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Statement of Need: This action is needed to clarify PIP regulations for the Agency and PIP developers, producers and farmers. Section 7 of FIFRA requires producers of pesticides to register their establishments with EPA and to submit annual reports stating the amounts of pesticides produced at each establishment. However, neither the Act nor the regulations promulgated under section 7 specifically address what constitutes the production of PIPs, or what units are relevant for purposes of reporting amounts of PIPs produced. This has led to inconsistency and confusion in the registration of PIP-producing establishments and in the reporting of units of PIPs produced. Members of the PIP production industry have indicated that they are uncertain of their legal obligations for PIPs under FIFRA section 7 and have requested guidance on these matters. The Agency reviewed the concerns raised by industry and other stakeholders and reached the conclusion that, because of problems inherent in the application of the current regulations to this class of pesticides known as PIPs, EPA is unable to provide guidance. As written, the current regulations have been difficult to enforce with respect to PIPs. Ambiguity regarding the applicability of section 7 requirements makes it difficult for EPA and regulators in States and tribes to monitor production and subsequent distribution, sale and use of products, and can cause difficulties with respect to compliance inspection and enforcement. State and tribal involvement in compliance oversight can be greatly complicated by a lack of clear compliance requirements. This uncertainty may be resolved by a substantive modification of the regulations through rulemaking.

Summary of the Legal Basis: EPA has regulatory authority to promulgate regulations under FIFRA sections 3(a), 8(a), 25(a), and 25(b) (7 U.S.C. 136a(a), 136f(a), 136w(a), and 136w(b)). PIPs are pesticides under FIFRA section 2 because they are introduced into plants with the intention of "preventing, destroying, repelling, or mitigating any pest…." (7 U.S.C. 136(u)). Under FIFRA section 2, any person who manufactures, prepares, compounds, propagates or processes any pesticide is a "producer." (7 U.S.C. 136(w)). FIFRA section 7 requires that producers of pesticides register the establishments where production occurs and requires that producers report their annual production (7 U. S. C. 136e). In addition, FIFRA section 8 provides that EPA may issue regulations requiring producers to maintain records with respect to their operations and to make such records available for inspection (7 U. S. C. 136f). Under FIFRA section 9, appropriately credentialed inspectors have the authority to conduct inspections at pesticide producing establishments, or other places where pesticides are being held for distribution or sale, for the purpose of inspecting products, labels and records, and for obtaining samples (7 U. S. C. 136g). FIFRA section 3(a) states that "[t]o the extent necessary to prevent unreasonable adverse effects on the environment, the Administrator may by regulation limit the distribution, sale, or use in any State of any pesticide that is not registered under this Act and that is not the subject of an experimental use permit under section 5 or an emergency exemption under section 18." FIFRA section 8(a) states that "[t]he Administrator may prescribe regulations requiring producers, registrants, and applicants for registration to maintain such records with respect to their operations and the pesticides and device produced as the Administrator determines are necessary for the effective enforcement of this Act and to make the records available for inspection and copying in the same manner as provided in [FIFRA section 8(b)] ." FIFRA section 25(a) states that "[t]he Administrator is authorized in accordance with the procedure described in [sec. 25(a)(2) of the Act], to prescribe regulations to carry out the provisions of this Act. Such regulations shall take into account the difference in concept and usage between various classes of pesticides, including public health pesticides, and differences in environmental risk and the appropriate data for evaluating such risk between agricultural, nonagricultural, and public health pesticides." FIFRA section 25(b) states that "[t]he Administrator may exempt from the requirements of this Act by regulation any pesticide which the Administrator determines either (1) to be adequately regulated by another Federal agency, or (2) to be of a character which is unnecessary to be subject to this Act in order to carry out the purposes of this Act."

Alternatives: Alternatives will be presented in the preamble to the proposed rule.

Anticipated Costs and Benefits: The Agency is conducting an economic analysis to inform decisions for the proposed rule. Anticipated benefits include greater certainty and transparency in terms of applicable requirements for these products. Since the proposed rulemaking is currently still under development, information about anticipated costs is not yet available.

Risks: This rulemaking is not intended to address a specific risk associated with registered PIPs. However, facilitating compliance with FIFRA requirements could minimize potential risks associated with inadvertent noncompliance. In addition the rulemaking is intended to provide a means to identify and minimize risks associated with use of unregistered PIPs for production for export.