[EPA press release - October 26, 1988]

On October 25, 1988, President Reagan signed into law the Federal Insecticide, Fungicide and Rodenticide Act Amendments of 1988.

"I am pleased with this bill and want to commend Congress for this action," said EPA Administrator Lee M. Thomas. "It will go a long way toward assuring safer pesticide use."

Below are highlights of the new amendments.

Amendments of 1988

On October 25, 1988, the President signed into law the Federal Insecticide, Fungicide and Rodenticide Act Amendments of 1988. The 1988 Amendments strengthen EPA's authority in several major areas. Among other things, the amendments require a substantial acceleration of the pesticide re-registration process and authorize the collection of fees to support re-registration activities. The law also changes EPA's responsibilities and funding requirements for the storage and disposal of suspended and canceled pesticides and the indemnification of holders of remaining stocks of such canceled pesticides.

Statutory Authority for Pesticide Regulation

The Federal Insecticide, Fungicide and Rodenticide Act (FIFRA) governs the regulation of pesticides in the United States. Under FIFRA, all pesticides must be registered (licensed) by the Environmental Protection Agency (EPA) before they may be sold or distributed in commerce. FIFRA sets an overall risk/benefit standard for pesticide registration, requiring that pesticides perform their intended function, when used according to labeling directions, without posing unreasonable risks of adverse effects on human health or the environment. In making pesticide registration decisions, EPA is required by law to take into account the economic, social, and environmental costs and benefits of pesticide uses.

FIFRA was first enacted in 1947. Thousands of pesticide products have been registered since then. However, the standards for pesticide registration have not remained the same since 1947, but have evolved in tandem with science and public policy. In particular, test data requirements for pesticides have become increasingly stringent in light of advances in toxicology, analytical chemistry, and other areas. Under FIFRA, pesticide registrants are responsible for providing all test data necessary to satisfy EPA's registration requirements.

To ensure that previously registered pesticides measure up to current scientific and regulatory standards, FIFRA requires the review and "re-registration" of all existing pesticides. This has proved to be a massive undertaking. A combination of factors has impeded the Agency's progress in carrying out the re-registration mandate, including inadequate resources and the sheer magnitude of the task. Of the approximately 600 existing active ingredients, EPA has issued "Registration Standards" for about 185. A Registration Standard includes a comprehensive review of all the available data on the chemical, a list of additional data needed for full re-registration, and the Agency's current regulatory position on the pesticides.

FIFRA authorizes EPA to cancel the registration of an existing pesticide if new test data show that it causes unreasonable adverse effects on human health or the environment. In addition, under certain circumstances, EPA may take action to suspend the registration of a pesticide to prevent an imminent hazard.

Until the amendments of 1988, EPA was required under FIFRA to accept certain suspended and canceled pesticides and dispose of them at government expense. In addition, an indemnification provision required EPA to reimburse holders of suspended and canceled pesticides for financial losses suffered, up to the cost of the pesticide.

FIFRA Amendments of 1988

Re-registration Provisions

Re-registration provisions are the principal focus of the 1988 amendments. These provisions establish requirements with very tight deadlines. A sequence of deadlines applies to pesticide registrants, who are responsible for supplying the complete test data bases necessary for EPA to make pesticide re-registration decisions. EPA must also meet very specific deadlines in analyzing data submissions and reaching decisions whether to re-register currently registered pesticides. Re-registration will take place in five phases, as follows:

Phase 1: EPA is required to publish lists of pesticide active ingredients subject to re-registration and to ask registrants of pesticide products containing those active ingredients whether they intend to seek re-registration. These lists must be published in four installments over a 10 month period after the effective date of the 1988 Amendments.

Phase 2: Registrants are required to respond to EPA concerning their intention to seek re-registration. For each active ingredient, registrants seeking re-registration must also identify missing and inadequate scientific studies required to satisfy EPA's current data requirements, formally agree to fill these "data gaps" according to prescribed deadlines, and pay the first portion of a re-registration fee. Phase 2 responses are required within three months after EPA publishes each chemical list. If the registrant decides not to seek re-registration, the registration will be canceled.

Phase 3: Registrants are required to summarize and reformat existing studies to facilitate EPA review, to certify that they possess or have access to "raw data" (such as laboratory records) supporting those studies, to "flag" any studies that indicate adverse effects, and to pay the final re-registration fee. Registrants are required to accomplish these Phase 3 requirements within one and one-half to two years after passage of the 1988 Amendments.

Phase 4: EPA is required to complete its review of submissions made by registrants under Phases 2 and 3, to independently identify data gaps, and to issue requirements for registrants to fill those gaps. This will take place over a period of two to four years after enactment of the 1988 Amendments.

Phase 5: This phase culminates the re-registration process under FIFRA as amended in 1988. It requires EPA to conduct a thorough, comprehensive examination of all data submitted in support of pesticide re-registration. Based on this review, the Agency will either re-register a pesticide or take other appropriate regulatory action. This phase will occur over a span of approximately three to nine years after enactment of the 1988 Amendments, depending on the scheduling of individual chemicals, the complexity of the required studies, and the time required for registrants to complete these studies.

Expedited Registration

The 1988 Amendments also require EA to give expedited consideration to applications for initial or amended registration of products which are similar to pesticides already registered with EPA. "Similar" products include not only those which are identical in composition to currently registered products, but also those which differ from registered products only in ways that would not significantly increase the risk to public health and the environment. In addition, the Agency is required to expedite certain minor amendments to existing product registrations.

Under the expedited review provisions, an applicant will be notified, with 45 days after the Agency receives an application, whether the application is complete. With 90 days after the Agency has received a fully complete application, the registrant will be notified in writing whether the request is granted or denied; if it is denied, the specific reasons for denial will be given. A portion of the fees collected by EPA will be made available to the Agency for the purpose of carrying out expedited processing of similar applications.

Fees

Re-registration is a complex regulatory process that is expected to cost about $250 million over the nine years of the 5-phase process. Approximately $110-$120 million of that cost is expected to come from a continuation of the current level of EPA's budget for re-registration activities. The remaining funds will come from the pesticide industry through two kinds of fees: a re-registration fee for each active ingredient, and an annual fee for registration maintenance to be paid for each registered product.

For each active ingredient intended for use on major food or animal feed crops, registrants will be required to pay re-registration fees totaling $150,000. In most cases, an initial payment of $50,000 is due during Phase 2, and the balance in Phase 3. For pesticide active ingredients not intended for major food or feed uses, registrants will be required to pay a fee of not more than $150,000 and not less than $75,000. Active ingredient fees are to be apportioned among registrants of each active ingredient, based on market share.

Fee reductions or waivers will be granted for certain pesticide registrants. Any antimicrobial active ingredient for which the annual level of production does not exceed 1 million pounds is exempt; also exempt is any active ingredient for which the value or volume of use is considered minor. In addition, for any "small business" registrant (any company with 150 or fewer employees and average annual sales for chemicals equal to or less than $40 million over the three-year period prior to re-registration), the re-registration fee will be based on a graduated rate ranging from 0.5 to 1.5 percent of average annual pesticide sales.

Unlike the re-registration fee, which is levied on the basis of active ingredients, the annual maintenance fee is assessed for each individual pesticide product. For up to 50 registrations, the annual fee is slated to be $425 per product; for 51 through 200 registrations, it is $100 per product, with no additional fee planned for registrations in excess of 200. The objective of the maintenance fee program is to generate approximately $14 million annually in additional operating funds for the Agency. For this reason, in the event that there are not enough pesticide product registrations to raise $14 million, EPA may raise these annual maintenance fees. However, regardless of any increase in per-product fees, the maximum possible total in maintenance fees for any registrant for up to 50 product registrations is $20,000; and the absolute maximum total in maintenance fees for any registrant for any number of product registrations is $35,000.

During the nine-year period that these fee provisions are in effect, the Agency is prohibited from levying any other fee for the registration of a pesticide. The registration fees established by regulation in May 1988 will be in abeyance during this period. However, payment of fees for the establishment of tolerances (maximum legal limits) for pesticide residues in food or feed, required by the Federal Food, Drug, and Cosmetic Act, are not affected by the 1988 Amendments to FIFRA.

Storage and Disposal of Suspended or Canceled Pesticides

The 1988 Amendments expand EPA's authority to regulate the storage, transportation, and disposal of pesticides. In addition to the authority to require data on storage and disposal methods, the 1988 Amendments authorize EPA to establish labeling requirements for transportation, storage, and disposal of the pesticide and its container. The new law also enables EPA, for the first time, to take direct enforcement action against violations of storage, disposal, and transportation requirements.

The 1988 Amendments eliminate from current law the requirement that EPA, upon request, must accept suspended and canceled pesticides and dispose of them at government expense. Under the new law, EPA may require registrants and distributors to recall suspended and canceled pesticide products. The Agency is authorized to require registrants to give evidence of their financial capacity to carry out such a recall. To facilitate any recalls of this kind, EPA may require all persons who sell, distribute, or commercially use pesticides to notify EPA and state and local officials concerning the quantities and location of suspended and canceled pesticides in their possession.

A registrant who wishes to become eligible for reimbursement of storage costs incurred as a result of a recall must submit a plan for storage and disposal of the pesticide that meets EPA's established criteria. Registrants will be reimbursed for portions of their storage costs that are attributable to delays in approval of storage plans.

In order to lessen the problems associated with pesticide container disposal, EPA is required to conduct a study to examine options to encourage or require: the return, refill, and reuse of pesticide containers; the development and use of pesticide formulations that facilitate the removal of pesticide residues from containers; and the use of bulk storage facilities to reduce the number of pesticide containers requiring disposal.

The 1988 Amendments also authorize EPA to regulate procedures for storage, transport, and disposal of containers, rinsates, or other materials used to contain or collect excess or spilled pesticides. Additionally, in order to promote the safe storage and disposal of pesticides, EPA will promulgate regulations for the design of pesticide containers. These forthcoming regulations will ensure that pesticide containers will allow the removal of pesticides from the containers, and will facilitate the safe use, disposal, and refill and reuse of the containers.

Indemnity Payments

Prior to the 1988 Amendments, if EPA suspended and canceled the registration of a pesticide, the Agency was required under FIFRA to indemnify holders of the pesticide for losses suffered, up to the cost of the pesticide. Persons previously covered by indemnification include farmers, commercial applicators, pesticide formulators, pesticide dealers and distributors, and registrants.

The 1988 Amendments end automatic entitlement to indemnity payments for all persons other than certain end users, and provide that all indemnity payments made will come from the Judgment Fund of the Treasury, not from the operating budget of EPA. End users, such as farmers, will continue to be eligible for indemnification through the Judgment Fund.

Indemnification to anyone other than an end user may be paid under the 1988 Amendments, if Congress provides a line-item appropriation. The 1988 Amendments also require all sellers of a pesticide (including registrants and wholesalers) to reimburse the buyer for the purchase price of a product whose registration is suspended and canceled, unless at the time of purchase the seller told the buyer in writing that the seller would not make such refunds. If EPA determines that a business insolvency or bankruptcy makes such reimbursements impossible, dealers and/or distributors will also be eligible for indemnification.

Miscellaneous Provisions

The 1988 Amendments also contain a number of other provisions designed primarily to make it easier for EPA to implement the major provisions described above, including:

Penalties: Criminal penalties are increased for registrants, applicants for registration, or other pesticide producers who knowingly violate the pesticide law.

Unlawful acts: The 1988 Amendments provide that certain acts, such as submitting false test data, violating suspension or cancellation orders, and failure to submit required records or allow inspection, will be unlawful.

Records and inspection: To help ensure compliance with storage and disposal provisions, additional authority is provided for EPA to request records and to inspect places where pesticides are being kept.

Scientific Advisory Panel (SAP): The 1988 Amendments provide that the FIFRA SAP, a panel of outside experts convened to review major pesticide decisions or regulations, will be permanent. Prior to the 1988 Amendments, the SAP required reauthorization every five years.

Congressional review: The 1988 Amendments shorten the period of Congressional review of final regulations from 60 days of continuous Congressional session to 60 calendar days.