5^0/09-92-2014
           EMERGENCY EXEMPTIONS UNDER SECTION 18 OF
     THE FEDERAL INSECTICIDE FUNGICIDE AND RODENT1CIDE ACT

           I.  GUIDANCE FOR STATE AND FEDERAL AGENCIES
                               PRO
                      REGISTRATION DIVISION
                 OFFICE OF PESTICIDE PROGRAMS

                            06/22/92
25                       'i'-ii'-n; !.";'>'"[ERS LIBRARY
<=>                       ::,-,'vinb^MEMrAL PROTECTION AGENCY
^                       WASHINGTON, D.C.204SO

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       This guidance does not establish or affect legal rights or obligations.  It does not
establish a binding norm and it is not finally determinative of the issues addressed.
Agency decisions in  any particular case will  be made applying the applicable law and
regulations to the specific facts of that case. In any proceeding in which the guidance
may be applied, the  Agency will thoroughly  consider the guidance's applicability to the
facts, the underlying validity of the guidance, and whether changes should be made in the
guidance based on submissions made by any person.
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                                  TABLE OF CONTENTS
                                     Page
Executive Summary

Introduction	
 1
I. Evaluation of the Emergency Situation ...  3

   A. Definition of "Emergency Condition"  . . 3
   B. Demonstration  of an "Urgent,
               Non-routine Situation	  3
   C. Demonstration that no registered
      pesticides or alternative practices which
      provide adequate control of the pest
                       are  available	 5
   D. Demonstration of Significant
                  Economic  Loss	  6

      ;.  Cause of Expected Loss	  7
      2.  Evaluating the Significance of an
          Economic Loss for Productive
                            Activities....  8
      3.  Evaluating the Significance of an
          Economic Loss for Activities Where
          Profits Cannot Be Calculated	11
   Emergency Exemption Applications	  11

   A. Documentation of the Emergency ....  11

      7. Efficacy Data	  12
      2. Economic Data	12
      3. Other Useful Information 	13
   B. Expedited Review of Applications for
                      Repeat Section 18s . . 14

   C. Applications for Regional Section 18s .  IS
                                                   Continued....
                                     Page »

IV. Emergency Exemptions for Two Active
    Ingredients to Control the Same Pest
                 on the Same Crop	 16

V. Emergency Exemptions for New Crops ... 16

   A. Non-routine Pest Problems for
       New Crops / Crop Varieties	 17

   B. Alternative Pesticides and Practices ... 17
            C. Significant Economic Loss for
                 New Crops / Crop Varieties
                                          18
         VI. Emergency Exemptions for
               Voluntarily Canceled Pesticides	18

             - Minor Uses	  18

         VH. Emergency Exemptions for New
              Chemicals and the First Food Use
                       of Registered Pesticides	19
             .  Emergency Exemptions for
                        Safer Pesticides
         IX. Emergency Exemptions for
                    Expanded Acreage .
                                          20
                                          21
         X. Reasonable Progress Toward Registration  21

         XI. Innovative Approaches to Repeat
                        Section 18 Problems	  24

         XD.  Crisis Exemptions	  24
    Emergency Exemptions for Pest
          Resistance Management.
IS
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                             EXECUTIVE SUMMARY

       In 1989, EPA formed an internal work group to discuss issues which had arisen
from the Agency's experience with the revised section 18 emergency exemption
regulations. The work group selected for discussion those issues which had proven to be
problematic in administering the emergency exemption program.  The goal of the work
group was to clarify the Agency's position on these issues and communicate the Agency's
position to the appropriate Federal and State lead agencies.

       This document summarizes the Agency's positions and policies regarding those
issues reviewed by the section 18 work group. It does not address every issue associated
with emergency exemptions and is not intended to supplant the section 18 regulations at
40 CFR part 166. It is meant to clarify certain parts of the existing regulations and to
serve as additional guidance to Federal and State agencies submitting section 18
emergency exemption requests.

       The document is organized into several general discussion areas. The major
points  from each area are summarized below.

I.  EVALUATION OF THE EMERGENCY SITUATION

A.  Definition of "Emergency Condition"

o    An "emergency condition" is defined in 40 CFR §166.3(d) as an urgent, non-routine
       situation that requires the use of a pesticide(s) and shall be deemed to exist when
       three conditions are met.  EPA believes that an "emergency condition" exists only
       when the situation is urgent and non-routine and all three conditions are met; (1)
       no effective registered pesticides are available, (2) no feasible alternative control
       practices are available, and (3) the situation involves the introduction of a new
       pest or will present significant risks to human health or the environment or will
       cause significant economic loss.

B.  Demonstration of an "Urgent, Non-routine situation*

o    To be "urgent" and "non-routine" the situation must require immediate attention and
       be other than an ordinary one.

o    The nature of the urgent, non-routine situation determines, in part, how long it
       would be expected to endure. Emergency situations brought about by unusual
       environmental conditions would not ordinarily be expected to occur in subsequent
       years.  Other situations, such as those involving the loss of a registered pesticide,
       would likely continue until a new pesticide is registered. Emergency exemptions
       will not be disallowed just because the emergency situation has occurred in two  or
       more consecutive years. The Agency will control the  number of years a use is

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                                         11

       authorized under section 18 through careful monitoring of the progress that is
       being made toward registration.

o    A situation need not be unpredictable to be "urgent and non-routine". The Agency
       will entertain emergency exemption requests based on the expectation that, under
       certain specific conditions, an emergency will exist in the future.

o    Chronic or continually occurring pest problems are specifically excluded from the
       definition of an emergency condition.

C.  Demonstration that no registered pesticides or alternative practices which provide
    adequate control of the pest are available

o    For each pesticide registered to control the pest problem, the applicant must
       demonstrate that it is either not effective in the given situation or not available in
       adequate supplies.  Claims regarding the efficacy of registered alternatives must
       be supported by data or testimony of qualified  experts. Claims regarding the
       unavailability of a registered pesticide must be  accompanied by a discussion of the
       attempts made to obtain adequate supplies.

o    The  applicant must also identify the alternative practices (nonpesticidal means of
       control) available to  control the pest problem and explain why they are not
       adequate or feasible  to use.

D.  Demonstration of a Significant Economic Loss

o    A "significant economic loss" means a substantial reduction in normally expected
       profitability; or, for types of activities where profits cannot be calculated, a
       substantial reduction in the value  of public or private fixed assets. In defining an
       emergency condition as one that is expected to result in "significant economic
       losses, the Agency  has in mind consequences more serious than a failure to
       maximize profits in a particular growing season.

o    Only those losses caused by the emergency condition are relevant in determining
       the expected economic loss. Losses due to obvious mismanagement are excluded
       from the loss estimate.  Losses due to an agent other than the target pest problem
       are also excluded from the loss estimate. Exemptions may not be granted for the
       purpose of increasing yield or income to offset losses resulting from some other
       cause (foreign competition, for example).
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                                         Ill

o   The "normal range in profitability" refers to the range of profits for a productive
       activity over the past several years. Typically, the Agency requires 5 years of
       yield, price, and cost of production data to conduct an economic analysis of an
       emergency situation.  In evaluating the significance of an anticipated economic
       loss, the Agency compares expected profits under the conditions of the emergency
       to the historical, "normal" range. If estimated profits are substantially below the
       normal range, the expected loss is considered significant

o   An emergency exemption may be granted in situations where a significant economic
       loss is not expected, but only in those situations where  the expected loss would
       affect the long-term financial viability expected for the activity.

II.  EMERGENCY EXEMPTION APPLICATIONS

A.  Documentation of the Emergency

o   40 CFR §166.20 outlines the information required in an application for  a specific,
       quarantine, or public health exemption. The Agency may discontinue the
       processing of any application which does not contain all of the required
       information until the missing information is submitted by the applicant.

       Each application will be reviewed on its own merit. EPA will not use information
       from one state's application to evaluate another state's exemption request.

o   Efficacy claims for the  proposed pesticide, registered alternative pesticides, and
       alternative practices should be supported by data or other scientific information.

o    In cases where significant economic loss is the basis of the request, the application
       should contain at least 5 years of historical economic information.  The
       information should reflect the situation in the area of the state where the
       emergency pest problem exists.  Statewide data should only be submitted if the
       problem exists on  a statewide basis.

       Estimated gross and net revenues for the site without the proposed pesticide
       should be based on the mean expected yield loss if growers use the next best
       practical means of control, rather than on worst case may'nnim  yield reductions if
       no alternative control measure is used.

       If the Agency's standard economic analysis is not appropriate to the applicant's
       situation, the applicant must explain why and provide an alternative analysis
       demonstrating that an emergency condition exists.
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                                       IV

o    The Agency's review of exemption applications is facilitated when the following
       information, not specifically required in the regulations, is submitted:  1) Dates
       application of the pesticide would begin and end, 2) specific location of sites to be
       treated within the state, and 3) a discussion of the current "registered" usage of
       the proposed pesticide within the state.

B.  Expedited Review of Applications for Repeat Section 18s

o    Repeat emergency exemption applications, to a certain extent, already receive an
       expedited review. The Agency is opposed to further expediting the review of
       repeat requests.  EPA believes it would be more appropriate to  investigate ways
       to improve or expedite the overall section 18 process.

C.  Applications for Regional Section  18s

o    The Agency has no previous experience with regional section 18 applications, but is
       willing to accept regional applications on a trial basis to evaluate their practicality.

III.  EMERGENCY EXEMPTIONS FOR PEST RESISTANCE MANAGEMENT

o    Emergency exemptions may only be authorized for resistance management in cases
       where documented pest resistance to the registered alternative(s) has already
       developed and is expected to result in significant economic losses.

IV. EMERGENCY EXEMPTIONS FOR TWO ACTIVE INGREDIENTS TO
    CONTROL THE SAME PEST ON THE SAME CROP

o    The current section 18 regulations do not preclude the granting of exemptions for
       the use of more than one pesticide for the same emergency condition;  however,
       such use under section 18 will be authorized only when necessary to provide
       adequate control of a pest or situation. Authorization of more than one chemical
       will not be made for competitive or marketing purposes.

V.  EMERGENCY EXEMPTIONS FOR NEW CROPS

o    It is the Agency's position that the section 18 process is not the appropriate
       mechanism for EPA to make pesticides available to control routine pest problems
       on new crops. Emergency exemptions for new crops may only be granted when
       the situation is urgent and non-routine, there are no effective  alternative
       pesticides or practices available, and the situation will result in significant
       economic losses.
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o    Only those situations involving 1) a pest not previously known to affect the crop, or
      2) an abnormal variation in the severity of a known pest problem would be
      considered non-routine by the Agency.

o    Historical yield and economic data are not usually available for new crops.  In lieu
      of these data, the Agency will examine  research data to determine expected yield
      under normal growing conditions.

VI. EMERGENCY EXEMPTIONS FOR VOLUNTARILY CANCELED PESTICIDES

o    The Agency is not inclined to grant exemptions for voluntarily canceled pesticides
      unless the applicant can demonstrate that reasonable progress toward registration
      has been made or is expected, £r. that an alternative to the canceled pesticide is
      expected to be available in the near future, ££ that a program will be carried out
      to find an alternative pesticide for use.

o    The Agency does not endorse use of the  section 18 process as a means to retain
      minor uses lost through the reregistration process. If, however, a pesticide
      registration for a minor crop is canceled due to reregistration and the criteria for
      an emergency condition as outlined in the section 18 regulations have been
      satisfied, the Agency may grant an emergency exemption.

o    The Agency is not inclined to grant a section 18 exemption for a use that was
      voluntarily canceled under circumstances which suggest the likelihood of
      unreasonable adverse effects on the environment.

VII.  EMERGENCY EXEMPTIONS FOR NEW CHEMICALS AND THE FIRST FOOD
     USE OF REGISTERED PESTICIDES

o    The issuance of emergency exemption requests for new chemicals or the first
      food use of a registered pesticide depends heavily on the available
      scientific data base for the chemical being requested and the gravity of the
      emergency situation.  The Agency weighs very heavily the progress that has
      been made toward registration in evaluating repeated emergency
      exemption requests for a new chemical or the first food use of a registered
      pesticide.  The section  18 regulations prohibit utilization of the crisis
      provision for pesticides which contain a new chemical or the first food use
      of a registered pesticide.
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                                        VI

VIH. EMERGENCY EXEMPTIONS FOR SAFER PESTICIDES

o    EPA believes its regulations do not allow for the authorization of a section 18
      exemption based solely upon a determination that a pesticide which is
      unregistered for a particular use is safer than, or environmentally preferable to a
      pesticide which is registered for that use.  If the effective registered alternative is
      sufficiently dangerous that the Office of Pesticide Programs would prefer that
      growers use an unregistered pesticide, the statutory scheme normally contemplates
      cancellation or suspension of the registered alternative, rather than ignoring the
      registered alternative and granting a section 18 for an unregistered chemical.

IX.  EMERGENCY EXEMPTIONS FOR EXPANDED ACREAGE

o    The Agency will Qnly grant repeat exemptions for use on expanded acreage when
      the pest emergency has spread to areas outside the original range. In particular,
      the Agency will not look favorably on repeat exemption requests for expanded
      acreage in situations where growers have planted additional acreage of a crop,
      based on the expectation that a pesticide will be available under an emergency
      exemption to control an anticipated pest problem.

X.  REASONABLE PROGRESS TOWARD REGISTRATION

o    The Agency is not inclined to grant repeated exemptions unless reasonable progress
      toward registration of the use has been made.

o    If a complete application for registration  of a use, which  has been .under a specific
      or public health exemption for any 3 previous years, has not been  submitted, it
      shall be presumed that reasonable progress toward registration has not been
      made. The Agency will exercise  its discretion  in determining whether or not
      reasonable progress has been made on  an IR-4 minor food use. Generally, ER-4
      minor food uses will be judged against a 5-year standard, as opposed to the 3-year
      standard for all other uses.

o    Once a complete application for registration has been submitted, the Agency
      evaluates progress toward  registration on a case-by-case basis, taking into account
      a number of different factors, including:

      -Compliance with the Agency's registration data requirements and guidelines.

      -The registrant's responsiveness to application deficiencies identified during
       Agency review.
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                                        vu

       -New registration data requirements.

       •Hie registrant's compliance with reregistration requirements.

o    If registration has not occurred within 3 years of receipt of an application, the
       Agency will presume that reasonable progress toward registration has not
       occurred and will not be inclined to grant further emergency exemptions for the
       use, except when an "emergency condition" exists and Agency inaction (supporting
       data has not been reviewed or a final decision has not been made) is the cause of
       the delay.

o    The section 18 application should contain a discussion of progress toward
       registration, including a summary of deficiencies and data gaps and the registrant's
       timetable for rectifying registration deficiencies.

o    Letters notifying emergency exemption applicants of the Agency's decision will also
       discuss the registration status of the proposed use.  When applicable, notification
       letters will also include a discussion of the reregistration status of the pesticide.

XI.  INNOVATIVE APPROACHES TO REPEAT SECTION 18 PROBLEMS

o    The Agency would like to identify pest problems that consistently result in
       emergency exemption requests and work with the states and affected growers to
       develop ways to address these problems using new and/or little known
       technologies. Authorization of repeat section 18 requests may be conditioned
       upon evidence that  the State applicant is attempting to find an innovative
       alternative solution.

XII. CRISIS EXEMPTIONS

o    The crisis provisions of FIFRA should be invoked only in dire situations where the
       emergency condition is unpredictable and there is no other way to mitigate the
       emergency.

       It is the Agency's belief that situations in which there is insufficient time  to file a
       request for a specific exemption far enough in advance to allow the Agency the
       normal 50-days of processing time should be rare. In most situations, by
       determining the magnitude of the outbreak that would constitute an  emergency
       and  submitting a request to the Agency incorporating this threshold level, the
       specific exemption can be requested far enough in advance to allow  EPA an
       adequate opportunity to review the application without resorting to the crisis
       provisions.


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                                        vm

     The State or Federal Agency issuing a crisis exemption must notify the Agency,
      when feasible, at least 36 hours in advance of utilization of the crisis provisions.
      In no case shall notice be given to the Agency later than 24 hours after the State
      or Federal agency's decision to avail itself of a crisis exemption.

     The Agency may revoke crisis exemptions or a State or Federal agency's authority
      to issue crisis exemptions when the  agency is not complying the requirements of
      the crisis provisions.
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                                INTRODUCTION

      Section 18 of the Federal Insecticide Fungicide and Rodenticide Act (FTFRA)
gives the Administrator of EPA the authority, at his discretion, to exempt any Federal or
State agency from any provision of FTFRA if he determines that emergency conditions
exist which require such exemption. Regulations to implement the exemption provision
were promulgated in 1973.  A 1982 Office of Pesticide Programs (OPP) review of the
regulations and audit of the exemption program concluded that the regulations could be
improved with some revisions. The House Subcommittee on Department Operations,
Research, and Foreign Agriculture released a report on December 17, 1982, entitled
"Regulatory Procedures and Public Health Issues in the EPA's Office of Pesticide
Programs". This report expressed concern that States or industry may have been using
section 18 authority to circumvent more stringent data and risk control requirements
which apply to registration  actions.

      In response to the OPP audit and Congressional report, EPA decided to revise
the section 18 regulations through a negotiated rulemaking process. Representatives
from environmental and public interest groups, agricultural trade associations, State
pesticide regulatory agencies, and other Federal agencies participated in the negotiations.
The proposed rule revising the regulations was published in the Federal Register on
April 8, 1985  (Vol. 50, No. 67, FR, April 8, 1985).  The final rule was published January
15, 1986 (Vol 51, No. 10, FR, January 15, 1986).

      In 1989, EPA formed an internal work group to discuss issues which had arisen
from the Agency's experience with the revised regulations. The work group selected for
discussion those issues which had proven to be problematic in administering the section
18 program. The goal bf the work group was to clarify the Agency's position on these
issues and communicate the Agency's position to the appropriate Federal and State lead
agencies.

      This document summarizes the Agency's positions and policies regarding those
issues reviewed by the section 18 work group.  It does not address every issue associated
with emergency exemptions, and it is not intended to supplant the section 18 regulations
at 40 CFR pan 166. It is meant to clarify certain parts of the existing regulations and to
serve as additional guidance to Federal and State agencies submitting section 18
emergency exemption requests.

      The document is organized into the following general discussion areas:

        I. EVALUATION OF THE EMERGENCY SITUATION

        II. EMERGENCY EXEMPTION APPLICATIONS

       HI. EMERGENCY EXEMPTIONS FOR PEST RESISTANCE MANAGEMENT

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                             -2-

      IV. EMERGENCY EXEMPTIONS FOR TWO ACTIVE INGREDIENTS TO
         CONTROL THE SAME PEST ON THE SA IE CROP

      V. EMERGENCY EXEMPTIONS FOR NEW CROPS

      VI. EMERGENCY EXEMPTIONS FOR VOLUNTARILY CANCELED
         PESTICIDES

     VII. EMERGENCY EXEMPTIONS FOR NEW CHEMICALS
         AND THE FIRST FOOD USE OF REGISTERED
         PESTICIDES

     VIII. EMERGENCY EXEMPTIONS FOR SAFER PESTICIDES

      IX. EMERGENCY EXEMPTIONS FOR EXPANDED ACREAGE

      X. REASONABLE PROGRESS TOWARD REGISTRATION

      XI. INNOVATIVE APPROACHES TO REPEAT SECTION 18 PROBLEMS

     XII. CRISIS EXEMPTIONS
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                                        -3-

I. EVALUATION OF THE EMERGENCY SITUATION

A.  Definition of "Emergency Condition"

       The first issue a State or Federal Agency should consider before requesting a
section 18 emergency exemption is whether an "emergency condition" exists. The term
"emergency condition", as defined  in 40 CFR §1663(d), means an urgent, non-routine
situation that requires the use of a pesticide. It shall be deemed to exist when:

       (1)   No effective pesticides are available under FIFRA that have labeled uses
             registered for control of the pest under the conditions of the emergency;
             and

       (2)   No economically or environmentally feasible alternative practices which
             provide adequate control are available; and

       (3)   The situation:

             (i)  Involves the introduction or dissemination of a pest new to or not
                   theretofore known to be widely prevalent or distributed within or
                   throughout the United States and its territories; or

             (ii)  Will present significant risks to human health;  or

             (iii) Will present significant risks to threatened or endangered species,
                   beneficial organisms, or the environment; or

             (iv) Will cause significant economic loss due to:

                   (A) An outbreak or an expected outbreak of a pest; or

                   (B)  A change in plant growth or development caused by unusual
                         environmental conditions where such change can be rectified
                         by the  use of a pesticide(s).

B. Demonstration of an "Urgent, Non-routine situation"

       EPA interprets the regulations in 40 CFR 1663(d) to require a finding that an
urgent, non-routine situation exists distinct from the findings in 40 CFR 1663(d)(l)(2)
and (3).
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                                         -4-

       To be "urgent" the situation must require immediate attention.

       To be "non-routine" the situation must be one other than an ordinary one.

       An urgent, non-routine situation is brought about by some change in the overall
 pest management environment for a particular pest problem, such as an abnormal
 fluctuation in pest population, an abnormal fluctuation in environmental conditions, loss
 of a registered pesticide(s), or documented loss of efficacy of a registered pesticide(s).

       The nature of the urgent, non-routine situation determines, in part, how long it
 would be expected to endure. Certain situations would not be expected to occur year
 after year.  Unusual weather, such as droughts and heavy rains, can result in pest
 outbreaks that  become urgent, non-routine situations, when the registered pesticides no
 longer control the pest at economic levels generally obtained for the  crop, or there are
 insufficient quantities of registered pesticides to deal with the pest outbreak. However,
 the return to normal weather patterns in the subsequent growing season would eliminate
 the urgent, non-routine situation.

       Others situations could be expected to occur for two or more consecutive years.
 There are instances  where a  registered pesticide(s) loses its effectiveness due to
 resistance build-up or the registered pesticide(s) is lost, resulting in an urgent,  non-
 routine situation.  Once such a situation occurs, an emergency situation will likely
 continue to exist unless a new pesticide is registered prior to the next growing  season.
 Although the emergency situation has occurred in two  consecutive years and could
 continue until a new pesticide is registered, the emergency situation has not changed and
 may not be disallowed just because it has occurred in two or more consecutive years.

       In fact, in promulgating the section 18 regulations, the Agency realized  that there
 would be cases where an emergency condition could continue for two or more
 consecutive years. Thus, in order to provide relief for  true emergencies and yet prevent
 the section 18 process from being used to circumvent the section 3 registration process, a
 provision was added to the regulations concerning the need for progress toward
 registration of a use under section 18. The Agency will control the number of years a
 use is authorized under section 18 through careful monitoring of the  progress that is
 being made toward registration.  Section X discusses in full the criteria the Agency will
 use in determining whether reasonable progress toward registration of a section 18 use
 has been made.

       Since a critical issue in determining whether or  not an emergency exists is
 determining whether or not the situation is non-routine, the applicant needs to provide
 the Agency with adequate scientific information to support the  claim that a situation is
 non-routine, in that it is being caused by a new pest problem having  recently developed,
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                                        -5-

or a pest problem which occurs rarely or infrequently in the state, unusual weather
conditions, or the current situation is abnormal for some other reason. The Agency will
make a decision on whether or not a situation is urgent and non-routine on a case-by-
case basis based on the information provided in the application.

       For a situation to be "urgent and non-routine" does not mean that it must be
unpredictable.  In some circumstances an emergency can be predicted.  An emergency
exemption application can be submitted to the Agency for consideration prior to the
actual existence of an emergency condition based on the expectation that an emergency
condition will exist in the future. The application must identify what conditions would
have to be experienced in order for the emergency condition to develop.  Authorization
of the exemption would include a "threshold" or other level which would have to be met
before applications of the pesticide could occur. Examples of threshold levels include a
specified number of plant pests per plant, some level of rainfall occurring within a
specific timeframe, the presence of weeds at a given crop stage, or some percentage of
crop defoliation due to a pest. It is appropriate for a State or Federal agency to submit
an application for an emergency exemption in advance to authorize use of pesticide to
deal with the predicted emergency when reasonable evidence indicates that a pest
outbreak will occur.

       The particular wording of the definition of "emergency condition" was developed
following extensive discussions by the negotiating committee, comprised of
representatives from states, industry, and environmental groups.  As discussed in the
preamble to the final rule  (51 FR 1896), the negotiating committee decided to exclude
chronic or continually occurring pest problems from the definition of an emergency.  In
promulgating the section 18 regulations, EPA supported the negotiating committee's
decision to exclude chronic pest problems from the definition of  an emergency. A
chronic problem is one that is caused by an ongoing pest problem within the state or
region, with pest intensity or environmental conditions within the levels of normal
fluctuation.  Although such problems may be significant to the growers, in that they
occur every year and registered efficacious chemicals are not available to address the
problem, they do not fit the Agency's criteria for an emergency condition.  Similarly, the
mere availability of a new pesticide to control an ongoing pest problem does not
constitute an emergency unless it can be demonstrated that the pest problem has
intensified in recent years.

C. Demonstration that no registered pesticides or alternative practices which  provide
   adequate control of the pest are available

       When requesting an emergency exemption, the applicant is expected to  identify
the registered pesticides and alternative cultural practices available to control the pest
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 problem and to provide a detailed explanation of why the available control strategies will
 not provide adequate control under the conditions  of the emergency.

        For each pesticide registered to control the  pest problem, the applicant must
 demonstrate that it is either not effective in the given situation or not available in
 adequate supplies.  If a registered pesticide is available but not recommended by the
 appropriate State officials, an explanation of why it is not recommended must be
 provided.  If the applicant claims that an available  registered pesticide is ineffective for
 the given situation, the claim must be supported by field data demonstrating its
 ineffectiveness. If such data are unavailable, testimony of qualified agricultural experts,
 extension personnel, university personnel or other persons similarly qualified in the field
 of pest control must be provided.

        If a registered pesticide is not available, the applicant must explain the attempts
 that were made to obtain adequate supplies and the results of those attempts. If
 application equipment required to use a registered pesticide is unavailable, the applicant
 must explain why and discuss the attempts that were made to acquire  the necessary
 equipment.

        The applicant must also identify the alternative practices available to control the
 pest problem and provide a detailed explanation of why the alternative practices, if any,
 are not adequate or not economically or environmentally feasible to use.  The term
 "alternative practices" is meant to encompass any nonpesticidal means of control
 including, but not limited to, crop rotation, tillage,  use of tolerant/resistant crop
 varieties, burning, hoeing, hand weeding and employment of good farm management
 practices.

        The Agency acknowledges that unforeseen circumstances may preclude the use of
 a registered pesticide or alternative practice to avert an emergency condition. For
 example, an unexpected pest outbreak might occur after the application "window" for a
 registered pesticide has passed.  However, the Agency expects registered pesticides
 and/or alternative practices, when feasible, to be employed in subsequent years and will
 not allow continued use of a pesticide under emergency exemptions in these situations.

 D.  Demonstration of a Significant Economic LASS

        Most emergency exemptions are requested to avert a significant economic loss.
, The term "significant economic loss" means a substantial  reduction in  normally expected
 profitability in the area affected by the emergency, or; for types of activities where profits
 cannot be  calculated, a substantial reduction in the value of public or private fixed assets.
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                                         -7-

        EPA interprets the definition of an emergency condition in 40 CFR 166.3 to mean
 those situations which could not reasonably have been anticipated and addressed through
 the section 3 registration process and which will have dire consequences if the exemption
 is not granted.  In defining an "emergency condition" as one which will result in a
 significant economic loss, the Agency has in mind consequences more serious than a
 failure to realize maximum profits in a particular growing season. It is the Agency's
 position that section 18 of FIFRA was not intended to help growers maximize yields or
 profits.

 1. Cause of an Expected Loss

        According to the regulations at 40 CFR §1663(h), only losses caused by the
 emergency conditions are relevant in determining the expected economic loss.  This issue
 of causation is a troublesome one in administering section 18.

        The regulations clearly state that losses resulting from obvious mismanagement
 must be excluded from the loss estimate.  However, the regulations do not address those
 situations in which business decisions falling short of mismanagement are, in part,
 responsible for the loss. In some instances, management decisions may be the principle
 cause of an anticipated loss and the unexpected pest problem a relatively insignificant
 contributing factor. The negotiated rule making committee was concerned that section
 18 could become a means for growers to recover losses resulting from unsuccessful
 business decisions. The Agency, however, does not consider this a legitimate use of the
 section 18 provisions and will not be inclined to grant exemptions in these situations.

        EPA  interprets its regulations to provide for section 18 emergency exemptions
 only when use of the pesticide authorized by the exemption will address the cause(s) of
 the emergency. The Agency deems it inappropriate to grant  an exemption for the use of
 a pesticide against a pest which is not the cause of the emergency in order to increase
 yields or income to offset losses caused by another agent.  EPA believes this construction
 is implicit in its definition of "emergency condition" at 40 CFR 166 J(d) as "...an urgent,
 non-routine situation that requires the use of a pesticide(s)..." The most natural reading
 of this phrase is that the pesticide is required for use against  the cause of the urgent,
 non-routine situation.

       Public policy also dictates that the granted exemption be limited to situations in
 which the emergency is due to the target organism(s) of the pesticide whose  use is being
. authorized.  As noted in the preamble to EPA's final rule at 40 CFR Part 166, concern
 was expressed that the granting of emergency exemptions on  the basis of "significant
 economic loss" would be similar to providing crop insurance through FIFRA (51 FED.
 REG. 1897, January 15, 1986).  The Agency clearly did not intend for such exemptions
 to be the vehicle by which growers could recover losses due to causes other than the


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 target organism(s) of the pesticide requested.  Otherwise, the section 18 program has
 the potential for becoming a crop insurance program in situations which are due to
 causes (e.g. foreign competition)  totally outside the scope of FIFRA.

 2.  Evaluating the Significance of an Economic Loss for Productive Activities

        a.  The Normal Range in Profitability:

        This graph depicts hypothetical grower profits over the past five years and three
 different profit scenarios for the current growing season:
             LU
             DC
             O
             CO
             o
             or
             D_
                        Theoretical Maximum Profits
                       -5-4-3     -2

                                 YEAR
-1    current
• The "normal range in profitability" refers to the range of profits for a productive activity
 over the past several years.  Typically, the Agency looks at profitability over the past five
 years to determine the normal range. In the above hypothetical example, grower profits
 were highest three years ago and lowest last year. These two points on the graph would
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                                        -9-

define the upper and lower bounds of the normal range in profitability for this
hypothetical enterprise.

       In evaluating the significance of an anticipated economic loss for a productive
activity, the Agency estimates profits for the current year to determine whether they fall
within the normal range in profitability. If they do (scenario 2 on the above graph), the
expected loss is not considered by the Agency to be significant, since it would not exceed
what would be expected as a result of normal fluctuation over a number of years. If
expected profits fall below the normal range (scenario 3 on the above graph), the
expected loss is considered significant, since it exceeds what would be expected as a
result of normal fluctuation.

       The Agency frequently receives applications requesting exemptions for the use of
a "new" pesticide which is more effective or less expensive than the registered pesticides
or alternative practices available to control  a particular pest problem.  In such cases,
growers are attempting to increase their profits above the historical or "normal" range
(scenario 1 on the above graph). Since profits without the requested exemption are
expected to fall within the normal range, an emergency condition would not exist. As
noted above, in defining an emergency situation as one that is expected to result in
"significant economic losses", the Agency has in mind consequences more serious than a
failure to maximize profits in a particular growing season.  When a new pesticide is
developed which offers better or more economical control of a pest problem, growers
may understandably want the use of the product  to maximize their profits.  However, this
situation does not meet the criteria for emergency exemption under section 18.

       b.  The Economic Analysis;

       To conduct an economic analysis of an emergency  situation, Agency scientists               I
examine yield, price, and cost of production (or crop budget) data for a number of years.
In most cases, the Agency requires at least five years of data to complete its analysis.
Using these data, Agency economists first calculate the mean profit over the past five
years and the range of profits over this same period. Next, the economists calculate
expected profits for the upcoming year, based on the yield losses  expected as a result of
the emergency condition.  If the  expected profits are below the historical range of profits,
then a "significant" economic loss is expected to occur. A hypothetical example of a
typical analysis is shown below:
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                                         -10-
Year
Year 1
Year 2
Year 3
Year 4
YearS
Average
Range of
Profits:
Current
Year1
Yield per
Acre
(Flats)
1,325
997
1,479
1,357
1,285
1,289

1,031
Price
per
Flat
$10.00
$13.86
$10.00
$10.42
$10.86
$11.03
$9,500 To
S11.032
Gross
Revenue
per
Acre
$13,250
$13,818
$14,790
$14,140
$13,955
$13,991
$11,000
$11,371
Cost
per
Acre
$3,250
$3,318
$3,790
$4,390
$4,455
$3,840

$3,8403
Net
Revenue
per
Acre
$10,000
$10,500
$11,000
$9,750
$9400
$10,150

$7,5314
              1 Yield loss of 20% expected by technical expert.

              2 Average price is used unless a target price or other
               known price is available.

              3 Average production cost used unless better estimate
               is available.

              4 In this case a significant economic loss is
               anticipated, since the emergency situation is
               expected to reduce net revenue (profit) below the
               historical, five-year range ($9,500 to $11,000 per
               acre).

       The Agency recognizes that in certain situations where an emergency condition
 exists, significant economic losses may not always be demonstrated using this analytical
 scheme.  For instance, if the historical data include data from one or more atypical years
. (either unusually profitable or unprofitable), the average  profits and the historical range
 of profits calculated by this analysis might not reflect the  "normal" profitability for the
 productive activity.  It is the applicant's responsibility in these situations to explain the
 abnormal data and provide an alternative estimate of the normal range in profitability.
 The application should fully explain how the alternative estimate was derived.
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                                        •11-

       In evaluating the significance of an economic loss for productive activities, the
 Agency will also consider whether the loss would affect the long-term financial viability
 expected for the activity.  For example, an enterprise may face a situation where, due to
 circumstances beyond its control (e.g. bad weather), it must have a remarkably good
 upcoming crop year to remain financially viable. Even though profits without an
 exemption are expected to be within the historical range, this will not be sufficient to
 make up for the previous crop failures. The enterprise will only realize the above-
 average profits needed to assure its long-term financial viability if an emergency
 exemption is granted to control an emergency pest problem.  In such a situation, an
 emergency exemption could be granted even though profits without the exemption are
 expected to be within the historical range.

 3.  Evaluating the Significance of an Economic Loss for Activities Where Profits Cannot
     Be Calculated

       Most emergency exemptions involve a request to use a pesticide on an agricultural
 commodity in a productive enterprise.  However, exemptions are, or could be, requested
 for the protection of structures, museum pieces, park land, or for other purposes
 unrelated to agricultural production. The significance of an expected economic loss
 associated with these applications will be considered on a case by case basis using
 measures of loss appropriate to the particular situation.

 II. EMERGENCY EXEMPTION APPLICATIONS

 A, Documentation of the Emergency

       Applications for emergency exemptions are often inadequate, lacking essential
 information needed by the Agency to evaluate emergency situations. Inadequate
 applications can result in unnecessary processing delays and may force the Agency to
 deny requests when information in the application is not adequate to demonstrate that
 an emergency condition exists. 40 CFR §166.20 outlines the information required in an
 application for a specific, quarantine, or public health exemption. It is the responsibility
 of the State or Federal agency submitting emergency exemption requests to ensure that
 each request contains the required information.

       The Agency may discontinue the processing of any application which does not
 contain all of the information required by §16620 until the additional information is
-submitted by the applicant  Incoming emergency exemption requests are reviewed for
 completeness when they are received in the Emergency Response and Minor Use
 Section. If the  application is incomplete, the applicant will be notified of the
 deficiencies and asked to submit additional information. If the deficiencies are minor,
 the missing information will be requested by phone and processing of the application will


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                                         -12-

 proceed. If major information is missing, the application will be rejected and the
 applicant will be notified in writing that no further processing will take place until the
 missing information is received.

        Each application will be reviewed on its own merit.  The Agency will not use
 information from one state's application to evaluate another state's exemption request
 for the same or similar use. Although emergencies in neighboring states might be
 similar, it cannot be assumed that information from one state would be applicable in
 other states.  Similarly, the finding that an emergency exists in one state does not
 necessarily dictate the finding by EPA that an emergency exists in other states. The
 Agency may grant exemption requests for a particular use in certain states but not in
 others, based on a separate evaluation of each state's request. Therefore, it is
 particularly important that each  state's application contain the information required in 40
 CFR §166.20.

 1.  Efficacy Data

        Efficacy claims for the proposed pesticide, registered alternative pesticides, and
 alternative  practices should be supported by data, if available. Applicants tend to submit
 efficacy data for the pesticide  being requested under the exemption but do not provide
 the Agency with data comparing the efficacy of the proposed pesticide with the efficacy
 of the currently registered pesticides or alternative practices in controlling the pest
 problem. If valid efficacy testing data are not available for any of the alternative control
 measures, other scientific information should be provided to support claims that a
 particular control measure is inadequate  or impractical.

        If available, yield data from studies comparing the proposed pesticide to the next
 best alternative(s)  should be provided by the applicant.  Efficacy studies often measure a
 pesticide(s) effect on the pest  using variables other than yield, such as percent
 defoliation, number of insects per plant, number of leaf lesions, weed density, etc.
 Although valuable, this information may not be useful in substantiating yield loss claims,
 unless  the relationship between these variables and yield loss is known.

 2. Economic Data

        In a majority of cases of inadequately documented emergencies, the applicant has
 failed to provide sufficient economic data to demonstrate that a significant economic loss
• is expected to occur.  The previous section in this document,  "Demonstration of a
 Significant  Economic  Loss", explains the Agency's process for evaluating the significance
 of an anticipated loss. The sub-section entitled "The Economic Analysis" contains a table
 showing five years of yield, price, production cost, and gross and net revenue data for a
 hypothetical emergency situation.  This same information should be submitted with every
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                                         •13-

  exemption application where significant economic loss is the basis of the request.  If
  some of this information is unavailable, the application should explain why it cannot be
  obtained.

        The economic information in an application should reflect the situation in the
  area of the state where the emergency pest problem exists. Applications often contain
  statewide data when the emergency condition exists only in certain geographical areas.
  Use of statewide data in these situations may mask the true impact of the pest problem
  in the affected areas.  In general, statewide economics data are inappropriate for
  demonstrating that an emergency condition exists, unless the problem exists  on most of
  the crop acreage within the state.

        Section 166.20(b)(4)(ii) requires the applicant to provide estimated net and gross
  revenues for the site without the use of the proposed pesticide. In developing these
  estimates, the applicant should assume that the next best alternative pesticide or cultural
  practice, if available, will be used to control the pest. The revenue estimates should also
  be based on  average expected yield reductions, not the maximum potential yield loss.
  Many applications provide revenue estimates for the site based on worst-case maximum
  yield reductions for the entire affected acreage if JJQ alternative pesticides or cultural
  practices are used to control  the pest problem. This approach results in an  inflated,
  unrealistic estimate of expected losses which  is unusable by the Agency in evaluating the
  applicant's request. The estimated gross and net revenues for the site without the use of
  the proposed pesticide should reflect the mean expected yield loss if growers use the next
  best practical means of control.

        The Agency may entertain emergency exemption applications based on an
  expectation that an emergency condition will exist in the future when a pest problem
  reaches some threshold level (e.g. number of pests per plant, amount of rainfall within a
  specified time period, weed density, or percent defoliation). In this case, the applicant
  should estimate  net and gross revenues without the proposed pesticide, based on average
  yield losses expected at the threshold level.

        The Agency acknowledges that its economic analysis may not be appropriate in
  every emergency situation. If it is not relevant to the applicant's situation, the applicant
  must explain why and provide an alternate analysis demonstrating that an emergency
  condition, as defined in the section 18 regulations, exists.

- 3. Other Useful  Information

        Although not specifically required in the regulations, the following information
  should be included in emergency exemption applications, when appropriate, to alleviate
  some problems that have delayed Agency review of requests in the past.


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                                        -14-
a. Use season:
       The application should give the date applications of the pesticide under the
exemption should begin and the date applications of the pesticide should end.

b. Location of sites to be treated:

       Applications for emergency exemptions should identify the location of the sites to
be treated under the exemption as specifically as possible, especially when the proposed
use may pose a risk to Federally listed endangered or threatened species.  Unless the
proposed  pesticide will be applied statewide, the application should identify the counties
and, if known, the specific areas within those  counties where the pesticide will be
applied. To facilitate review of requests where Federally listed endangered or
threatened species may be at risk from the proposed use, the applicant should contact
the appropriate office of the U.S. Fish and Wildlife Service and obtain a list of
endangered or threatened species which may be exposed to the pesticide from the
proposed  use. The USFWS's species list should be included in the application or
submitted to the Agency as soon as it becomes available.

c. Registered Uses of the Requested Chemical:

       In  evaluating the risks to human health and the environment from a proposed
pesticide,  the Agency may consider the current, "registered" usage of the pesticide on
other sites in the area of the pest emergency. To facilitate the Agency's risk assessment,
the emergency exemption applicant should identify the sites within the region already
being treated with the pesticide and recommended application rates for each site.  The
applicant  should also provide an estimate, if available, of the total acreage already being
treated with the pesticide in the area of the pest emergency.

B. Expedited Review of Applications for Repeat Section 18s.

       One of the major concerns of State agencies is the length of time it takes EPA to
review section 18 requests. To address this concern, the State FIFRA Issues Research
and Evaluation Group (SFIREG) proposed that the Agency consider an abbreviated
section 18 application and expedited review process for repeat exemption requests,
provided the initial request had met the requirements for a section 18 exemption.
Review of requests in subsequent years would be limited to consideration of
unreasonable adverse effects on the environment identified during the first year's use,
the efficacy of the product in the first year, and progress toward registration of the
proposed  use.
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                                        -15-

       The section 18 decision making process requires several policy judgements.
 Although EPA may have granted an emergency exemption in a particular year, the
 Agency might want to reconsider and make a different policy judgement in subsequent
 years. The proposed expedited review process for repeat section 18 requests would
 preclude such reconsideration by the Agency. In addition, further expediting the review
 of repeat requests would necessarily result in longer review times for new requests, given
 the limited resources available to the section 18 program.

       Repeat requests, to a certain extent, already receive an expedited review. The
 Agency  is concerned about further expediting the review of repeat requests for the
 reasons  cited above.  EPA believes it would be more appropriate to investigate ways to
 improve or expedite the overall section 18 process and is currently exploring a number of
 alternatives.

 C.  Applications for Regional Section 18s

       The Agency has been asked  to consider allowing  regional section 18 exemption
 requests in situations where the emergency pest problem exists on a regional basis. The
 Agency  has no previous experience with regional section 18 applications.  However, the
 Agency  is willing to accept regional applications on a trial basis to evaluate their
 practicality.  Applications for regional emergency exemptions must be accompanied by
 an application letter signed by the head of each Federal or State agency, the Governor
 of each  State, or their official designee. Every participating State should review the
 application carefully to ensure that the information in the application is relevant to the
 emergency situation in  their state.  Regional exemption  applicants should be aware that
 unresolved issues in one part of the region, such as unresolved endangered species
 concerns, could delay authorization of the use throughout the region.

       If two or more states share a common emergency situation but do not wish to
 submit a regional application, the Agency encourages the states, if possible, to coordinate
 their requests so that they arrive at the Agency within a few days of each other. The
 Agency  can often review similar requests more efficiently and in less time if all of the
 requests are submitted  during the same time period.

 III. EMERGENCY EXEMPTIONS FOR PEST RESISTANCE MANAGEMENT

       The development of pest resistance to registered  pesticides as the condition
' causing  an emergency is a troublesome issue under section  18. Since resistance occurs
 .over a period of years,  it is difficult to make a case that an emergency exists in any one
 year, even though the longer term effect may be significant.  In addition, the localized
 nature of resistance makes it difficult to document its  economic effects.  Nevertheless,
 EPA's current position  is that exemptions may only be authorized for resistance


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                                       -16-

 management in cases where documented pest resistance to the registered altemative(s)
 has already developed and is expected to result in significant economic losses.

 IV.  EMERGENCY EXEMPTIONS FOR TWO ACTIVE INGREDIENTS
      TO CONTROL THE SAME PEST ON THE SAME CROP

       The Agency has occasionally received specific exemption requests for the use of
 two different pesticide products, containing different active ingredients, to control the
 same pest on the same crop. Prior to the 1986 it was the Agency's policy not to grant
 such requests.  This policy was announced in the December 5, 1979, memorandum from
 Ed Johnson, OPP Director, to State Lead Personnel and Federal Agencies.

       The negotiating committee that revised the section 18 regulations in 1985/86
 revisited this issue of multiple pesticides for a single pest emergency.  As discussed in the
 preamble to the proposed rule (50 FR,  April 8, 1985), concerns were raised that  the use
 of several pesticides on the same field would lead to complex risk analyses  or
 enforcement problems. However, the Committee agreed that there may be instances
 when the use of more than one pesticide is necessary and justifiable; such as when
 supplies of one chemical are inadequate to control the pest situation or when there is a
 need to manage pest resistance or control different  life stages of the pest.  The current
 section 18 regulations do not preclude the granting of exemptions for the use of more
 than one pesticide for the same emergency condition; however, such use under section  18
 will be authorized only when necessary  to provide adequate control of a pest or situation.
 Authorization of more than one chemical will not be made for competitive or marketing
 purposes.

       Essentiality is a key factor in section  18 decisions. When EPA grants an
 exemption for one active ingredient to control a pest emergency,  an emergency condition
 requiring the use of another pesticide would ordinarily no longer exist, since an effective
 alternative would be available to control the pest problem.  Only under certain
 circumstances,  such as those discussed above, would an emergency condition requiring
 the use of another pesticide still exist. It is  the responsibility of the emergency
 exemption applicant to demonstrate that a special circumstance exists which would
 warrant approval of an exemption for multiple pesticides. Requests for multiple
 pesticides should be made in a single application  so these issues may be properly
 considered by EPA.

. V. EMERGENCY EXEMPTIONS FOR NEW CROPS

       The U.S. Federal Govemment/USDA encourages the diversification of U.S.
 agriculture through the introduction of new  crops. However, there are often few or no
 pesticides registered to control pests on these  crops, because of their recent introduction.


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                                        •17-

 State agencies frequently request authorization under section 18 to use a pesticide to
 control a routine (i.e. expected) pest problem on a new crop or crop variety, based solely
 on the lack of available registered alternatives. It is the Agency's position that the
 section 18 process is not the appropriate mechanism for EPA to make pesticides
 available to control routine pest problems on new crops.  This position may be seen as
 undermining USDA's policy of encouraging the diversification of U.S. agriculture.
 However, the Agency does not believe its section 18 regulations may be interpreted
 otherwise.

       In evaluating emergency exemption requests involving new crops or crop varieties,
 the Agency will use the same criteria used to evaluate all exemption requests.
 Applicants seeking emergency exemptions for new crops must  demonstrate that the
 situation is urgent and  non-routine, that no effective alternative pesticides or practices
 are available, and that  the situation will result in significant economic losses without the
 exemption. These  criteria should provide growers of new crops with adequate means to
 protect against unexpected, non-routine pest emergencies.

 A. Non-routine Pest Problems for New Crops/Crop Varieties

       The issue of what constitutes a non-routine pest problem for a new crop is a
 difficult one.  Generally, potential pest problems would be  identified during the research
 conducted on a crop in the development process, prior to its release for general use. A
 person undertaking to grow a new crop is assumed to have accepted the economic risks
 associated with the crop, including the risk of loss due to normal variation in known pest
 problems for which there are no effective controls.  Only those situations involving 1) a
 pest not previously known to affect the crop, or 2) an abnormal variation in the severity
 of a known pest problem would be considered non-routine  by  the Agency.

    If an exemption is requested for a new crop, based on the claim that the severity of
 the pest problem exceeds what would reasonably be expected, the applicant should
 provide historical information on the pest problem sufficient to demonstrate that the
 current situation is non-routine. The applicant should also address  the factors (e.g.
 unusual weather) responsible for the abnormally severe pest problem.

 B. Alternative Pesticides and Practices

       The Agency will evaluate alternative control measures for new crops no
.differently than for established crops. Therefore, when requesting an emergency
 exemption involving a new crop or crop variety, the applicant is expected to identify the
 registered pesticides and alternative cultural practices available to control the pest
 problem and to provide a detailed explanation of why the available control strategies will
 not provide adequate control under the conditions of the emergency.


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                                        -18-

 C.  Significant Economic Loss for New Crops/Crop Varieties

       Historical yield, price, and production cost data are usually not available for
 recently introduced crops or crop varieties.  In lieu of these data, the Agency will
 examine data from field trials or similar research to determine the expected yield under
 normal growing conditions with normal pest pressures. The Agency will compare the
 normal yield to the yield expected under the conditions of the emergency to determine
 the anticipated yield reduction. The applicant should also provide price information and
 a crop budget or best  estimate of production costs. The Agency will use this information
 in determining whether the expected yield reduction will result in a significant economic
 loss.

 VI. EMERGENCY EXEMPTIONS FOR VOLUNTARILY CANCELED PESTICIDES

       With the implementation of the 1988 revisions to FIFRA, the Agency expects to
 receive an increased number of emergency exemption requests based on the loss of a
 pesticide due to voluntary cancellation. Requests  are expected to be of two types;
 requests for an alternative pesticide to replace the canceled pesticide and requests for
 the pesticide that has  been  canceled.   Requests for the use of an alternative pesticide
 should not present any unique problems and will, therefore, be evaluated under the same
 criteria as other emergency exemption requests.

       Section 18 requests for the use  of a pesticide or a pesticide use which has been
 voluntarily canceled present a potential problem to the Agency if progress toward
 registration cannot be demonstrated.   When a pesticide or pesticide use has been
 voluntarily canceled the Agency must assume that the registrant  is not interested in
 pursuing its  registration in the future.  Therefore, progress toward registration for any
 voluntarily canceled pesticide or pesticide use is very questionable.  Prior to acting on a
 section 18 request for a voluntarily canceled pesticide or pesticide use the Agency will
 require evidence demonstrating that; (1) there is progress toward registering the
 pesticide or  use once again, or (2) an  alternative pesticide will be registered in the near
 future, or (3) a program will be carried out to find an alternative pesticide for use.  Prior
 to authorizing a section 18 an emergency situation must still be demonstrated.
  linor uses
       EPA, USDA and agricultural chemical companies are concerned about the loss of
. pesticide minor uses due to reregistration. These groups have worked cooperatively to
 develop an early notification network to notify user groups of the potential loss of
 pesticides while there  is still time for affected groups to take action to alter the outcome
 of reregistration.  In association with the notification network, EPA and USDA have
 jointly issued a Minor Use Fact Sheet intended to help user groups plan for future
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                                        -19-

 reregistration decisions.  In addition, EPA is cooperating with IR-4 in the
 implementation of a strategy for the reregistration of as many as 1,000 high priority
 minor uses.

       Because of all the efforts underway to save minor use pesticides, the Agency does
 not endorse use of the section 18 process as a means to retain minor uses lost through
 the reregistration process.  If, however, a pesticide registration for a minor crop is
 canceled due to reregistration and the criteria for an emergency condition as outlined in
 the section 18 regulations have been satisfied, the Agency may grant an emergency
 exemption. The Agency expects growers in this situation to actively pursue registration
 of the use requested under section 18. The progress that is being made toward
 registration should be addressed in the exemption application. In lieu of evidence of
 progress toward registration, the Agency may allow the use of a voluntarily canceled
 pesticide or pesticide use upon evidence that an alternative pesticide will be registered in
 the near future or upon evidence that  a program will be carried out to find an
 alternative pesticide for use.

       Under sections 6(b) and 6(c) of FIFRA,  EPA may cancel or suspend the
 registration of a pesticide if the Agency determines that the pesticide causes
 unreasonable adverse effects on the environment. 40 CFR §166.25(b)(iii) of the section
 18 regulations prohibits the Agency from granting exemptions for pesticide uses that
 have been suspended under section 6(c)  of FIFRA or canceled following a notice under
 section 6(b) of FIFRA, unless the use  is  authorized in accordance with the regulations at
 40 CFR §§164.130 through 164.133.  Similarly, the Agency will not be  inclined to grant a
 section 18 exemption for a use that was voluntarily canceled under circumstances which
 suggest the likelihood of unreasonable adverse effects on the environment. In such
 situations, EPA would not likely be able to make the determination required by
 166.25(b)(ii) that the use will not cause unreasonable adverse effects on the environment.

 VII. EMERGENCY EXEMPTIONS FOR NEW CHEMICALS AND THE FIRST FOOD
      USE OF REGISTERED PESTICIDES

       A new chemical is defined as any pesticide containing an active ingredient not
 contained in any currently registered pesticide.  The Agency gives particularly close
 scrutiny to emergency exemption requests for the use of new chemicals and for the first
 food use of registered pesticides. The Agency is concerned that the section 18 process
 may be used to circumvent the more rigorous requirements of the section 3 registration
. process, and thus permit early market  entry of a new chemical or food use pesticide.

       The issuance of such emergency exemption requests depends heavily on the
 available scientific data base for the pesticide and the gravity of the emergency situation.
 The Agency usually has a substantial data base  on the pesticide before it will allow such


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                                        -20-

use. The Agency needs to have, at a minimum, the same studies required to support an
experimental use permit for the use in question. For example, the data base needed to
evaluate risks to human health would include, at least, acute toxicity, subchronic feeding,
teratology, and mutagenicity studies. (Special studies, such as neurotoxicity,
cholinesterase inhibition, or inhalation toxicity, would be required if the chemical
structure indicates that such studies are needed.)  Only after the Agency is reasonably
satisfied that there would  be no significant adverse effect and there is an emergency
condition is an emergency exemption granted for a new chemical or the first food use of
a registered pesticide.

       In evaluating a repeated emergency exemption request for a new chemical  or the
first food use of a registered pesticide the Agency will weigh very heavily the progress
that has been made  toward registration of that use.  The regulations state  that if a
complete application for registration of a use "which has been under a specific or  public
health exemption for any 3 previous years", has not been submitted, it shall be presumed
that reasonable progress toward registration has not been made. As further discussed in
Section X of this document, the Agency will not be inclined to grant repeated
exemptions unless reasonable progress toward registration has been made.

       It should be noted  that the regulations at 40 CFR 166.41 prohibit utilization of
the crisis provisions for pesticides which contain a new  chemical and for the first  food
use of a registered pesticide.

VIII. EMERGENCY EXEMPTIONS FOR SAFER PESTICIDES

       Section  166.3(d) defines "emergency condition" as an urgent, non-routine situation
that requires the use of a  pesticide(s) and shall be deemed to exist when three conditions
are met. EPA believes that an "emergency condition" exists only when the situation is
urgent and non-routine and all three conditions are met; (1) no effective registered
pesticides are available, (2) no feasible  alternative control practices are available, and (3)
the situation involves the introduction of a new pest or will present significant risks to
human health or the environment or will cause  significant economic loss.

       EPA believes its regulations do not allow for the authorization of a section 18
exemption based solely upon a determination that a pesticide which is unregistered for a
particular use is safer than, or environmentally preferable to a pesticide which is
registered for that use.  The primary mechanism for weighing risks and benefits under
FIFRA is the registration  process.  If the effective registered alternative is sufficiently
dangerous  that the Office  of Pesticide Programs would prefer that  growers use an
unregistered pesticide, the statutory scheme  normally contemplates cancellation or
suspension of the registered alternative, rather than ignoring the registered alternative
and granting a  section 18 for an unregistered chemical.


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 IX.  EMERGENCY EXEMPTIONS FOR EXPANDED ACREAGE

       State or Federal agencies seeking repeat emergency exemptions should be aware
 of the Agency's policy regarding expansion of acreage.  In general, the Agency will only
 grant repeat exemptions for use on expanded acreage when the pest emergency has
 spread to areas outside the original range.  The Agency will not be inclined to grant
 exemptions for expanded acreage within the original range of the emergency unless the
 applicant can demonstrate that the pest problem on the additional acreage could not
 have been anticipated.

       In particular, the Agency will not look favorably on repeat exemption requests for
 expanded acreage in situations where growers have planted additional acreage of a crop,
 based  on the expectation that a pesticide will be available under an emergency
 exemption to control an anticipated pest problem.  The purpose of section 18 is to
 provide relief from unexpected pest emergencies. Growers choosing to plant new
 acreage of a crop in an area where a pest is expected to occur are assumed by the
 Agency to have accepted the risk of loss from the pest problem. If an expected pest
 outbreak occurs, the Agency will consider the losses as having resulted from "obvious
 mismanagement" and will not grant an emergency exemption for use on the expanded
 acreage.

 X. REASONABLE PROGRESS TOWARD REGISTRATION

       In accordance with 40 CFR §166.25(b)(2)(ii), one of the factors the Agency must
 consider in deciding whether to grant an emergency exemption is the  progress toward
 registration of the proposed use if a repeated specific or public health exemption is
 sought. Except in unusual circumstances, the Agency is not inclined to grant repeated
 exemptions unless reasonable progress toward registration has been made. In evaluating
 progress toward registration, the Agency will take into consideration delays which were
 beyond the control of the registrant or the emergency exemption applicant.

       The regulations state that if a complete application for registration of a use,
 "which has been under a specific or public health exemption for any 3 previous years",
 has not been submitted, it shall be presumed that reasonable progress toward registration
 has not been made. The Agency interprets this standard  to apply to uses which have
 been requested under section 18 for any 3 previous years, regardless of whether the
 requests were granted or  denied. This interpretation is consistent with the intent of the
 negotiating committee.  The Agency interprets "complete application" to  mean an
application which contains all of the scientific studies and other information required for
registration and which passes the Agency's front end screening process.  If the
application for registration is rejected by the Agency because it is incomplete and the
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 application deficiencies cannot be rectified within 75 days, the Agency will presume that
 reasonable progress toward registration has not been made.

       EPA has reconsidered the 3-year standard set forth in the regulations and
 concluded that, although it is reasonable in most cases, it may be unrealistic for many
 IR-4 minor food  uses due to the program's limited resources and consequent backlog.
 Therefore, in evaluating progress toward registration, the Agency will exercise its
 discretion in determining whether or not reasonable progress has been made on an IR-4
 minor food use.  Generally, IR-4 minor food uses will  be judged against a 5-year
 standard, as opposed to the 3-year standard for all other uses.

       The section 18 regulations do not set forth criteria for evaluating progress toward
 registration once a complete application for registration has been submitted. After this
 point in the registration process, the Agency evaluates progress toward registration on a
 case-by-case basis, taking into account a number of different factors, including:

    -Compliance with the Agency's registration data requirements and guidelines. The
       pesticide registration data requirements are clearly presented in 40 CFR §158.
       The Pesticide Assessment Guidelines contain the standards for conducting
       acceptable tests, guidance on evaluation and reporting of data, definition of terms,
       further guidance on when data are required, and examples of acceptable
       protocols.  Registrants are expected to read and apply the Guidelines when
       conducting and submitting studies in support of registration. If studies are
       determined by the Agency to be deficient and not in compliance with the
       Pesticide Assessment Guidelines, the Agency may determine that reasonable
       progress toward registration has not been made.

       Many of the registration data requirements in 40 CFR §158 are tiered.  The
       results of lower tier studies may trigger the need for additional, higher tier studies.
       The Agency expects the registrant to evaluate results of its lower tier studies and
       conduct higher tier studies when warranted. If  the results of lower tier studies
       clearly indicate the need for additional studies which the registrant has not
       conducted, the Agency may determine  that reasonable progress toward
       registration has not been made.

    -The registrant's responsiveness to application deficiencies identified  during Agency
       review.  Under the Agency's current policy, registrants are given 75 days to
       respond when notified of deficiencies associated with registration or amended
       registration applications and tolerance  petitions. The response must indicate how
       the registrant plans to address the deficiencies.  Therefore, if the registrant fails to
       respond to notification of deficiencies within 75 days or has not provided the
       Agency with an acceptable plan and timetable for rectifying the deficiencies, the
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        Agency may determine that reasonable progress toward registration has not been
        made.

     •New registration data requirements. The Agency may occasionally require
        additional data to support registration of a use which the registrant could not have
        anticipated at the time the original application for registration was submitted.
        The Agency will take this into consideration in evaluating progress toward
        registration. However, the Agency expects the registrant to commit to generate
        the required data and to provide the Agency with an acceptable timetable for
        submission of the additional data. If the registrant fails to do this, the Agency will
        presume that reasonable progress toward registration has not been made.

     -The registrant's compliance with reregistration requirements. The reregistration
        provisions of FIFRA '88 establish mandatory timeframes and duties for
        reregistration of pesticides.  In evaluating progress toward registration of repeated
        section 18 uses, the Agency will also consider  the registrant's .^registration record.
        The Agency will not be inclined to grant repeated emergency exemptions for a
        pesticide unless the registrant is meeting its reregistration obligations.

        The amount of time required to obtain section 3 registration once an application
 has been submitted varies, depending on the  pesticide and the particular use pattern.
 However, 2 to 3 years should be adequate in most cases,  if the registrant submits a
 complete registration  package in accordance with Agency guidelines and the Agency
 meets its obligations in reviewing the application. Therefore, if registration has not
 occurred within 3 years of receipt of an application, the Agency will presume that
 reasonable progress toward registration has not occurred.  The Agency will conduct a
 thorough evaluation of the factors responsible for the delay but will not be inclined to
 grant further emergency exemptions for the use, except when an "emergency condition"
 exists and Agency inaction (supporting data has not been reviewed or a final decision has
 not been made) is the cause of the delay.

       The Agency expects the applicant to keep abreast  of the progress that is being
 made toward registration of uses requested under section 18. Prior to making an
 application for a repeated specific or public health exemption, the State or Federal
 agency should contact the registrant regarding the progress being made toward
 registration of the proposed use.  The section 18 application should contain a discussion
 of progress toward registration, including a summary of deficiencies and data gaps and
• the registrant's timetable for rectifying registration deficiencies.

        In the past, the Agency has provided little  information to emergency exemption
 applicants concerning the registration status of uses requested under section 18.  To
 better enable State and Federal agencies to plan and develop strategies to manage pest


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                                        -24-

 emergencies, the Agency has adopted a new policy of providing this information to
 section 18 applicants in its decision notification letters. The letters will discuss the
 registration status of the proposed use, summarizing the outstanding deficiencies and
 issues which may affect registration. When applicable, notification letters will also
 include a discussion of the reregistration status  of the pesticide and the potential for
 ^registration  issues to affect registration of the proposed use.

 XI.  INNOVATIVE APPROACHES TO REPEAT SECTION 18 PROBLEMS

       The Office of Pesticide Programs (OPP) is embarking on a new initiative to
 develop innovative and non-traditional approaches to achieve the Agency's
 environmental objectives. The primary goals of this initiative are to identify issues and
 environmental problems that elude traditional regulatory methods and determine
 innovative ways to address them. As part of this strategy, OPP is considering new
 opportunities under the section 18 process that  will allow the Agency to effectively deal
 with pest emergencies and reduce risk.  In general, the Agency would like to identify
 pest problems that consistently result in emergency exemption requests, and work with
 the states and affected growers to develop ways to address these problems using new
 and/or little known technologies.

       Currently, OPP is considering a broad range of potential alternative  pest control
 strategies. The  availability of alternate control  measures tend to be site specific.  In the
 future, authorization of repeat section  18 requests may be conditioned upon evidence
 that the State  applicant is attempting to find an innovative alternative solution.

 XII. CRISIS EXEMPTIONS

       It was the Agency's intention in promulgating  the section 18 regulations that
 resort to the crisis provisions would be relatively rare.  When proposing the current
 section 18 rules at 40 CFR Part 166, EPA noted that the regulatory negotiating
 committee gave some thought to abolishing crisis exemptions. The Committee retained
 the crisis exemption provisions of the pre-existing regulations, agreeing that, "the crisis
 provisions should be invoked only in dire situations where the emergency condition is
 unpredictable  and there is no other way to mitigate the emergency" (Fed. Reg. 13953;
 April 8, 1985).

       Section 166.40 allows the head of a Federal or State agency, the Governor of a
 State, or their official designee, to issue crisis exemptions in situations involving
 "unpredictable" emergency situations when there is insufficient time to request a specific,
 quarantine, or public health exemption, or for EPA to review such a request. It is the
Agency's belief that situations in which there is insufficient  time to file a request for a
specific exemption far enough in advance to allow the Agency the normal 50-days of
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 processing time should be rare.  In almost any emergency situation, an applicant would
 have adequate time to submit a request to the Agency for a specific exemption prior to
 declaring a crisis.  Indeed, in most situations, by determining the magnitude of the
 outbreak that would constitute an emergency and submitting a request to the Agency
 incorporating this threshold level, the specific exemption can be requested far enough in
 advance to allow EPA an adequate opportunity to review the application. Crisis
 exemptions should not be issued to mitigate emergencies for which crisis exemptions
 have been issued or specific exemptions requested in previous years.  It is difficult to
 imagine how these pest emergencies  could be considered unpredictable and why a
 specific exemption request could not have been submitted in time to address the
 emergency. Tardiness in preparing emergency exemption requests for predictable
 emergencies will not be viewed by the Agency as a valid reason for resorting to the
 section 18 crisis provisions.

       Section 166.42(a)(l) of the regulations requires the State or Federal Agency
 issuing a crisis exemption to notify the Agency, when feasible, at least 36 hours in
 advance of utilization of the crisis provisions. In no case shall notice  be given to the
 Agency later than 24 hours after the  State or Federal agency's decision to avail itself of a
 crisis exemption.  EPA does not consider an indication from a State or Federal Agency
 that they are considering a crisis exemption adequate notification.

       Section 166.53(b) gives the Agency the authority to revoke  crisis exemptions or a
 State or Federal agency's authority to issue crisis exemptions when the agency is not
 complying the requirements of the crisis provisions in 40 CFR §166, subpart C.
 Improper notification to the Agency of crisis exemptions or resort to the crisis provisions
 to mitigate predictable pest emergencies will be considered noncompliance with the crisis
provisions and may result in revocation of the State or Federal agency's crisis exemption
or crisis authority.
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