Attachment II - Page 37 
Federal Register / 
4. Research and development 
exemption. Section 5(h)(3) of TSCA 
exempts new chemical substances 
produced only in small quantities solely 
for research and development (R&D) 
from PMN requirments (“small 
quantities” must be defined by rule). 
R&D includes research or testing of a 
substance’s chemical, physical, 
production, and performance 
characteristics. As a result, the R&D 
exemption encompasses a relatively 
broad scope of activities, including 
monitored performance testing. Under 
EPA’s PMN rule (40 CFR 720.3(cc)), 
"small quantities" are those “not greater 
than reasonably necessary" for the 
purposes of R&D. Therefore, current 
requlations put no specific quantitiative 
limit on the size of R&D activities. These 
requirements are discussed more fully in 
the preamble to EPA's PMN rule and in 
the notice clarifying those rules, 
published in the Federal Register of 
September 13. 1983 (48 FR 41132). 
The specific provisions of EPA's PMN 
rule addressing the R&D exemption (40 
CFR 720.36 and 720.78(b)) are now 
subject to stay (48 FR 41132). Until Final 
provisions are developed, persons 
producing new chemical substances 
under the R&D exemption must comply 
with section 5(h)(3) of TSCA and 
§ 710. 3(y) of the Inventory rules. In 
particular, the R&D must be conducted 
under the supervision of a technically 
qualified individual, and manufacturers 
must notify all persons involved in the 
R&D activities of risks they are aware 
of. 
An important issue for EPA in 
implementing the TSCA biotechnology 
program is whether significant risks 
could occur without Agency review if 
persons conducted R&D field tests of 
new microorganisms in an open setting. 
Concern for small-scale field testing of 
traditional chemicals is relatively low. 
because the amounts involved are likely 
to be small, and the area of application 
is geographically circumscribed. 
However, because microorganisms may 
reproduce and spread in the 
environment, EPA review at a later 
commercial stage for these types of 
products may be too late to prevent 
widespread exposure. 
The possibility of a gap in Federal 
authority to review field testing of 
genetically engineered organisms has 
been widely discussed. It was a major 
focus of the June 23, 1983 Congressional 
hearings on the environmental 
implications of genetic engineering (U.S. 
House of Representatives Subcommittee 
on Oversight and Investigations, and 
Subcommittee on Science, Research and 
Vol. 49, No. 252 / Monday, December 
Technology), and has been the subject 
of other discussions. 
Up to the present time, NIH, through 
the RAC, is the major Federal agency 
that has reviewed Field testing of 
microorganisms engineered by rDNA 
techniques. However, the NIH RAC's 
authority is limited to research 
sponsored by institutions which receive 
NIH funds for rDNA research. Its 
guidelines and review are not binding 
for privately funded ventures (although 
voluntary compliance seems to have 
been effective to date), and it does not 
address organisms produced through 
techniques other than rDNA. As a result, 
it is possible that genetically engineered 
organisms that would eventually be 
reviewed under TSCA could be released 
to the environment as part of a Field test 
before any review had occurred. 
To eliminate this possibility, EPA 
believes that it may be appropriate to 
require review bf new microorganisms 
before they are tested in an open 
environment for TSCA purposes. One 
approach would be to limit the R&D 
exemption by rule to exclude field 
testing. Because living organisms might 
reproduce and spread in the 
environment, EPA believes that the 
quantities bf organisms involved in 
Field-testing may not be small for 
purposes of TSCA section 5(h)(3). 
Therefore, the Agency is considering 
initiating rulemaking to amend the 
definition of “small quantities solely for 
research and development” to exclude 
living microorganisms directly released 
to the environment. The effect of this 
amendment would be to eliminate the 
PMN R&D exemption for new Field- 
tested microorganisms and ensure their 
review under TSCA before release. 
A number of difficult issues would 
have to be addressed in order to 
implement such an amendment to the 
R&D exemption. For example, clear 
definitions of “Field testing" and "direct 
release to the environment" would have 
to be developed, so that researchers 
could determine what types of activities 
were subject. Greenhouse testing, for 
example, may involve releases to the 
environment which could in some cases 
be significant. Should greenhouse testing 
therefore be considered "direct 
release”? Should EPA set containment 
standards for greenhouses as a 
condition for being subject to the R&D 
exemption? Should EPA incorporate 
some portion of the RAC guidelines as 
conditions for the R&D exemption? 
These and other questions would be 
addressed during the process of 
amending the R&D exemption. In the 
meantime, the Agency welcomes 
31. 1984 / Notices 50891 
comments and suggestions on these and 
related issues. 
Even under this approach, PMN 
requirements might not apply to purely 
academic or noncommercial field tests. 
TSCA section 5(i) specifies that, for the 
purposes of section 5, "manufacture" 
and "process" mean “manufacturing or 
processing for commercial purposes." 
Therefore, PMN requirements, including 
any requirements extended to field 
testing, might not apply to purely 
academic Field testing conducted for 
basic research rather than commercial 
intent. This may create an anomoly, 
because any risks associated with the 
field testing of a microorganism are 
independent of the commercial intent of 
the tester. The NIH RAC already 
provides considerable protection, and 
EPA believes it is appropriate for purely 
academic research to remain in the 
domain of the NIH, but the RAC's 
mandate is limited to federally funded 
institutions and rDNA research. The 
issue of academic as well as commercial 
field testing is under discussion by the 
Federal Cabinet Council described in 
Unit IV.B. 
The Agency requests comments on the 
potential risks posed by small-scale 
field tests, the appropriateness of the 
approach EPA is considering for 
addressing these risks, possible 
alternatives, and the need to address 
purely academic or other 
noncommercial field testing. 
5. Other TSCA PMN exemptions. 
Section 5(h) provides for several other 
exemptions for PMN requirements. The 
most important of these for 
biotechnology may be section 5(h)(4). 
which allows EPA by rule to exempt 
from PMN requirements chemical 
substances that it finds will not present 
an unreasonable risk. For example, it 
might be possible to develop partial or 
complete exemptions for 
microorganisms used in closed systems 
with appropriate methods of 
containment. EPA requests comments 
on how the section 5(h)(4) authority 
could be used to reduce the impact of 
PMN requirements for specific 
categories or uses of genetically 
engineered organisms. 
Another important exemption 
provision may be section 5(h)(1), which 
provides for an expedited review (45 
days rather than the full 90 days) for 
new chemical substances manufactured 
for test marketing. This exemption may 
be appropriate for field tests and other 
limited commercial applications. 
C. Significant New Use Authority 
EPA recognizes that any practical 
approach to defining "new 
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