
by
companies
that
receive
essential
use
allowances.
In
putting
forward
our
2007
essential
use
exemption
nomination,
the
United
States
carefully
reviewed
the
size
of
company
reserves,
bearing
in
mind
that
information
on
reserves
at
the
end
of
2003
or
2004
is
not
a
reliable
indicator
of
the
amounts
that
will
be
held,
and
their
distribution
at
the
beginning
of
2007.

Bearing
in
mind
this
uncertainty,
the
United
States
has
given
due
consideration
to
the
existence
of
stocks
in
accordance
with
Decision
XVI/
12"
(
p.
16).
Thus,
the
United
States
has
acted
in
conformance
with
Decision
XVI/
12.

Third,
Decision
XVI/
12
only
sets
an
objective
of
a
one­
year
operational
supply.
It
does
establish
an
absolute
limitation.
Giving
"
due
consideration"
to
the
level
of
stocks
at
the
time
of
nomination
does
not
necessarily
equate
to
adjusting
the
U.
S.
nomination
if
the
stockpile
data
at
that
point
in
time
indicate
a
supply
greater
than
one
year's
worth.
The
commenters
cited
data
regarding
onhand
CFC
supplies
at
the
beginning
of
2004.
To
the
extent
the
commenters'
concern
is
based
on
this
data,
EPA
directs
their
attention
to
the
more
recent
report
filed
with
the
Ozone
Secretariat
on
February
23,
2005
(
see
Docket
No.
OAR­

2004­
0063).

GSK
noted
that
Decision
XVI/
2
expressly
references
Decision
IV/
25.
However,
Decision
IV/
25
does
not
alter
the
plain
meaning
of
Decision
XVI/
12,
and
indeed
it
could
not,

having
been
decided
by
the
Parties
twelve
years
before
they
decided
Decision
XVI/
12.
GSK
also
stated
that
Decision
IV/
25
independently
requires
EPA
to
reduce
allocations
to
the
extent
that
stockpiles
are
"
excessive."
This
statement
assumes
that
the
Decision's
language
could
only
apply
to
individual
Parties,
ignores
its
hortatory
nature,
and
overlooks
the
fact
that
the
Parties
specifically
chose,
in
Decision
XVI/
12,
to
address
the
stockpile
topic
by
setting
an
"
objective"
and
by
referring
to
the
nomination,
not
to
any
domestic
allocation
process.

GSK
also
referred
to
Decision
XV/
5(
2),
in
which
the
Parties
decided,
among
other
things,
"[
t]
o
request
that
Parties*
*
*
when
submitting
their
nominations
for
essential­
use
exemptions
for
CFCs
for
metered­
dose
inhalers,
specify,
for
each
nominated
use,
the
active
ingredients*
*
*
and
the
quantity
of
CFCs
required."
GSK
stated
that
the
combined
effect
of
Decisions
IV/
25
and
XV/
5
is
that
EPA
must,
"[
i]
n
most
cases*
*
*
assess
stockpiles
on
a
company­
specific
basis"
(
OAR­
2004­
0063­
0008,
p.
13).

As
a
consequence,
GSK
argued,
EPA
must
consider
both
available
stockpiles
in
the
aggregate
and
as
held
by
individual
companies.
If
a
single
company
holds
stockpiles
greater
than
one
year's
operational
supply,
then
according
to
the
commenter
EPA
must
reduce
the
amount
of
that
company's
allocation.

GSK
has
incorrectly
interpreted
a
Decision
that
explicitly
refers
to
individual
Parties'
nominations
as
referring
to
individual
Parties'
licensing
processes.
The
United
States
acted
in
accordance
with
Decision
XV/
5,
which
was
taken
in
November
2003,
by
submitting
the
requested
information
in
a
letter
to
the
TEAP
co­
chairs
(
dated
April
21,
2004)
in
connection
with
the
2006
essential
use
nomination.
The
United
States
also
sent
updated
information
to
the
TEAP
co­
chairs
on
February
23,
2005,
in
connection
with
the
2007
essential
use
nomination.

Decision
XV/
5,
whether
considered
alone
or
together
with
Decision
IV/
25,
does
not
require
the
United
States
to
take
any
action
other
than
to
submit
the
requested
information
as
part
of
its
essential
use
nomination.
GSK
did
not
explain
the
assertion
that
the
two
Decisions,
taken
together,
provide
more
direction
than
either
provides
on
its
face,
nor
is
there
any
indication
of
a
direct
relationship
between
the
two
Decisions.
Decision
XV/
5
does
not
make
reference
to
Decision
IV/
25.
Furthermore,
the
U.
S.
nomination
for
2005
had
already
been
submitted
at
the
time
the
Parties
took
Decision
XV/
5
and
thus
Decision
XV/
5
did
not
apply
to
that
nomination
because
it
post­
dated
it.

Another
commenter
quoted
the
May
2004
TEAP
Report
(
see
Docket
no.
OAR­
2004­
0063)
to
the
effect
that
"
individual
companies
may
hold
a
substantial
and,
perhaps,

disproportionate
amount"
of
a
Party's
stockpile
(
OAR­
2004­

0063­
0011,
p.
2).
EPA
does
not
agree
with
this
commenter
that
the
statements
in
the
TEAP
report
regarding
individual
holdings
mean
that
Decision
XVI/
12
must
be
read
as
relating
to
individual
holdings.
The
TEAP
serves
as
an
advisory
body
to
the
Parties
to
inform
their
decision
making.
It
is
not
a
directive
body.
Moreover,
the
natural
reading
of
Decision
XVI/
12
is
that
each
Party's
objective
should
be
to
maintain
no
more
than
one
year's
(
aggregate)
supply.

Paragraph
3
of
that
Decision
states
that
"
Parties*
*
*

should
give
due
consideration
to
existing
stocks*
*
*
with
the
objective
of
maintaining
no
more
than
one
year's
operational
supply."
The
"
Parties"
are
the
subject
of
the
sentence
and
are
thus
the
entities
to
which
the
phrase
"
objective
of
maintaining
no
more
than
one
year's
operational
supply"
pertains.

H.
EPA
must
comply
with
the
Act's
requirements
for
notice
and
comment
rulemaking.

GSK
stated
that
EPA,
in
our
supplemental
proposal
to
correct
Armstrong's
allocation,
failed
to
comply
with
section
307(
d)
of
the
Act.
Section
307(
d)(
3)
directs
EPA
to
make
available,
among
other
items,
the
factual
data
on
which
a
proposed
rule
is
based
and
the
methodology
used
in
obtaining
and
analyzing
those
data.
GSK
stated
that
the
supplemental
proposal
was
based
on
information
that
had
not
been
placed
in
the
docket,
and
also
that
the
supplemental
proposal
was
not
justified
based
on
information
that
EPA
had
made
public.
GSK
also
stated,
"
Even
if
it
were
correct
that
a
requesting
company
has
sufficient
information
to
comment
on
its
own
proposed
allocation,
neither
EPA
nor
FDA
have
[
sic]
provided
any
basis
for
a
different
interested
party
to
meaningfully
comment
on
that
allocation"
(
OAR­

2004­
0063­
0016,
p.
3).

As
stated
above,
the
information
on
which
FDA,
in
consultation
with
EPA,
based
the
proposed
allocations
was
claimed
confidential
by
the
submitting
companies,
including
Armstrong
Pharmaceuticals.
As
a
consequence,
EPA
has
treated
this
information
in
accordance
with
our
regulations
on
confidential
business
information
at
40
CFR
§
§
2.201
to
2.311.
EPA
has
entered
placeholder
documents
in
the
public
portion
of
the
docket
to
indicate
the
documents
that
we
placed
in
the
confidential
portion.

With
respect
to
the
methodology
used
to
determine
the
proposed
allocations,
EPA
described
the
process
for
allocating
essential
use
allowances
in
the
preamble
to
the
proposed
rule
published
on
December
22,
2004
(
69
FR
76657).

Section
604(
d)(
2)
of
the
Act
directs
the
Agency
to
authorize
production
of
class
I
substances
"
if
such
authorization
is
determined
by
the
Commissioner,
in
consultation
with
the
Administrator,
to
be
necessary
for
use
in
medical
devices."
EPA
entered
the
Acting
Commissioner's
letter
of
determination
(
OAR­
2004­
0063­

0005),
as
well
as
the
FDA's
subsequent
letter
of
correction
(
OAR­
2004­
0063­
0010),
into
the
public
docket
for
comment.

EPA
also
explained
in
the
preamble
of
the
supplemental
proposal
that
the
allocation
originally
proposed
for
Armstrong
Pharmaceuticals
was
based
on
an
error,
and
the
purpose
of
the
supplemental
notice
was
to
correct
the
error.
Portions
of
the
correspondence
regarding
the
nature
of
the
error
have
been
placed
in
the
confidential
portion
of
the
docket
due
to
concerns
regarding
disclosure
of
information
claimed
as
confidential.
A
placeholder
has
been
entered
in
the
public
portion
of
the
docket
with
respect
to
this
information.

EPA
thus
has
made
public
the
most
information
possible
given
our
obligations
regarding
the
treatment
of
information
claimed
as
confidential.
Therefore,
EPA
has
acted
in
accordance
with
section
307(
d)
of
the
Act
with
respect
to
making
public
the
basis
and
methodology
for
our
proposed
allocations.
EPA
has
also
acted
in
accordance
with
section
604(
d)(
2)
of
the
Act.
EPA
does
not
have
discretion
to
refuse
to
authorize
production
that
is
consistent
with
the
Montreal
Protocol
and
that
has
been
determined
to
be
necessary
by
FDA
in
consultation
with
EPA.

I.
The
increase
in
Armstrong's
proposed
allocation
was
not
supported
by
publicly
available
information.

GSK
stated
that
the
corrected
allocation
proposed
for
Armstrong
Pharmaceuticals
in
the
supplemental
notice
was
too
high
and
"
cannot
be
supported
under
the
CAA
or
the
Montreal
Protocol"
(
OAR­
2004­
0063­
0016,
p.
6).
This
commenter
argued
that
Armstrong's
actual
MDI
production
in
recent
years,
according
to
publicly
available
data,
was
far
less
than
would
warrant
the
amount
of
CFC
production
allowances
that
Armstrong
would
receive
according
to
the
supplemental
proposed
rule.
Also,
GSK
stated
that
Armstrong
"
must
be
holding
huge
stockpiles
of
CFCs
 
at
least
sufficient
to
supply
its
production
for
more
than
a
year,"
and
that
by
allocating
additional
allowances
to
Armstrong
in
2005
EPA
would
violate
the
terms
of
the
Montreal
Protocol
(
OAR­
2004­
0063­
0016,
p.
5).

Because
Armstrong
has
claimed
its
2005
essential
use
allowance
documentation
as
confidential,
EPA
is
unable
to
respond
to
the
points
made
by
the
commenter
specifically
with
regard
to
Armstrong's
proposed
allocation.
However,

GSK
made
several
assumptions
that
EPA
may
respond
to
in
general
terms.
First,
GSK
assumed
that
a
company
uses
all
of
the
allowances
it
is
allocated
in
a
given
year.
This
is
not
the
case,
as
evidenced
by
the
U.
S.
Accounting
Framework,
which
since
2001
has
shown
that
the
amount
authorized
has
consistently
exceeded
the
amount
actually
acquired
(
Accounting
Frameworks
for
2001­
2004
have
been
placed
in
Docket
no.
OAR­
2004­
0063).
In
the
2004
Accounting
Framework,
for
example,
the
United
States
reported
964
metric
tons
of
CFCs
authorized
but
not
acquired.
This
fact
reflects
an
important
aspect
of
the
essential
use
program:
both
the
U.
S.
nomination
and
the
subsequent
allocation
rule
issued
for
a
given
year
involve
projections,
and
there
is
unavoidably
some
uncertainty
associated
with
projections
of
demand
for
CFC
MDIs.
In
the
interest
of
ensuring
public
access
to
essential
MDIs,
EPA
believes
it
is
safer
for
public
health
to
risk
allocating
more
allowances
than
may
be
used
than
to
allocate
too
few
and
risk
a
shortage.

Second,
GSK
assumed
that
a
company
would
be
able
to
generate
a
large
stockpile
of
essential
use
CFCs
by
using
all
of
its
allowances
to
produce
or
import
CFCs
without
actually
using
those
CFCs
to
manufacture
MDIs
during
the
same
control
period.
However,
a
company
engaging
in
this
practice
would
reveal
itself
in
its
reporting
to
EPA
in
accordance
with
regulations
at
40
CFR
82.13(
u).
As
discussed
above,
EPA
does
not
agree
with
the
commenter
that
the
Agency
is
required
to
reduce
any
individual
company's
allocation
to
the
extent
its
stockpiles
exceed
a
one­
year
supply.
However,
EPA
expects
companies
to
manage
their
allowances
in
good
faith
consistent
with
the
goals
of
the
essential
use
program.

The
proposition
that
any
company
has
accrued
stores
of
essential
use
CFCs
many
times
in
excess
of
its
annual
usage
is
contradicted
by
the
Accounting
Framework.
Since
2001,

the
amount
of
CFCs
that
the
United
States
reported
to
the
Ozone
Secretariat
as
on­
hand
at
the
end
of
the
year
(
Column
L
of
the
Accounting
Framework)
has
decreased
every
year,

from
1,910
metric
tons
in
2001
to
1,521
metric
tons
in
2004.
Excessive
stockpiling
of
CFCs
by
one
or
more
companies
would
be
reflected
in
the
Accounting
Framework
as
an
increase
in
on­
hand
CFCs.

Third,
the
commenter
assumed
that
a
company's
allocations
must
be
based
on
the
company's
prior
record
of
production.
If
a
company's
projected
need
for
CFCs
is
higher
than
past
usage,
the
commenter
suggests,
then
EPA
should
not
authorize
additional
CFCs.
It
is
true
that
a
company's
prior
usage
of
CFCs
is
relevant
to
EPA's
proposed
allocations,
which
is
why
EPA's
February
24,
2004,
letter
to
MDI
manufacturers
required
them
to
include
in
their
essential
use
applications
prior­
year
production
data
(
OAR­

2004­
0063­
0002).
Nevertheless,
past
production
alone
is
an
insufficient
basis
for
allocating
allowances
in
light
of
the
fact
that
market
conditions
may
change,
and
a
company
may
increase
or
decrease
its
levels
of
production
accordingly.
Thus,
EPA's
February
24,
2004,
letter
also
requested
information
regarding
anticipated
needs
during
2005.
For
this
reason
and
the
other
reasons
explained
above,
EPA
disagrees
with
the
conclusions
reached
by
the
commenter
with
regard
to
the
proposed
allocation
for
Armstrong.
IV.
Allocation
of
Essential
Use
Allowances
for
Calendar
Year
2005
With
today's
action,
EPA
is
allocating
essential
use
allowances
for
calendar
year
2005
to
the
entities
listed
in
Table
1.
These
allowances
are
for
the
production
or
import
of
the
specified
quantity
of
class
I
controlled
substances
solely
for
the
specified
essential
use.

TABLE
I
­­
ESSENTIAL
USE
ALLOCATION
FOR
CALENDAR
YEAR
2005
Company
Chemical
Quantity
(
metric
tons)

Metered
Dose
Inhalers
(
for
oral
inhalation)
for
Treatment
of
Asthma
and
Chronic
Obstructive
Pulmonary
Disease
Armstrong
Pharmaceuticals
CFC
­
11
or
CFC­
12
or
CFC­
114
270.90
Boehringer
Ingelheim
Pharmaceuticals
CFC
­
11
or
CFC­
12
or
CFC­
114
480
Inyx
USA,
Ltd.
4
CFC­
11
or
CFC­
12
or
CFC­
114
111
Schering­
Plough
Corporation
CFC­
11
or
CFC­
12
or
CFC­
114
816
3M
Pharmaceuticals
CFC­
11
or
CFC­
12
or
CFC­
114
69.18
Wyeth
Pharmaceuticals
CFC­
11
or
CFC­
12
or
CFC­
114
73.40
V.
Statutory
and
Executive
Order
Reviews
A.
Executive
Order
12866:
Regulatory
Planning
and
Review
Under
Executive
Order
12866
(
58
FR
51735,
October
4,

1993),
the
Agency
must
determine
whether
this
regulatory
action
is
"
significant"
and
therefore
subject
to
review
by
the
Office
of
Management
and
Budget
(
OMB)
and
the
requirements
of
the
Executive
Order.
The
Order
defines
4
As
explained
in
Section
III.
C
of
the
preamble,
allowances
allocated
to
Aventis
in
the
proposed
rule
are
being
allocated
to
Inyx
in
today's
final
rule.
"
significant
regulatory
action"
as
one
that
is
likely
to
result
in
a
rule
that
may:

(
1)
Have
an
annual
effect
on
the
economy
of
$
100
million
or
more,
or
adversely
affect
in
a
material
way
the
economy,
a
sector
of
the
economy,
productivity,

competition,
jobs,
the
environment,
public
health
or
safety,
or
State,
local,
or
tribal
governments
or
communities;

(
2)
Create
a
serious
inconsistency
or
otherwise
interfere
with
an
action
taken
or
planned
by
another
agency;

(
3)
Materially
alter
the
budgetary
impact
of
entitlements,
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
the
Executive
Order.

Pursuant
to
the
terms
of
Executive
Order
12866,
OMB
has
notified
EPA
that
it
considers
this
rule
a
"
significant
regulatory
action"
within
the
meaning
of
the
Executive
Order.
[
PLACEHOLDER:
EPA
submitted
this
action
to
OMB
for
review
and
incorporated
changes
as
a
result.
A
copy
of
the
rule
showing
changes
that
were
made
is
available
in
EPA
Docket
no.
OAR­
2004­
0063.]
Under
Section
6(
a)(
3)(
B)(
ii)
of
Executive
Order
12866,

the
Agency
must
provide
to
OMB's
Office
of
Information
and
Regulatory
Affairs
an
"
assessment
of
the
potential
costs
and
benefits
of
the
regulatory
action,
including
an
explanation
of
the
manner
in
which
the
regulatory
action
is
consistent
with
a
statutory
mandate
and,
to
the
extent
permitted
by
law,
promotes
the
President's
priorities
and
avoids
undue
interference
with
State,
local,
and
tribal
governments
in
the
exercise
of
their
governmental
functions."

EPA
is
undertaking
today's
final
action
under
the
mandate
established
by
Section
604(
d)
of
the
Clean
Air
Act
Amendments
of
1990,
which
directs
the
Administrator
to
authorize
the
production
of
limited
quantities
of
class
I
substances
solely
for
use
in
medical
devices,
if
the
Commissioner
of
FDA
determines
that
the
authorization
is
necessary.
The
final
allocations
in
today's
rule
are
the
amounts
determined
by
FDA
to
be
necessary
for
calendar
year
2005.

EPA
has
not
assessed
the
costs
and
benefits
specific
to
today's
final
action.
The
Agency
examined
the
costs
and
benefits
associated
with
a
related
regulation.
The
Agency's
Regulatory
Impact
Analysis
(
RIA)
for
the
entire
Title
VI
phaseout
program
examined
the
projected
economic
costs
of
a
complete
phaseout
of
consumption
of
ozonedepleting
substances,
as
well
as
the
projected
benefits
of
phased
reductions
in
total
emissions
of
CFCs
and
other
ozone­
depleting
substances,
including
essential­
use
CFCs
used
for
metered­
dose
inhalers
(
U.
S.
Environmental
Protection
Agency,
"
Regulatory
Impact
Analysis:
Compliance
with
Section
604
of
the
Clean
Air
Act
for
the
Phaseout
of
Ozone
Depleting
Chemicals,"
July
1992).

B.
Paperwork
Reduction
Act
This
action
does
not
add
any
information
collection
requirements
or
increase
burden
under
the
provisions
of
the
Paperwork
Reduction
Act,
44
U.
S.
C.
3501
et.
seq.
OMB
previously
approved
the
information
collection
requirements
contained
in
the
final
rule
promulgated
on
May
10,
1995,

and
assigned
OMB
control
number
2060­
0170
(
EPA
ICR
No.

1432.21).

Burden
means
the
total
time,
effort,
or
financial
resources
expended
by
persons
to
generate,
maintain,

retain,
or
disclose
or
provide
information
to
or
for
a
Federal
agency.
This
includes
the
time
needed
to
review
instruction;
develop,
acquire,
install,
and
utilize
technology
and
systems
for
the
purposes
of
collecting,

validating,
and
verifying
information,
processing
and
maintaining
information,
and
disclosing
and
providing
information;
adjust
the
existing
ways
to
comply
with
any
previously
applicable
instructions
and
requirements;
train
personnel
to
be
able
to
respond
to
a
collection
of
information;
search
data
sources;
complete
and
review
the
collection
of
information;
and
transmit
or
otherwise
disclose
the
information.
An
Agency
may
not
conduct
or
sponsor,
and
a
person
is
not
required
to
respond
to
a
collection
of
information
unless
it
displays
a
currently
valid
OMB
control
number.
The
OMB
control
numbers
for
EPA's
regulations
are
listed
in
40
CFR
part
9
and
48
CFR
Chapter
1.

C.
Regulatory
Flexibility
EPA
has
determined
that
it
is
not
necessary
to
prepare
a
regulatory
flexibility
analysis
in
connection
with
this
final
rule.
EPA
has
also
determined
that
this
rule
will
not
have
a
significant
economic
impact
on
a
substantial
number
of
small
entities.
For
purposes
of
assessing
the
impact
of
today's
rule
on
small
entities,
small
entities
are
defined
as:
(
1)
pharmaceutical
preparations
manufacturing
businesses
(
NAICS
code
325412)
that
have
less
than
750
employees;
(
2)
a
small
governmental
jurisdiction
that
is
a
government
of
a
city,
county,
town,
school
district
or
special
district
with
a
population
of
less
than
50,000;
and
(
3)
a
small
organization
that
is
any
not­
for­
profit
enterprise
that
is
independently
owned
and
operated
and
is
not
dominant
in
its
field.

After
considering
the
economic
impacts
of
today's
final
rule
on
small
entities,
EPA
has
concluded
that
this
action
will
not
have
a
significant
economic
impact
on
a
substantial
number
of
small
entities.
In
determining
whether
a
rule
has
a
significant
economic
impact
on
a
substantial
number
of
small
entities,
the
impact
of
concern
is
any
significant
adverse
economic
impact
on
small
entities,
since
the
primary
purpose
of
the
regulatory
flexibility
analyses
is
to
identify
and
address
regulatory
alternatives
"
which
minimize
any
significant
economic
impact
of
the
proposed
rule
on
small
entities."
5
U.
S.
C.

Sections
603
and
604.
Thus,
an
agency
may
conclude
that
a
rule
will
not
have
a
significant
economic
impact
on
a
substantial
number
of
small
entities
if
the
rule
relieves
regulatory
burden,
or
otherwise
has
a
positive
economic
effect
on
all
of
the
small
entities
subject
to
the
rule.

This
rule
provides
an
otherwise
unavailable
benefit
to
those
companies
that
are
receiving
essential
use
allowances.
We
have
therefore
concluded
that
today's
final
rule
will
relieve
regulatory
burden
for
all
small
entities.

D.
Unfunded
Mandates
Reform
Act
Title
II
of
the
Unfunded
Mandates
Reform
Act
of
1995
(
UMRA),
P.
L.
104_
4,
establishes
requirements
for
Federal
agencies
to
assess
the
effects
of
their
regulatory
actions
on
State,
local,
and
tribal
governments
and
the
private
sector.
Under
section
202
of
the
UMRA,
EPA
generally
must
prepare
a
written
statement,
including
a
cost_
benefit
analysis,
for
proposed
and
final
rules
with
"
Federal
mandates"
that
may
result
in
expenditures
to
State,
local,

and
tribal
governments,
in
the
aggregate,
or
to
the
private
sector,
of
$
100
million
or
more
in
any
one
year.

Before
promulgating
an
EPA
rule
for
which
a
written
statement
is
needed,
section
205
of
the
UMRA
generally
requires
EPA
to
identify
and
consider
a
reasonable
number
of
regulatory
alternatives
and
adopt
the
least
costly,
most
cost_
effective,
or
least
burdensome
alternative
that
achieves
the
objectives
of
the
rule.
The
provisions
of
section
205
do
not
apply
when
they
are
inconsistent
with
applicable
law.
Moreover,
section
205
allows
EPA
to
adopt
an
alternative
other
than
the
least
costly,
most
cost_
effective,
or
least
burdensome
alternative,
if
the
Administrator
publishes
with
the
final
rule
an
explanation
why
that
alternative
was
not
adopted.

Before
EPA
establishes
any
regulatory
requirements
that
may
significantly
or
uniquely
affect
small
governments,
including
tribal
governments,
it
must
have
developed
a
small
government
agency
plan
under
section
203
of
the
UMRA.
The
plan
must
provide
for
notifying
potentially
affected
small
governments,
enabling
officials
of
affected
small
governments
to
have
meaningful
and
timely
input
in
the
development
of
EPA
regulatory
proposals
with
significant
Federal
intergovernmental
mandates,
and
informing,
educating,
and
advising
small
governments
on
compliance
with
the
regulatory
requirements.

Today's
rule
contains
no
Federal
mandates
(
under
the
regulatory
provisions
of
Title
II
of
the
UMRA)
for
State,

local,
or
tribal
governments
or
the
private
sector,
since
it
merely
provides
exemptions
from
the
1996
phaseout
of
class
I
ODSs.
Similarly,
EPA
has
determined
that
this
rule
contains
no
regulatory
requirements
that
might
significantly
or
uniquely
affect
small
governments,
because
this
rule
merely
allocates
essential
use
exemptions
to
entities
as
an
exemption
to
the
ban
on
production
and
import
of
class
I
ODSs.

E.
Executive
Order
13132:
Federalism
Executive
Order
13132,
entitled
"
Federalism"
(
64
FR
43255,
August
10,
1999),
requires
EPA
to
develop
an
accountable
process
to
ensure
"
meaningful
and
timely
input
by
State
and
local
officials
in
the
development
of
regulatory
policies
that
have
federalism
implications."

"
Policies
that
have
federalism
implications"
is
defined
in
the
Executive
Order
to
include
regulations
that
have
"
substantial
direct
effects
on
the
States,
on
the
relationship
between
the
national
government
and
the
States,
or
on
the
distribution
of
power
and
responsibilities
among
the
various
levels
of
government."

This
final
rule
does
not
have
federalism
implications.

It
will
not
have
substantial
direct
effects
on
the
States,

on
the
relationship
between
the
national
government
and
the
States,
or
on
the
distribution
of
power
and
responsibilities
among
the
various
levels
of
government,
as
specified
in
Executive
Order
13132.
Thus,
Executive
Order
13132
does
not
apply
to
this
rule.

F.
Executive
Order
13175:
Consultation
and
Coordination
with
Indian
Tribal
Governments
Executive
Order
13175,
entitled
"
Consultation
and
Coordination
with
Indian
Tribal
Governments"
(
65
FR
67249,

November
9,
2000),
requires
EPA
to
develop
an
accountable
process
to
ensure
"
meaningful
and
timely
input
by
tribal
officials
in
the
development
of
regulatory
policies
that
have
tribal
implications."
This
final
rule
does
not
have
tribal
implications,
as
specified
in
Executive
Order
13175.

Today's
rule
affects
only
the
companies
that
requested
essential
use
allowances.
Thus,
Executive
Order
13175
does
not
apply
to
this
rule.

G.
Executive
Order
13045:
Protection
of
Children
from
Environmental
Health
Risks
and
Safety
Risks
Executive
Order
13045,
"
Protection
of
Children
from
Environmental
Health
risks
and
Safety
Risks"
(
62
FR
19885,

April
23,
1997),
applies
to
any
rule
that
(
1)
is
determined
to
be
'
economically
significant"
as
defined
under
E.
O.

12866,
and
(
2)
concerns
an
environmental
health
and
safety
risk
that
EPA
has
reason
to
believe
may
have
a
disproportionate
effect
on
children.
If
the
regulatory
action
meets
both
criteria,
the
Agency
must
evaluate
the
environmental
health
or
safety
effects
of
the
planned
rule
on
children,
and
explain
why
the
planned
regulation
is
preferable
to
other
potentially
effective
and
reasonably
feasible
alternatives
considered
by
the
Agency.
EPA
interprets
E.
O.
13045
as
applying
only
to
those
regulatory
actions
that
are
based
on
health
or
safety
risks,
such
that
the
analysis
required
under
section
5_
501
of
the
Order
has
the
potential
to
influence
the
regulation.
This
rule
is
not
subject
to
E.
O.
13045
because
it
implements
the
phaseout
schedule
and
exemptions
established
by
Congress
in
Title
VI
of
the
Clean
Air
Act.
H.
Executive
Order
13211:
Actions
that
Significantly
Affect
Energy
Supply,
Distribution,
or
Use
This
rule
is
not
subject
to
Executive
Order
13211,

Actions
Concerning
Regulations
That
Significantly
Affect
Energy
Supply,
Distribution,
or
Use
(
66
Fed.
Reg.
28355,

May
22,
2001)
because
it
is
not
likely
to
have
a
significant
adverse
effect
on
the
supply,
distribution,
or
use
of
energy.
The
rule
affects
only
the
pharmaceutical
companies
that
requested
essential
use
allowances.

I.
National
Technology
Transfer
and
Advancement
Act
Section
12(
d)
of
the
National
Technology
Transfer
and
Advancement
Act
of
1995
("
NTTAA),
Public
Law
No.
104_
113,

section
12(
d)
(
15
U.
S.
C.
272
note)
directs
EPA
to
use
voluntary
consensus
standards
in
this
regulatory
activities
unless
to
do
so
would
be
inconsistent
with
applicable
law
or
otherwise
impractical.
Voluntary
consensus
standards
are
technical
standards
(
e.
g.,
materials
specifications,

test
methods,
sampling
procedures,
and
business
practices)

that
are
developed
or
adopted
by
voluntary
consensus
standards
bodies.
The
NTTAA
directs
EPA
to
provide
Congress,
through
OMB,
explanations
when
the
Agency
decides
not
to
use
available
and
applicable
voluntary
consensus
standards.
This
final
rule
does
not
involve
technical
standards.
Therefore,
EPA
did
not
consider
the
use
of
any
voluntary
consensus
standards.

J.
Congressional
Review
Act
The
Congressional
Review
Act,
5
U.
S.
C.
801
et
seq.,
as
added
by
the
Small
Business
Regulatory
Enforcement
Fairness
Act
of
1996,
generally
provides
that
before
a
rule
may
take
effect,
the
agency
promulgating
the
rule
must
submit
a
rule
report,
which
includes
a
copy
of
the
rule,
to
each
House
of
the
Congress
and
to
the
Comptroller
General
of
the
United
States.
Therefore,
EPA
will
submit
a
report
containing
this
rule
and
other
required
information
to
the
U.
S.

Senate,
the
U.
S.
House
of
Representatives,
and
the
Comptroller
General
of
the
United
States
prior
to
publication
of
the
rule
in
the
Federal
Register.
This
rule
is
not
a
"
major
rule"
as
defined
by
5
U.
S.
C.
804(
2).
This
rule
will
be
effective
[
insert
date
of
FR
publication].

VI.
Judicial
Review
Under
section
307(
b)(
1)
of
the
Act,
EPA
finds
that
these
regulations
are
of
national
applicability.

Accordingly,
judicial
review
of
the
action
is
available
only
by
the
filing
of
a
petition
for
review
in
the
United
States
Court
of
Appeals
for
the
District
of
Columbia
Circuit
within
sixty
days
of
publication
of
the
action
in
the
Federal
Register.
Under
section
307(
b)(
2),
the
requirements
of
this
rule
may
not
be
challenged
later
in
judicial
proceedings
brought
to
enforce
those
requirements.

VII.
Effective
Date
of
this
Final
Rule
Section
553(
d)
of
the
Administrative
Procedures
Act
(
APA)
generally
provides
that
rules
may
not
take
effect
earlier
than
30
days
after
they
are
published
in
the
Federal
Register.
Today's
final
rule
is
issued
under
section
307(
d)
of
the
CAA,
which
states,
"
The
provisions
of
section
553
through
557*
*
*
of
Title
5
shall
not,
except
as
expressly
provided
in
this
subsection,
apply
to
actions
to
which
this
subsection
applies."
Thus,

section
553(
d)
of
the
APA
does
not
apply
to
this
rule.
EPA
nevertheless
is
acting
consistently
with
the
policies
underlying
APA
section
553(
d)
in
making
this
rule
effective
[
insert
date
of
publication
in
the
Federal
Register].
APA
section
553(
d)
provides
an
exception
for
any
action
that
grants
or
recognizes
an
Protection
of
Stratospheric
Ozone:
Allocation
of
Essential
Use
Allowances
for
Calendar
Year
2005
(
p.
48
of
50)

exemption
or
relieves
a
restriction.
Because
today's
action
grants
an
exemption
to
the
phaseout
of
production
and
consumption
of
CFCs,
EPA
is
making
this
action
effective
immediately
to
ensure
continued
availability
of
CFCs
for
medical
devices.

List
of
Subjects
in
40
CFR
Part
82
Administrative
practice
and
procedure,
Air
pollution
control,
Chemicals,
Chlorofluorocarbons,
Exports,

Environmental
protection,
Imports,
Methyl
Chloroform,

Ozone,
Reporting
and
recordkeeping
requirements.

Dated:
_______________________________________

______________________________________________

Stephen
L.
Johnson,
Acting
Administrator
40
CFR
Part
82
is
amended
as
follows:

PART
82
 
PROTECTION
OF
STRATOSPHERIC
OZONE
1.
The
authority
citation
for
part
82
continues
to
read
as
follows:

Authority:
42
U.
S.
C.
7414,
7601,7671­
7671q.

Subpart
A
 
Production
and
Consumption
Controls
1.
Section
82.8
is
amended
by
revising
paragraph
(
a)
to
read
as
follows:

§
82.8
Prohibitions
for
class
I
controlled
substances.

(
a)
*
*
*

TABLE
I
_
ESSENTIAL
USE
ALLOCATION
FOR
CALENDAR
YEAR
2005
Company
Chemical
Quantity
(
metric
tons)

Metered
Dose
Inhalers
(
for
oral
inhalation)
for
Treatment
of
Asthma
and
Chronic
Obstructive
Pulmonary
Disease
Armstrong
Pharmaceuticals
CFC
­
11
or
CFC­
12
or
CFC­
114
270.90
Boehringer
Ingelheim
Pharmaceuticals
CFC
­
11
or
CFC­
12
or
CFC­
114
480
Inyx
USA,
Ltd.
CFC­
11
or
CFC­
12
or
CFC­
114
111
Schering­
Plough
Corporation
CFC­
11
or
CFC­
12
or
CFC­
114
816
3M
Pharmaceuticals
CFC­
11
or
CFC­
12
or
CFC­
114
69.18
Wyeth
Pharmaceuticals
CFC­
11
or
CFC­
12
or
CFC­
114
73.40
BILLING
CODE
6560­
50­
P
