WEDNESDAY May 5, 1993 Part IV Environmental Protection Agency 40 CFR Part 165 Pesticide Management and Disposal; Proposed Rule (This reprint was prepared from the electronic file that accompanied the original signed documents transmitted to the Office of the Federal Register. This file was certified to be a true copy of the original.) (This document appeared at 58 FR 26855 - 26883.) Federal Register / Vol. 58, No. 85 / Wednesday, May 5, 1993 / Proposed Rules ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 165 [OPP - 190000; FRL - 3847 - 1] RIN No. 2070 - AB95 Pesticide Management and Disposal AGENCY: Environmental Protection Agency (EPA). ACTION: Proposed rule. SUMMARY: This document proposes procedures for mandatory and voluntary recall actions taken under section 19(b) of the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA), 7 U.S.C. 136 et seq., and would establish criteria for acceptable storage and disposal plans which registrants may submit to the Agency to become eligible for reimbursement of storage costs under section 19(c) of FIFRA. In addition, this proposal would establish procedures for the indemnification of owners of suspended and canceled pesticides as authorized by section 15 of FIFRA. Finally, this document proposes to amend current regulations which address the Agency's responsibility for accepting for disposal suspended and canceled pesticides, to reflect changes made by the 1988 amendments to FIFRA. DATES: Comments must be submitted on or before July 6, 1993. ADDRESSES: Submit written comments, bearing the document identification number OPP-190000, by mail to: Public Docket and Freedom of Information Section, Field Operations Division (H-7506C), Office of Pesticide Programs, Environmental Protection Agency, 401 M St., SW., Washington, DC 20460. In person deliver comments to: Rm. 1128, CM 2, 11921 Jefferson Davis Hwy., Arlington, VA. Information submitted in any comment concerning the proposal may be claimed as confidential by marking any or all of that information as ``Confidential Business Information'' (CBI). Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2. A copy of the comment that does not contain CBI must be submitted for inclusion in the public record. Information not marked confidential may be disclosed publicly by EPA without prior notice to the submitter. Comments will be available for public inspection in Room 1128 at the address given above, from 8 a.m. to 4 p.m., Monday through Friday, except legal holidays. FOR FURTHER INFORMATION CONTACT: By mail: David Stangel, Office of Compliance Monitoring (EN-342W), U. S. Environmental Protection Agency, 401 M St., SW., Washington, DC 20460, (703)-308-8295. SUPPLEMENTARY INFORMATION: Electronic Availability: This document is available as an electronic file on The Federal Bulletin Board at 9 a.m. the day of publication in the Federal Register. By modem dial 202-512-1387 or call 202-512-1530 for disks or paper copies. This file is available in Postscript, Wordperfect 5.1, and ASCII. The preamble to this proposed rule is organized into four units. Unit I provides the authority and background of this proposed rule. Unit II discusses the proposed changes to the current Acceptance Regulations found at 40 CFR part 165, subpart B. Unit III discusses the proposed approach for the recall regulations. Unit IV discusses the proposed criteria which would have to be met by registrants seeking reimbursement for storage costs incurred as a result of recall of a suspended and canceled pesticide. Unit V discusses the proposed procedures that would have to followed by owners of suspended and canceled pesticides in order to be indemnified for losses suffered as a result of suspension and cancellation. I. Authority and Background These proposed rules are issued pursuant to the authority given the Administrator of EPA in sections 8, 19 and 25 of FIFRA, 7 U.S.C. 136f, 136q and 136w. Section 6 of FIFRA authorizes EPA to take certain actions to prohibit sale, distribution and use of pesticides that cause unreasonable adverse effects on the environment. An ``unreasonable adverse effect'' determination involves the weighing of the risks of using the pesticide against the benefits of that use. If a pesticide poses a risk that outweighs the benefits of continued use, the pesticide's registration may be canceled. A pesticide's registration is canceled by operation of law 30 days after the date the registrant receives a notice of the intent to cancel or the date of its publication in the Federal Register, whichever is later, unless by that date an adversely affected person requests a hearing. If action is necessary to prevent an imminent hazard to human health or the environment during the time required for cancellation, EPA may suspend a pesticide registration under FIFRA section 6(c), and at the same time issue a Notice of Intent to Cancel the registration. A suspension order may immediately prohibit all use, sale, and distribution of the pesticide. Prior to amendment of FIFRA in 1988, section 19 of FIFRA authorized EPA to establish procedures and regulations for the disposal or storage of packages and containers of pesticides and for disposal or storage of excess amounts of such pesticides. Section 19 also required the Agency to accept pesticides suspended and canceled under section 6(c) for safe disposal if requested by the owner of the pesticide. Recommended procedures for storage and disposal, and acceptance regulations were promulgated in 1974 and are codified at 40 CFR part 165. The 1988 amendments to FIFRA amended section 19 of the Act to give the Agency clearer and broader authority to regulate the storage, disposal, and transportation of registered pesticides as well as the storage, disposal, transportation, and recall of suspended and canceled pesticides. The amendments also eliminated the Agency's responsibility to conduct disposal activities, and limited payments of indemnification. The rules being proposed today are the first segment of rules EPA is considering in implementing the 1988 amendment to section 19. At a later date, EPA intends to propose rules adding data requirements to part 158 regarding storage and disposal, and amending part 165 to add regulations on container design and residue removal. EPA is also considering rulemaking under section 19 on the storage and transportation of pesticides, and management of excess pesticides. Section 19 also grants EPA the authority to require registrants to show proof of their financial ability to carry out a recall. EPA, however, has decided not to propose financial responsibility requirements at this time. EPA does not have sufficient information to establish a workable financial responsibility scheme. After EPA has gained experience with the new provisions of section 19 concerning recall, EPA may consider proposing rules on demonstration of financial responsibility. II. Acceptance Prior to its amendment in 1988, FIFRA section 19 required EPA to accept suspended and subsequently canceled pesticides for safe disposal, upon request by the owner. For the past several years, EPA has been in the process of carrying out this statutory responsibility for ethylene dibromide (EDB), dinoseb, 2,4,5-T and silvex. The Agency has recently completed the disposal of EDB stock accepted under the previous section 19 and is no longer accepting stocks of EDB for disposal. EPA is currently accepting for disposal those suspended and canceled pesticides containing the chemicals dinoseb, 2,4,5-T and silvex. The Agency has published notices in the Federal Register requesting holders of dinoseb, 2,4,5-T and silvex to identify themselves to the Agency and present any requests for disposal, so that orderly disposal of these pesticides may be completed. The 1988 amendments to section 19 relieved EPA of its responsibility to accept suspended and subsequently canceled pesticides for safe disposal, instead leaving this responsibility with owners and registrants who hold such pesticides. The proposed regulations amend the language describing this responsibility. The principal revision would clarify that the Agency's obligation to accept pesticides for disposal is limited to the three pesticides suspended and canceled prior to 1988 for which it is completing its disposal obligations, namely dinoseb, 2,4,5-T and silvex. EPA's intent is to amend the Acceptance regulations only to the extent necessary to clarify EPA's remaining legal obligations under pre-1988 section 19. EPA is not soliciting comments on other aspects of the Acceptance regulations. The Agency proposes to redesignate the current 40 CFR part 165 as subpart A with the intention of removing sections as new regulations are promulgated which would supersede the current requirements. After all identified stocks of dinoseb, 2,4,5-T and silvex have all been accepted for disposal, the Agency intends to delete this section from 40 CFR part 165. III. Recalls A. Overview For the purposes of section 19, a recall is the process of moving stocks of a suspended and canceled pesticide, other than those owned by the registrant, from the owner of the pesticide back to the custody or control of the registrant of the pesticide and all the activities necessary to accomplish this in a safe and effective manner. A registrant would not be recalling his own inventory of a suspended and canceled pesticide because the registrant already has custody or control over these pesticides. In addition to establishing requirements for recalling pesticides, this proposal would establish reporting and recordkeeping requirements for suspended and canceled pesticides owned by the registrant. This will assure that EPA can oversee the movement of suspended and canceled pesticides, including those that are outside the scope of the recall because they are owned by the registrant and also provide information that would assist EPA in evaluating claims for reimbursement of storage costs and indemnification. B. Statutory provisions Section 19(b) of FIFRA authorizes EPA to require, by order or by regulation, the recall of pesticides suspended and canceled under section 6 of the Act. If EPA finds that a recall of a pesticide is necessary to protect health or the environment, EPA shall order a recall of the pesticide. Section 19(b)(2) requires EPA to request a registrant to submit a voluntary recall plan for suspended and canceled pesticides if the Administrator finds that a voluntary recall may be as safe and effective as a mandatory recall. The registrant of the affected pesticide has 60 days from the date of the request to submit a voluntary recall plan. If EPA approves the plan, EPA would then order the registrant to conduct the recall in accordance with the plan unless the Administrator determines, after an informal hearing, that the plan is inadequate to protect health or the environment. Under section 19(b)(3) of FIFRA, if EPA does not request a voluntary recall or finds a voluntary recall plan to be inadequate, EPA must issue a regulation that prescribes a plan for the mandatory recall of the pesticide. The regulation may apply to any person who is or was a registrant, distributor, or seller of the pesticide prior to its suspension and cancellation, or any successor in interest to such a person. Section 19(a)(2) and (a)(3) authorize EPA, by order or regulation, to issue requirements and procedures to be followed by any person who stores, transports, or disposes of stocks of a suspended and canceled pesticide, or containers or other materials containing the pesticide. C. Approach EPA considered several options for conducting recalls under section 19 and is proposing this rule taking into consideration the statutory mandate and the needs of both EPA and the regulated community. EPA considered two options for voluntary recalls. The first option would be to prescribe the elements of a voluntary recall plan each time EPA requests a registrant to conduct one. This option would allow the Agency to be very specific about how the recall is to be conducted and tailor the terms of the recall to the pesticides being recalled. This option would leave registrants uncertain of their obligations when conducting any recalls, until the last minute. The second option is to propose a rule prescribing the elements of a voluntary recall plan. This option would allow the registrant to know with greater certainty what is required of him when conducting a recall and would allow him to plan ahead so that he could meet the 60 day time limit for submission of a recall plan. This option would also benefit EPA by speeding up the voluntary recall process. EPA is proposing the second option because it allows the registrant to know what would be required of him in the event of a voluntary recall, while still addressing all the elements the Agency considers necessary to conduct a safe and effective recall. This option would enable EPA to implement voluntary recalls more efficiently since EPA would not have to create program elements for the voluntary recall action each time one is requested. EPA may request that the registrant include special conditions for storage or handling of the recalled pesticide in the plan, as required by the physical or chemical properties of the pesticide, e.g., if the pesticide were corrosive or the pesticide containers were deteriorating. The Agency considered two options for mandatory recalls. The first option would be to conduct rulemaking prescribing a plan for recall each time EPA determined that a mandatory recall was necessary. This option would save Agency resources until rulemaking was necessary to issue a regulation ordering a mandatory recall. The chief disadvantage of this option is that rulemaking would probably not be carried out in a timely manner when the necessity of a prompt recall of a suspended and canceled pesticide is taken into account. Further, EPA believes that registrants would want to know the terms of a mandatory recall to plan for one if it were to occur. The second option would be to propose generic regulations for mandatory recalls which would be applicable to all mandatory recalls. If a mandatory recall should be necessary, EPA would issue a rule that incorporates the generic provisions, and any special provisions of that particular mandatory recall. The Agency would allow an abbreviated comment period on the specific recall rule, since the major provisions of the recall would have already undergone notice and comment rulemaking. The primary advantage of this option is that it would afford the registrant the opportunity to develop in advance procedures to conduct a mandatory recall should one be necessary. Also, having generic provisions would provide the Agency with a framework for issuing recall regulations and so enable EPA to proceed more quickly with rules on a particular recall. The disadvantage is that this option may require a greater expenditure of EPA's resources and would be the most time consuming. Not only would EPA be issuing the generic provisions in the rules proposed today, but each time EPA determined a mandatory recall is necessary, EPA would be involved in an additional rulemaking process. EPA has chosen to propose the second option for mandatory recalls. This would allow the registrant to establish procedures for conducting mandatory recalls with a degree of certainty that the requirements will not change, while speeding up the rulemaking process by allowing a shorter comment period on the proposed rule for a particular recall. 1. Voluntary Recall As proposed, 165.167 describes the elements that would have to be addressed in a voluntary recall plan for the plan to be protective of human health and the environment. When EPA requests submission of a voluntary recall plan, registrants would have to address all the elements found in 165.167 in the recall plan they submit to EPA. EPA would then evaluate the adequacy of the plan in accordance with the criteria found in 165.170 and, if approved, order the registrant to conduct the recall in accordance with the plan. In evaluating the plan EPA would determine if, among other things, the plan assures that a registrant would be able to: a. Identify all holders of the suspended and canceled pesticide and obtain the necessary information concerning the holder's pesticides. b. Provide holders of the registrant's pesticide with information on the recall. c. Encourage holders to participate in the recall. d. Recall the pesticide from the holders in a safe and timely manner. e. Provide for proper transportation of the pesticide to the storage facility. f. Provide storage for the recalled pesticides. The Agency's primary objective in developing the elements of a recall plan was to develop a program for the safe and effective recall of suspended and canceled pesticides and allow for the oversight necessary to ensure that recalls are carried out according to the plans submitted. The Agency drew on its recent experience with registrants conducting recalls for the pesticides EDB, 2,4,5-T, silvex, and dinoseb. Based on this experience, EPA has determined that to be adequate, a plan should address a number of objectives. The plan should identify contacts within the registrant's company (165.167(a)); identify holders of suspended and canceled pesticides (165.167(b)); locate and inventory stocks of the suspended and canceled pesticides (165.167(c)); provide information to holders on how to store and transport the pesticides in accordance with applicable law (165.167(d)); transport and store recalled pesticides safely (165.167(e), (f), (g)); and maintain and submit records necessary for the oversight of any recall action (165.172 and 165.174). In addition, 165.167(h) would require registrants to evaluate management options for the recalled pesticides. Under 165.167(j), EPA would allow the registrant the opportunity to apply innovative strategies for conducting a voluntary recall. Where the circumstances of a particular voluntary recall action would not fit all the elements in 165.167, a registrant may propose an alternative in the recall plan. However, the recall plan must demonstrate that it accomplishes the same objectives as the elements in 165.167(a) through (i). Registrants may wish to join together to develop and submit a joint recall plan for approval. EPA would encourage registrants to do this wherever possible. Once approved by EPA, the recall plan is binding for all the parties involved. Section 19(b)(2) states that the Administrator shall approve a voluntary recall plan unless the Administrator determines, after an informal hearing, that the plan is inadequate to protect health or the environment. Neither the statute nor the legislative history indicate the specific congressional intent regarding procedures for the informal hearing. Generally, the informal procedures necessary to satisfy due process vary according to the circumstances of the case and the interest to be protected. In the absence of congressional guidance, EPA has discretion to determine what procedures are appropriate. Here, EPA considers procedures which provide registrants notice and an opportunity to present their views as adequate to satisfy due process. Accordingly, before EPA determines that a voluntary recall plan is inadequate to protect health or the environment, 165.170(c) provides that the registrant will be notified of the plan's inadequacies and the basis for the inadequacies. Registrants will then have 15 days after receipt of the notification to present comments or arguments either orally or in writing to the Agency official responsible for making the final determination. If, after this informal hearing, EPA makes a final determination that the plan does not adequately protect health or the environment, it will notify the registrant by certified mail. EPA intends to determine the adequacy of the plan by reviewing the plan submitted by the registrant and judging whether a recall conducted according to the plan is likely to be safe and effective in recalling suspended and canceled pesticides in a timely manner. The only issue for an informal hearing would be whether the plan is adequate to protect public health or the environment. EPA believes that providing a registrant the opportunity to present its views to the Agency before the Agency makes a final determination on the matter provides a satisfactory informal procedure. In addition, EPA may, at any time, decide to reevaluate the adequacy of the plan to protect health or the environment. One example of circumstances that could lead to EPA reevaluating a plan would be the situation of a significant number of holders of the suspended and canceled pesticides failing to return their stocks to the registrant. Section 19(b) does not explicitly address the situation where a registrant cannot successfully carry out the recall according to its plan. However, section 19(b) does not preclude the Agency from reevaluating the adequacy of the plan, after approval of the plan. Based on quarterly and final reports, EPA expects to monitor the continued effectiveness and adequacy of the recall. Accordingly, as provided in 165.170(d), upon such reevaluation, if EPA determines that the plan is inadequate to protect health or the environment, EPA may require a mandatory recall. Prior to finding the plan inadequate to protect health or the environment, EPA will follow the informal procedures as set forth at 165.170(b) and (c). EPA believes that it is a reasonable interpretation of section 19(b)(2) that the Agency has authority to reevaluate plans if such action is necessary to achieve a safe and effective recall. 2. Mandatory Recall As set forth in 165.186, if EPA finds that a mandatory recall is appropriate, he would require the recall by issuance of a proposed rule in the Federal Register. Such a proposed rule would provide that the recall be carried out in accordance with requirements of 165.190, the level in the distribution chain to which the recall is to extend, and any special terms of the recall that EPA finds necessary for safe and effective recall of the pesticide, in addition to the generic requirements in 165.190. The proposed rule would allow a brief comment period before EPA published a final regulation applicable to the particular suspended and canceled pesticide. The final recall regulation would establish a date for initiation of the recall. Section 19(d)(2) of FIFRA waives the 60-day congressional review period under section 25(a)(4) for the final recall regulation. EPA may decide to delay the date for initiation of the mandatory recall until after the date for cessation of sales of existing stocks of the suspended and canceled pesticide. If the pesticide has already been suspended and canceled, the Administrator would issue a proposed rule requiring a recall for the pesticide in accordance with the published regulations. The proposed rule would allow a comment period before EPA published a final regulation applicable to the particular suspended and canceled pesticide. Section 165.190 prescribes the steps which would have to be carried out in a mandatory recall and provides persons responsible for conducting these recalls the opportunity to create an infrastructure within their company for conducting a recall should one become necessary. Section 165.190 and the other generic regulations being proposed also provide a degree of certainty for registrants and others regarding the requirements for conducting a recall. The generic regulations also allow EPA to streamline the process for requiring a mandatory recall and assure that suspended and canceled pesticides are removed from the sale, distribution, and use chain in a timely manner. EPA plans to make information collected under section 6(g) of FIFRA available to registrants to help them locate holders of their pesticides. Section 6(g) of FIFRA requires any producer or exporter of pesticides, registrant of a pesticide, applicant for registration of a pesticide, applicant for or holder of an experimental use permit, commercial applicator, or any person who distributes or sells a pesticide which is suspended or canceled under section 6 to report the amount of the pesticide they hold and the location of the pesticide. EPA has proposed a policy which will: (1) Clarify the responsibilities of persons required to submit information under FIFRA section 6(g); (2) Establish procedures that must be followed in order to comply with FIFRA section 6(g); and (3) Clarify when FIFRA section 6(g) information must be submitted. EPA anticipates receiving this information prior to issuing a recall order or final recall regulation. In addition to section 6(g) information, registrants could also use the information they are required to maintain under section 8 of FIFRA to locate holders of their pesticides. D. Recall Procedures 1. General As previously discussed, voluntary recall plans cover the same elements as mandatory recall plans; however, two major differences between voluntary and mandatory recalls are who is responsible for conducting the recall and the deadlines for completing the mandatory recall. In voluntary recalls, EPA will request the registrant of a suspended and canceled pesticide to submit a voluntary recall plan and then order the registrant to conduct the recall in accordance with the approved plan. The registrant sets his own timetable for completion of the recall action, subject to EPA approval. For mandatory recalls, registrants must still develop a recall plan, but after EPA issues the regulation requiring implementation of the recall, any person who is or was a registrant, distributor or seller of the suspended or canceled pesticide prior to suspension and cancellation, or any successor in interest to such a person, could be required to conduct or participate in a mandatory recall action. EPA would specify the level in the chain of distribution to which the recall would extend, either at the time of the voluntary recall request or in the Federal Register notice proposing a mandatory recall of a suspended and canceled pesticide. In addition, the mandatory recall must be completed within 6 months of initiation. EPA would normally request a voluntary recall plan or propose to require a mandatory recall in the Notice of Intent to Cancel a pesticide. There may be instances, however, where EPA would request a voluntary recall or require a mandatory recall of a pesticide which has been suspended and canceled for some time, or which has been the subject of an earlier voluntary recall. For instance, EPA may have allowed, at the time the pesticide was canceled, sales and use of existing stocks of the canceled pesticide for a specific period of time, anticipating that the existing stocks would be sold and used by a certain date based upon information known at the time. If EPA later learns or has information indicating that there may be large amounts of the pesticide still left in the distribution/use chain due to diminished use after the time period has expired, EPA may require a recall of the pesticide. The Agency expects that registrants would begin developing procedures for recalling suspended and canceled pesticides well in advance of an actual recall request. This would allow the registrant to evaluate its ability to conduct both a voluntary and a mandatory recall and make any changes necessary in its operations enabling it to conduct a recall in the most efficient manner possible. 2. Conducting a Recall In the voluntary recall plan, under 165.167(a), the registrant can designate persons who will act as its agents (i.e., distributors, dealers, or retailers) in contacting persons who may be holders of the suspended and canceled pesticide. However, the registrant remains ultimately responsible for the actions of its agents and compliance with the terms of the recall. Pursuant to 165.167(b)(2) and 165.190(e), registrants would have an obligation to accept their own suspended and canceled pesticides from persons other than those identified in the recall plan. A recall conducted under subpart I or J of part 165 would be considered complete when the registrant has recalled all its pesticides from those persons who have offered the pesticide for recall and the pesticides have either been placed in storage or a management option chosen for the pesticide has been completed. EPA recognizes the possibility that some quantities of suspended and canceled pesticides may not be discovered until after a recall is completed, particularly in the case of mandatory recalls which must be completed in 6 months. EPA's experience with its disposal program has been that these late discoveries are typically by end users holding small quantities of the material. These holders either failed to hear about EPA's disposal operations or discovered additional material previously overlooked. The recall regulations being proposed today put the burden on registrants and, in the case of mandatory recalls, on distributors and retailers to identify and contact their customers. This should help assure that everyone who is involved in the recall is notified. Nevertheless, despite best efforts, someone may for legitimate reasons not hear about the recall until it is over. EPA solicits comments on whether the regulations should provide for extending the recall for a period of time upon receipt of information showing that some holders may not be aware of the recall or have not participated in the recall in a timely manner despite the registrant's best efforts. As proposed, registrants, distributors and dealers who sold and distributed the suspended and canceled pesticide prior to its suspension and cancellation, and any successors in interest to such persons, could be subject to a regulation requiring a mandatory recall. EPA has determined that because of the nature of the mandatory recall and the circumstances under which the Agency anticipates a mandatory recall would be required, (i.e., registrants unwilling or unable to conduct a voluntary recall, an inadequate voluntary recall plan is submitted, or compelling reasons for requiring a mandatory recall without first affording registrants the opportunity to submit a voluntary recall plan), requiring registrants, distributors and dealers to participate is generally the most effective means of conducting a mandatory recall. As set forth in 165.190, registrants would be responsible for contacting their customers within 20 days of the effective date of the recall, advising them of the terms of the recall, providing them with the name, address and telephone number of the person responsible for conducting the recall, providing them with a copy of the recall plan and determining whether their customers are holding stocks of the recalled pesticide. By customers, EPA means persons to whom a registrant's pesticide was sold or distributed. If the registrant's customer is holding stocks of the recalled pesticide, the registrant would have to determine the types, amount and location of the pesticide being held and provide his customer with the information listed in 165.190(d). The registrant's customer (if he is a distributor or seller and not an end-user) in turn would be responsible, as a recaller himself, for contacting his customers and determining whether they are holding stocks of the pesticide to be recalled. If they are, the registrant's customer would determine the types, amount and location of the pesticide being held, and provide the holder with the information listed in 165.190(f). Additionally, the registrant's customer would either offer to assist in collecting and storing the holder's recalled pesticide himself, or after determining the types, amount and location of the recalled pesticide being held, refer the holder to the registrant with the information collected and have the registrant provide for transportation to the registrant's designated storage facility as specified in the registrant's plan. If his customer is a distributor or seller, the registrant's customer would be required to provide the distributor or seller with a copy of the registrant's recall plan. This process would continue down the chain of distribution and sale to the level required by the rule. Each person in the chain would be responsible for contacting all his customers who may be holding the recalled pesticide. Distributors and dealers would be responsible for providing the registrant with all the recordkeeping information necessary for the registrant to submit interim and final reports as required. The proposed regulations under 165.190 require that certain deadlines be met in the conduct of the mandatory recall. Section 165.190(c) requires registrants to develop a written plan for conducting a recall within 10 days of the effective date for initiation of the recall and to distribute the plan to their customers within 20 days of the effective date for the recall. In addition, 165.190(d)(1), requires all persons responsible for conducting a recall provide EPA with their name, address and telephone number within 10 days after receipt of the recall plan. Section 165.190(j) requires that the registrant have recalled all pesticides offered for recall within 6 months after the effective date for initiation of the recall. EPA is very concerned that mandatory recalls be completed in a timely manner. Because the pesticides have been suspended and canceled for risk reasons, the length of time to conclude the cancellation and rulemaking for a mandatory recall makes it necessary to conduct the recall as swiftly as possible in order to consolidate and safely store the stocks of the pesticide. The notice given the affected community through the rulemaking process allows those persons responsible for conducting the recall sufficient time to plan their recall activities; thus six months after the regulation is effective is a reasonable time for conducting the recall. However, with the ample notice given the affected community through the rulemaking process in regard to their responsibilities in the event of a mandatory recall, persons responsible for conducting a recall should be able to comply with these deadlines. 3. Transportation and Storage of Recalled Pesticides Under section 19(b)(4)(C) of the Act, EPA may require that any person subject to a recall regulation must ``provide for proper transportation of the pesticide to a storage facility,'' if transportation is requested by the holder. EPA interprets ``provide for proper transportation'' to include paying the cost of transportation. Section 165.167(e) requires the registrant to include in the recall plan a description of how the registrant intends to provide for transportation. The description must inform EPA of the method of transportation, who is bearing the cost of transportation, and, if someone other than the registrant is paying transportation costs, why. EPA will review this portion of the plan to assure that registrants are meeting the requirement for providing transportation upon request. Failure to meet this requirement could result in EPA finding that the plan is inadequate to protect health or the environment. For mandatory recalls, EPA is proposing in 165.190(a) that registrants must provide for transportation, if requested by a holder of the registrant's pesticide. EPA considered proposing that all persons subject to the recall regulation must provide for transportation, but decided that having the registrant alone responsible for providing for transportation should result in more efficient transfer of the pesticides to the registrant, and avoid unnecessary movement of the materials. In those instances where persons subject to the recall regulation other than the registrant provide transportation for a holder, as specified in the registrant's recall plan, such persons may seek reimbursement of transportation costs from the registrant. EPA considers it reasonable to interpret section 19(b)(4)(C) of the Act as requiring the registrant to pay transportation costs because such requirement will help promote safe and effective recalls. It has been EPA's past experience with its disposal operations that the cost of transportation has been a disincentive to participation by holders. For example, some holders of the suspended and canceled pesticide chose to continue to store the pesticide rather than ship it to the EPA for disposal. To assist holders that were unable or unwilling to transport their stocks of suspended and canceled pesticides to EPA, several states spent considerable money, time and manpower to set up programs for collection and transport of the material to EPA. The Maine Board of Pesticides Control collected, packed and shipped over 2,200 gallons of dinoseb. Texas, New York and Wisconsin have collected and shipped 2,4,5-T and silvex. Washington developed a program to collect dinoseb. State officials feel strongly that the cost of transportation is a disincentive to participation in EPA's disposal program, especially in the case of small holders. Collection by the recaller or local and State governments increases participation. Requiring registrants to provide for transportation at no cost to holders (when requested to provide transportation) should make the recall more effective in achieving return of all stocks. Also, transferring technical and financial responsibility for handling the material to the pesticide registrant who knows best how to manage the material safely should aid in achieving a safe recall. The legislative history on section 19 of the Act supports the interpretation that ``providing for'' transportation includes payment for transportation and that registrants should bear transportation costs, if requested. According to the Report from the Senate Committee on Agriculture, Nutrition, and Forestry, Congress amended section 19 of the Act so as to shift the burden for transporting, storing, and disposing of suspended and canceled pesticides to the pesticide registrant. S. Rept. 100-346, 100 Cong. 2nd Sess. 8 (May 13, 1988). ``The registrants have the greatest knowledge of how to handle the chemical safely and possess the technical expertise and the funds to deal with the products under agency oversight.'' Id. The requirement in 165.190(a) for a registrant to provide for transportation upon request of any holder of his pesticide is subject to section 19(d)(1) of the Act, which provides that sellers and buyers may make any agreement regarding the ultimate allocation of the costs of transportation. Registrants could show in comments on a proposed rule for a particular recall that they have such agreements, or could provide other evidence showing that payment of transportation would not be necessary for a safe and effective recall. Section 165.190(a)(5) would require the registrant to inform, in writing, any end-user who has declined to participate in the recall because of transportation costs, that the registrant will pay for transportation if requested to do so. End-users may not be aware that they can ask the recaller to provide transportation and its been EPA's experience that endusers are the holders most seriously at risk of not participating due to the cost of transportation. EPA believes that requiring registrants to pay transportation costs, if requested, will also help promote safe and effective voluntary recalls. However, EPA intends that registrants will have greater flexibility in carrying out voluntary recalls than mandatory recalls. Also, EPA recognizes that allowing flexibility for working out provisions for transportation may be desirable, since registrants are only required to provide transportation if requested and registrants may enter into voluntary agreements concerning the ultimate allocation of costs. Section 165.167(e) provides the registrant such flexibility. However, EPA is concerned about end-users refusing to participate in a recall because of transportation costs. Therefore, in determining the adequacy of a plan under 165.16, EPA will scrutinize the plan to determine what steps the registrant will take to address this problem. Proposed 165.167(d) would require the recall plan to describe the information to be furnished to the holder on the provision for transportation, and such information must include a description of the registrant's responsibilities and planned activities with respect to transportation of the pesticide. Among other things, registrants may inform holders that they will provide for transportation, that holders may furnish their own transportation and seek reimbursement from the registrant, or that transportation costs are negotiable and provide steps the holders can take to negotiate such costs. Transportation and storage of the recalled pesticide under both voluntary and mandatory recalls must be in accordance with applicable DOT regulations, and all other applicable Federal regulations, and State or local hazardous and solid waste regulations. Under the Resource Conservation and Recovery Act (RCRA) regulations, commercial chemical products such as pesticides become ``solid wastes'' (and thus, potentially, hazardous wastes) at the point where the pesticide's holder (i.e., end-user, dealer, distributor, or registrant) decides to discard them. If a suspended and canceled pesticide is listed in 40 CFR 261.31 or 261.33, or exhibits a hazardous waste characteristic identified in 40 CFR 261.21 through 261.24, it becomes a hazardous waste at the point when its holder decides to discard it. Section 19(b)(4) of the Act also provides that EPA may require any person subject to a recall regulation to ``accept and store'' the recalled pesticides. EPA interprets this language to include the responsibility for payment of storage costs. For similar reasons discussed above concerning transportation costs, EPA is proposing that the registrant be responsible for the costs of storage, subject, of course, to section 19(d)(1) of the Act concerning voluntary agreements between buyers and sellers. EPA believes that interpreting ``accept and store'' to include responsibility for storage costs accords with the congressional intent of placing the burden on registrants because they have the technical expertise and the funds to handle the pesticides. Section 165.190(b) of the CFR provides that any recaller in the distribution chain that assists the registrant in making storage facilities available and storing pesticides, if specified in the recall plan or requested by the registrant, may seek reimbursement of storage costs for the recalled pesticides from the registrant. EPA's interpretation of section 19(b)(4) of the Act in requiring the registrant to pay all storage costs incurred as a result of the recall also fits the congressional scheme in section 19 of the Act because Congress, in section 19(c) of the Act, provided for only registrants and no one else to be reimbursed for a portion of the storage costs incurred as a result of a recall under section 19(b) of the Act. EPA is considering requiring that registrants include in the recall plan for both voluntary and mandatory recalls, a statement as to whether the Emergency Planning and Community Right-to-Know Act (EPCRA), 42 U.S.C. 11002, applies to the storage of the suspended and canceled pesticide. A recent report completed by the EPA Office of Inspector General cited as a problem that few of the storage facilities used for storage of EDB and dinoseb had notified their local emergency planning committee (LEPC) that suspended and canceled pesticides which were hazardous wastes were being stored in the facility. Persons storing the pesticide may have been unaware of EPCRA's requirements. A suspended and canceled pesticide must be reported to an LEPC by a storage facility only when the material has been declared a waste and the pesticide is either a listed or characteristic waste under RCRA. Sections 165.167(f) and 165.190(h) of the CFR would require that the registrant include a statement in the recall plan on the applicability of EPCRA and a description of the notification requirement. The Agency solicits comment on this proposed requirement of the regulations or any alternatives to this requirement which could help inform persons storing the pesticide about EPCRA's applicability. 4. Management Options. The holder who makes the decision to discard controls the point at which the pesticide becomes a solid waste; if the pesticide is a hazardous waste, RCRA regulations govern its transportation and storage from that point on. Thus, if an enduser decides to dispose of the suspended and canceled pesticides in his possession instead of returning them to the registrant through a recall program, the pesticide would be considered a solid waste subject to RCRA. The end-user may decide to participate in the recall program relying on the registrant's selection of management options for determining the status of the recalled pesticide. When registrants initially notify holders about the recall, registrants must also provide information to holders on the management options being considered. Then, after the registrant takes possession of the recalled pesticides, the proposed regulations at 165.167 and 165.190 require the registrant to evaluate the options for management of the recalled pesticide and to provide such information on the options being pursued in an update of the recall plan. EPA recognizes that in certain cases the registrant may elect to have the pesticide picked up from the end-user and taken directly to a disposal facility instead of collecting such material at one or more central storage areas. In those situations where the end-user agrees to participate in a recall and the material is to go directly to a disposal site, the recalled pesticide, if it is a hazardous waste, would be subject to RCRA regulations. Ultimately, EPA expects that more pesticides will be collected during the recall if the registrant makes the decision about whether to discard the material at some point after taking possession of the pesticide from the holder. If an end-user becomes subject to RCRA regulations prior to the recall because of a registrant's decision as to the waste status of the recalled pesticide, EPA is concerned that less material will be collected during the recall and that pesticides subject to the recall may be disposed of improperly. However, EPA would like comments on whether determinations that suspended and canceled pesticides are hazardous wastes in fact cause end-users to improperly dispose of them, rather than participating in the recall. EPA also requests commenters to provide information on instances where they believe improper disposal has occurred under these circumstances. EPA has recently proposed (58 FR 8102; Feb. 11, 1993) a set ``special collection system'' regulations under RCRA subtitle C that would apply to suspended and canceled pesticides that are recalled under FIFRA section 19(b), where the pesticides are hazardous wastes. These regulations, in combination with the forthcoming technical standards for section 19(b) recalled pesticides, would ensure the safe handling of such pesticides as they are returned up the distribution chain. Once they reach a RCRA-permitted or interim status facility, their management is fully controlled under the current RCRA regulations. Pesticides owned by the registrant, as well as those recalled by the registrant must be stored in accordance with the terms of the cancellation notice, and all applicable State, Federal, and local laws and regulations. The registrant's obligation to manage its suspended and canceled pesticides in accordance with all applicable requirements does not end when the recall is completed, but rather for as long as the pesticides are in the registrant's control. If the pesticides are hazardous wastes under the RCRA, a permit is required for storage. Under the Land Disposal Restrictions program, restricted hazardous wastes may be stored solely for the purpose of accumulating sufficient quantities of waste to facilitate proper treatment, recovery or disposal (see 40 CFR 268.50). For storage of less than 1 year, the burden of proof that storage is solely for the purpose stated above lies with EPA. After 1 year the burden of proof shifts to the facility owner or operator. Under both 165.167(h) (voluntary recalls) and 165.190(i) (mandatory recalls), registrants would be responsible for evaluating the management options to be implemented for their suspended and canceled pesticides after the pesticides are recalled and in their custody and would be required to report to EPA on the options being considered (165.174(b)(4) and 165.194(e)(4)). EPA intends registrants to evaluate available management options. Distributors and dealers in a mandatory recall action would not be responsible for evaluating management options. The ``management options'' EPA expects registrants to consider encompass activities to manage the pesticide after it has been recalled, including, but not limited to, legal pesticide or nonpesticide use, recycling (e.g., recovery), treatment (e.g., neutralization, deactivation of the active ingredient, degradation), burning for energy or materials recovery, as well as disposal. EPA invites comment on the definition of the term ``management options'' in 165.163 and 165.183. The purpose of requiring consideration of a range of management options is to encourage the development and consideration of alternatives to disposal. Use, reuse and other forms of recycling may be beneficial because they are more likely to result in resource conservation and pollution prevention compared to treatment and disposal. Registrants may be able to minimize the amount of pesticides requiring disposal by recycling or selling the material for nonpesticidal use. If a registrant wishes to export a suspended and canceled pesticide, he should be advised that any export must be in compliance with section 17 of FIFRA, the Agency's export policy and the terms and conditions of the cancellation notice. Such exporters will be closely scrutinized by the Agency. 5. Recordkeeping The recordkeeping requirements proposed in 165.172 is similar to that requested by EPA in the past when it requested registrants to conduct recalls of 2,4,5-T, silvex, EDB, and dinoseb and EPA has determined that the recordkeeping is necessary for the registrant to be able to verify the effectiveness of the recall as required by section 19(b)(5)(B) of the Act. The recordkeeping would also provide the Agency with the information it needs to be able to track the suspended and canceled pesticide (both recalled pesticides and pesticides owned by the registrant) throughout the recall process to disposal or other management options. The proposed rule would not require the records to be kept or reported in a specified format. EPA solicits comments on whether a suggested format or reporting form should be used to report this information. The information would have to be available and readily accessible in the event of an inspection by EPA or its designated representative and presented in a clear and legible format when reported to EPA. EPA anticipates providing information regarding the conduct and outcome of the recall to the States so that the States may be able to monitor not only the recall, if they have a cooperative enforcement agreement with EPA, but also any storage and disposal activities taking place in their State. Section 19(b)(5)(B) of the Act requires that the registrant be able to verify the effectiveness of the recall. The recordkeeping proposed in 165.172 and 165.192 is necessary for the registrant to verify the effectiveness of the recall. EPA expects that the registrant could analyze the information set forth in these provisions to determine, among other things, how many persons identified by the registrant were contacted, how many persons outside those identified by the registrant offered their pesticide for recall, how many persons who held suspended and canceled pesticides refused recall, and any problems encountered during the recall. The reporting proposed by 165.174 and 165.194 is necessary for EPA to carry out its mandate to assure the safe and effective recall of suspended and canceled pesticides. Review of the progress reports of the recall will allow the Agency to monitor the recall and identify any problems that may arise during the course of the recall, such as lack of participation in the recall by holders or problems arranging for transportation which make it likely that a registrant may not be able to complete the recall as scheduled. Reporting on the outcome of a recall is the final step in the recall procedure and assures EPA that the recall has been carried out according to plan and that pesticides are being stored and managed safely. IV. Storage and Disposal Plans A. Background In 1988, Congress amended FIFRA section 19 to eliminate EPA's responsibility for disposal of suspended and canceled pesticides, and shifted the responsibility to registrants. When EPA takes action under section 6 of FIFRA to suspend registrations of a pesticide, and such registrations are subsequently canceled, EPA may determine under section 19(b) that a recall of the pesticides is necessary to protect health or the environment. If the Agency determines that a recall is necessary, section 19(c) requires the Agency to share in a portion of the costs of storing the pesticides recalled under section 19(b). The Agency will reimburse the registrant for part of the storage costs incurred for the recalled pesticide in accordance with the statutory allocation of FIFRA section 19(c)(2). Only registrants are eligible for cost sharing under section 19(c); other persons who are required to recall pesticides under a mandatory recall or who participate in a recall are not eligible for cost sharing. Registrants who wish to become eligible for reimbursement of storage costs must submit a storage and disposal plan to EPA that meets criteria established in this regulation. Only registrants with an approved storage and disposal plan will be eligible for reimbursement. EPA is proposing to establish criteria which storage and disposal plans must meet and set out procedures for registrants to follow in submitting claims for reimbursement of storage costs. Registrants who recall a pesticide under section 19(b) of FIFRA but do not elect to claim reimbursement do not have to submit a storage and disposal plan. B. Cost-Sharing Schedule Section 19(c)(2) establishes a schedule for sharing storage costs with the intent of providing incentives to both manufacturers and EPA to expedite the safe disposal of the materials. The Agency must reimburse the registrant, on request, as follows: 1. None of the costs incurred by the registrant before the date of submission of the plan to the Agency. 2. All of the costs (100%) incurred by the registrant after the date of submission of the plan to the Agency or the date of cancellation of the registration of the pesticide, whichever is later, but before the approval of the plan by the Administrator. 3. Half of the costs (50%) incurred by the registrant during the 1-year period beginning on the date of the approval of the plan by the Agency or the date of cancellation of the registration of the pesticide, whichever is later. 4. None of the costs incurred by the registrant during the 3-year period beginning on the 366th day following approval of the plan by the Agency or the date of cancellation of the registration of the pesticide, whichever is later. 5. One quarter of the costs (25%) incurred by the registrant during the period beginning on the first day of the 5th year following the date of approval of the plan by the Agency or the date of cancellation of the registration of the pesticide, whichever is later, and ending on the date that a disposal permit for the pesticide is issued by a State or EPA region, or an alternative plan for disposal of the pesticide in accordance with applicable law has been developed. C. Storage and Disposal Plans Section 19(c)(1) states that under certain circumstances registrants may be reimbursed for a portion of the storage costs incurred as a result of a recall; it does not provide for reimbursement of storage costs for dealers, distributors or end users. The statute also makes clear that only recalls carried out under section 19(b) will qualify the registrant for reimbursement. Recalls initiated by the registrant other than pursuant to section 19(b) will not entitle the registrant to reimbursement of storage costs. Registrants would also not be reimbursed for storage costs incurred for their own inventory of suspended and canceled pesticides. Only costs incurred for storing pesticides received from others by the registrant through the recall process are reimbursable. Pesticides which are owned by the registrant at the time of initiation of the recall, even if the pesticide is in the possession of someone other than the registrant, are not eligible for reimbursement claims. Under section 19(c) of the Act, registrants must submit a storage and disposal plan for recalled pesticides ``as soon as practicable after the suspension.'' In 165.205(c), EPA is proposing that registrants submit a storage and disposal plan no later than either the date the voluntary recall plan is requested to be submitted; or 60 days after publication in the Federal Register of a proposed rule prescribing a mandatory recall. EPA decided that it is more appropriate to link submission of a storage and disposal plan to a recall than to specify a time period after the suspension because pesticides suspended under section 6(c) of FIFRA may be canceled at varying times, depending in part on whether a registrant challenges the cancellation. Requiring registrants to submit a storage and disposal plan before the registrant actually begins recalling pesticides will help assure that the registrant has planned in advance for the storage and management of the pesticides to be recalled. Also, the registrant should have more specific information to submit in a storage and management plan as a result of beginning to plan for a recall. If EPA allows sale and distribution of existing stocks after cancellation, and EPA delays ordering a recall until after cessation of the existing stocks period, registrants will also be able to delay submission of a storage and disposal plan. In such situations, registrants would submit a plan no later than the two dates mentioned above. D. Criteria for Storage and Disposal Plans Congress directed EPA to establish minimum criteria for storage and disposal plans in order to judge the adequacy of the plan. The criteria must be designed so that EPA can reject a plan that clearly does not provide a scheme for safe storage and safe, practicable disposal of the recalled pesticides that is reasonable in its general approach. (Sen. Rept. 100-346, 100th Cong. 2d Sess. 76 (May 9, 1988); H. Rept. 100-339, 100th Cong. 2d Sess. 53 (Sept. 16, 1988)). Based on its own experience with arranging for safe disposal of pesticides, EPA has developed minimum criteria against which the registrant's plan will be judged. As a general matter, the plan must provide a framework for accomplishing safe storage and disposal of the pesticides. Section 165.207 lists the criteria for evaluating whether a storage and disposal plan provides this framework. First, the plan must show that storage will be in accordance with applicable laws and regulations. EPA may set out specific requirements for storage in the cancellation order. State law that applies to storage of the pesticides will vary, and the Federal law that applies will depend on the circumstances and the material to be stored. Section 165.207(a) requires a registrant to indicate what Federal and State laws apply to the registrant's storage of the materials and the steps the registrant would take to meet those requirements. If the suspension or cancellation order prescribes additional conditions for storage, these must also be addressed by the registrant in the plan. EPA expects a fairly detailed discussion concerning the registrant's plans for storage and will examine the sections of the plan addressing the elements in 165.208(a), (d), (e), and (f) for this discussion. Second, 165.207(b) requires that the plan must also show that the registrant will consider available management options for handling the recalled pesticides. As discussed in the preamble to subpart I (Unit III. C. of this preamble), management options encompass activities to manage the pesticide after it has been recalled, including, but not limited to, legal pesticide or non-pesticide use, recycling (e.g., recovery), treatment (e.g., neutralization, deactivation of the active ingredient, degradation), burning for energy or materials recovery, and disposal. Requiring registrants to consider all management options in a disposal plan is supported by the legislative history. See 134 Cong. Rec. S13454 (Sept. 28, 1988) (statement by Sen. Leahy). The purpose of requiring consideration of a range of management options is to encourage the development and consideration of alternatives to disposal. Use, reuse and other forms of recycling may be beneficial because they generally result in resource conservation and reduced pollution compared to treatment and disposal. Registrants may be able to minimize the amount of pesticides requiring disposal by recycling or selling the material for nonpesticidal use. The third criteria requires that the plan adequately address each required element of a storage and disposal plan as described in 165.208. (165.208 is discussed more fully in the next unit, E.) A plan ``adequately'' addresses each element if the registrant has made a good faith effort to discuss each element. A response that the registrant ``has no information'' on a particular element would not be a good faith effort in preparing a storage and disposal plan. Another example of a plan inadequately addressing all elements would be where the information provided in addressing one element contradicts other information in the plan. In such cases, EPA would reject the plan and request that the registrant resubmit a corrected plan. Finally, 165.207(d) would require that a plan must be signed by the registrant or an authorized representative. E. Storage and Disposal Plan Contents Essential elements of planning for storage and disposal include the determination of conditions necessary to ensure safe storage of the recalled material, assignment of persons responsible for storage and disposal, identification of recalled pesticides (amount, formulation, container size and type), location of suitable and available storage facilities, and identification of management options for the material. Section 165.208(a) requires that the plan must include a general discussion of the registrant's scheme for accomplishing safe storage of the pesticide. In addition to a discussion of the requirements of applicable law and how the registrant will meet these requirements, registrants must provide information they have on the particular storage needs for the recalled material. The registrant is in the best position to know how the materials can be safely stored. If the pesticides and their containers require particular precautions with regard to storage, the plan must address the precautions that must be taken. The plan must include the names of the person employed by the registrant who will be responsible for overseeing the storage of the pesticide and the disposal of the pesticide (165.208(c)). This person would be the contact for questions the Agency has concerning the pesticides or the plan. The registrant is responsible for keeping the Agency informed of any changes in the contact person. Section 165.208(d) requires that the plan describe the registrant's own inventory of suspended and canceled pesticides as well as recalled stocks. EPA considers information on the registrant's own inventory necessary for later evaluation of storage reimbursement claims. In identifying recalled stocks the registrant anticipates collecting, EPA would allow the registrant to estimate the quantities for each formulation and container type if the plan is submitted before the recall is complete. Until the recall is complete, registrants may not have exact information. If registrants have completed a recall before submitting a storage and disposal plan, then the registrant must provide the exact information, rather than estimates. EPA requires storage and disposal plans to identify each storage facility and their locations, and to provide the storage capacity for each listed facility (165.208(e)). The storage capacity estimates are to be in units of gallons or pounds. This standardization of units of measure will facilitate quick review of the plans. These units of measure were chosen based on the Agency's past experience with solicitation of contracts for storage and disposal of pesticides. Registrants must indicate whether they believe that the stated storage capacity will be sufficient to handle the amount of pesticides to be recalled. If the storage capacity is less than needed to accommodate the recalled pesticides, then the plan must set out the steps the registrant will take to either locate additional storage capacity or manage the recalled pesticides so that storage capacity will not be exceeded. If the registrant plans to store recalled stocks alongside the registrant's own inventory, the registrant should provide this information. Additionally, 165.208(e) asks for information on anticipated storage costs. This information will be used by the Agency in evaluating claims for reimbursement of storage costs as well as preparing requests for reimbursement funds from Congress. EPA realizes that the plan will only provide cost estimates, but in order to have meaningful estimates, the Agency asks the registrant to provide the basis for calculating the estimated storage costs. Section 165.208(f) requires the registrant to describe the available management options or the steps being taken to determine the options for handling the recalled pesticides. As described elsewhere in this preamble, the registrants are required to update the plans. With each update of the storage and disposal plan, the registrant must describe the progress made in the management or disposal of the recalled pesticide. Pesticides which will be disposed of as waste may be subject to applicable RCRA regulations relating to storage, transportation and disposal. Section 165.208(g) requires that the plan list the location where records will be stored. This will facilitate the inspection of records by the Agency. To the extent the registrant has already provided any of the above information to EPA in a recall plan, the registrant may refer to appropriate sections of the recall plan instead of resubmitting information. F. Approval, Notification, and Updating Plans Storage and disposal plans submitted by the registrant will have to meet the criteria listed in this regulation in order to be approved by EPA and make the registrant eligible for reimbursement of storage costs. Congress intended that EPA be able to reject a plan that does not provide a scheme for safe storage and disposal or that has not been submitted in good faith. (See Sen. Rept. 100-346, 100th Cong. 2d Sess. 76 (May 9, 1988); H. Rept. 100-339, 100th Cong. 2d Sess. 53 (Sept. 16, 1988)). The Agency will approve plans that meet the minimum criteria and notify registrants of the date of approval. The Agency's approval of a storage and disposal plan establishes the end of the period for reimbursement of storage costs at the 100% level. The Agency anticipates that there will be cases where the contents of a plan indicate that the plan was submitted in good faith, but that corrections need to be made. In such cases, instead of rejecting a plan, the Agency would conditionally approve a plan and require that the registrant submit a corrected plan within 30 days. If the plan is corrected and resubmitted in 30 days, the date of conditional approval would be the date that establishes the end of the 100% reimbursement period. If the registrant fails to correct and resubmit the plan within 30 days, or the plan is unacceptable for another reason, the plan would be rejected and the registrant would not be entitled to reimbursement of storage costs for this period. In such situations, the date the registrant submits a corrected plan would establish the beginning of the 100% reimbursement period. In other words, until the registrant submits a corrected plan, the Agency's liability for the 100% reimbursement period does not begin. The registrant must update or modify the plan as the information submitted in the plan changes, particularly for significant changes such as completion of the recall (so that estimates can be replaced with exact amounts) or changes in the contact persons or storage sites. An updated plan would be required with each claim for reimbursement of storage costs. Additionally, after reviewing and approving the plans, the Agency may ask for modifications. These modifications must be reflected in the updated plan submitted with a claim for reimbursement of storage costs. Failure to modify the plan may result in a denial of the reimbursement claim. G. Reimbursement of Storage Costs Section 165.212 provides that the Agency would only reimburse storage costs which are reasonable and necessary, and consistent with the approved storage and disposal plan. The claims would be reviewed by the Agency and any unreasonable costs would be rejected. The Agency requests comments describing the storage costs a registrant might incur. Costs not considered reimbursable include: cost incurred for the acquisition of permits, transportation of recalled pesticides to a storage facility, transportation from one storage facility to another, repackaging costs, the cleanup of spills, structural expansion, or remediation of site contamination. H. Procedures for Submission of Storage Reimbursement Claims Section 165.214 sets forth the proposed procedures for submitting a storage cost reimbursement claim to the Agency and describes the documentation that must accompany a claim. Section 165.214(d) would require proof of quantities of recalled pesticides. Registrants must present documentation showing that they recalled and stored the pesticides for which they seek storage costs. For the 50% reimbursement period, the registrant would submit evidence showing the exact quantity being stored during the first year. For example, the registrant could submit routine business records kept on the storage facilities which itemize quantities being stored. If, during the first year, some quantity of the pesticides has been recycled, exported, used for some lawful use, or disposed of, the registrant must submit documentation showing the quantities which left the storage facilities, the date of its departure, and the disposition of the recalled pesticides. Such evidence could include waste manifests, bills of sale, or contracts. Section 165.214(e) would require the registrant to provide evidence supporting all claimed storage costs. The costs must be itemized so that the Agency can evaluate the reasonableness and necessity of costs. The registrant could consolidate the supporting information required to accompany the claim form and verify the contents of the claim by submitting an independent auditor's or accountant's report or schedule. If a registrant chooses to submit an independent audit, the auditor must review and independently determine the validity of each element of the claim covered by the audit. The Agency retains the right to request submission of the information that formed the basis for the audits or reports in order to verify the validity of the information submitted. The registrant would submit a separate claim for storage costs incurred for each reimbursement period. Section 165.214(i) directs that claims be submitted after expiration of the appropriate period; i.e., 100% reimbursement, 50% reimbursement, and 25% reimbursement period. Annual claims may be submitted during the 25% reimbursement period. Section 165.214(g) would require claimants to substantiate any claims of confidentiality asserted for information submitted with the claim at the time the confidentiality claim is made. EPA will determine whether the information is entitled to confidentiality under 40 CFR part 2, subpart B. Since suspended and canceled pesticides can no longer be distributed and sold as pesticides in the United States, EPA anticipates that most information submitted with claims for reimbursement of storage costs would not be entitled to confidential treatment. Section 165.214(g) includes procedures for substantiating claims of confidentiality. Failure to assert a claim of confidentiality at the time the claim is submitted would result in a waiver of any confidentiality claim for the information submitted. If a confidentiality claim is made, but no supporting documentation is received, the claim would be considered incomplete and returned to the submitter. Each claim submitted must be certified by the registrant that, among other things, all statements and information provided are true and correct to the best of the registrant's knowledge. Registrants may be liable for civil and criminal penalties for any false statements in the reimbursement claim as provided in 31 U.S.C. 3729, and 18 U.S.C. 287 and 1001. The Agency encourages registrants to join together to arrange for storage and/or disposal of suspended and canceled pesticides. Thus, the Agency solicits comments on whether registrants find that the procedures as proposed in 165.214 present any obstacles for registrants considering such arrangements. I. Additional Requirements for Claims Submitted After the 5th Year Section 165.216 would require registrants to submit additional information with their reimbursement claim for storage during the 25% reimbursement period. The Agency expects that the registrant, in most instances, would have disposed of the pesticides by the fifth year. Congress established a storage cost reimbursement scheme to encourage this by making registrants completely responsible for storage costs in years 2, 3, and 4. The lack of commercial treatment or disposal technology could be a reason that the registrant is still storing recalled pesticides in the fifth year,. For example, in the case of 2,4,5-T and silvex pesticides, EPA suspended many uses of 2,4,5-T and silvex pesticides in 1979 and registrations of these pesticides were canceled over a period of several years. EPA has a statutory responsibility for safe disposal of these materials under FIFRA prior to amendment in 1988. However, currently there is no commercial disposal capacity available for 2,4,5-T and silvex. Congress may have been mindful of this situation when it provided for the Agency to again share in the storage costs, if the registrant is still storing the recalled pesticides after the fifth year. At the point the registrant determines that there are no facilities with appropriate permits to dispose the recalled pesticides, and that there is no facility in the process of obtaining a disposal permit from a State or EPA Regional Administrator, the registrant should begin developing an alternative plan for disposal of the recalled pesticides. Registrants may consult with the Agency in developing an alternative disposal plan. If there are facilities with appropriate permits to dispose of the recalled pesticides, registrants will not be eligible for reimbursement of storage costs. EPA's responsibility for 25% reimbursement of storage costs ends on the date that a disposal permit for the pesticide is issued, section 19(c)(2)(E). Therefore, in addition to the information required in 165.216 and the claim form, registrants, as part of their reimbursement claim for the 25% period, must provide evidence that there is no facility permitted for disposal of the recalled pesticides and there are no alternatives to disposal. Such evidence could include documentation of registrants' search for facilities capable of disposing of the pesticide, such as copies of advertisements for disposal bids and all responses to the advertisements, and correspondence with state agencies concerning facilities permitted to dispose of the pesticide, or similar documents. The registrant must also list the various alternatives to disposal considered and explain why these alternatives were found unsuitable. This information and documentation should be included as part of an updated storage and disposal plan If the registrant is storing recalled pesticides for some reason other than lack of commercially available treatment or disposal capacity, the registrant must justify the continued need for storage in order to be eligible for reimbursement. If the pesticides are hazardous wastes under the Resource Conservation and Recovery Act, a permit is required for storage. Under the Land Disposal Restrictions program, restricted hazardous wastes may be stored solely for the purpose of accumulating sufficient quantities of waste to facilitate proper treatment, recovery or disposal (see 40 CFR 268.50). For storage of less than 1 year, the burden of proof that storage is solely for the purpose stated above lies with EPA. After 1 year the burden of proof shifts to the facility. V. Indemnification A. Background Prior to 1988, if the registration of a pesticide was suspended and subsequently canceled under FIFRA section 6, the Agency was required to indemnify owners of the pesticide for losses suffered, not to exceed the cost of the pesticide. Any person who owned a pesticide on the date of suspension and suffered losses by reason of the suspension and cancellation was eligible for indemnification. Due to past suspension and cancellation actions, the Agency has handled indemnification claims for four pesticides: ethylene dibromide (EDB), 2,4,5-T, silvex, and dinoseb. Prior to 1988, claims were paid from Agency funds, or from the Judgment Fund when a claimant obtained a judgment from the U. S. Court of Claims. To prevent indemnification payments from draining the Agency's budget, Congress ordered in the 1988 Continuing Appropriations Act, Public Law 100-202, Dec. 22, 1987, that indemnification claims be referred to the Department of Justice for settlement under 28 U.S.C. 2414 and payment be made from the Judgment Fund, 31 U.S.C. 1304. Congress directed that this payment arrangement be continued until all the Government's obligations under section 15 of FIFRA, prior to amendment in 1988, are satisfied. In 1988, the FIFRA amendments revised section 15 to restrict who could get paid indemnification from the Judgment Fund in the event of future suspension and cancellation actions. Under section 15 as amended, most owners of pesticides suspended and canceled will only get indemnified if Congress specifically appropriates funds for that purpose. More specifically, section 15 provides as follows: 1. Eligible owners of suspended and canceled pesticides suffering losses will receive indemnification only if Congress provides a line item appropriation for indemnification. 2. Registrants, wholesalers, dealers, and distributors (i.e., sellers) must reimburse purchasers, other than end users, for any quantity of pesticide remaining unused or unsold as a result of the suspension or cancellation of the pesticide, unless the seller provided a written notice at the time of distribution or sale that the pesticide is not subject to reimbursement. Section 15(b)(2)(A). 3. As an exception to the requirement for a line item appropriation, end users, and certain dealers and distributors who could not get reimbursed due to their seller's bankruptcy or insolvency, may be indemnified from the Judgment fund. In the past, EPA has provided guidance on submitting indemnification claims in Federal Register Notices addressing the particular suspended and canceled pesticide. The 1988 FIFRA amendments did not change the eligibility requirements for indemnification so that many of the procedures for submitting claims are still applicable and have been incorporated into this proposed rule. B. The Proposed Rule 1. Definitions--Special Status Seller Section 15 of FIFRA requires sellers to reimburse those to whom they have distributed or sold the pesticide, unless the seller provided a written notification at the time of sale or distribution that it would not reimburse purchaser. Those dealers or distributors who did not receive advance notification of nonreimbursement and who are unable to get reimbursement due to their seller's bankruptcy or insolvency are referred to in the proposed rule as special status sellers. 2. Eligibility Requirements for Indemnification a. Eligible pesticides. Section 15 of FIFRA is straightforward in providing that only pesticides suspended and subsequently canceled under FIFRA section 6 are eligible for indemnification. Section 165.225(a) would simply restate this eligibility requirement. FIFRA section 24(c) registrations are deemed to be Federal registrations and thus subject to FIFRA provisions on suspension and cancellation. Accordingly, suspension and cancellation of section 24(c) registrations make the pesticides eligible for indemnification. Section 15 of FIFRA provides for indemnification for losses suffered ``by reason of suspension and cancellation of the registration.'' This phrase has not changed from prior law. EPA has consistently interpreted this language as limiting indemnification to registered pesticide products. Pesticides which are not packaged, labeled and released for shipment as of the date of suspension are not eligible for indemnification. Release for shipment is the point at which the registered pesticide is ready for distribution or sale. Prior to this point, samples taken by the producer could show that a batch was off-specification and therefore not suitable for sale or distribution. Additionally, it is at this point that EPA has authority to inspect the labeling and composition of the pesticide. b. Eligibility of persons. FIFRA section 15 states that the person who owned the pesticide at the time of suspension may seek indemnification. Section 165.225(b) tracks section 15 of the Act in setting forth the criteria for persons who are eligible for indemnity. Under the statute it is clear that anyone who acquires the pesticide after the suspension is not eligible for indemnification. An example of a lawful acquisition after suspension and cancellation that would not entitle the holder to indemnification would be acquisition for use under an existing stocks provision of a final cancellation order. Any person acquiring the pesticide for such use from the person owning it at the time of suspension, would not be eligible for indemnification for any leftover pesticide. However, the purchaser could try to return it to the person who owned it at the time of suspension and who would be eligible for indemnification. Additionally, a claim may be filed by a person holding a power of attorney for the owner. A seller who has received an assignment from the person who owned the pesticide at the time of suspension will not be eligible for indemnification unless the Government waives the Anti-Assignment of Claims Act, 31 U.S.C. 3727(b). The Act prohibits assignment of a claim against the Government before the ``claim is allowed, the amount of the claim is decided, and a warrant for payment of the claim has been issued.'' Thus, unless the Government expressly waives its prohibition against early assignment, the Act would bar payment of indemnification claims acquired from an eligible individual by assignment and submitted to the government for payment. The Act was intended to protect the government from: (i) The buying by influential persons of numerous claims against the federal government and the improper urging of them upon governmental officers; (ii) Possible multiple payment of claims, the necessity of investigating the validity of assignments, and the inability to deal with the original claimant; and (iii) The loss to the government of defenses to an assignor's claim not applicable to an assignee. Although in the past, to encourage recall of suspended and canceled pesticides, the Government has waived the prohibition against early assignment provided certain conditions were met, with the 1988 amendment of FIFRA sections 15 and 19, waiver may be less appropriate. Section 15 of the Act requires sellers to reimburse their purchasers. Those purchasers who are reimbursed have not suffered losses by reason of the suspension and cancellation and therefore have no right to claim indemnification under section 15 of the Act. The sellers will bear the loss for reimbursement paid. If sellers provide advance written notification of no reimbursement, then the purchasers may have suffered losses for which they could file for indemnification under section 15(A) of the Act. Of course, claims filed under section 15(a) of the Act would not be paid unless Congress appropriates funds. However, if, in such a situation, the purchaser were to assign his right to indemnification to the seller, the seller would, in effect, be avoiding the intent of section 15 that sellers absorb the loss for reimbursements paid to their purchasers. Secondly, EPA now has the authority under section 19 to require recall of suspended and canceled pesticides, therefore, EPA does not need to take extraordinary steps, such as waiver of the prohibition against early assignment, to encourage registrants to recall their pesticides. For future suspension and cancellation actions, if EPA determines that a recall is necessary under section 19(b) of the Act, the Government will consider whether circumstances warrant waiver of the Act's prohibition against early assignment and whether it is in the Government's interest. If EPA notifies registrants and other potential claimants that the Government may waive the prohibition against early assignment, such waiver would be subject to limitations. Namely, only assignments to the person from whom the pesticide was purchased in the chain of distribution would be acceptable. Secondly, all assignments would have to include a statement that any defenses the Government has against the assignor (including set-off) would be applicable to the assignee. Section 165.234(j)(9) requires registrants submitting assigned claims to certify that the United States may assert against the assignee any defenses, or right of set-off or counterclaim applicable against the person who assigned the claim. 3. Limitation on Amount of Indemnification Section 15(c) of the Act limits the amount of indemnification to the cost of the pesticide (other than the cost of transportation) at the time of suspension, not to exceed fair market value. EPA has consistently interpreted this statutory limitation to cost of the pesticide to mean that manufacturers and registrants can recover for their own inventory of suspended and canceled pesticides only production costs, which include properly allocated overhead. Others can recover only the purchase price, less any sales tax or transportation. Any discounts received must be subtracted from the purchase price. Section 165.227 incorporates this interpretation of section 15(c). Section 165.227(b) refers to a duty to mitigate losses. FIFRA section 15 directs that owners of pesticides can recover only for losses. If, after suspension or cancellation, an owner is able to lawfully sell or use the pesticide, then the owner has the responsibility to make a reasonable effort to do so before seeking indemnification from the government. 4. Payment of Indemnification Section 165.230 describes the groups of pesticide owners that may receive indemnity from the Judgment Fund: (a) Qualified end users; and (b) special status sellers. Persons who are sellers of pesticides (i.e., dealers) who also apply pesticides will be treated as sellers only. Persons who are applicators who only sell the service of applying registered pesticides without delivering any unapplied pesticide to any person so served will be treated as an end-user. The legislative history of the 1988 amendment to section 15 of the Act indicates that Congress intended to restrict the end-users that could be paid from the Judgment Fund in such a manner. In discussing subsection 15(b), the Senate Committee on Agriculture, Nutrition, and Forestry stated that ``The Committee intends to authorize indemnification for a person who owned the pesticide only for the purpose of applying or using it, and does not intend to authorize indemnification for a person who owned the pesticide for the purpose of selling or applying it***. The Committee intends to exclude persons who sell the service of applying pesticides from indemnification under this subsection.'' S. Rept. 100-346, 100th Cong. 2d Sess. 67 (May 13, 1988). Such persons, if they are eligible under section 15(a), would receive payment only if Congress makes a specific line item appropriation of funds, just as eligible registrants, distributors, and dealers. Owners of suspended and canceled pesticides could fall in the category of both those who are entitled to payment from the Judgment Fund, and those who will only get indemnified if Congress provides a line item appropriation. For example, dealers and distributors may get indemnified because of their status as a purchaser owed, but not paid, reimbursement by an insolvent or bankrupt seller (i.e., special status sellers). The same dealers and distributors may have inventory on hand for which they received advance written notice of no reimbursement and be seeking to recover indemnification for these pesticides. 5. Seller's Requirement to Reimburse Purchasers In the event of suspension and cancellation, section 15(b) of FIFRA requires registrants, wholesalers, dealers, and distributors, referred to as ``sellers,'' to reimburse purchasers other than end users ``for any quantity of the pesticide that such person cannot use or resell as a result of the suspension or cancellation***.'' Section 15(b) provides two options--sellers must provide advance written notification that they are not going to reimburse or they must reimburse their purchasers. If a seller does not wish to reimburse purchasers, he must provide the written notification at the time of purchase. Section 165.232 incorporates the statutory requirement for reimbursement by sellers. In the event of suspension and cancellation, sellers should notify purchasers on how to present their claims for reimbursement. Such notification could also aid the sellers in securing a thorough and prompt recall in accordance with section 19 of FIFRA. Section 15(b)(2)(A) of FIFRA does not specifically address whether people who receive advance notice of non-reimbursement are themselves eligible for indemnification from the government. However, section 15(a) provides that any owner of pesticides suffering losses by reason of the Agency's suspension and cancellation action may seek indemnification. Purchasers who suffered losses by reason of the suspension and cancellation, and who were not reimbursed by their seller because of the advance written notice, would seem to fall within the scope of section 15(a). EPA therefore considers that such purchasers can file indemnification claims and, if eligible, may be indemnified through a line item appropriation. 6. Procedures for Submission of Claims Section 165.234 of the proposed rule sets forth a list of items which must be supplied by claimants, including a completed claim form, proof of ownership and cost, and certification of the claim. a. Proof of cost. Claimants must submit documentary evidence, such as purchase receipts or invoices, supporting the claimed cost of the pesticide. Manufacturers, registrants, distributors, and any other claimants that normally maintain business records are permitted to verify the contents of the claim by submitting an independent auditor's or accountant's report or schedule. Each element of the claim, such as cost per unit of pesticide or quantity of pesticide owned at the time of suspension, must be reviewed and independently determined by the auditor or accountant to be valid if verification for the complete contents of the claim is being provided through the report or statement. If the independent review is being conducted for only one element of the claim, such as a manufacturer's cost of production per unit of pesticide, supporting documentation must be submitted for all other elements of the claim. EPA retains the right to request submission of the information that formed the basis for the audits or reports in order to verify the validity of the information submitted. Often the evidence submitted on proof of cost will also serve to verify ownership on date of suspension. b. Proof of status. Under 165.234(f), a person who qualifies both as (i) an end user, or a special status seller, and (ii) a seller or applicator, must separate the quantities of pesticides according to the appropriate category, and file claims for the end user or special status seller and the seller or applicator category separately. End users and special status sellers must certify to their eligibility for payment from the Judgment Fund. Under section 15(b)(2)(B), dealers or distributors are entitled to indemnification from the Judgment Fund if they are unable to obtain reimbursement due to the bankruptcy or insolvency of their seller. Further, section 15(b)(2)(B)(iv) provides that payment from the Judgment Fund is appropriate where a bankrupt or insolvent seller ``is and will continue to be unable to provide reimbursement.'' EPA considered what evidence would be necessary for a claimant to be able to show that its bankrupt or insolvent seller continues ``to be unable to provide reimbursement.'' EPA concluded that dealers or distributors must provide evidence of their attempt to recover through bankruptcy or insolvency proceedings before they are entitled to payment from the Judgment Fund. If a seller is bankrupt, the dealer or distributor can seek to recover through the bankruptcy proceedings as a creditor. If the dealer or distributor cannot recover cost completely, then it may have a claim for indemnification. Since bankruptcy proceedings may continue several years before resolution, the dealer or distributor can file a claim with EPA while pursuing relief through bankruptcy proceedings. Accordingly, 165.234(f)(2)(iii) requires that the claimant provide evidence of participation in bankruptcy proceedings, such as a copy of the proof of claim, and, at termination of the proceedings, evidence of the distribution. Insolvency usually means that the aggregate of the debtor's property, at a fair market value, is not sufficient to pay debts. (See, e.g., the Bankruptcy Act, 11 U.S.C. 101). However, because the definition varies from state to state, the rule does not set out a particular definition for insolvency. Note that a person could be in bankruptcy proceedings, but not be insolvent. A person may file an indemnification claim with EPA while seeking relief through insolvency proceedings. Section 165.234(f)(2)(ii) requires the claimant seeking indemnification due to the seller's insolvency to submit evidence of the seller's insolvency such as a court order declaring the seller insolvent, a judgment against the seller and evidence that the claimant has been unable to recover, or some other documentation showing the seller's insolvency. EPA considered allowing claimants to prove their seller's insolvency by providing copies of the seller's financial records that establish the insolvency. EPA decided not to propose this alternative, however, because the Agency does not have the resources to make insolvency determinations and because the burden of proving insolvency should be on the claimant. EPA solicits comments on what other evidence could be submitted to demonstrate the seller's insolvency. If a dealer or distributor cannot provide sufficient proof of his seller's bankruptcy or insolvency, the indemnification claim could be processed under section 15(a) instead of for payment from the Judgment Fund under section 15(b). c. Confidential business information (CBI). In 165.234(i) the Agency is proposing that claimants be required to substantiate any claims of confidentiality asserted for information submitted through the claim form at the time they assert the CBI claim. Section 165.234(i) sets out the procedures for substantiating confidentiality claims. EPA may need to disclose this information to contractors, and must be able to provide information in the claim to the other Federal agencies involved in processing indemnification claims, including the Department of Justice and the General Accounting Office (GAO). In processing claims for payment from the Judgment Fund, EPA reviews the claim to determine whether claimant meets the statutory eligibility requirements and has provided adequate documentation for the amount claimed; then EPA certifies the claim to the Department of Justice. The Department of Justice reviews the claim, then certifies the claim to the GAO for payment from the Judgment Fund. Processing claims with CBI is administratively cumbersome and time consuming. So that claims can be handled as expeditiously as possible, EPA will need to know at the time the claim is submitted what information, if any, may be subject to claims for confidential treatment. d. Certification of claim form. In submitting a claim to the government for money, claimants must certify that all statements made and information provided are true and correct. Additionally, in signing the claim, among other things, a claimant attests that it has received no other payment for the cost of the pesticides for which indemnification is sought, that acceptance by the claimant of any payment made by the Federal government constitutes full satisfaction and final settlement of the claim, and that a claimant filing as an end user or special status seller meets the criteria for those categories. Claimants may be liable for civil and criminal penalties for any false statements in the claim as provided in 31 U.S.C. 3729 and 18 U.S.C. 287, 1001. VI. Economic Analysis EPA has evaluated the potential costs to registrants, distributors and dealers of suspended and canceled pesticides resulting from the recall of the pesticide. EPA's complete economic analysis is available in the public docket for this proposed rule (OPP-190000). VII. Rulemaking Record EPA has established a docket of this rulemaking (Docket control number OPP-190000). This record presently contains the following information: 1. Current rule 2. Proposed rule. 3. The economic analysis of this proposed rule. 4. A compilation of documents concerning participation of holders in EPA's disposal program. As comments are received on this proposed rule they will be added to this record. In addition, upon publication, the final rule will be added to this record. A public version of this record is available for review and copying from 8 a.m. to 4 p.m., Monday through Friday, except holidays, in the Public Docket and Freedom of Information Section, Rm. 246, Crystal Mall 2, 1921 Jefferson Davis Hwy., Arlington, VA. VIII. Statutory Review A. U.S. Department of Agriculture As required by FIFRA section 25(a), a copy of this proposed rule was provided to the Secretary of Agriculture. On February 21, 1992, Nancy N. Ragsdale, Director, National Agricultural Pesticide Impact Assessment Program, provided written comments on behalf of the Secretary. Following is a summary of the comments, together with the Agency's response. Comment 1: If the recall plan does not work, through no fault of the registrant, EPA should take direct action on those who do comply rather than reevaluate the plan. Response: Under section 19 of FIFRA, only registrants can be compelled to comply with a voluntary recall. Other persons (dealers and distributors) may be required to participate in a recall only if the Agency requires a mandatory recall by regulation. There is no requirement that holders who are endusers participate in a recall. EPA expects that, given a reasonable opportunity to return a canceled and suspended pesticide to the registrant, most holders would be anxious to participate in a recall rather than bear the costs of disposing of the pesticide themselves. The fact that a voluntary recall is not working is reason enough for EPA to review the recall plan to see if modifications are necessary or if a mandatory recall is necessary. Comment 2: The following statement is unclear. USDA recommends that it be rephrased. The statutory requirement for rulemaking for a mandatory recall action may make it difficult for a mandatory recall to be conducted within a reasonable timeframe, there are other factors that mitigate this effect. Response: EPA agree with USDA's comment. EPA proposes that the last two sentences of the paragraph in question be deleted and the following language be inserted. Because the pesticides have been suspended and canceled for risk reasons, the length of time to conclude the cancellation and rulemaking for a mandatory recall makes it necessary to conduct the recall as swiftly as possible in order to consolidate and safely store the stocks of the pesticide. The notice given the affected community through the rulemaking process allows those persons responsible for conducting the recall sufficient time to plan their recall 1activities; thus six months after the regulation is effective is a reasonable time for conducting the recall. Comment 3: USDA proposed that the following sentence in the preamble reading: ``In those instances where persons subject to the recall regulation other than the registrant provide transportation for a holder, such persons may seek reimbursement of transportation costs from the registrant.'', be clarified to conform with 165.188(b)(5) to indicate the circumstances under which a holder subject to recall may expect reimbursement by the registrant. The registrant should not be held responsible for the cost of transportation performed by a third party unless such transportation has been authorized by the registrant. Response: EPA agrees with the comment and will revise the sentence to read: In those instances where persons subject to the recall regulation other than the registrant provide transportation for a holder, as specified in the registrant's recall plan, such persons may seek reimbursement of transportation costs from the registrant. Comment 4: Please clarify the following sentence in the preamble to indicate whether ``(upon request)'' refers to a request for payment or a request for the provision of transportation: ``Requiring registrants to pay for transportation (upon request) should make the recall more effective...''. Response: The sentence in question has been amended to read: ``Requiring registrants to provide for transportation at no cost to holders (when requested to provide transportation) should make the recall more effective in achieving return of all stocks.'' Comment 5: With regard to applicability of EPCRA, 42 U.S.C. 11002, the Agency should bear in mind the chemicals are no more hazardous after being canceled/suspended than they were prior to this action. Response: EPA agree with USDA's statement regarding the relative hazard of a pesticide. This section is intended to address a finding that facilities were sometimes unaware of their responsibilities under EPCRA. Whether a pesticide is suspended and canceled has no bearing on a facility's responsibility to report. EPA have revised the preamble to clarify this. Comment 6: USDA questions whether it is appropriate for an agency to ``strongly discourage'' a legal use such as export of a suspended and canceled pesticide, especially when the statute makes explicit the circumstances under which such exports are permitted. The statement appears to be intimidating and thus diminishes the ability of a registrant to mitigate the cost of the recall. Response: The statement in question reflects the Agency's policy regarding the export of suspended and canceled pesticides to foreign countries. EPA has encountered situations where suspended and canceled pesticides were being exported without the foreign government's knowledge and in some cases in violation of that country's laws. In addition, if a pesticide was not produced solely for export, it may be illegal to export the product. We are not telling registrants they cannot export suspended and canceled pesticides, just that there are alternatives and that all exports will be closely scrutinized. We have deleted this sentence and revised the preamble to read: ``If a registrant wishes to export a suspended and canceled pesticide, he should be advised that any export must be in compliance with section 17 of FIFRA, the Agency's export policy and the terms and conditions of the cancellation notice. Such exporters will be closely scrutinized by the Agency.'' Comment 7: A suggested format could help registrants provide EPA the needed information in a form that is consistent and easy to follow. However, this format should not be a requirement. Response: The Agency did not require a specified reporting format in order to allow the registrant some latitude in devising an accountability system which best suited their needs. We can see the utility of a suggested reporting format. A suggested reporting format would certainly make it easier for the Agency to manipulate and utilize the information. The preamble will be revised to ask for comment on the advisability of a suggested reporting format. Comment 8: It should be made clear what the responsibility of the registrant is, if asked to modify a plan which has been previously approved by the Agency. Response: Modifications in a storage and disposal plan requested by EPA must be reflected in the updated plan submitted with a reimbursement claim. Failure to modify the plan may result in a denial of the reimbursement claim. The preamble will be amended by adding the following: These modifications must be reflected in the updated plan submitted with a claim for reimbursement of storage costs. Failure to modify the plan may result in a denial of the reimbursement claim. Comment 9: USDA recommends that the following sentence, ``If there are facilities with appropriate permits to dispose of the recalled pesticides, registrants would not be eligible for storage costs.'', in the preamble be revised to read: ``If there are facilities within reasonable distance with appropriate capacity and permits to immediately dispose of the recalled pesticides, registrants would not be eligible for storage costs.'' Response: The preamble will be amended to reflect the issue of adequate capacity at a disposal facility. The Agency always intended for lack of capacity at a permitted facility to be a valid reason for continued storage. EPA is, however, unwilling to add a provision that a disposal facility be within reasonable distance to a storage facility. Registrants, if so inclined, could claim that any facility is not within a reasonable distance. Additionally, there may be only one facility in the country permitted to dispose of a given chemical. Provided the facility has sufficient capacity, the registrant should dispose of the product since he has no other options for disposition of the pesticide. Comment 10: USDA recommends that the following statement in the preamble and 165.230(a)(2) be clarified to indicate that applicators who sell the pesticides they apply but do not deliver unapplied pesticides to any person so served will be treated as an end-user. EPA is proposing that applicators who sell the pesticide in addition to the service of applying the pesticide are not end-users that may receive indemnification from the Judgement Fund. Response: The second sentence under Payment of Indemnification will be deleted and the following text will be inserted: Persons who are sellers of pesticides (i.e., dealers) who also apply pesticides will be treated as sellers only. Persons who are applicators who only sell the service of applying registered pesticides without delivering any unapplied pesticide to any person so served will be treated as an end-user. The legislative history of the***. Comment 11: In 165.234(h), the requirement that an independent auditor or certified accountant verify claims is an unnecessary burden on the company or organization. Since the reimbursement of storage costs section does not include such a stipulation, it should not be included in the indemnification section. Response: The intent of the regulation is to allow an independent auditor or certified accountant to verify claims in lieu of the claimant submitting all documentation to the Agency. This option is intended to lessen the burden on the registrant and speed processing of the claims by EPA. The first sentence under 165.234(h) will be amended to read: ``In lieu of submitting all documentation to EPA, a person who normally maintains business records may consolidate the supporting information***.'' EPA does not feel it is necessary for the storage cost reimbursement section to be consistent with the indemnification section in this particular case. Comment 12: What would EPA's course of action be if a holder did not hear about the recall and had material after the recall period had ended? Response: The proposed rule requires the registrant and others conducting a recall to take steps to try to reach every holder. Based on EPA's experience in conducting disposal programs, it is likely that there will be holders who do not hear about the recall until the recall is completed. The holder then has two options in this situation: (1) Contact the registrant and see if the registrant would take the product off their hands, or (2) dispose of the product himself. Comment 13: A timeframe of 20 days is an unreasonably short time for a registrant to contact customers and determine if stocks are held. A timeframe of 45-60 days is more reasonable. A timeframe of 10 days is unreasonable. The purpose of the recall is to eliminate the material from use and to have it under control. The process does not have to be completed in a short timeframe. Response: EPA agrees that the timeframes are very tight. However, the timeframes were purposely kept tight for a number of reasons. The timeframes for conducting a mandatory recall create an incentive for the registrant to conduct a voluntary recall. The Agency fully anticipates using voluntary recall provisions for most situations and requiring mandatory recalls only as necessary. In addition, a mandatory recall doesn't occur until after cancellation proceedings are complete. By the time mandatory recalls occur, the Agency believes there is a need for completing the recall given the length of time such products have been in storage. The Agency is very concerned that the suspended and canceled pesticide get into the hands of the persons who have the technical knowledge and capability to safely handle and store the pesticide as soon as possible. Finally, the registrants have ample notice of the Agency's intentions to conduct a mandatory recall for a particular pesticide, since the Agency must go through notice and comment rulemaking to conduct a mandatory recall and therefore have sufficient opportunity to prepare for a recall. Comment 14: USDA was unable to find in the summary of the RIA any allocation for the cost of the seller's reimbursement to purchasers of the cost of recalled pesticides; nonindemnifiable sales taxes and delivery costs; unreimburseable cost of storage of the registrant's inventory; costs incurred in the acquisition of transportation and storage permits; transportation of recalled pesticides to storage and/or disposal facilities; repackaging costs; the cleanup of spills; remediation of site contamination; the shortfall under 50 percent and 25 percent reimbursement schedules; disposal costs; registrant's loss of revenue; and increased agricultural production costs. Response: The cost of a seller's reimbursement to purchasers of the cost of recalled pesticides is required by FIFRA section 15(b)(2) and therefore not attributable to the rule. The cost of nonindemnifiable sales taxes may be subject to consideration in the RIA; however delivery costs are excluded by statute from indemnification. The statute only provides for recalled pesticides, stocks that are under the registrant's control are not defined as recalled pesticides and not subject to reimbursement. The rule does not require that recalled pesticides be handled as hazardous wastes, and therefore does not require the acquisition of transportation and storage permits, except when the holder (or registrant) decides that it is a waste; then the RCRA RIA would cover this. The costs of transportation to a storage facility have always been paid by the registrant and are not new or extra costs. There is no requirement that disposal be undertaken and therefore costs of transportation to a disposal facility are not attributable to the rule. Repackaging costs at the user level are incurred only when the container is leaking or damaged, are part of the costs of shipping in accordance with DOT specifications and therefore should be considered as a cost under the DOT regulations. The costs of cleanup of spills and remediation of site contamination are not requirements of this rule, and therefore not attributable to this rule. The cost of the shortfall under 50 percent and 25 percent reimbursement schedules are statutory, and therefore not subject to consideration under the RIA. The costs associated with the registrant's loss of revenue and increased agricultural production costs are part of the costs associated with suspension and cancellation of a pesticide and not a subject of this rule. B. Congressional Committees As required by FIFRA section 25(a), a copy of this proposed rule was provided to the Committee on Agriculture, Nutrition and Forestry of the U.S. Senate and the Committee on Agriculture of the U.S. House of Representatives. No comments were received. C. Scientific Advisory Panel Pursuant to FIFRA section 25(d), a copy of the proposed rule was provided to the Scientific Advisory Panel (SAP). The SAP waived formal review of the proposed rule. IX. Other Regulatory Requirements A. Executive Order 12291 Under Executive Order 12291, EPA must judge whether a rule is ``major'' and therefore requires a Regulatory Impact Analysis. EPA has determined that this proposed rule is not a ``major'' rule because it will not have an effect on the economy of $100 million or more, and will not have a significant effect on competition, costs, or prices. B. Regulatory Flexibility Act Under the Regulatory Flexibility Act [5 U.S.C. 605(b)], EPA has determined that this proposed rule will not have a significant impact on a substantial number of small businesses. In the instances where a small business may hold a registration for a suspended and canceled pesticide, the distribution of the pesticide is usually limited and the costs of recalling the pesticide are less. In most cases, small businesses are distributors of pesticides produced by larger companies and may therefore pass the recalled pesticide to the registrant for storage and management. C. Paperwork Reduction Act This proposed rule and associated information collection request (ICR) amend a previously approved ICR (OMB Clearance No. 2070-0110) and imposes additional burden hours as a result. The information collection requirements in this proposed rule have been submitted for approval to the Office of Management and Budget(OMB) under the Paperwork Reduction Act, 40 U.S.C. 3501 et seq. An Information Collection Request document has been prepared by EPA (ICR No. 1520.01) and a copy may be obtained from Chief, Information Policy Branch, PM-223, Environmental Protection Agency, 401 M St., SW., Washington, DC 20460. Public reporting burden for collection of information under this proposed rule is estimated to average 287 hours per response, including time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding the burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to Chief, Information Policy Branch, PM-223, U.S. Environmental Protection Agency, 401 M St., SW., Washington, DC 20460; and to the Office of Information and Regulatory Affairs, Office of Management and Budget, Washington, DC 20503, marked ``Attention: Desk Officer for EPA.'' List of Subjects in 40 CFR Part 165 Environmental protection, Pesticides, Pesticide management, Indemnification, Reimbursement, Reporting and recordkeeping requirements. Dated: April 21, 1993. Carol M. Browner, Administrator. Therefore it is proposed that 40 CFR chapter I, subchapter E, part 165 be amended as follows: 1. The authority citation for part 165 continues to read as follows: Authority: 7 U.S.C. 136q and 136w. 2. The table of contents for part 165 is revised, to read as follows: PART 165--REGULATIONS FOR THE ACCEPTANCE OF CERTAIN PESTICIDES AND RECOMMENDED PROCEDURES FOR THE DISPOSAL AND STORAGE OF PESTICIDES AND PESTICIDES CONTAINERS Subpart A--General Sec. 165.1 Authorization and scope. 165.3 Definitions. 165.5 Acceptable pesticides. 165.7 Request for acceptance 165.8 Delivery. 165.10 Disposal 165.11 Recommended procedures for the disposal of pesticides. 165.12 Procedures not recommended. 165.14 Recommended procedures for the disposal of pesticide containers and residues. 165.16 Recommended procedures and criteria for storage of pesticides and pesticide containers. 165.18 Procedures for disposal and storage of pesticide-related wastes. Subparts B--H [Reserved] Subpart I--Voluntary Recall Plans 165.160 Scope. 165.161 Applicability. 165.163 Definitions. 165.165 Submission procedures. 165.167 Contents of voluntary recall plan. 165.170 Approval of the recall plan. 165.172 Recorkeeping. 165.174 Reporting. 165.176 Enforcement. Subpart J--Mandatory Recalls 165.180 Scope. 165.181 Applicability. 165.183 Definitions 165.186 When a mandatory recall will be required. 165.188 Initiation of the recall. 165.190 Requirements of the recall. 165.192 Recordkeeping. 165.194 Reporting. 165.196 Enforcement. 165.198 Pesticides subject to mandatory recall. [Reserved] Subpart K--Storage And Disposal Plans; Reimbursement Of Storage Costs 165.200 Scope and applicability. 165.203 Definitions. 165.205 Submission of storage and disposal plan. 165.207 Criteria for the evaluation of storage and isposal plans. 165.208 Contents of storage and disposal plans. 165.210 Agency action. 165.212 Reimbursement of storage costs. 165.214 Procedures for submission of storage reimbursement claims. 165.216 Additional requirements for 25-percent reimbursement claims. 165.217 Final Agency decision. 165.218 Recordkeeping. Subpart L--Indemnification 165.220 General. 165.223 Definitions. 165.225 Eligibility criteria. 165.227 Limitations on amount of indemnification. 165.230 Payment of indemnification. 165.232 Seller's requirement to reimburse. 165.234 Procedures for submission of claims. 165.236 Agency review of claim. Subpart A--General 3. Part 165 is amended by redesignating existing 165.1 through 165.11 (subparts A through D) as subpart A and by renumbering those sections as follows: ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ Old section New section ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ 165.1...................................................... 165.3 165.2...................................................... 165.1 165.3...................................................... 165.5 165.4...................................................... 165.7 165.5...................................................... 165.8 165.6...................................................... 165.10 165.7...................................................... 165.12 165.8...................................................... 165.11 165.9...................................................... 165.14 165.10..................................................... 165.16 165.11..................................................... 165.18 ÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ Subparts B--H [Reserved] 4. By reserving subparts B through D and by adding and reserving subparts E through H. 165.1 [Amended] 5. In newly designated 165.1, paragraph (a), by changing the reference ``165.8(a)(6)'' to read ``paragraph (a)(6) of this section'' and in paragraph (d) by changing the reference ``165.10(a)'' to read ``165.16(a).'' 165.3 [Amended] 6. In newly designated 165.3, paragraph (d), by changing the reference ``165.10'' to read ``165.16.'' 7. By revising newly designated 165.5, to read as follows: 165.5 Acceptable pesticides. (a) This subpart applies only to those pesticides that were suspended and subsequently canceled under section 6(c) of the Act before December 24, 1988. (b) The Administrator will accept for safe disposal only those pesticides identified in paragraph (a) of this section, the registrations of which have been canceled, after first having been suspended to prevent an imminent hazard during the time required for cancellation proceedings as specified in section 6(c) of the Act. No other pesticides will be accepted pursuant to section 19(a) of the Act (prior to amendment in 1988), and nothing herein shall obligate the Federal Government to own or operate any disposal facility. 165.10 [Amended] 8. In newly designated 165.10 by revising the phrase ``in subparts A and C of this part'' to read `` in subpart A of this part.'' 165.11 [Amended] 9. In newly designated 165.11 by amending paragraphs (a)(5), (b)(5), and (c)(3) by changing the references to ``165.10'' to read ``165.16'' and in paragraphs (b)(6) and (c)(1) by changing the references to to ``165.8(a)(6)'' and ``165.8(a)(4)'', respectively, to read ``165.11(a)(6)'' and ``165.11(a)(4),'' respectively. 165.14 [Amended] 10. In newly designated 165.14, paragraphs (a) and (d), by changing the reference ``165.8(a)'' and ``165.8'', respectively, to ``165.11(a)'' and ``165.11'' respectively. 165.18 [Amended] 11. In newly designated 165.18, paragraph (a), by revising the phrase ``165.7 and 165.8'' to read ``165.11 and 165.12'' and by amending paragraph (b) by changing the reference ``165.10'' to read ``165.16.'' 12. By adding new subparts I, J, K, and L, to read as follows: Subpart I -- Voluntary Recall Plans 165.160 Scope. This subpart describes the procedures EPA will use in requesting and approving a voluntary recall plan under section 19(b)(2) of the Act for pesticides that have been suspended and subsequently canceled under section 6. The subpart sets out the elements of a voluntary recall plan that must be addressed for EPA to determine whether the plan is adequate to protect health and the environment, the consequences of failure to submit a plan and the consequences of failure to adhere to the plan after the Administrator orders the plan carried out. 165.161 Applicability. This subpart applies to each registrant of a suspended and canceled pesticide if the Administrator finds that a voluntary recall by the registrant and others in the chain of distribution of the suspended and canceled pesticide may be as safe and effective as a mandatory recall. Where specified, this subpart applies to the registrant's own inventory of suspended and canceled pesticides as well as to the recalled pesticides. 165.163 Definitions. Terms used in this subpart shall have the meanings set forth in the Act. In addition, the following terms are defined for the purposes of this subpart. End user. Means any person who holds any quantity of a suspended and canceled pesticide which was obtained for purposes of applying or using the pesticide, rather than for purposes of distributing or selling it or further processing it for distribution or sale. Holder. For purposes of this subpart means the owner of a pesticide at the time of cancellation of a pesticide that has previously been suspended under FIFRA section 6(c) or the owner of a pesticide at the end of the period designated for sales of existing stocks of the pesticide. Management options. Means the methods to manage the pesticide after it has been recalled, including, but not limited to, legal pesticide and non-pesticide use, recycling (e.g., recovery), treatment (e.g., neutralization, deactivation of the active ingredient, degradation), burning for energy or materials recovery, and disposal. Recall. Means the process of transferring stocks of a suspended and canceled pesticide, other than those stocks owned by the registrant, from the holder of the pesticide back to the custody and control of the registrant who produced the pesticide and all activities necessary to accomplish this. 165.165 Submission procedures. (a) Who must submit a plan. EPA will request the registrant of a suspended and canceled pesticide to submit a recall plan if the Administrator determines that a voluntary recall is appropriate pursuant to 165.161. The request will specify the level of the distribution chain to be included in the recall plan. (b) Notification to registrant. EPA will request the registrant, either through a written request by certified mail or through a notice in the Federal Register, to develop and submit a recall plan. Within 15 days after receipt of EPA's request or within the time specified by the Notice, the registrant must respond, in writing, indicating whether he will submit the plan. The voluntary recall plan must be submitted within 60 days after receipt of EPA's initial request or publication in the Federal Register. (c) Failure to respond or submit. EPA will invoke the mandatory recall procedures of subpart J of this part by promulgation of a rule in the Federal Register if: (1) The registrant fails to respond within 15 days indicating that he intends to submit a plan. (2) The registrant fails to submit such a plan within 60 days after receipt of EPA's request for a recall plan, or publication of a notice in the Federal Register requesting the registrant to submit a recall plan. 165.167 Contents of a voluntary recall plan. Each voluntary recall plan shall the information requested in paragraphs (a) through (i) of this section: (a) Identification of persons responsible for the recall. The recall plan must identify the primary contact person within the registrant's company who is responsible for conducting the recall together with his business address and telephone number. In addition, the plan must identify any other persons, within the company or in the distribution chain of the pesticide, who will be responsible for assuring that specific elements of the recall are carried out, and shall describe their responsibilities. (b) Identification of potential holders of the pesticide. (1) The recall plan must define the level of recall (wholesaler, distributor, retailer, user) that the registrant will undertake, and include a description of the steps the registrant will take to contact potential holders at each level of recall. The plan must specifically address the steps that the registrant will take with regard to supplemental registrants to ensure that holders of the supplemental registrant's products are notified. (2) The plan must provide that holders of the registrant's suspended and canceled pesticide not specifically identified by the recall plan shall, upon request to the registrant, be afforded the same opportunity for recall as those covered by the recall plan. (c) Information to be obtained from holders. The plan must list the information that will be obtained from each potential holder contacted by the registrant. At a minimum, the plan shall prescribe the following items of information to be collected from each person contacted: (1) Name, address, (both street and, if applicable, P.O. Box, city, state and zip code) and telephone number of the person. (2) Whether the potential holder possesses any stocks of the suspended and canceled pesticide and if the potential holder does possess the pesticide in question, the following information about each pesticide: (i) Brand name(s) and EPA Registration Number(s) of the pesticide(s). (ii) Size (volume or weight) and type(s) of containers in his possession. (iii) Number of units of each size container full and the number of containers partially full. (iv) Total amount (volume or weight) of the suspended and canceled pesticide held. (3) The physical location of the stocks of pesticides, if not at the address of the holder. (d) Information to be provided to holders of the pesticide. The plan shall describe the information on the recall that will be furnished to each holder of a suspended and canceled pesticide subject to recall. If information is not known at the time of initial notification of holders, the plan must include followup notification by the registrant when the information is available. At a minimum, the following topics must be included: (1) Notification that the material is suspended and canceled and must not be sold or distributed and, if applicable, used. (2) A description of the registrant's responsibilities and planned activities in conducting the recall, with respect to: (i) Interim storage of the pesticide in the holder's possession. (ii) Preparation of the pesticide for transport. (iii) Transportation of the pesticide. (3) A description of the responsibilities of the holder if he chooses to participate in the recall, with respect to: (i) Interim storage of the pesticide, i.e., safe storage of the pesticide by the holder until the registrant takes custody. (ii) Preparation of the pesticide for transport. The registrant must provide necessary information on proper packing, consolidation of stocks, or separation of pesticide products, including any applicable laws and regulations that must be complied with. (iii) Transportation of the pesticide. The registrant must provide sufficient information to the holder to ensure the safe transportation of the pesticide, including any information on applicable laws and regulations that must be complied with. (4) A date or schedule for taking the pesticide into the registrant's custody, whether or not the pesticide will be physically removed from the holders location at that time. (5) Notification that if a Stop Sale, Use or Removal Order (SSURO) has been issued, it must be vacated by the official who issued the SSURO prior to anyone moving the pesticide, and information on the steps for requesting the vacation of a Federal and/or State SSURO if one has been issued. (6) Management options available for the pesticide, including, but not limited to, a discussion of: (i) The management options being considered by the registrant. (ii) The management options available to the holder if he chooses not to participate in the recall. (iii) If any of the holder's management options include discarding the pesticide as a solid waste (as defined under the Resource Conservation and Recovery Act regulations 40 CFR part 240.101(y)), then the registrant must provide the holder with any information the registrant has which could help the holder to determine whether the pesticide meets any of the listing descriptions in 40 CFR part 261, subpart D, or exhibits any of the hazardous waste characteristics identified in 40 CFR part 261, subpart C. (7) Information on reimbursement of the purchase price of the pesticide in accordance with 165.232, if applicable. (8) The name, address and telephone number of a contact person or authorized representative of the registrant for further information or questions. (e) Transportation of recalled pesticides. (1) The recall plan must describe the means by which the pesticide will be transported from each holder to a storage facility or to a facility carrying out a chosen management option. (2) The plan must describe how the registrant intends to provide for transportation. Such description must include a discussion of any arrangements that are or will be made by the registrant, and who will pay for costs of transportation. The registrant must provide transportation at no cost to a holder, if the holder requests the registrant to provide transportation, unless the parties have agreed to an alternative cost allocation as provided by section 19(d)(1) of the Act. In no case shall necessary transportation be delayed pending agreement on such allocation of costs. (3) The plan must state that, regardless of possible cost allocation between the registrant and the holder, the registrant will ensure that any necessary transportation arranged by the registrant is accomplished safely, and in accordance with applicable laws and regulations. (4) The plan must state that, upon taking custody of the pesticide, the registrant will provide the holder with a receipt, which will include the following information: (i) The name, address (both street and P.O. Box, if applicable, city, state and zip code;) and telephone number of the holder. (ii) The EPA Registration Number of the pesticide(s). (iii) The number of units of each size (volume or weight) container. (iv) The total amount (volume or weight) of pesticide received from the holder. (v) The date the registrant or his agent took custody of the pesticide. (f) Storage of recalled pesticides. The plan must list the address (both street and P.O. Box, if applicable, city, state and zip code) of each storage facility where recalled pesticides will be stored. The plan must specify that storage of recalled pesticides will be in accordance with all applicable laws and regulations governing storage. (g) Transfer or movement of recalled pesticides from the storage area. The recall plan must specify that prior to moving the recalled pesticide from one storage facility to another storage facility, or utilizing additional storage facilities, the registrant will notify EPA at the address listed in 165.174(c), 15 days prior to the change. (h) Management options. The recall plan must list the available options for management of the recalled pesticide known by the registrant. (1) If the registrant chooses to hold the recalled pesticide in storage, then after receipt of the pesticide from the holder, the registrant must evaluate the management options and provide information on the options being considered to EPA in an update to the recall plan. Such updates may be made at the time the registrant submits his quarterly reports. (2) If the registrant chooses to pursue one or more of the management options besides storage, the registrant must update the recall plan. Such updates may be made at the time the registrant submits his quarterly reports as specified in 165.174(a). (i) Recall schedule. The recall plan must provide a schedule for conducting the recall, identifying interim milestones such as completing identification of holders, completing contact with holders, beginning transport, and completion of the recall. A recall is considered complete when all stocks offered for recall by all holders have been turned over to the custody of the registrant and are either in storage or the registrant is pursuing one of the management options identified. The registrant must adhere to the recall schedule unless an extension or modification of the schedule is approved in writing by EPA. The recall plan must specify that requests for modifications or extensions of the schedule will be submitted in writing to the EPA Office of Compliance Monitoring at the address given in 165.174(c) at least 10 working days prior to the date of the milestone deadline. (j) Alternatives to elements of the plan. Where any of the elements in paragraphs (a) through (i) of this section are not appropriate for the circumstances of a particular voluntary recall, the recall plan may provide an alternative to one or more of the elements. The plan must explain why the particular element is not appropriate and demonstrate that the plan accomplishes the same objectives as the elements in paragraphs (a) through (i) of this section. (k) Special conditions. In addition to paragraphs (a) through (i) of this section, if the physical or chemical properties of the pesticide warrant special storage or handling, in the request for submission of a recall plan, EPA may require that registrants include these special conditions in the plan. 165.170 Approval of the recall plan. (a) The recall plan must be submitted to the address listed in 165.174(c). If EPA approves the plan, it will notify the registrant and order the recall either by notice in the Federal Register or by certified mail to the registrant or both. Generally, EPA will approve the plan if it determines that: (1) The plan is complete; and (i) the plan includes each element listed in 165.167(a) through (i); or (ii) if the plan contains alternatives to one or more of the elements as provided in 165.167(j), that the plan adequately accomplishes the same objectives as the elements in 165.167(a) through (i). (2) The registrant has proposed a recall to the level in the distribution chain specified in the recall request. (3) If conducted according to the plan, the recall is likely to be effective in recalling stocks of suspended and canceled pesticides to the level of distribution the registrant has proposed, in a timely manner. (4) If conducted according to the plan, the recall is likely to be adequate to protect health and the environment. (b) If EPA determines that the recall plan is not adequate to protect health or the environment, EPA may, at its discretion, afford the registrant the opportunity to modify the plan, or notify the registrant of its intent to reject the plan. The notification of intent to reject will explain the plan's inadequacies and the basis for the inadequacies. Registrants will then have 15 days after receipt of the notification to present comments or arguments either orally or in writing to the Agency official who is responsible for a final determination on the adequacy of the plan. The only issue for such informal hearing is whether the plan is adequate to protect public health or the environment. (c) If, after an informal hearing as described in paragraph (b) of this section, EPA makes a final determination that the plan does not adequately protect health and the environment, it will notify the registrant by certified mail, and require by regulation that the mandatory recall procedures of subpart J of this part be instituted. (d) EPA will evaluate the effectiveness of the recall based on the reports required by 165.174. At any time during or after the recall, EPA may reevaluate its determination of adequacy of the plan to protect health and the environment and, after an opportunity for an informal hearing as described in paragraph (b) of this section, may determine that the plan is inadequate. EPA will notify registrants by certified mail of a final determination of inadequacy, and require by regulation that the mandatory recall procedures of subpart J of this part be instituted. 165.172 Recordkeeping. Registrants shall keep the records listed below for pesticides recalled under the recall plan and records required by paragraphs (c), (f), (g), and (h) of this section for suspended and canceled pesticides owned by the registrant. The registrant conducting the voluntary recall must keep records concerning the recall for a period of 3 years following the completion of the recall. The registrant shall make the records available to EPA or its designated representative for inspection and copying, or shall provide them to EPA upon request. The following records shall be maintained: (a) A copy of the recall plan approved by EPA with any approved modifications. (b) The names, addresses and telephone numbers of all persons identified by the registrant as potential holders of the suspended and canceled pesticide, and other persons who identified themselves to the registrant as holders of the registrant's pesticide seeking to have it recalled. (c) Records of the information required by 165.167(c) concerning the identity and quantity of the suspended and canceled pesticide in the hands of holders. These records must be updated to show any changes in the amount of the suspended and canceled pesticide being held by each holder, until such time as the registrant takes custody of the pesticide. (d) For each holder, the date when the pesticide was transferred from the custody of the holder to the custody of the registrant and a copy of receipt of the pesticide, or notation of the fact that the holder declined to participate in the recall and the reason for the refusal. (e) A copy of the written information provided to the holders regarding interim storage and transportation. (f) If the pesticide was transported by the registrant, documentation to show that the pesticide was transported in accordance with the recall plan. (g) Records verifying that the pesticide is or was being stored in a facility meeting storage requirements specified in an order issued under section 6 and any other applicable law and regulations. (h) Records of receipt of the recalled pesticide at the storage facility. These records shall be maintained at the storage facility. 165.174 Reporting. (a) If EPA orders that the voluntary recall be conducted, the registrant must report, in writing, at least quarterly during the recall period to EPA. Each report must contain the following information: (1) The number of persons identified to date as potential holders of the suspended and canceled pesticide. (2) The number of potential holders contacted to date. (3) The number of persons who were identified as holders of the pesticide. (4) For each holder, the information required by 165.167(c). (5) The total amount of pesticide subject to recall. (6) The amount of suspended and canceled pesticide transferred from the custody of the holder to the registrant's storage facility. (7) The amount of pesticide owned by the registrant and the physical location where it is being stored. (b) Within 45 days after completion of the recall (see 165.167(i)) the registrant must submit a final report to EPA, in writing, on the outcome of the recall action. The final report will consist of: (1) For each person from whom the registrant accepted suspended and canceled pesticides, the information required by 165.167(c) and when the pesticide was transferred to the custody of the registrant. (2) If the holder has declined to participate in the recall, the reason for the refusal, if known. (3) The location of each storage facility where the suspended and canceled pesticide was or is being held. (4) The management options being considered by the registrant for the recalled material or, if the registrant is pursuing a management option for the recalled material, the option chosen. (c) Reports to the EPA shall be sent to the following address unless otherwise directed by EPA: Director, Compliance Division, Office of Compliance Monitoring (EN-342), U. S. Environmental Protection Agency, 401 M St., SW., Washington, DC 20460. 165.176 Enforcement. Failure by a registrant to comply with an order to conduct a voluntary recall according to the plan approved by the Administrator under section 19(b) may be a violation of FIFRA sections 12(a)(2)(B), 12(a)(2)(M), or 12(a)(2)(N) depending on the offense. Additionally, the Administrator may take action against persons subject to a voluntary recall order who have failed substantially to comply with the terms of such an order under FIFRA sections 13 and 14, including seeking civil penalties of up to $5,000 per offense, and criminal penalties of up to $50,000 and/or 1 year imprisonment per offense, under section 14 of FIFRA, or seek injunctive relief under section 16(c) of FIFRA. Subpart J--Mandatory Recalls 165.180 Scope. This subpart describes the minimum requirements for a mandatory recall of suspended and canceled pesticides. While the requirements in this subpart must be adhered to in all mandatory recalls, nothing in this subpart is intended to limit the scope of the recall. Persons required to conduct a recall may augment these procedures or conduct a broader recall program than is required by this subpart. 165.181 Applicability. The requirements of this subpart apply to any person who is or was a registrant, distributor or seller of the pesticide subject to recall, or any successor in interest to such a person, and who is identified by regulation as being responsible for conducting the recall. Where specified, this subpart applies to the registrant's own inventory of suspended and canceled pesticides as well as to the recalled pesticides. 165.183 Definitions. Terms used in this subpart shall have the meanings set forth in the Act. In addition, the following terms are defined for the purposes of this subpart. Holder. For the purposes of this subpart means the owner of a pesticide at the time of cancellation of a pesticide that has previously been suspended under section 6(c) of the Act or the owner of a pesticide at the end of the period designated for sales of existing stocks of the pesticide. Management options. Means the methods to manage the pesticide after it has been recalled, including (but not limited to) legal pesticide and non-pesticide use, recycling (e.g., recovery), treatment (e.g., neutralization, deactivation of the active ingredient, degradation), burning for energy or materials recovery, and disposal. Recall. Means the process of transferring stocks of a suspended and canceled pesticide, other than those stocks owned by the registrant, from the holder of the pesticide back to the custody and control of the registrant who produced the pesticide and all activities necessary to accomplish this. 165.186 When a mandatory recall will be required. A mandatory recall will be required when: (a) The Administrator determines that a recall is necessary to protect human health and the environment but does not request submission of a voluntary recall plan from the registrant under subpart I of this part. (b) The Administrator determines that a voluntary recall plan, submitted by a registrant after EPA solicitation, is inadequate to protect human health or the environment. (c) A voluntary recall plan is not submitted by a person requested to do so under 165.165. (d) The Administrator determines, during or after the recall, in accordance with 165.170(d) that the voluntary recall plan was not adequate to protect health and the environment. 165.188 Initiation of the recall. (a) Proposed rule for mandatory recall. EPA will notify persons required to conduct a mandatory recall (the recallers) by proposing a regulation requiring a recall of a suspended and canceled pesticide. (1) Proposed mandatory recalls will be published either concurrent with the Notice of Intent to Cancel in the Federal Register, or through a notice published in the Federal Register after the Notice of Intent to Cancel has been published. (2) The proposal will incorporate appropriate requirements of this subpart and specify the level of recall in the chain of distribution required. (3) The proposal may include special terms for the conduct of the recall not addressed in these regulations (e.g., special storage or handling conditions). (4) An appropriate period for public comment will be provided. (b) Final rule for mandatory recall. EPA will publish a final rule in the Federal Register for the mandatory recall, specifying the effective date for initiation of the recall. 165.190 Requirements of the recall. A mandatory recall must be conducted as described in this section. (a) Responsibilities of registrants. Each registrant is responsible for: (1) Developing a recall plan. (2) Coordinating the recall. (3) Ensuring that all persons to whom the registrant sold or distributed the pesticide have received a copy of the recall plan. (4) Providing for storage of recalled pesticides at no cost to holders, subject to any alternative cost allocation as provided by section 19(d)(1) of the Act. This includes reimbursement of storage costs incurred by recallers under the terms of the recall plan. (5) At the request of any holder of the registrant's pesticide, providing for transportation of the pesticide to a storage facility or to a facility carrying out a chosen management option, at no cost to the holder. This includes reimbursement of transportation costs incurred by recallers under the terms of the recall plan. If an end-user declines to participate in a recall because of transportation costs, then the registrant must inform the end-user in writing that the registrant will provide transportation at no cost, upon request. (6) Collecting and reporting information on the conduct of the recall from all participants in the recall. (b) Responsibilities of other recallers. Each recaller who is not a registrant (supplemental registrant, distributor, seller, or any successor in interest to such a person), and who is subject to the recall regulation must conduct a recall by: (1) Notifying his customers of the recall. (2) Obtaining registrant's recall plan, which may include responsibilities for recording information as specified in paragraph (e) of this section and providing certain information to holders as specified in paragraph (f) of this section. (3) If he has a storage facility, making it available for storage of pesticide recalled from his customers, if specified by the registrant's recall plan. (4) If requested by a holder who obtained the pesticide from him, providing for proper transportation of the recalled pesticide to his storage facility, unless the registrant's recall plan specifies otherwise. If the registrant's recall plan specifies transportation to a facility other than the recaller's, the registrant must provide for transportation to such facility. (5) Transporting all pesticides under his custody, as well as pesticides recalled from his customers, to the person recalling it or directly to the registrant, as specified in the registrant's recall plan. (6) Maintaining the records required by 165.192, and furnishing these records to the registrant. (7) Reporting to the registrant the information required by 165.194. (c) Recall plan. (1) Within 10 days after the effective date for initiation of the recall, the registrant shall develop a written plan for conducting a recall in accordance with this subpart. Registrants may form consortia to develop a single recall plan, however, all members of the consortia are legally responsible for conducting the recall according to the plan, subject to the limitation in section 19(d)(3) of the Act. No person other than the registrant is required to develop a recall plan. (2) The plan must be specific to the particular mandatory recall action and must be distributed, within 20 days after the effective date for initiation of the recall, to all persons, including supplemental registrants, to whom the registrant sold or distributed the pesticide that is subject to recall. (3) The recall plan must include the name, address and telephone number of the person who is responsible for coordinating the recall and any other persons, within the company, who will be responsible for specific elements of the recall, (e.g., transportation arrangements from the holder to the registrant's storage facility, receipt of records from recallers) and their responsibilities. (d) Identification of primary contact. (1) Each registrant must, within 10 days after the effective date for initiation of the recall, provide EPA with the name, address and telephone number of the person responsible for coordinating the recall. This information must be mailed to the address listed in 165.194(g). (2) All other persons responsible for conducting the recall (distributors, dealers, sellers, supplemental registrants, etc.) must, within 10 days after receipt of the recall plan, provide EPA with the name, address and telephone number of the person responsible for coordinating the recall. This information must be mailed to the address listed in 165.194(g). (e) Identification and contact of holders. Persons responsible for conducting a recall must take all reasonable steps to identify and contact all persons to whom he sold or distributed the suspended and canceled pesticide that is subject to recall. Holders of the registrant's suspended and canceled pesticide not specifically covered by the recall plan must, upon request to the recaller who sold them the pesticide, be afforded the same opportunity for recall as those covered by the recall plan. Upon contact of persons who may be holders of the suspended and canceled pesticide, the recaller or his representative will: (1) Record the name, address (both street and P.O. Box, if applicable; city, state and zip code) and telephone number of the potential holder. (2) Determine and record if the potential holder possesses any stocks of the suspended and canceled pesticide; and if the potential holder does possess the pesticide(s) in question, record the: (i) Brand name(s) and EPA Registration Number(s) of the suspended and canceled pesticide(s). (ii) Size (volume or weight) and type(s) of the containers in his/her possession as well as the condition of the containers (intact, rusting, leaking, etc.). (iii) Number of units of each size container full and the number of containers partially full. (iv) Total amount (volume or weight) of the pesticide held. (3) Record the physical location of the stocks of the pesticide, if not at the address of the holder. (f) Information to be provided to the holder of the pesticide. Each recaller shall provide the holders of suspended and canceled pesticides identified under paragraph (e) of this section, orally, immediately after verification that the person is a holder, and in writing within 10 days, the following information: (1) Notification that the material is suspended and canceled and may not be sold or distributed. (2) Information concerning interim storage of the pesticide by the holder until such time as the recaller takes custody of the pesticide. (3) Information on proper transportation of the pesticide, and, if requested, how the registrant will provide for transportation of the pesticide to a specified storage facility or to a facility carrying out a chosen management option. (4) A means for a holder who is an end-user (e.g., a response form, card or telephone number for the end-user's use) to inform the recaller whether he wishes to participate in the recall, and of his reasons for not participating. (5) Schedule for taking the pesticide into the registrant's custody. (6) Notification that if a Stop Sale, Use or Removal Order (SSURO) has been issued, it must be vacated by the official who issued the SSURO prior to anyone moving the pesticide and the steps for requesting the vacation of a Federal and/or State SSURO if one has been issued. (7) Information on reimbursement for the purchase price of the pesticide, if applicable, in accordance with 165.232. (8) Management options available for the pesticide, including, but not limited to, a discussion of: (i) The management options being considered by the registrant. (ii) The management options available to the holder if he chooses not to participate in the recall. (iii) If any of the holder's management options include discarding the pesticide as a solid waste (as defined under the Resource Conservation and Recovery Act regulations), then the registrant must provide the holder with any information the registrant has which could help the holder to determine whether the pesticide meets any of the listing descriptions in 40 CFR part 261, subpart D, or exhibits any of the hazardous waste characteristics identified in 40 CFR part 261, subpart C. (g) Transportation of recalled pesticides. (1) No person may transport recalled pesticides except in accordance with all applicable Federal and State laws and regulations. (2) Each recaller shall provide the holder with information on the proper transportation of the pesticide to a storage facility or to a facility carrying out a chosen management option. (3) At the request of any holder of the registrant's pesticide, the registrant shall provide for transportation of the suspended and canceled pesticide at no cost to the holder, unless the registrant and the holder agree to an alternative cost allocation as provided by section 19(d)(1) of the Act. Necessary transportation shall not be delayed pending agreement on the allocation of costs. (4) Each recaller who takes custody of a recalled pesticide must provide the holder with a receipt for the material taken into custody. The receipt shall have: (i) The name, address (both street and P.O. Box, if applicable, city, state and zip code) and telephone number of the holder. (ii) The EPA Registration Number of the pesticide(s). (iii) The number of units of each size container both full and partially full. (iv) The total amount (volume or weight) of pesticide received from the holder. (v) The date the registrant took custody of the recalled pesticide. (h) Storage of recalled pesticides. Recallers who store recalled pesticides must notify EPA in writing of the address of each storage facility where the recalled pesticide will be stored. This information must be reported to EPA as specified in 165.194(b)(2). If that person wishes to move the recalled pesticide to a storage facility not previously listed or utilize additional storage facilities, he must notify EPA at the address listed in 165.194(f) and provide the address of the new facility 15 days prior to the change, unless movement of the recalled pesticide is to the registrant's storage facility. Storage of recalled pesticides must be in accordance with all applicable laws and regulations governing storage. (i) Management options. The recall plan must list a range of available options for management of the recalled pesticide. (1) If the registrant chooses to hold the recalled pesticides in storage, then after receipt of the pesticide from the holder, the registrant must evaluate the management options and provide information on the options being considered to EPA in an update to the recall plan. Such updates may be made at the time the registrant submits his interim or final reports. (2) If the registrant chooses to pursue one or more of the management options besides storage, the registrant must update the recall plan. Such updates may be made at the time the registrant submits his interim report. (j) Completion of the recall. (1) The recall shall be concluded within 6 months of the date of initiation. A recall action is considered complete when all stocks offered for recall by the holder have been turned over to the custody of the registrant and are either in storage or the registrant is pursuing one of the management options identified and a final report has been filed with EPA. The responsibilities of recallers other than the registrant have been completed when all stocks identified by the recaller have been transferred to the custody and control of the registrant and all required reporting has been completed. (2) If a recaller needs more time to complete the recall, he may submit a written request for an extension stating the reason for the requested extension to the EPA Office of Compliance Monitoring at the address listed in 165.194(g) at least 10 working days prior to the end of the 6 month period. The Office of Compliance Monitoring will review the request and either approve or deny the request. If the request is denied, the original completion date applies. 165.192 Recordkeeping. (a) Each recaller must develop and maintain the following records: (1) A copy of the recall plan developed by the registrant. (2) Lists of all persons other than those identified and contacted by the recaller as potential holders of the registrant's suspended and canceled pesticide(s), i.e., persons who identified themselves to the recaller as holders of the suspended and canceled pesticide seeking recall. (3) Records of the information required by 165.190(e) concerning the identity and quantity of the suspended and canceled pesticide in the hands of holders. These records must be kept current so as to accurately show any changes in the amount of the suspended and canceled pesticide being held until the registrant takes custody of the pesticide. (4) For each holder, the date when the pesticide was transferred from the custody of the holder to the custody of the person conducting the recall or the registrant and a copy of the receipt of the pesticide, or notation of the fact that the pesticide was not offered for recall and the reason why it was not offered. (5) A written copy of the information provided to the holders regarding interim storage and transportation. (6) Documentation of how the recalled pesticide was transported to a storage facility, if applicable. (7) Documentation showing that the recalled pesticide is being stored in a storage facility meeting all applicable storage requirements. If additional storage facilities were used or the recalled pesticide was moved from one storage facility to another, the names and addresses of the additional storage facilities must be maintained, if applicable. (8) Records of receipt of the recalled pesticide at the storage facility, if applicable. These records shall be maintained at the storage facility. (b) Registrants are required to keep the following records for their own inventory of suspended and canceled pesticides. (1) The total amount of suspended and canceled pesticide owned by the registrant. (2) Documentation that the pesticides were properly transported to a storage facility. (3) Documentation showing that the pesticide is being stored in a storage facility meeting all applicable storage requirements. If additional storage facilities were used or the pesticide was moved from one storage facility to another, the names and addresses of the additional storage facilities must be maintained. (4) Records of receipt of the pesticide at the storage facility. These records shall be maintained at the storage facility. (c) A copy of the records listed in paragraphs (a)(2) through (a)(8) of this section must be forwarded by the recaller to the registrant whose suspended and canceled pesticide was recalled, after the recaller has fulfilled his responsibilities under the mandatory recall rule and the recall plan. The registrant is responsible for collating and maintaining these records. (d) The registrant shall maintain records at a central location for a period of 3 years following completion of the recall and make the records available for inspection or submission to EPA or its designated representative upon request. 165.194 Reporting. (a) Within 10 days after the effective date for initiation of the recall, registrants must report to EPA, in writing: (1) The name, address and telephone number of the person responsible for conducting the recall. (2) Where records will be stored. (3) Where recalled pesticides will be stored as well as suspended and canceled pesticides owned by the registrant. (b) Within 10 days after receipt of the recall plan, all other recallers must report to EPA: (1) The name, address and telephone number of the person responsible for conducting the recall. (2) Where recalled pesticides will be stored, if the recaller chooses to store the recalled pesticides himself. (c) Persons responsible for conducting the recall must report to the registrant, in writing, no later than 3 months after the effective date for initiation of the recall: (1) The total number of potential holders of the suspended and canceled pesticide. (2) The number of potential holders contacted to date. (3) The number of persons who are known to be holders of the pesticide. (4) For each holder, the information required by 165.190(e). (5) The total amount of pesticide identified as subject to recall. (6) The total amount of pesticide transferred to date to a designated storage facility. (d) The registrant must report to EPA, in writing, the information received pursuant to paragraph (c) of this section within 15 working days of the 3 month deadline. The registrant must also report the total amount of the suspended and canceled pesticide owned by him. (e) Within 10 days of transferring custody to the registrant of all suspended and canceled pesticides identified and recalled by the recaller, the recaller will provide a copy of the records described in 165.192(a)(2) through (a)(8) to the registrant. (f) Within 30 days of completion of the recall, i.e., transfer of all identified stocks of the suspended and canceled pesticide to the custody of the registrant or final disposal of all identified stocks; the registrant must submit a final report to EPA, in writing, on the outcome of the recall action. The final report will consist of: (1) For each former holder, the information required by 165.190(e)(1) and (2), and when the pesticide was transferred to the recaller's custody. (2) If the holder has not offered the pesticide for recall, documentation of the refusal. (3) The location of the storage facility where the pesticide was or is being held. (4) The management options chosen by the registrant for the recalled material or, if the recalled material has been disposed of, the method of disposal, if known. (g) Reports must be submitted to the following address unless otherwise directed by EPA in the final mandatory recall rule: Director, Compliance Division, Office of Compliance Monitoring (EN-342), U. S. Environmental Protection Agency, 401 M St., SW., Washington, DC 20460. 165.196 Enforcement. The Administrator may take action, under FIFRA sections 13 and 14, including seeking civil penalties of up to $5,000 per offense, and criminal penalties of up to $50,000 and/or 1 year imprisonment per offense, or seek injunctive relief under section 16(c) of FIFRA, against any registrant, distributor, or seller of a pesticide subject to a mandatory recall, or any successor in interest to such a person, who has failed substantially to comply with the terms of a mandatory recall as required by this subpart and any rule issued under 165.188. Additionally, failure to comply with the terms of a rule issued under 165.188 may be a violation of FIFRA sections 12(a)(2)(B), 12(a)(2)(M), 12(a)(2)(N) or 12(a)(2)(S) depending on the offense and subject to the penalties noted above. 165.198 Pesticides subject to mandatory recall. [Reserved] Subpart K--Storage And Disposal Plans; Reimbursement Of Storage Costs 165.200 Scope and applicability. (a) Scope. This subpart describes the criteria that the Agency will use in evaluating a storage and disposal plan submitted under FIFRA section 19(c)(1). Such a plan must be submitted by a registrant who seeks reimbursement of storage costs for a pesticide that has been recalled under FIFRA section 19(b). In addition, this subpart sets out the procedures for submitting claims for reimbursement of storage costs incurred as a result of a recall. (b) Applicability. This subpart applies only to registrants seeking reimbursement of storage costs for pesticides recalled under section 19(b) of FIFRA. This subpart does not apply to any registrant who conducts a recall of a pesticide not ordered or required by the Administrator under section 19(b), regardless of whether the registration has been suspended or not. No registrant is required to submit a storage and disposal plan under this subpart. However, if a registrant wishes to be reimbursed for storage costs incurred as a result of the recall under section 19(b), the registrant must submit a storage and disposal plan, and comply with the provisions of this subpart in so doing. 165.203 Definitions. Terms used in this subpart shall have the meanings set forth in the Act. In addition, the following terms are defined for the purposes of this subpart. Fifty percent reimbursement period. Means a 1-year period beginning on the later of: (1) The date of approval of a storage and disposal plan by the Agency; or (2) The date of cancellation of the pesticide. Management options. Means the methods to manage the pesticide after it has been recalled, including (but not limited to) legal pesticide and non-pesticide use, recycling (e.g., recovery), treatment (e.g., neutralization, deactivation of the active ingredient, degradation), burning for energy or materials recovery, and disposal. One hundred percent reimbursement period. Means that period of time beginning on the later of: (1) The date of submission of an acceptable storage and disposal plan; or (2) The date of cancellation of the pesticide, if it occurs before approval of the plan. In either case, the 100% period ends on the date of approval or conditional approval, if appropriate, of the plan by the Agency. The term does not include any period of time culminating in the disapproval of a storage and disposal plan by the Agency. Twenty-five percent reimbursement period. Means the period of time beginning on the first day of the fourth year after the end of the 50-percent reimbursement period, and ending on the date that a disposal permit is issued by any State, or an alternative plan for disposal has been developed. 165.205 Submission of storage and disposal plan. (a) Who must submit a plan. Registrants who wish to be eligible for reimbursement of storage costs incurred as a result of a recall must submit a storage and disposal plan to the Agency that meets the criteria set forth in these regulations. (b) Where to submit the plan. In order to be eligible for reimbursement, the registrant must submit the storage and disposal plan to: Office of Pesticide Programs (H7507C), Attention: Storage and Disposal Plans, U. S. Environmental Protection Agency, 401 M St., SW., Washington DC 20460. (c) When to submit a storage and disposal plan. A storage and disposal plan must be submitted no later than: (1) The date the voluntary recall plan is required to be submitted as set forth in 166.165; or (2) If EPA does not require submission of a voluntary recall plan under section 19(b)(2) of FIFRA or if the registrant fails to submit a recall plan that is approved under 165.170, 60 days after publication in the Federal Register of a proposed rule prescribing mandatory recall. 165.207 Criteria for the evaluation of storage and disposal plans. The following criteria will be used to evaluate whether a storage and disposal plan is acceptable: (a) Storage in compliance with applicable law. The plan must provide sufficient information for the Agency to be able to determine that the registrant is taking steps to assure that storage will be in compliance with applicable law. (b) Adequate discussion of management options. The plan must show that the registrant is taking or will take appropriate steps for managing the recalled pesticides. The plan shall discuss all available management options and evaluate their feasibility, costs, and risks and benefits. (c) Completeness of the plan. The plan must adequately address each item in 165.208. For example, if the information provided in addressing one item contradicts other information in the plan, the plan would not have adequately addressed each item. (d) Signature. The plan must be signed by the registrant or his authorized representative. 165.208 Contents of storage and disposal plans. The Storage and Disposal Plan must include each of the following elements: (a) Storage. The plan must describe the steps the registrant will take to assure that the recalled pesticides will be stored in accordance with applicable law. Additionally, if the pesticides have particular characteristics that require specific storage conditions, the discussion must include such information. (b) Recall. The plan must include a statement describing the current status of the recall, for example, whether the registrant has started recall procedures, and, if so, how much has been accomplished to date. (c) Identification of persons responsible for storage and disposal. The storage and disposal plan must identify the primary contact person(s) within the registrant's company who will be responsible for carrying out the storage and disposal plan. The registrant must inform the Agency within 10 days, at the address listed in 165.205(b), of any contact person(s) changes. (d) Description of pesticides to be stored. The storage and disposal plan must describe the stocks of the suspended and canceled pesticides as follows: (1) For registrant's own inventory. Provide the formulation types, container types and sizes, and the quantities of each being stored. (2) For the pesticides recalled from others. Provide estimates of the formulation types, container sizes and types, and the quantities of each expected to be recalled. Estimates will not be acceptable if the registrant has completed the recall; the storage and disposal plan must then provide the actual information. (e) Storage facilities. The storage and disposal plan must include: (1) The location of the facility(ies) where the registrant's own inventory of suspended and canceled pesticides is being stored, and the name of the owner of the storage facility. (2) For each storage facility to be used or anticipated to be used for storage of recalled pesticides, the following information must be included. (i) The location of the storage facility and the name of the owner of the storage facility; (ii) The available storage capacity either in pounds, and/or gallons. The registrant must indicate whether the total capacity is sufficient to handle the amount of pesticide that the registrant expects to recall. If the storage capacity available to the registrant at the time of submission of the plan is insufficient for the amount of recalled pesticides estimated, the registrant must describe the steps being undertaken or that will be undertaken to locate additional adequate storage. (3) An estimated annual storage cost for the recalled pesticides and the basis for calculating such costs. (4) If the storage facility(ies) is owned or leased by the registrant, the actions the registrant will take to assure effective supervision of the storage of recalled pesticides. (5) If the storage facility(ies) for recalled pesticides are owned or leased by someone other than the registrant, the steps the registrant will take to assure effective control and supervision of the storage operation by that other person. (f) Management options. The storage and disposal plan shall contain a full and complete discussion of management options of the recalled pesticide and the containers. The plan must discuss all available options (i.e., recycling, reclamation, lawful use of the recalled pesticides, as well as disposal) and evaluate their feasibility, cost, and risks and benefits. The plan must also estimate the quantities of pesticides which will be managed by each option and a timeframe for completing the option. If the options for management of the suspended and canceled pesticides are not known, the plan must describe a timeframe and the steps the registrant will take to identify management options. (g) Records retention. The storage and disposal plan must list the location where records required by 165.218 will be stored. Records must be retained by the registrant at the same central location for both the registrant's own inventory and recalled pesticides. 165.210 Agency action. (a) Notification of receipt of the plan. EPA will acknowledge the date of receipt of a storage and disposal plan by sending a notification to the registrant. Except as provided by paragraph (c) of this section, the 100 percent reimbursement period of storage costs begins on the date of receipt of the storage and disposal plan by the Agency. (b) Approval of storage and disposal plans. The Agency will evaluate the storage and disposal plan according to the criteria in 165.207. If the Agency determines that the plan is acceptable, it will approve the plan. The Agency will notify the registrant of the date of approval of the plan, and such date establishes the end of the 100-percent reimbursement period. The Agency may send to the registrant the acknowledgement of the date of receipt of the plan and the notification of approval at the same time. (c) Rejection of storage and disposal plans. (1) A plan will be rejected as unacceptable if: (i) The plan does not provide a scheme for safe storage and safe, practicable management of the recalled pesticides. For example, if the contents of the plan indicate the registrant would not be storing pesticides in compliance with applicable law. (ii) The plan does not adequately address each element of the contents of a storage and disposal plan, as set forth in 165.208. (iii) The plan has not been signed by the registrant or by the registrant's authorized representative. (iv) The plan is not submitted within the timeframes provided in 165.205(c), unless the registrant can show extenuating circumstances that caused untimely submission of the plan. (2) If EPA rejects a plan, EPA will return the plan to the registrant within 45 days of receipt of the plan, along with an explanation of why the plan is not acceptable. Such notification will describe the steps that must be taken for the plan to be approved. The 100-percent reimbursement period will not begin until the Agency receives a revised plan which is acceptable and subsequently approved. (3) If EPA fails to reject a plan within 45 days of receipt of the plan, and upon review finds the plan unacceptable under paragraph (c)(1) of this section, then EPA will notify the registrant that the plan will be considered conditionally approved pending timely revision of the plan. Such notification will include the date of conditional approval and explain the steps that must be taken for the plan to be finally approved. (4) If EPA finds at any time that a registrant submitted materially false or misleading information in the plan the Agency will reject the plan and take any other appropriate action. (d) Conditional approval. (1) The Agency may conditionally approve a plan with minor errors. If this is the case, the Agency will notify the registrant of the conditional approval and the minor errors in the plan, and require that the errors be corrected and the plan be resubmitted. The following are examples of errors that could result in conditional approval: (i) Typographical errors that cause the information submitted to be misleading or unclear. (ii) Minor technical errors, such as misstatement of the name of the formulation. (iii) Ambiguous information such that the meaning of a statement is not clear. (2) The notification will include the date of conditional approval subject to resubmission and subsequent approval of the corrected plan. (3) If the registrant fails to submit a corrected plan within 30 days of receipt of the notification, the Agency will consider the plan unacceptable and notify the registrant that the conditional approval has been rescinded and that the plan is rejected. In such situations, the 100-percent reimbursement period will not begin until EPA receives a corrected plan. (4) If the registrant submits a corrected plan within 30 days of the notification, the date of conditional approval establishes the end of the 100- percent reimbursement period. (e) Modifications. Upon written request by EPA, the registrant must modify the plan or submit additional information. 165.212 Reimbursement of storage costs. The Agency will reimburse only those costs which are reasonable and necessary and consistent with the approved storage and disposal plan. For purposes of this section, reasonable and necessary storage costs are those costs directly attributable to storage of the pesticides recalled under section 19(b) of the Act. Storage costs do not include indirect costs such as costs for acquiring permits, transportation of pesticides to or between storage facilities, transportation costs incurred as part of the recall, repackaging costs, cleanup of spills, structural expansion, or remediation of site contamination. The claimant has the burden to establish and support the reasonableness and necessity of all costs claimed. Storage costs for registrant's inventory of suspended and canceled pesticides are not reimbursable as they are not recalled pesticides under section 19 of the Act. 165.214 Procedures for submission of storage cost reimbursement claims. (a) General. Any registrant who seeks reimbursement of costs incurred in accordance with an approved storage and disposal plan, must file a claim with the Agency. Only the registrant may seek reimbursement. Claims from other persons will not be accepted. Reasonable and necessary storage costs, which are consistent with the approved plan, will be allowed. (b) Claim form. The registrant must submit the claim on a claim form provided by the Agency. (c) Current storage and disposal plan. The registrant must submit an updated storage and disposal plan and any modifications requested by the Agency under 165.210 to accompany its reimbursement claim. This updated plan must provide current information on all the elements of a plan listed in 165.208. All estimates must be replaced with exact information. Under management options (165.208(f)), the registrant must provide information on types and amounts of recalled pesticides that have been lawfully sold, disposed of, or handled by other management options. If the registrant has not disposed of any of the recalled pesticides, the registrant must describe the progress it has made in developing options for management. A reimbursement claim without an updated plan containing all the foregoing information will be rejected. (d) Proof of quantities of recalled pesticides. The registrant must submit evidence showing that quantities claimed in storage were received and stored at the storage facility and the period of time for which they were stored. At a minimum, such documentation must include copies of manifests or other business records showing date of receipt, number of containers, and amount of recalled pesticides at each facility. If the documentation covers both recalled pesticides and the registrant's own inventory at the same facility, the registrant must clearly establish which portion of the total amount is recalled pesticides and which is the registrant's own inventory. The Agency will only reimburse the registrant for the storage costs of recalled pesticides. (e) Proof of storage costs. The registrant must fully document the reasonableness and necessity of the claimed storage costs. Copies of lease or rental payments must be included and must be itemized so that all charges included in the payment are shown. If there is no lease or rental payment, business records must be provided which itemize costs. If the recalled pesticides only occupy a part of the total capacity of the storage facility, the costs submitted in the claim must be prorated to reflect the actual costs of storing the recalled pesticides. (f) Right to inspect. The Agency retains the right to inspect all records and data supporting the claimed storage costs. To the extent that the registrant contracts with a third party for storage, the registrant must ensure that the government has complete access to all records and data maintained by the third party which supports the claimed storage costs. (g) Confidential business information. (1) A registrant may assert a claim of confidential business information for information submitted through the claim form, in the manner described in 40 CFR 2.203. Claimants must substantiate all claims of confidentiality at the time they assert the confidentiality claim (i.e., when the reimbursement claim is filed). Claimants substantiate confidentiality claims by providing comments on the following: (i) The period of time for which confidential treatment is desired. (ii) Whether disclosure of the information is likely to result in substantial harmful effects to the competitive position of the business and if so, what those harmful effects would be, why they should be viewed as substantial, and an explanation of the causal relationship between disclosure and such harmful effects. (iii) Measures taken by the business to guard against undesired disclosure of information to others. (iv) The extent to which the information has been disclosed to others, and the precautions taken in connection therewith. (v) Pertinent confidentiality determinations, if any, by EPA or other federal agencies, and a copy of such determination, if available. (vi) Whether claimant asserts that the information is voluntarily submitted information under 40 CFR 2.201(i), and if so, whether and why disclosure of the information would tend to lessen the availability to EPA of similar information in the future. (2) The information covered by the claim of confidentiality will be disclosed by the Agency only to the extent allowed by section 10 of the Act, and by means of the procedures set forth in 40 CFR part 2. If no claim of confidentiality is made at the time the reimbursement claim is submitted to the Agency, the information in the claim for reimbursement may be made available to the public by the Agency without further notice to the registrant (See 40 CFR 2.203(a)(2)). If a confidentiality claim is made but no supporting documentation received, the reimbursement claim will be considered incomplete and returned to the submitter. (h) Certification of claim. At the time of submission of a claim, the registrant or his authorized representative must sign the claim form, certifying that: (1) All statements made and information provided in the claim are true and correct to the best of registrant's knowledge. (2) Acceptance by the registrant of any payment made by the Federal Government constitutes full satisfaction and final settlement of the claim. (3) By submission of the claim, the registrant grants permission to authorized agents/designated representatives of the Federal Government to enter premises where records or pesticides are stored and to conduct inspections, audits, and/or examinations determined by the Government to be necessary to verify contents of the claim. (4) For any recalled pesticide stored or being stored, the registrant has complied with the requirements of all applicable laws and regulations governing such storage. (i) When claims may be filed. (1) The registrant must submit a separate claim for storage costs incurred for each reimbursement period. (2) Each separate claim for storage costs incurred may be submitted only after the expiration of the appropriate period. For example, a claim for costs incurred during the 50-percent reimbursement period may be submitted only after the end of the 1-year period that circumscribes the 50-percent reimbursement period. (3) If the registrant continues to store the pesticide into the 25-percent reimbursement period, he may submit an initial claim for reimbursement no earlier than 1 year after the beginning of the 25-percent reimbursement period. Thereafter, he may submit subsequent claims for 25-percent reimbursement annually until the reimbursement period ends. (4) At the end of the 25-percent reimbursement period, the registrant may submit a final claim. (j) Where to file. The registrant must submit the reimbursement claim to: Office of Pesticide Programs (H7507C), Attention: Storage and Disposal Plans, U. S. Environmental Protection Agency, 401 M St., SW., Washington DC 20460. 165.216 Additional requirements for 25-percent reimbursement claims. (a) A registrant who continues to store recalled pesticides into the 25- percent reimbursement period must provide the Agency, within 30 days after the beginning of the 25-percent reimbursement period, the following information: (1) A description of the steps the registrant has taken to manage the recalled pesticide during the zero percent reimbursement period, documenting the management options considered, and the reasons why such options were not feasible. Acceptable reasons for continued storage might include, but are not limited to, the following: (i) That the quantities of recalled pesticide temporarily exceed the capacity of the lawful use demand or disposal. The registrant must provide evidence showing that steps are being taken to rectify the situation, including information on the rate of lawful use or disposal, and give an estimate of the time needed. (ii) If the pesticide would be disposed of as a hazardous waste, evidence that the registrant cannot lawfully dispose of the pesticide and that management options other than disposal are not reasonably available, or that there are no legal management options. (2) The quantities of pesticide that have been managed during the zero percent reimbursement period, and the method(s) of management that have been used. (3) A schedule for managing the remaining pesticides. (b) Failure to submit the information requested in paragraph (a) of this section within 30 days after the beginning of a 25-percent reimbursement period will result in rejection of a 25-percent reimbursement period claim submitted later. (c) The Agency presumes that the registrant holding recalled pesticide is able to identify and avail himself of one or more management options during the zero percent reimbursement period. The burden is upon the registrant seeking reimbursement to document and justify the need for continued storage into the 25-percent reimbursement period. If the registrant cannot adequately justify his continued need, the Agency will reject a 25-percent reimbursement claim. 165.217 Final Agency decision. (a) EPA's determination regarding the amount of storage costs reimbursable will be sent in writing to the registrant. A denial of a storage costs reimbursement claim will also be sent in writing to the registrant and will include a statement of the reason(s) for the denial. In either case, the administrative determination will be final, unless EPA reconsiders its decision as set forth in paragraph (b) of this section. (b) Upon a timely filing of a request for reconsideration, EPA may reconsider a decision if the registrant establishes that an error was made in the computation of the award, or that evidence or material facts were unavailable to the registrant at the time of filing the claim and that failure to provide the information was not a result of the registrant's lack of care. A registrant seeking reconsideration must file a request within 30 days from the date of EPA's final determination of the claim. 165.218 Recordkeeping. Any registrant that receives reimbursement must maintain records and data supporting the claim or ensure that records and data are maintained by a third party for 3 years following payment of the claim or final disposition of the pesticides, whichever is later. Subpart L--Indemnification 165.220 General. (a) This subpart describes a pesticide owner's entitlement to indemnification for losses suffered by reason of suspension and subsequent cancellation of a pesticide, and establishes procedures for submitting indemnification claims to the Agency. (b) All claims must be submitted in accordance with the requirements of this subpart and with any additional requirements issued by the Agency at the time of suspension and cancellation of specific pesticides. 165.223 Definitions. Terms used in this subpart shall have the meanings set forth in the Act. In addition, the following term is defined for the purposes of this subpart. Special status seller. Means any dealer or distributor who did not receive advance notification of nonreimbursement and who is unable to get reimbursement due to his seller's bankruptcy or insolvency. 165.225 Eligibility criteria. (a) Eligible pesticides. In general, indemnification may be claimed for a pesticide whose registration has been suspended under FIFRA section 6(c) and subsequently canceled under FIFRA sections 6(b), 6(d), or 6(f). Lists of pesticides by registration numbers which are eligible for indemnification will be provided in a separate Notice issued by the Agency and published in the Federal Register after suspension and cancellation. (b) Eligibility of persons. (1) A person is eligible to submit a claim for indemnification if: (i) The person owned any quantity of a pesticide immediately before the date of its suspension under section 6. (ii) The person suffered losses by reason of suspension and subsequent cancellation of the pesticide's registration under sections 6(b), 6(d) or 6(f). (2) The right to receive indemnification belongs to the owner of the pesticide at the time of suspension. (c) Persons not eligible. (1) A person is not eligible for indemnification if the Administrator finds that the person had knowledge of facts that, in themselves, would have shown that the pesticide did not meet the requirements for registration, and continued thereafter to produce the pesticide without giving timely notice of such facts to the Administrator. (2) A person is not eligible for indemnification for stocks of a suspended and canceled pesticide acquired after the pesticide is suspended under section 6(c) even if the pesticides are acquired in a lawful manner for a lawful sale, distribution or use. (3) A seller who reimburses purchasers as set forth in section 15(b)(2) of the Act cannot seek indemnification for the reimbursement. (4) A seller who has been assigned a claim for indemnification will not be eligible for payment of the indemnification unless the Government waives the prohibition against early assignment in the Anti-Assignment of Claims Act, 31 U.S.C. 3727(b). EPA will consider waiving the prohibition against early assignment only if circumstances warrant such action and it is in the Government's interest to do so. 165.227 Limitations on amount of indemnification. (a) An owner can be indemnified only for losses suffered by reason of suspension and subsequent cancellation of a pesticide. The amount of loss which can be indemnified is limited to the cost of the pesticide owned by the person immediately before suspension, but cannot exceed the pesticide's fair market value at that time. The cost of the pesticide does not include incidental items such as transport, tax, storage costs, or repackaging. (b) Owners have the responsibility to make a reasonable effort to mitigate their loss by converting the pesticide to other lawful uses such as reprocessing, recycling, or sale and distribution in accordance with the terms of applicable suspension and cancellation orders. The total amount of loss sustained by the owner for a given amount of a pesticide must be reduced by the amount of any sale, distribution or use of that pesticide. A claimant is not entitled to an indemnity payment for any amount of suspended and canceled pesticide for which losses were recovered through sale or use. Owners are not entitled to be indemnified for pesticides that are recycled or reprocessed, except to the extent that losses resulting from the suspension and cancellation have not been offset. 165.230 Payment of indemnification. (a) Two groups of eligible pesticide owners may receive payment from the Judgment Fund: (1) End-users. (2) Special status sellers. Persons who are sellers of pesticides who also apply pesticides will be treated as sellers only. Persons who are applicators who only sell the service of applying pesticides without delivering any unapplied pesticides to any person so served will be treated as an end-user. (b) All other persons who are eligible for indemnification may receive payment only if Congress makes a specific line item appropriation of funds for the payment. 165.232 Seller's requirement to reimburse. (a) Each seller shall reimburse its purchasers (other than end users) who suffered a loss by reason of the suspension or cancellation of the pesticide unless the purchaser has been notified, in writing, at the time of sale, that the pesticide is not subject to reimbursement by the seller. (b) After suspension and cancellation of the registration of a pesticide, the seller should notify all his purchasers (other than end-users) that the purchasers can obtain reimbursement. (c) Reimbursement shall be provided for the quantity of the pesticide that cannot be used or resold as a result of suspension or cancellation. 165.234 Procedures for submission of claims. (a) General. Any person who files a claim for indemnification for a suspended and canceled pesticide must submit the items of information identified in this section. It is the responsibility of the person submitting an indemnification claim to submit the required documentation to support the claim. The Agency reserves the right to require additional information on a case by case basis. (b) Claim form. The Agency will provide a specific claim form and instruction sheet for each suspended and canceled pesticide. The claim form will have boxes to identify the filing status of claimant. The instructions will indicate what supporting documentation is required for each element of the claim. The claim form must be completed and submitted to the agency in accordance with the instructions. (c) Filing status. Each person submitting a claim for indemnification must identify his status as either: (1) An end user or special status seller. (2) Seller. A separate claim must be submitted for each status category. (d) Proof of ownership. (1) An owner must supply proof that he/she owned the pesticide at the time of suspension. Such proof may be production records or purchase invoices. (2) If the person filing the claim was not the owner on the date of suspension, the claimant must submit documentation of authority to file the claim, such as a power of attorney or assignment. The documentation must identify the owner of the pesticide at the time of suspension, and the owner's address and telephone number. A claimant with an assignment must supply proof that the assignor owned the pesticide at the time of suspension. (e) Proof of cost. Proof of the cost of the pesticide can be substantiated by records of production costs, purchase receipts, and/or purchase invoices. (f) Proof of status. A claimant applying as an end user or special status seller must check the appropriate box on the claim form and must certify that he qualifies for such status. (1) A claimant applying as an end-user must certify that he/she is in fact an end user. (2) A claimant applying as a special status seller must provide the following documentation: (i) If the claimant seeks indemnification due to the seller's bankruptcy, the claimant must furnish a copy of a proof of claim filed with the Bankruptcy Court or other document showing that the claimant is included on the list of creditors, and a copy of documentation showing the amount of distribution received through the bankruptcy proceedings, such as the disclosure statement with a court-approved reorganization plan. (ii) If the claimant seeks indemnification due to the seller's insolvency, the claimant must furnish evidence of the seller's insolvency such as a copy of a court order declaring the seller insolvent, a judgment that claimant has obtained against the seller and evidence that claimant has been unable to recover on the judgment, or some other documentation showing that the claimant attempted to recover from the seller but was unable to recover due to the seller's insolvency. (iii) A dealer or distributor seeking indemnification under paragraph (f)(2) of this section may file a claim contingent upon the outcome of bankruptcy or insolvency proceedings. However, payment will not be authorized until bankruptcy proceedings have been completed and the amount of distribution, if any, has been verified. (g) Composite claim lists. A seller who has several claims may submit composite lists for separate elements of the claim form identifying the pesticide, pesticide owner, quantities and units of pesticide, and other pertinent information indicated on the claim form. (h) Business records verification. In lieu of submitting all documentation to EPA, a person who normally maintains business records may consolidate the supporting information required to accompany the claim form and verify the contents of the claim by submitting an independent auditor's or certified accountant's report. Each element of the claim, such as cost per unit of pesticide or quantity of pesticide owned at the time of suspension, must be reviewed and independently determined by the auditor or accountant to be valid if verification for the complete contents of the claim are provided through the report or statement. If the independent review is conducted for only one element of the claim, such as a manufacturer's cost of production per unit of pesticide, supporting documentation must be submitted for all other elements of the claim. The Agency may require submission of the information that formed the basis for the audits or reports to verify the validity of the information submitted. (i) Confidential Business Information. (1) A claimant may assert a claim of confidential business information for the information submitted through the claim form in the manner described in 40 CFR 2.203. Claimants must substantiate all claims of confidentiality at the time they assert the confidentiality claim (i.e., when the indemnification claim is filed). Claimants substantiate confidentiality claims by providing comments on the following: (i) The period of time for which confidential treatment is desired. (ii) Whether disclosure of the information is likely to result in substantial harmful effects to the competitive position of the business and if so, what those harmful effects would be, why they should be viewed as substantial, and an explanation of the causal relationship between disclosure and such harmful effects. (iii) Measures taken by the business to guard against undesired disclosure of information to others. (iv) The extent to which the information has been disclosed to others, and the precautions taken in connection therewith. (v) Pertinent confidentiality determinations, if any, by EPA or other Federal agencies, and a copy of such determination, if available. (vi) Whether claimant asserts that the information is voluntarily submitted information under 40 CFR 2.201(i), and if so, whether and why disclosure of the information would tend to lessen the availability to EPA of similar information in the future. (2) The information covered by the claim of confidentiality will be disclosed by the Agency only to the extent allowed by section 10 of the Act, and by means of the procedures set forth in 40 CFR part 2. If no claim of confidentiality accompanies the information when it is received by the Agency, the information in the claim for indemnification may be made available to the public by the Agency without further notice to the claimant. If a confidentiality claim is made but no supporting documentation received, the indemnification claim will be considered incomplete and returned to the submitter. (j) Certification of claim. At the time of submission of a claim, the claimant or authorized representative must sign the claim form, attesting to the following: (1) That all statements made and information provided in the claim are true and correct to the best of the claimant's knowledge, and that the amount of the claim is an accurate statement of the cost of the pesticide. (2) That the claimant had no knowledge of facts which, in themselves, showed that the pesticide did not meet registration requirements at the time of suspension. (3) That acceptance by the claimant of any payment made by the Federal government constitutes full satisfaction and final settlement of the claim. (4) That by submission of the claim, the claimant grants permission to authorized agents of the Federal government to enter premises where records or pesticides are retained to conduct whatever inspections, audits, or examinations are necessary to verify the contents of the claim, including any facts supporting a payment from the Judgment Fund, as set forth in 165.234(f). (5) That by submission of the claim, the claimant waives any claim of confidentiality for the following types of information: composition, quantity of pesticide, the unit size of containers, and the pesticide's location. (6) That the claimant has received no other payment, including reimbursement by the seller, for the cost of the pesticides for which indemnification is claimed and that should claimant receive such other payment, claimant agrees to promptly repay the Federal government, in such amount up to and including the full amount of the indemnification payment made under section 15 of FIFRA. (7) That ownership of and responsibility for pesticides for which indemnification payments are made remain with the claimant. (8) That payment of indemnification under section 15 of FIFRA does not in any way constitute a finding or warranty by the United States with respect to the proper or safe storage, packaging, handling, transport, or disposal of such pesticides by the owners or holders of the pesticides or by agents, employees, or other persons acting in their behalf. (9) That if the claim is filed by an assignee, the United States may assert against the assignee any defenses, or right of set-off or counterclaim, applicable against the person who assigned the claim. (10) That if the claimant is applying as an end user or special status seller, the claimant meets the applicable criteria for this category. (k) When to file. After suspension and cancellation of a pesticide registration, the Agency will issue guidance in a notice published in the Federal Register, providing specific information and requirements for the particular pesticide, and establishing a time frame for submission of indemnification claims. (l) Where to file. The address to which claims should be submitted will be provided on the claim form and in the Federal Register notice which provides details of the indemnification program for a specific suspended and canceled pesticide. 165.236 Agency review of claim. (a) Upon receipt of a claim, the Agency will assign it a claim number and all correspondence regarding the claim will reference that number. Each claimant will be notified of any additional information or verification required for consideration of the claim. If a claimant is unable to provide the documentation required for consideration of his/her claim within a prescribed time period, the claim will be denied. (b) A claim may be amended at any time before final action by EPA. All amendments must be submitted in writing and signed by the claimant or his/her authorized agent or legal representative. (c) A claimant may withdraw a claim at any time by written notice to the Agency. A claim that has been withdrawn may be resubmitted only within the response period established by the Agency in the Federal Register notice referred to in 165.234(k). (d) The Agency's determinations regarding eligibility of claims and amounts of indemnity payable shall be final. (e) EPA, at its discretion, may reconsider a decision if the claimant establishes that an error was made in the computation of the amount of indemnification, or that evidence or material facts were unavailable to the claimant at the time of filing the claim and that failure to provide the information was not the result of claimant's lack of care. (1) A claimant seeking reconsideration of denial must submit a written request within 30 days of the date of the decision. The request for reconsideration must specify, if applicable, the evidence or material facts not previously considered and the reasons why the evidence or facts were not previously available. (2) Requests for reconsideration should be submitted to the Agency Indemnification Claims officer at the following address: Office of Pesticide Programs (H7507C), Attention: Indemnification Claims Officer, U. S. Environmental Protection Agency, 401 M St., SW., Washington, DC 20460. [FR Doc. 93 - 10480 Filed 5 - 4 - 93; 8:45 am] BILLING CODE 6560 - 50 - F