Citation: 57 Fed. Reg. 6753 1992

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Federal Register / Vol. 57, No. 39 - Thursday. February 27. IM / Notce.

and standards, policy recommendations,and guidance for the procurement,operation, safety, and disposal ofcivilian agency aircraft, (ii) operating agovernment-wide aircraft managementinformation system; (iii) identifying andadvising agencies and OMB ofopportunities to share, transfer, ordispose of underutilized aircraft, toreduce excessive aircraft operations andmaintenance costs; and to replaceobsolete aircraft- (iv) providing othertechnical assistance to agencies inestablishing their own automatedaircraft information and cost accountingsystems and conducting the costanalyses required by this Circular;, (v)reviewing proposed agency internalaircraft policies for compliance withOMB guidance and notifying OMB ofany discrepancies- and (vi) conductingan annual study of the variable andfixed costs of operating the differentcategories of government aircraft anddisseminating the results for use inmaking the cost comparisons required inSection 8.a.(ii) and reporting the tripcosts as required in Section 10.c.

In order to carry out theseresponsibilities, the Administrator ofGeneral Services shall maintain aninteragency aviation policy workinggroup to advise him in developing orchanging aircraft policies andinformation requirements.

d. Except for provisions of thisCircular which specify their ownimplementation dates, each agency headshall issue internal agency directives toimplement this Circular no later than 180days from the date of the Circular.These internal agency directives mustinclude all policies contained in thisCircular, but may also containadditional policies unique to the agency.Responsibility for these policies shall beassigned to a senior managementofficial who has the agency-wideauthority and resources to implementthem.

13. Accounting for Aircraft Costs.Agencies must maintain systems fortheir aircraft operations which willpermit them to: (i) justify the use ofgovernment aircraft in lieu ofcommercially available aircraft, or theuse of one government aircraft in lieu ofanother; (ii) recover the costs ofoperating government aircraft whenappropriate. (iii) determine the costeffectiveness of various aspects of theiraircraft programs, and (iv) conduct thecost comparisons required by OMBCircular A-76 to justify in-houseoperation of government aircraft versusprocurement of commercially availableaircraft services. Although agencyaccounting systems do not have to be

uniform in their design or operation tocomply with this Circular, they mustaccumulate costs which can besunmarized into the standard AircraftProgram Cost Elements defined inAttachment B. The use of these elementsto account for aircraft costs is discussedin Attachment A.

14. Effective Date. This Circular iseffective on publication.

15. Information Contact. All inquiresshould be addressed to the GeneralManagement Division, Office ofManagement and Budget, telephonenumber (ZO) 95-5090.Richard Darman.Director.[FR Doc. 92-4268 Filed 2-2-92 8:45 am]BILUNO COCNE 311-1-u

OFFICE OF SCIENCE ANDTECHNOLOGY POUCY

Exercise of Federal Oversight WithinScope of Statutory Authority: PlannedIntroductions of BiotechnologyProducts Into the Environment

AGENCY. Executive Office of thePresident, Office of Science andTechnology Policy.ACTIoN: Announcement of policy.

SUMMARY: Biotechnology is the use ofvarious biological processes, bothtraditional and newly devised, to makeproducts and perform services fromliving organisms or their components.Because these diverse processes,products and services may findapplication in many areas, such asmedicine and pharmaceuticals,agriculture, energy, manufacturing, andenvironmental protection, the attendantplanned introduction of biotechnologyproducts into the environment may besubject to federal oversight under thefederal statute(s) relating to each sucharea. The statutory provisionsnecessarily define the boundaries of thescope of discretion afforded to executivebranch agencies to exercise oversight..

In 1986 the "Coordinated Framework"was issued to explain the properallocation and coordination of oversightresponsibilities under the severalrelevant statutes and among the severalrelevant federal agencies. TheCoordinated Framework thus addressedwho shall have oversight authority ineach instance, but did not address howthat authority should be exercised in thefrequent situations in which a statuteleaves the implementing agency latitudefor discretion.

To fill that need, the Federal Registernotice sets forth the proper basis for

agencies' exercise of oversight authoritywithin the scope of discretion affordedby statute. It describes a risk-based,scientifically sound approach to theoversight of planned introductions ofbiotechnology products into theenvironment that focuses on thecharacteristics of the biotechnologyproduct and the environment into whichit is being introduced, not the process bywhich the product is created. Exercise ofoversight in the scope of discretionafforded by statute should be based onthe risk posed by the introduction andshould not turn on the fact that anorganism has been modified by aparticular process or technique.

In order to ensure that limited tederaloversight resources are applied wherethey will accomplish the greatest netbeneficial protection of public healthand the environment, oversight will beexercised only where the risk posed bythe introduction is unreasonable, that is,when the value of the reduction in riskobtained by additional oversight isgreater than the cost thereby imposed.The extent and type of oversightmeasure(s) will thus be commensuratewith the gravity and type of risk beingaddressed, the costs of alternativeoversight options, and the effect ofadditional oversight on existing safetyincentives.

These principles recognize thedesirability of appropriate oversight ofunreasonable risks, such as currentrestrictions on the introduction ofdangerous pathogens, the principles alsoconfirm the limited extent of currentoversight of low-risk activities, such asthe traditional breeding of farm animalsand plants.

Means for implementing theseprinciples are illustrated; specificimplementation must be developed inthe context of each agency's statutoryprograms. Because this Final Statementon Scope addresses the exercise ofoversight discretion within the scope ofstatutory authority, nothing hereindisplaces agencies' duties underapplicable statutes, nor providesadditional authority not available underapplicable law.

Dated& February 24. 1992.D. Allan Bromley,Director, Office of Science and TechnologyPolicy.Table of Contents

A. Statutes pertaining to biotechnologyproducts

B. Coordinated Framework and the needfor a Scope document

C. Proposed Statement on Scope

I I II I I I I • I II I I I

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D. Public Conunents on the ProposedStatement on Scope and SubsequentPolicy Developments

I. Rationale for Risk-Based ApproachA. Scientific Principles for the Risk-Based

ApproachB. Risk-Based Approach Ensures SafetyC. Risk-Based Approach Avoids

Discouraging Useful InnovationIll. Final Statement on Scope

IV. ImplementationA. Exercising Discretion Within the Scope

of Statutory AuthorityB. Evaluating RiskC. Assessing Oversight OptionsD. Use of "Categories of Exclusion/

Inclusion"1. Treatment of former exclusion examples2. Development of categories of exclusion3. Development of categories of inclusion4. Developing Combined Approaches

Appendix: Comments on Proposed Statementon Scope and Subsequent PolicyDevelopments

1. Presirtent's Principles of RegulatoryReview

2. EPA Report on Risk Priorities3. Summary of Public Comments on

Proposed Statement on Scope4. Report on National Biotechnology Policy5. Competitiveness Council Fact Sheet on

Critical Technologies

1. Background

A. Statutes Pertaining to BiotechnologyProducts

Biotechnology is the use of variousbiological processes, both traditionaland newly devised, to make productsand perform services from livingorganisms or their components. SeeReport on National Biotechnology Policy(President's Council onCompetitiveness: Feb. 1991), p. 1.Because these diverse processes,products and services may findapplication in many areas, such asmedicine and pharmaceuticals,agriculture, industry, and environmentalprotection, the attendant plannedintroduction of organisms or otherbiotechnology products into theenvironment may be subject to federaloversight under the one or more federalstatutes relating to each such area. TheFederal Register of November 14, 1985(50 FR 47174) contains a matrix of themany federal authorities related tobiotechnology products. There is nosingle, unified statute governing allintroductions of biotechnology productsinto the environment, just as there is nosingle, unified statute governing the useof any other basic, multipurposetechnology such as chemicalengineering, civil engineering, or the useof fire or electricity. A single statutewould quickly become obsolete, or anexcessive constraint on innovation, aspeople devised new and useful ways toemploy the technology, and would fail to

address the important differences in thepotential impacts of the technologywhen used in different ways.

Introductions into the environment ofbiotechnology products are thereforesubject to government oversightpursuant to statutory authoritycorresponding to the particular type ofintroduction in question. The FederalPlant Pest Act governs the importationand movement of plant pests; theFederal Food, Drug and Cosmetic Act(FFDCA) governs foods, food additives,cosmetics, human and veterinary drugs,and medical devices; the FederalInsecticide, Fungicide and RodenticideAct (FIFRA) governs pesticides- theToxic Substances Control Act (TSCA)governs chemicals; several statutes (theClean Air Act, Clean Water Act, OilPollution Act, "Superfund" law, andResource Conservation & Recovery Act)govern the use of pollution controltechniques; and certain statutes governprojects that are federally funded. Oneor more of these laws may apply tointroductions of biotechnology productsfor research or commercial purposes.

Each of these laws is administered bya Federal agency. For example, the Food& Drug Administration (FDA)administers FFDCA; the EnvironmentalProtection Agency (EPA) administersFIFRA, TSCA, and the pollution-controlstatutes; and the Department ofAgriculture (USDA) administers theFederal Plant Pest Act while alsofunding many research projectsinvolving biotechnology.

Each statute directs the implementingexecutive branch agency to carry outcertain responsibilities. The statutoryprovisions necessarily define theboundaries of the scope of discretionafforded to executive branch agencies toexercise oversight. Typically eachstatute leaves the agency discretionwithin those bounds in exercisingoversight.B. The "Coordinated Framework" andthe Need for a Scope Document

In view of the diversity of Federalstatutes pertaining to biotechnologyproducts, in 1986 the CoordinatedFramework for the Regulation ofBiotechnology was issued to describethe comprehensive Federal regulatorypolicy for ensuring the safety ofbiotechnology research and products. Itexplained that existing statutes providea basic network of agency jurisdictionover both research and products,assuring reasonable safeguards for thepublic and the environment. It alsoexplained the coordination amongFederal agencies to ensure that suchsafeguards would be generated by asmooth, understandable regulatory

oversight process. The CoordinatedFramework stated that "to the extentpossible, responsibility for a product usewill lie with a single agency." (51 FR23363). The Framework was expected toevolve in light of experience, andmodifications to the framework wereanticipated. The CoordinatedFramework for the Regulation ofBiotechnology continues to be FederalGovernment policy today for theallocation of oversight responsibilities-which agencies shall have oversightresponsibility for which biotechnologyproducts.

But the Coordinated Framework didnot fully address how oversight shouldbe exercised within the scope ofdiscretionary authority afforded bystatute. The Coordinated Frameworkrecognized that while the statutorybases for regulation among the involvedagencies may differ, common principlesshould govern decisions on how toexercise discretionary oversight overintroductions of biotechnology products.

C. Proposed Statement on Scope

In order to fill that need, the Federalagencies worked closely to devise sucha common statement of the basis forexercising oversight within the scope ofdiscretionary authority afforded bystatute. This statement has commonlycome to be called the "Scope"document. In July 1990, OSTP publisheda proposed version of the Scopedocument prepared through theInteragency Biotechnology WorkingGroup of the President's Council onCompetitiveness, which had been askedto review the scope issues by theDirector of OSTP after prior attempts todevelop a scope had not reachedconsensus and because the Directorobserved the need for attention by aninteragency group concerned with policyimplications as well as scientific issues.This history of this effort is detailed inthe Proposed Scope document publishedby OSTP. See "Principles for FederalOversight of Biotechnology: PlannedIntroduction Into the Environment ofOrganisms with Modified HereditaryTraits," 55 FR 31118 (July 31, 1990). TheProposed Scope set forth a risk-basedapproach to the scope of oversight: "Tothe extent permitted by law, plannedintroductions into the environment oforganisms with modified hereditarytraits should not be subject to oversight* * * unless information concerning therisk posed by the introduction indicatesthat oversight is necessary." 55 FR at31120. This statement expresses a risk-based approach that focuses on theproperties of products introduced intothe environment, the characteristics of

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the target environment, and theconfinement measures employed, ratherthan on the process or technique bywhich the product was created.Information on the process couldprovide evidence of likely risk and ofquality control in production, but thenature of the process could not be thesole or dispositive criterion for triggeringoversight. The Proposed Scopedelineated possible criteria forevaluating risk, pertaining to both theorganism and the target environmentinto which it was introduced.

The Proposed Scope also suggestedsix examples of categories for exclusionfrom oversight. Five of these categorieswere defined by modifications such asselective breeding, transformation,deletions and use of noncoding markergenes. The sixth category consisted ofmodified organisms that present nogreater risk than their unmodifiedparental strains.

D, Public Comments on the ProposedScope and Subsequent PolicyDevelopments

The Proposed Scope was issued forpublic comment. A summary of thepublic comments received is provided inthe appendix below.

In addition, several important policydevelopments have occurred since theissuance of the Proposed Scope, whichhave been taken into account indeveloping the current final statementon Scope. These developments include adecision by the President to approvePrinciples for Regulatory Review forBiotechnology, and an EPA reportendorsing the risk-based approach toenvironmental policy. These policy.These policy developments are alsosummarized in the appendix.

Agency proposals that address theintroduction of organisms into theenvironment have also been issuedsince the Proposed Scope. On February1, 1991, USDA proposed guidelines (56FR 4134) which set out points-to-consider for scientists in designing fieldtrials and were intended to providequality assurance for federally-fundedagricultural research.

EPA is considering proposedregulations under FIFRA for small-scalerelease of microbial pesticides titled:Microbial Pesticides; Experimental UsePermits and Notifications, and proposedregulations under TSCA titled: MicrobialProducts of Biotechnology; ProposedRegulations under the Toxic SubstancesControl Act.

The present final statement ofprinciples for the exercise of oversightwithin the scope of statutory authority isbased on interagency deliberationssince July 1990 and careful consideration

of all the items set forth at greater lengthin the Appendix, including considerationof comments from public andsubsequent policy developments. Asindicated below, the fundamental risk-based approach in the Proposed Scopereceived widespread endorsement andhas been retained and strengthened intoday's final statement.

II. Rationale for Risk-Based ApproachThe propose of this statement is to

guide the exercise of agencies' oversight,within the scope of authority affordedby statute, to ensure the safety ofplanned introductions of biotechnologyproducts into the environment while notunduly inhibiting the benefits of suchintroductions. This approach thereforefocuses on the characteristics and riskposed by an introduction, rather than onthe process by which a product iscreated. This is the same fundamental,risk-based approach enunciated in theProposed Scope in July 1990 (see 55 FRat 31119), and endorsed by the greatmajority of public comments on theProposed Scope (see appendix below).The risk-based approach is scientificallysound, properly protects public healthand the environment against risk, andavoids hindering safe innovations.Citing these rationales, the first Principleof Regulatory Review for Biotechnologyapproved by President Bush in August1990 requires the federal government toadhere to a risk-based approach.Likewise, the EPA Report on RiskPriorities issued in September 1990 andthe Competitiveness Council Fact Sheeton Critical Technologies issued in April1991 explain the imperative of followinga risk-based approach. (See excerpts inappendix, below.) This section brieflyexplains the reasoning behind this risk-based approach.

A. Scientific Principles for the Risk-Based Approach

Introductions of organisms into theenvironment may pose hazards tohumans, wild or domesticated plantsand animals, or to the environmentgenerally (for example, algal blooms inponds or disruptions of natural cycles).The risk posed by an introduction ofbiotechnology products into theenvironment is a function of thecharacteristics of the organisms or otherproducts, the particular application(including confinement measures), andthe environment itself. As stated in theCoordinated Framework, "Withinagriculture, for example, introductions ofnew plants, animals andmicroorganisms have long occurredroutinely with only some of those thatare not native or are pathogenicrequiring regulatory approval." (51 FR

23303). Even many organisms that arepathogenic are routinely used withpractices or under conditions thatmitigate risk; much of the researchwithin the discipline of plant pathologyis in this category. Meanwhile, certainunmodified organisms are of such greatrisk that they are not allowed into theUnited States, such as the Foot andMouth Disease Virus (FMDV).

Just as with traditional breedingtechniques, the production of organismsusing new molecular techniques ofgenetic manipulation may or may notpose risk, depending on thecharacteristics of the organism, thetarget environment, and the type ofapplication. The National ResearchCouncil's extensive review of thepotential risks of introductions oforganisms made from newbiotechnology processes (NRC, FieldTesting Genetically Modified Organisms(1989)) reached the conclusion thatorganisms that have been geneticallymodified are not per se of inherentlygreater risk than unmodified organisms.

It elaborated:1. The same physical and biological

laws govern the response of organismsmodified by modern molecular andcellular methods and those produced byclassical methods. (p. 15)

2. Information about the process usedto produce a genetically modifiedorganism is important in understandingthe characteristics of the product.However, the nature of the process isnot a useful criterion for determiningwhether the product requires less ormore oversight. (pp. 14 and 15.)

3. No conceptual distinction existsbetween genetic modification of plantsand microorganisms by classicalmethods or by molecular techniques thatmodify DNA and transfer genes. (p. 14)

4. Crops modified by molecular andcellular methods should pose risks nodifferent from those modified byclassical methods for similar traits. Asthe molecular methods are morespecific, users of these methods will bemore certain about the traits theyintroduce into the plants. (p. 3)

5. In many respects, molecularmethods resemble the classical methodsfor modifying particular strains ofmicroorganisms, but many of the newmethods have two features that makethem even more useful than the classicalmethods.

Precision allows scientists to makegenetic modifications in microbialstrains that can be characterized morefully, in some cases to the level of DNAsequence. This reduces the degree ofuncertainty associated with anyintended application. The new methods

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have greater power because they enablescientists to isolate genes and transferthem across natural barriers. (p. 123)

The process of modification is thusindependent of the safety of theorganism. Although the newbiotechnology processes can be used toproduce risky organisms, so cantraditional techniques; it is thecharacteristics of the organism, theenvironment, and the application thatdetermine risk (or lack thereof) of theintroduction, not the technique used toproduce the organism. Indeed, the newtechnologies of molecular modificationmay increase the potential for safe,planned introductions because theyemploy techniques that are more preciseand more efficient than traditionalcross-breeding, and that therefore yielda better-characterized and morepredictable organism. On the otherhand, their great power allows us totransfer genes more readily, thusresulting in organisms with new traits orcombinations of traits.

From these scientific observationsderive the following fundamental Scopeprinciples:

1. A determination to exerciseoversight within the scope of discretionafforded by statute should not turn onthe fact that an organism has beenmodified or modified by a particularprocess or technique, because such factis not alone a sufficient indication ofrisk.

2. A determination to exerciseoversight in the cope of discretionafforded by statute should be based onevidence that the risk presented byintroduction of an organism in aparticular environment used for aparticular type of application isunreasonable.

3. Organisms with new phenotypictrait(s] conferring no greater risk to thetarget environment than the parentalorganisms should be subject to a level ofoversight no greater than that associatedwith the unmodified organisms.

B. Risk-BasedApproach Ensures SafetyA purpose of government regulation of

biotechrology, as with any safetyregulation, is to limit unreasonable risksfaced by the public and theenvironment. Yet agency resources arescarce, and cannot be applied to everypossible problem responsible officialsmust choose carefully the risks ofhighest concern and find the best way tocombat them. In order to protect thepublic and the environment, the scope ofoversight should help focus agencyefforts at reduction of the mostimportant risks (and at least cost, sothat society's resources are keptavailable to combat the next highest

risks). As the US EnvironmentalProtection Agency (EPA) recentlystated.

There are heavy costs involved ifsociety fails to set environmentalpriorities based on risk. If finiteresources are expended on lower-priority problems at the expense ofhigher-priority risks, then society willface needlessly high risks. (US EPA,SAB, "Reducing Risk: Setting Prioritiesand Strategies for EnvironmentalProtection," Sept. 199M, Exec. Sum.,(p. 2.))

C. Risk-Based Approach AvoidsDiscouraging Useful Innovation

Determining the scope of oversight ongrounds other than risk would also tendto discourage useful innovations. Thepotential benefits of biotechnology areenormous; as described in the February1991 Report on National BiotechnologyPolicy, innovation in biotechnology hasbegun to make possible greatimprovements in our ability to growfood, protect the environment, andproduce medications, among otherapplications. Triggering the exercise ofoversight based on the use of a specificinnovative technology, such asrecombinant DNA, will tend todiscourage the use of that technology byindustry and researchers.

The distribution of oversight burdenacross technologies is in many ways asimportant as the total amount of burden:If oversight is aimed only at one type oftechnology, the burden will be skewedagainst that technology and hinder itsdevelopment. New regulations oftenplace greater restrictions on newproducts or technologies whilegrandfathering in older, and sometimesmore risky, products or technologies.This uneven regulation encourages thecontinued use of older products andtechnologies, while discouraginginnovation and potential risk reduction.

Similarly, special oversight directed at"new techniques" in biotechnologycould discourage innovations usingthose techniques.IIL Final Statement on Scope

Statutory provisions necessarilydefine the boundaries of the scope ofdiscretion afforded to executive branchagencies to exercise oversight. Withinthe scope of authority provided bystatute, federal agencies shall exerciseoversight of planned introductions ofbiotechnology products into theenvironment only upon evidence thatthe risk posed by the introduction isunreasonable. A risk is unreasonablewhere the full value of the reduction inrisk obtained by oversight exceeds thefull cost of the oversight measure. This

formulation ensures that limited federaloversight resources will be appliedwhere they will accomplish the most netbeneficial protection of public healthand the environment while allowinguseful, safe innovations to proceed.Evidence of risk must incorporateinformation about the chacteristics ofthe organism or other biotechnologyproduct, the target environment, and thetype of application.

Federal government regulatoryoversight should focus on thecharacteristics and risks of thebiotechnology product-not the processby which it is created. Productsdeveloped through biotechnologyprocesses do notperse pose risks tohuman health and the environment; riskdepends instead on the characteristicsand use of individual products. Whereoversight is warranted, the extent andtype of oversight measure(s) must becommensurate with the gravity and typeof risk being addressed, must maximizethe net benefits of oversight by choosingthe oversight measure that achieves thegreatest risk reduction benefit at theleast cost, and must consider the effectthat additional oversight could have onexisting safety incentives.

The risk-based approach taken in thisFinal Statement on Scope is the same asthe approach enunciated in the July 190Proposed Scope, which provided that"To the extent permitted by law,planned introductions into theenvironment * * * should not be subjectto oversight * * unless informationconcerning the risk posed by theintroduction indicates that oversight isnecessary." 55 FR at 31120. As detailedbelow, the Final Statement on Scopealso retains the "criteria for evaluatingrisk" suggested in the Proposed Scope.The principal differences betweentoday's Final Statement on Scope andthe Proposed Scope are (i) therecognition that there are a variety ofoversight measures that agencies mightemploy, not simply a binary choicebetween "oversight" and "no oversight,"and therefore the provision thatagencies choose from among the menuof measures thme oversight measuresthat achieve risk reduction at net benefitand least cost; (i) the removal of theexamples of "categories for exclusion'in the Proposed Scope, because, asdescribed below under"Implementation," those categories werenot explained in the basis of risk andignored the need for each agency tohave the flexibility to fashion itsimplaentation in the context of itsstatutory program. These differences arewarranted in the interest of sound publicpolicy, and reflect the numerous public

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comments (summarized in the appendix)recommending such revisions.

TV. Implementation

A. Exercising Discretion Within theScope of Statutory Authority

As described above, this FinalStatement on Scope guides agencies'exercise of oversight within the scope ofdiscretion provided by statute. Nothingin this document displaces agencies'duties under applicable statutes, nordoes this document provide the basis foradditional authority not available toagencies under applicable law. Rather,this document guides the exercise ofdiscretion within the range of authorityleft to agencies under their statutes.Each agency will need to implementthese guidelines in a manner appropriateto each statutory framework, and toexercise its oversight authorityconsistent with the risk-based principlesof this Final Statement on Scope.

This Final Statement on Scopegoverns all oversight within the scope ofagency discretion afforded by statute ofplanned introductions of biotechnologyproducts into the environment. It doesnot relate only to new regulatoryinitiatives or new categories oforganisms introduced into theenvironment. In addition, the term"planned introduction" as used hereincludes introductions in the course ofresearch and in commercial and otherapplications. It is not limited to initialsmall-scale field trials.

In applying the risk-based approachthere will of course be areas in whichregulatory interventions are frequent,and areas in which such interventionsare legally authorized but are lesscommon because the industry operatessafely and the occasions for regulationand enforcement are fewer. Such safetycould be the result of longstandingindustry practices, and of industry'spragmatic understanding thatgovernment intervention-whetherthrough federal or state law orotherwise-would occur if safety ruleswere violated. Although federaloversight for such activities may belegally available, it may be observedthat where an industry operates in asafe manner, little or no oversight iscommonly exercised. One example ofsuch a safe equilibrium may betraditional agriculture operating withsafe organisms following acceptedpractices and precautions. This isconsistent with recommendations madeby the National Research Council in thepublication, Field Testing GeneticallyModified Organisms, 1989, p. 66.

B. Evaluating Risks

Products developed throughbiotechnology processes do not per sepose risks to human health and theenvironment; risk depends instead onthe characteristics and use of individualproducts. Such determinations should bebased on risk factors or criteria like theones listed below pertaining to theorganism's ecological niche, potentialfor gene exchange, ability to monitorand to mitigate persistence and spreadand potential consequences ofdissemination into the greaterenvironment. These factors forevaluation of risk are largely derivedform the work of the Ecological Societyof America. (See J. Tiedje, R. Colwell, Y.Grossman, et al., 70 Ecology 298 (April1989).)

For the Organism: Fitness; infectivity,virulence, pathogenicity, toxicity; hostrange; the type of substrate or resourcesutilized; the purity of the formulation;environmental limits to growth orreproduction (habitat, microhabitat);susceptibility to control by antibiotics,biocides, by substrate, or by mechanicalmeans; whether and how introducedtraits are expressed.

For the Target Environment: Selectionpressure for the introduced trait;presence of wild, weedy or feralrelatives within dispersal capability ofthe organism or its genes; presence ofvectors or agents of dissemination ordispersal (e.g., mites, insects, rodents,birds, humans, machines, wind, water);direct involvement in basic ecosystemprocess (e.g., nutrients cycling); whetherthere are alternative hosts or partners(e.g., the organism is involved insymbiosis or mutualism); range ofenvironments for testing or use in lightof potential geographic range;effectiveness of confinement, monitoringand mitigation plans.

The scope principles do not dictateprecisely how information on riskshould be evaluated. Different ways ofmaking the risk determination arepossible. One means of judging the riskposed by an introduction is to compareits risk to an introduction of acomparable organism or biotechnologyproduct previously used in introductionsin a comparable target environment. Anorganism or other biotechnology productcan be comparable to a previously usedorganism or product regardless of theprocess by which that organism hasbeen modified or product produced. Anintroduction should be subject to nogreater degree of oversight than was acomparable organism or productpreviously used in past safeintroductions in a comparable targetenvironment. Effective confinement

techniques in appropriate cases can alsoreduce the potential risk of anintroduction, and accordingly, the needfor oversight.

Unreasonable risk is the threshold forexercising oversight within the scope ofdiscretion afforded by statute. The termdoes not denote a fixed absolutenumber. Rather, a risk is "unreasonable"where the environmental benefitsachieved by oversight measures toreduce the risk are greater than thesocial cost of those oversight measures.This definition enables, and requires,agencies to choose from among therange of oversight options thosemeasures that obtain net benefits. Thus,a more demanding oversight option maybe warranted when the risk reduction tobe gained from government interventionis large. If the risk reduction to begained is small, as will usually be thecase with low-level risks, less costlyoversight options will need to apply. Asdescribed above under "Rationale forRisk-Based Approach," this formulationensures that oversight resources will beallocated to address priority risks. "Iffinite resources are expended on lower-priority problems at the expense ofhigher-priority risks, then society willface needlessly high risks." (US EPA,SAB, "Reducing Risk: Setting Prioritiesand Strategies for EnvironmentalProtection," Sept. 1990, Exec. Sum. (p. 2.)It should also be noted that"unreasonable risk" is already acriterion used by federal agencies, suchas in exercising oversight underprovisions of TSCA and FIFRA.

Of course, in some cases an agencymay not have sufficient information todetermine whether the introductions oforganisms would pose unreasonablerisk, and whether additional oversighttherefore would be warranted. In casesin which an agency has reason tobelieve that introductions could poserisk but lacks adequate information todetermine if that risk is unreasonable,agencies may need to collectinformation. Any information requestsshould be designed to maximize theirbenefits and minimize their costs bysoliciting only the most usefulinformation in the least costly manner.

Certain terms used to characterizerisk evaluation in the Proposed Scope,55 FR 31118, have been dropped becausethey were ambiguous and raisedconcerns among the public commenters.Several comments noted the confusinglanguage and potential circularity of theterm "similar organism" or "similarintroduction." That usage has thereforebeen removed and, where appropriate,replaced by the more precise idea of anintroduction posing comparable risk to a

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previous introduction. The term"organism with deliberately modifiedhereditary traits" was intended toencompass any organism with changedhereditary traits, regardless of thetechnique or process used to effect thechange. This term was intentionallybroader than terms such as "geneticallymodified organism" which have come toimply a specific technique of geneticmanipulation (namely, use ofrecombinant DNA methods). Yet,"deliberately modified hereditary traits"might not have encompassed exoticorganisms introduced by humans into avulnerable target environment. Thus, theterm has been omitted and the focus isnow placed on the risk of anintroduction, not the genesis of theorganism.

C. Assessing Oversight OptionsAgencies have a wide variety of

oversight options with which to fashiontheir oversight programs consistent withthe risk-based approach enunciatedhere. The term "federal oversight"includes a range of possible Federalactivities related to plannedintroductions: Issuance of suggestedindustry practices, development ofguidelines for certain introductions, andrequirements for notification, labelling,prior review or approval of certainintroductions. This range of federaloversight activity might be undertakenby a Federal agency or by a local entityas directed by or under guidance from aFederal agency. It could involve, forexample, a research institutionestablishing an "institutional safetycommittee" for review of certainplanned introduction experiments.

This menu of oversight options meansthat agencies can choose oversightmeasures to be commensurate with thegravity and type of risk being addressed,and fashioned to maximize the netbenefits to society and the environment,taking into account the costs ofoversight.

In determining the risk reduction thatmay be achieved by a contemplatedoversight measure, it is important torecognize that persons introducingbiotechnology products into theenvironment often face otherinstitutional incentives to ensure thatsuch introductions are safe. Suchexisting safety incentives may includeoversight already being exercised underanother regulatory authority, state laws,and marketplace incentives for safetycreated by the interests of workers andconsumers in obtaining products thatare safe. Safety can also be promoted bygenerally accepted research practices,professional and industrial associationstandards, and other safety-oriented

guidelines and procedures. It isimportant to take account of theinterplay between the new oversightmeasure and the pre-existing incentivesystems. In some circumstances theeffect of a new oversight measure maycomplement existing safety incentives,but in others its effect may be dampenedor undercut by its (unintended)displacement of existing safetyincentives. For example, imposing newsafety standards may in certaincircumstances simply displace existingsafety incentives provided by state lawor by market price differentials foraccepting risk. Agencies should accountfor these potential incentive effects intheir calculation of the net benefits ofpotential oversight measures. Further,agencies should affirmatively designoversight measures to work in concertwith pre-existing safety systems, such asby strengthening the information baseon which marketplace incentivesdepend. In appropriate cases agenciesmight forgo additional oversight whereexisting incentives adequately addressthe risks posed.

D. Use of "Categories of Exclusion/Inclusion"

1. Treatment of Former ExclusionExamples

The six examples of "categories forexclusion" provided in the ProposedStatement on Scope (55 FR at 31121)have been deleted from the FinalStatement on Scope. As these exampleswere set forth without the contextprovided by the statutes under whichregulations were to be implemented, norationales were provided in theProposed Scope relating them to risk.Thus, a certain amount of confusionarose concerning their relationship torisk. Indeed, several commenterssuggested that the exclusions wereinconsistent with a risk-based approachbecause they were "process-based." Forinstance, the first proposed exclusioncategory contained plants and animalsthat result from natural reproduction orthe use of traditional breedingtechniques. Traditional breedingactivities, however, are typically of lowor trivicl risk because the plants andanimals chosen for breeding bytraditional agricultural breeders aretypically of low or negligible risk in theirapplications and target environments,not because the techniques arethemselves intrinsically safe. Becausethis Final Statement is to be a guidancedocument to the agencies, it is not meantto provide the risk rationales for theseexamples. Any agency that wishes touse any of these categories in the

context of a specific statute wouldprovide a rationale based on risk.

The five examples of categories forexclusion addressed only variousaspects of the introduced organism,whereas the present Final Statement onScope addresses the entire introduction,necessarily including the characteristicsof the target environment and theparticular application as well as thenature of the biotechnology product. Thefive examples for exclusion gave noinsight into the critical issue of thepotential interactions between anorganism's traits and its ecologicalcontext. An organism may pose risk inone target environment but be relativelyharmless, or beneficial, in another. It isfundamental that the present FinalStatement on Scope requires oversightdecisions to be made within the scope ofdiscretion afforded by statute based oninformation about the organism or otherproduct, the target environment and thetype of application, not about theorganism alone.

The simple binary choice between"oversight" and "no oversight," impliedby the notion of a single scope with asingle set of exclusions, does notaccurately characterize the range ofchoices open to an agency within thescope of discretion afforded by statute.Oversight measures may include theoption of no oversight, or no furtheroversight in cases where statutes requireinitial oversight, as well as a range ofother measures.

A single list of "exclusions" (or, forthat matter, "inclusions") cannotpragmatically be written to applyuniformly to all agencies and allstatutes. The specific mechanisms ofimplementation of the risk-basedprinciples will of course depend on thestatute at issue, and accordingly nosingle list of "categories" can bepromulgated for use by all agenciesunder all statutes. Agencies could, forinstance, develop categorical risk-basedexclusions from a statute's oversight net,such as where a statute begins byencompassing all of a certain set ofactivities and then exempts low-riskelements of that set. Or agencies coulddevelop categorical risk-basedinclusions in a statute's oversight net,such as where a statute attachesoversight only when an activity createsan unreasonable risk. Or agencies couldemploy a stratified hierarchy, providingseveral levels or types of oversight thatcorrespond to levels of risk. The choiceof these or other means will depend onthe statute and the nature of the activitysubject to oversight. Not every statutemay be open to all of these options.Indeed, by listing specific "examples of

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categories for exclusion," the ProposedScope issued in July 1990 may havegiven the incorrect impression that someexclusion-oriented approach wasmandatory for all agencies, or that thespecific categories listed in thatproposed document were mandatory, orthat an extra burden of persuasionwould be borne by agencies seeking tocraft a different approach or set ofexclusions; none of these was intended.

2. Developing Categories of Exclusion

The concept of categories forexclusion may nonetheless retainusefulness in appropriate statutorycircumstances. Where a statute initiallycasts a wide net over a field of activity,the agency may retain or be delegatedauthority to exclude some subcategoriesof activity from oversight on the groundthat the potential risks they pose are toolow to justify oversight or that such risksare already adequately overseen byanother agency.

For example, under TSCA, EPA mustreceive notice of all "new chemicals";those that pose "unreasonable risk" aresubject to further regulatory restrictions.But TSCA enables EPA to excludeproducts from review, in at least fourways. First, EPA may determine thatcertain products are not "new" and thusdo not require premanufacturing noticeto the agency. For instance, where smallchanges in genetic or molecularstructure are involved, it may be amatter of judgment whether the productis "new." In exercising such judgment,the agency may determine that certaincategories of products are not "new"under TSCA because they possess no"new" properties. Second, under TSCAsection 5(h)(3), EPA may excludemicroorganisms used in small quantities(defined by rule) for research anddevelopment. Third, the agency candecline to act during the 90-day periodafter a notice is filed. Unless the agencyacts, after 90 days the product may beproduced without further restriction.EPA could develop guidance to its TSCAprogram to decline action with respectto certain low-risk categories ofintroductions of organisms. Fourth,under TSCA 5(h)(4), the agency has theauthority to exclude broad categories ofproducts by rulemaking where thoseproducts do not pose "unreasonablerisk." EPA could propose risk-based5(h)(4) exclusions for certain categoriesof introductions, simultaneous withproposing any regulations applyingTSCA to organisms.

Similarly, under FFDCA, no "foodadditive" may be marketed unless it isin compliance with an authorizingregulation promulgated by FDA.However, substances that are "generally

recognized as safe," as defined in thestatute, are excluded from the definitionof "food additive," and therefore fromthe premarket clearance requirements.For organisms to be used as or to makefood ingredients, FDA could describethe criteria by which it will determinethe organisms or their products will fallinto the "generally recognized as safe"exclusion, or will be subject topremarket regulation.

Thus, agencies exercising oversightpursuant to this document shouldconsider employing risk-basedexclusions. For example, an exclusioncould be fashioned (if its risk basis isappropriately explained in the contextof the particular oversight measure) fororganisms whose introductions pose lowor negligible risk, e.g. domesticatedanimal and crop varities used inagriculture.

3. Developing Categories of InclusionA different approach could be

employed where a statute bases theexercise of oversight on risk and givesthe agency the task of affirmativelyidentifying which particular activitiesout of a larger universe pose riskssufficient to justify oversight. Agenciescould therefore develop risk-basedcategories of inclusion to define the areaof oversight.

For example, the Federal Plant PestAct governs the movement of plantpests regardless of the process by whichthe organisms were produced. The Actdefines "plant pests" as any organisms"which can directly or indirectly injureor cause disease or damage in anyplants or parts thereof * * " In order toimplement the Act, USDA has identifiedspecific organisms with these propertiesand placed them on a published list.Movement or importation of organismson the list requires an advancepermission from the agency. The list isexpanded as new plant pests areidentified; also, items can be removedfrom the list when they are believed tono longer present a plant pest risk.

4. Developing Combined ApproachesIn some areas, an agency might use

both "exclusion" and "inclusion"approaches. It might identify categoriesof activities for inclusion on the groundthat they pose a sufficient risk to justifyoversight, and simultaneously excludeother activities on the ground that theydo not present risk justifying oversight.Any activities not included in eithercategory could be dealt with on a case-by-case basis, and perhaps addressedexplicitly in categorical exclusions orinclusions at a later date. For example,the guidelines on recombinant DNAorganisms developed by NIH use both

approaches. An appendix to theguidelines list microorganisms on thebasis of likely hazard, an example of the"inclusion" approach. The guidelinesalso specifically exclude certainorganisms, such as E. coli K-12, B.subtilis and Saccharomyces. As anoLherexample, an agency might implement astatute requiring public disclosure of allhazardous introductions by explicitlyexcluding some trivial-risk activitiesfrom the duty to disclose, specificallyincluding some categories ofintroductions that typically pose apotential hazard, and announcingcriteria for deciding whether theremaining introductions are riskyenough to require disclosure.

Finally, agencies could employ a"hierarchy" of oversight options tocorrespond to degrees and types of risk.Some statutes arm that agency with anarray of oversight instruments to deployas the circumstances warrant. In suchcases, agencies must decide not onlywhether or not to exercise oversight butalso the appropriate level and type ofoversight when it is exercised. Agenciescould develop categories of criteria forexercise of varying degrees of oversight,based on the degree of risk posed by anintroduction, and the costs of oversightoptions. For example, oversight optionsmight include: guidance on soundpractices, simple notification to a localreview committee, application for priorapproval by a local review committee,notification to a federal agency,considered deference to another agencyalready overseeing such introduction, orapplication for prior approval by afederal agency. Or under its statutoryauthority an agency might impose (as arequirement of all introductions of acertain risk level or as a condition ofprior approval in a specific case)disclosure of information, restrictions ona planned introduction, appropriateprophylactic measures (confinement orcontainment), or prohibition of certainkinds of activities. Other options couldalso be available under variousstatutory programs.

One example of such a hierarchicalapproach to the degree of oversight iscontained in USDA's proposedguidelines for federally-fundedresearchers (56 FR 4134 (Feb. 1, 1991)).The guidelines calculate the likely riskof an introduction of a modifiedorganism according to the likely risk tohealth and environment posed byintroducing the parental strain, and thechange in that risk (increase ordecrease) effected by modification ofthe parental strain. For each of five risklevels, they suggest levels ofconfinement measures to be applied,

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and degrees of review by a disinterestedparty (such as a local safety committee).

Appendix: Comments on ProposedStatement on Scope and SubsequentPolicy Developments

Several important statements ofgovernment policy on risk and newtechnology have been published sinceJuly 1990. Because these policyguidelines have played a formative rolein the development of the current FinalStatement on Scope, they are excerptedbriefly below. In addition, publiccomments on the Proposed Statement onScope were received. The discussion inthe present document relies on andrefers to the concepts andrecommendations contained in thesepolicy guidelines and the viewsexpressed in the public comment letters.The items below are presented inchronological order.1. President's Principles of RegulatoryReview

In August 1990 President Bushapproved Four Principles of RegulatoryReview for Biotechnology, as follows:

(1) Federal government regulatoryoversight should focus on thecharacteristics and risks of thebiotechnology product-not the processby which it is created.

Products developed throughbiotechnology processes do notper sepose risks to human health and theenvironment; risk depends instead onthe characteristics and use of individualproducts. Biotechnology products thatpose little or no risk should not besubject to unnecessary regulatoryreview during testing andcommercialization. This allows agenciesto concentrate resources in areas thatmay pose substantial risks and leavesrelatively unfettered the development ofbiotechnology products posing little orno risk.

(2) For biotechnology products thatrequire review, regulatory review shouldbe designed to minimize regulatoryburden while assuring protection ofpublic health and welfare.

Expedited review procedures shouldbe adopted for products likely to poselesser risk. The jurisdiction of theseveral regulatory agencies should beciarified to avoid unnecessary confusionand delay and agencies should use thesame standards and apply themconsistently. This is especiallyimportant where a product could beregulated by several agencies. Forexample, pest-resistant plants may besubject to regulation by both theEnvironmental Protection Agency (forpesticidal properties) and by the Food

and Drug Administration (for foodsafety).

(3) Regulatory programs should bedesigned to accommodate the rapidadvances in biotechnology.Performance-based standards are,therefore, generally preferred overdesign standards.

A performance standard sets the endsor goals to be achieved, rather thanspecifying the means to achieve it (e.g.,through a design standard). Thisprovides firms and researchers withflexibility in choosing the best means ofcompliance. A performance-basedstandard for containment, for example,would permit alternative biologicalapproaches for assuring containment inplace of a design-based standardrequiring specific physical barriers.

The adoption of performance criteriain developing regulations reduces theneed to rely on a lengthy andcontentious regulatory process to reviseregulations. Such unwieldly regulatoryprocedures inevitably inhibit thechanges in regulatory structure neededto accommodate advances in scienceknowledge. Procedures should beadopted to provide agency decision-makers with up-to-date scientificopinion and knowledge-for example,through the use of science advisorypanels.

(4) In order to create opportunities forthe application of innovative newbiotechnology products, all regulation inenvironmental and health areas-whether or not they addressbiotechnology-should use performancestandards rather than specifying rigidcontrols or specific designs forcompliance.

"Design-based" requirements maypreclude use of biotechnology productseven when such approaches may beboth less costly and more effective. Forexample, a requirement to employspecific pollution control equipmentwould prevent use of innovativebiotechnology pollution remediation orcontrol techniques.

2. EPA Report on Risk Priorities

In September 1990 the U.S.Environmental Protection Agency'sScience Advisory Board released itsreport, "Reducing Risk: Setting Prioritiesand Strategies for EnvironmentalProtection." The report stated (Exec.Sum. p. 21:

There are heavy costs involved if societyfails to met environmental priorities based onrisk. If finite resources are expended onlower-priority problems at the expense ofhigher-priority risks, then society will faceneedlessly high risks.

Setting regulatory policy based on theprocess used to modify an organismrather than on the relative risk of itsintroduction, or based on type oftechnology (e.g., biotechnology versesother technologies) rather than therelative risk of an activity, would beinconsistent with this risk-basedapproach; it would misallocate oversightresources and thereby burden low-riskactivities while exposing society tohigher-risk activities.

3. Summary of Public Comments on theProposed Statement on Scope

By October 1990, the deadline forsubmissions, forty-four letters ofcomment on the OSTP ProposedStatement on Scope (55 FR 31118 (July 1,1990)) were received. The following is abrief summary of these comments.

(A) Overview@ The general response to the "Scope

Document" and the Administration'seffort to define a common approach tooversight of planned introductions waspositive.

* Commentators strongly supportedthose principles outlined in the body ofthe document which emphasized a risk-based approach to regulation.

e The majority of criticisms focusedon the "Examples of Potential ExclusionCategories" while other commentsrelated to ensuring implementation ofthe principles through the regulatoryprocess. Particular words or phraseswere cited as vague or otherwiseproblematic.

(B) Specific Issues

(i) Risk-based Approach9 Thirty-two letters specifically noted

the wisdom of a risk-based approach,particularly if the level of oversight iscommensurate with the degree ofpotential risk.

* The "Criteria for Evaluating Risk"were deemed adequate and appropriatein that they focused on characteristics ofthe organism and the environment intowhich it is being released, rather thanon the process by which the organism isproduced.

e Several respondents stated thatthere is a sufficient body of scientificexperience to support risk evaluation asa means for determining need foroversight.

(ii) Examples of Potential ExclusionCategories

* Several respondents supported theuse of categories of introductions thatcould be excluded from oversight as amove away from case-by-caseregulatory review.

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* The most frequent objection to theexclusion categories (10 letters) was thatcategories 1-5 were process-based, incontradiction with the principlescontained in the body of the document.Thus, several respondents proposeddeleting the "Examples of PotentialExclusion Categories."

9 At least 3 commenters opposed anyregulatory scheme that did not includeall of the exclusion categories on thepremise that current regulatoryinconsistencies and confusion would beretained otherwise.

* Five commenters proposedemploying category 6 as the cornerstonefor federal policy on exemptions.

e It was pointed out that manyorganisms produced using methodsdescribed in categories 1-5 would besubsumed under category 6 if theresulting product posed no greater riskto the target environment than theparental organism.

• Evidence was offered thatorganisms produced via methodsproposed for possible exclusion underexclusion categories 1-5 may still posehealth or environmental hazards and,thus, should not be exempted.

* One commenter felt that category 2should be modified to cover only thoseexchanges "known to occur in nature"and another suggested adding viruses.

* There was a proposal to add"organisms resulting from mutagenesisby transposable elements" to category 5.

* A new category was proposedcomprised of organisms developed usingrecombinant techniques (such as PCR. invitro mugagenesis, homologousrecombination, or other self-cloningmethods) which result in phenotypesidentical to those obtainable throughtraditional techniques.

* One letter suggested adding threeorganisms to the exempt list indicatinginterest in a process similar to that usedby the National Institutes of Health(NIH) whereby conditions under whichcertain experiments may be performedare considered by petition to theRecombinant DNA Advisory Committee.

(iii) Implementation* A recurring theme was the need for

consistent implementation acrossagencies. It was suggested that OSTPremain visible and involved in order toensure interagency consistency.

* Three letters noted the past delaysin proposing agency regulations andencouraged rapid implementation of the"Scope Document."

* Four coimmenters predicted that itwould be difficult or impossible toimplement this scheme because it wasnot clear who was responsible fordetermining the need for oversight.

* Local Industrial BiosafetyCommittees (IBCs) or similar institutionswere proposed as a venue fordetermination of risk and need forfurther oversight.

* Two commentators suggested thatnotification be deleted from thedescription of oversight methods inorder to allow for categories ofexemption from other, more burdensomeforms of oversight.

* Several respondents stated that asystem of licenses or permits was notappropriate for research activities.

(iv) Definitions

o The most problematic word was"similar" when used to describe thesituation in which "the level of risk of anintroduction is the same as or less thana previous safe introduction." Suggestedalternative language in 3 letters was"comparable to or less than."

* Two letters questioned the adoptionof the term "modified hereditary traits"as opposed to "genetically modifiedorganisms," which implies that modifiedtraits are heritable, regardless of howthe modification was achieved.

- There was a question as to whetheror not contained field tests would beincluded under "planned introductionsinto the environment."

(v) Additional Issues

* Four respondents proposedalternate schemes, three of whichinvolved the development of lists ofexempt organisms or introductions.Suggested criteria for inclusion on sucha list were "familiarity" or inclusion onthe list currently maintained by CDCand NIH.

* OSTP was reminded that thisdocument will play an important role ininternational negotiations and productexport.

4. Report on National BiotechnologyPolicy

In February 1991, the President'sCouncil on Competitiveness publishedthe Report on National BiotechnologyPolicy. The Report describes theAdministration's policy onbiotechnology regulations (p. 11)

In biotechnology, as in many other hightechnology industries, Federal regulation is acritical determinant of the time and cost tobring a product to market. In serving as"gatekeepers" for the development and use ofnew products, regulatory agencies may createsubstantial barriers to product development.These barriers result from the costs of testingto meet regulatory requirements, the potentialfor delay in regulatory approval, and theuncertainty associated with the possibleimposition of extensive restrictions oroutright disapproval of new biotechnologyresearch or products. In addition, uncertainty

related to the extent or effectiveness ofFederal regulation may lead to the enactmentof a patchwork of conflicting andburdensome state regulations. Delay, cost,and regulatory uncertainty discourage newresearch in regulated areas and curtail thedevelopment of new products, as well asundermine public confidence.

In general, to avoid unnecessary burdenson biotechnology, the Administration hassought to eliminate unneeded regulatoryburdens for all phases of the development ofnew biotechnology products-laboratory andfield experiments, products development, andeventual sale and use. Existing regulatorystructures for plants, animals,pharmaceuticals, chemicals and toxicsubstances provide an adequate frameworkfor regulation of biotechnology in thoselimited instances where private markets failto provide adequate incentives to avoidunreasonable risks to health and theenvironment. In these instances, regulationalso can help shield industry from avoidableincidents that could tarnish its image andimpair its development.

5. Competitiveness Council Fact Sheeton Critical Technologies

In April 1991 the President's Councilon Competitiveness issued a Fact Sheetconcurrently with the OSTP publicationof the Report of the National CriticalTechnologies Panel. The Fact Sheetstated:

Because technological innovation holds thepromise of providing new and better ways tomeet the very objectives of particular health.safety, or environmental regulations, thoseregulations that discourage or penalizeinnovation are self-perpetuating burdens ofAmerican industry.

While appropriate regulation in response tomarket failures can serve valuable social andeconomic functions, it may also imposesignificant costs that particularly affect theability and incentive of firms to develop newhigh technology products. Some regulatoryregimes are no longer appropriate to newtechnologies, while others were developedwithout adequate consideration of theburdens placed on international competition,and many regulations explicitly imposegreater burdens on new facilities andproducts.

Regulation inhibits innovation most whenthe regulatory agency takes on the task ofspecifying which technologies or designsindustry must employ. Further, once atechnology is enshrined in regulation, firmshave little incentive to invest in bettertechniques.

The following principles were offeredto minimize disincentives to innovation:

e Regulations should be issued onlyon evidence that their potential benefitsexceed their potential costs. Regulatoryobjectives, and the methods forachieving these objectives, should bechosen to maximize the net benefits tosociety.

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* Regulations that seek to reducehealth or safety risks should be basedupon scientific risk-assessmentprocedures, and should address risksthat are real and significant rather thanhypothetical or remote.

- Voluntary private standards anddisclosure should be relied on wherepossible instead of inflexible regulation.

* Health, safety and environmentalregulations should address ends ratherthan means. They should employperformance-based incentives thatharness the creativity of market actorsto design and continually innovatebetter ways of reducing excess risks.They should not specify technologies ordesigns that firms must employ.

9 Licensing and permitting decisionsand review of new products should bemade swiftly and should be based onstandards that are clearly defined inadvance.

[FR Doc. 92-4603 Filed 2-26-92; 8:45am]BILLING COOE SO-50-0

Meeting of the President's Council ofAdvisors on Science and Technology

The President's Council of Advisorson Science and Technology will meet onMarch 5-6, 1992. The meeting will beginat 9 a.m. on Thursday, March 5, 1992 inthe Conference Room, Council onEnvironmental Quality, 722 JacksonPlace, NW., Washington, DC. Themeeting will conclude at approximately12 noon on Friday, March 6, 1992.

The purpose of the Council is toadvise the President on mattersinvolving science and technology.

Proposed Agenda

1. Briefing of the Council on the currentactivities of the Office of Science andTechnology Policy.

2. Briefing of the Council on currentfederal activities and policies inscience and technology.

3. Discussion of progress of workinggroup panels.Portions of the March 5-6 meeting will

be closed to the public.A portion of the briefings on current

federal activities and policies in scienceand technology will require discussionof budget preparation procedures of theExecutive Office of the President andother federal agencies which, ifprematurely disclosed, wouldsignificantly frustrate theimplementation of decisions maderequiring agency action. Also, a portionof the discussion of panel progress willnecessitate discussion of informationwhich is formally classified in theinterest of national security.Accordingly, these portions of the

meeting will be closed to the publicpursuant to 5 U.S.C. 552b(c)(1), (2), and(9)(B).

Because of the security requirements.persons wishing to attend the openportion of the meeting should contactMs. Ann Barnett (202) 395-4692, prior to3 p.m. on March 4, 1992. Ms. Barnett isavailable to provide specific informationregarding time, place, and agenda.

Dated: February 20, 1992.Damar W. Hawkins,Executive Assistant. Office of Science andTechnology Policy.[FR Doc. 92-4485 Filed 2-2-92; 8:45 am]BILLING CODE 3170-01-U

DEPARTMENT OF STATE

Office of the Secretary

[Public Notice 1577]

Extension of the Restriction on theUse of the United States Passport forTravel to, In, or Through Iraq

On February 1, 1991, pursuant to theauthority of 22 U.S.C. 211a andExecutive Order 11295 (31 FR 10603),and in accordance with 22 CFR 51.73(a)(2) and (a)(3), all United Statespassports, with the followingexceptions, were declared invalid fortravel to, in, or through Iraq and Kuwaitunless specifically validated for suchtravel. The restriction was notapplicable to those American citizensthen residing in Iraq and Kuwait nor toAmerican professional reporters andjournalists on assignment there. Therestriction was required by the fact thatarmed hostilities then were taking placein Iraq and Kuwait, and the safety ofany American citizens travelling tothose countries no longer could beguaranteed.

With cessation of armed hostilities,the restrictions on use of the UnitedStates passport for travel to, in, orthrough Kuwait was revoked on March6, 1991. The restriction on use of thepassport for travel to, in, or through Iraqwas continued because the Secretaryconcluded that conditions in thatcountry continued to present animminent danger to the public health orphysical safety of American citizens.

Although armed hostilities haveended, the Government of Iraqcontinues to direct hostile acts againstUnited States citizens and nationals.There have been numerous incidentsover the past year in which Americancitizens, including some who enteredIraq inadvertently, were detained byIraqi authorities for extended periods oftime without notification to the U.S.

Interest Section of the Polish Embassy inBaghdad. Several of these Americanswere subjected to harsh and inhumanetreatment during their detention.

In light of these circumstances, I havedetermined that Iraq continues to be acountry " * * where there is imminentdanger to the public health or physicalsafety of United Slates travelers."

Accordingly, United States passportsshall be invalid for use in travel to, in, orthrough Iraq unless specificallyvalidated for such travel under theauthority of the Secretary of State. Therestriction shall not apply to Americancitizens who were residing in Iraq onFebruary 1, 1991 who continue to residethere nor to American professionalreporters and journalists on assignmentthere.

The Public Notice shall be effectiveupon publication in the Federal Registerand shall expire at the end of one yearunless sooner extended or revoked byPublic Notice.

Dated: February 18, 1992.Lawrence S. Eagleburger,Acting Secretary of State.[FR Doc. 92-4494 Filed 2-26-92; 8:45 amJBILLING CODE 4710-10-M

THRIFT DEPOSITOR PROTECTION

OVERSIGHT BOARD

National Advisory Board Meeting

AGENCY: Thrift Depositor ProtectionOversight Board.ACTION: Notice of meeting.

SUMMARY: In accordance with section10(a)(2) of the Federal AdvisoryCommittee Act, 5 U.S.C. app.,announcement is hereby published for ameeting of the National Advisory BoardThe meeting is open to the public. Pleasenote that elsewhere in this issue of theFederal Register is a meeting notice forthe newly established National HousingAdvisory Board which will meet in theafternoon following the NationalAdvisory Board meeting.DATES: The meeting is scheduled forWednesday, March 11, 9 a.m. to 12 noon.ADDRESSES: The meeting will be held atthe Federal Deposit InsuranceCorporation, Board Room, 6th floor, 55017th Street. NW., Washington, DC.FOR FURTHER INFORMATION CONTACT:Jill Nevius, Committee ManagementOfficer, Thrift Depositor ProtectionOversight Board, 1777 F Street, NW.,Washington. DC 20232, 202/786-9675.SUPPLEMENTARY INFORMATION: Pursuantto section 21A(d) of the Federal HomeLoan Bank Act, the Thrift Depositor

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