[Federal Register Volume 77, Number 132 (Tuesday, July 10, 2012)]
[Notices]
[Pages 40688-40692]
[FR Doc No: 2012-16762]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67339; File No. SR-BX-2012-043]

Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Adopt
Transaction and Routing Fees

July 3, 2012.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on June 26, 2012, NASDAQ OMX BX, Inc. (``BX'' or ``Exchange'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I, II, and III below, which
Items have been prepared by the Exchange. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend Chapter XV, Section 2 entitled ``BX
Options Market--Fees and Rebates'' to adopt rebates and fees relating
to various options, including during the Opening Cross, and establish
Routing Fees.
    While the changes proposed herein are effective upon filing, the
Exchange has designated these changes to be operative on July 2, 2012.
    The text of the proposed rule change is available on the Exchange's
Web site at http://www.nasdaqtrader.com/micro.aspx?id=BXRulefilings, at
the principal office of the Exchange, and at the Commission's Public
Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange filed and received approval to operate a new options
market.\3\ The new market, called NASDAQ OMX BX Options, or BX Options,
is an all-electronic trading platform with no physical trading floor.
At this time BX proposes to adopt various fees and rebates which would
be effective as of July 2, 2012. There are no fees or rebates for
transacting an options business on BX prior to this date, except for
membership, services and equipment charges, which may be applicable, as
noted in the 7000 Rules.
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    \3\ See Securities Exchange Act Release No. 67256 (June 26,
2012) (SR-BX-2012-030).
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    BX proposes to amend Chapter XV, Section 2(1) to adopt rebates and
fees for Customers, BX Options Market Makers \4\ and Non-Customers \5\
in various options \6\ as follows:
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    \4\ A BX Options Market Makers must be registered as such
pursuant to Chapter VII, Section 2 of the BX Options Rules, and must
also remain in good standing pursuant to Chapter VII, Section 4.
    \5\ A Non-Customer includes a Professional, Firm, Broker-Dealer
and Non-BX Options Market Maker.
    \6\ The Exchange is proposing to adopt fees and rebates for
options overlying iShares Russell 2000 (``IWM''), PowerShares QQQ
Trust (``QQQ'')[supreg]; Standard and Poor's Depositary Receipts/
SPDRs (``SPY''), Bank of America Corporation (``BAC''), Citigroup,
Inc. (``C''), Cisco Systems, Inc. (``CSCO''), Ford Motor Company
Common Stock (``F''), Intel Corp (``INTC''), Microsoft Corporation
(``MSFT''), JP Morgan Chase & Co. (``JPM''), SPDR Gold Shares
(``GLD''), iShares Silver Trust (``SLV''), United States Oil Fund LP
Units (``USO'') and all other Penny Pilot Options.

                                                Fees and Rebates
                                             [Per executed contract]
----------------------------------------------------------------------------------------------------------------
                                                                                BX Options
                                                                Customer        market maker    Non-Customer \1\
----------------------------------------------------------------------------------------------------------------
IWM, QQQ, SPY:
    Rebate to Add Liquidity...............................         \2\ $0.15         \2\ $0.15             $0.00
    Fee to Add Liquidity..................................          \3\ 0.15          \3\ 0.15              0.43
    Rebate to Remove Liquidity............................              0.12              0.00              0.00
    Fee to Remove Liquidity...............................              0.00              0.43              0.43
BAC, C, CSCO, F, INTC, MSFT, JPM, GLD, SLV, USO:
    Rebate to Add Liquidity...............................          \2\ 0.15          \2\ 0.15              0.00
    Fee to Add Liquidity..................................          \3\ 0.37          \3\ 0.37              0.43
    Rebate to Remove Liquidity............................              0.32              0.00              0.00
    Fee to Remove Liquidity...............................              0.00              0.43              0.43

All Other Penny Pilot Options:
    Rebate to Add Liquidity...............................          \2\ 0.10          \2\ 0.10              0.00
    Fee to Add Liquidity..................................          \3\ 0.40          \3\ 0.40              0.43
    Rebate to Remove Liquidity............................              0.32              0.00              0.00
    Fee to Remove Liquidity...............................              0.00              0.43              0.43
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\1\ A Non-Customer includes a Professional, Firm, Broker-Dealer and Non-BX Options Market Maker.
\2\ The Rebate to Add Liquidity will be paid to a Customer or BX Options Market Maker only when the Customer or
  BX Options Market Maker is contra to a Non-Customer or BX Options Market Maker.
\3\ The Fee to Add Liquidity will be assessed to a Customer or BX Options Market Maker only when the Customer or
  BX Options Market Maker is contra to a Customer.

    The Exchange would pay the Rebate to Add Liquidity, in any symbol,
to a Customer or BX Options Market Maker only when the Customer or BX
Options Market Maker is contra to a Non-Customer or BX Options Market
Maker. The Exchange would not pay a Rebate to Add Liquidity to a
Customer or BX Options Market Maker if this qualifier is not met.
Similarly, the Exchange would assess a Fee to Add Liquidity, in any
symbol, to a Customer or BX Options Market Maker only when the Customer
or BX Options Market Maker is contra to a Customer. The Exchange would
not assess a Fee to Add Liquidity to a Customer or BX Options Market
Maker if this qualifier is not met.
    The Exchange also proposes to amend Chapter XV, Section 2(2) to
adopt rebates and fees for the Opening Cross to state that Customer
orders will receive the Rebate to Remove Liquidity during the
Exchange's Opening Cross, unless the contra-side is also a Customer (in
which case no Fee to Remove Liquidity is assessed and no Rebate to
Remove Liquidity is received). Professionals, Firms, Broker-Dealers and
Non-BX Options Market Makers will be assessed the Fee to Remove
Liquidity during the Exchange's Opening Cross.
    Finally, the Exchange proposes to amend Chapter XV, Section 2(4) to
adopt fees for routing contracts to markets other the BX Options market
as follows:

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                                                                            Firm/Market Maker/
                        Exchange                              Customer        Broker-Dealer       Professional
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BATS (Penny Pilot).....................................              $0.55              $0.55              $0.55
BOX....................................................               0.11               0.55               0.11
CBOE...................................................               0.11               0.55               0.31
CBOE orders greater than 99 contracts in ETFs, ETNs and               0.29                N/A               0.31
 HOLDRS)...............................................
C2.....................................................               0.55               0.55               0.55
ISE (Standard).........................................               0.11               0.55               0.29
ISE (Select Symbols) *.................................               0.31               0.55               0.39
NOM....................................................               0.11               0.55               0.55
NYSE Arca (Penny Pilot)................................               0.55               0.55               0.55
NYSE Amex..............................................               0.11               0.55               0.31
PHLX (for all options than PHLX Select Symbols)........               0.11               0.55               0.36
PHLX Select Symbols **.................................               0.50               0.55               0.55
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* These fees are applicable to orders routed to ISE that are subject to Rebates and Fees for Adding and Removing
  Liquidity in Select Symbols. See ISE's Schedule of Fees for the complete list of symbols that are subject to
  these fees.
** These fees are applicable to orders routed to PHLX that are subject to Rebates and Fees for Adding and
  Removing Liquidity in Select Symbols. See PHLX's Pricing Schedule for the complete list of symbols that are
  subject to these fees.

    The Exchange believes that the proposed fees and rebates are
competitive and will encourage BX members to transact business on the
Exchange. Specifically, the Exchange believes that the proposed rebates
will incentivize BX members to direct orders to the Exchange, resulting
in greater liquidity, which benefits all market participants. The
proposed fees would enable the Exchange to fund the various proposed
rebates and incentivize market participants to route orders to the
Exchange. The Routing Fees are proposed to recoup costs that the
Exchange incurs for routing and executing certain orders on away
markets.
2. Statutory Basis
    BX believes that the proposed rule changes are consistent with the
provisions of Section 6 of the Act,\7\ in general, and with Section
6(b)(4) of the Act,\8\ in particular, in that they provide for the
equitable allocation of reasonable dues, fees and other charges among
members and issuers and other persons using any facility or system
which BX operates or controls.
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    \7\ 15 U.S.C. 78f.
    \8\ 15 U.S.C. 78f(b)(4).
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Transaction Charges
    The Exchange believes that its proposal to assess different fees
and rebates for IWM, QQQ and SPY as compared to BAC, C, CSCO, F, INTC,
MSFT, JPM, GLD, SLV, USO and also different fees and rebates for all
other Penny Pilot Options is reasonable given the fact that certain
symbols such as IWM, QQQ and SPY, as well as other symbols which the
Exchange differentiates, are highly liquid Penny Pilot Options as
compared to other Penny Pilot Options. Additionally, other

options exchanges differentiate pricing by security today.\9\
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    \9\ See NASDAQ OMX PHLX LLC's (``Phlx'') Pricing Schedule, which
has different pricing for its Select Symbols and different pricing
for other Multiply Listed Options. See also the NASDAQ Options
Market LLC (``NOM'') at Chapter XV, Section 2(1), which
distinguishes pricing for NDX and MNX. See also the International
Securities Exchange LLC's (``ISE'') Fee Schedule, which
distinguishes pricing for Special Non-Select Penny Pilot Symbols.
See also the Chicago Board Options Exchange, Incorporated's
(``CBOE'') Fees Schedule, which distinguishes index products.
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    The Exchange believes that its proposal to assess different fees
and rebates for IWM, QQQ and SPY as compared to BAC, C, CSCO, F, INTC,
MSFT, JPM, GLD, SLV, USO and also different fees and rebates for all
other Penny Pilot Options is equitable and not unfairly discriminatory
as described hereafter. With respect to the proposed Rebate to Add
Liquidity \10\ and Rebate to Remove Liquidity \11\ for IWM, QQQ, SPY,
BAC, C, CSCO, F, INTC, MSFT, JPM, GLD, SLV, USO and all other Penny
Pilot Options, the Exchange believes that these rebates will attract
Customer order flow to the Exchange to the benefit of all market
participants through increased liquidity. Further, the Exchange also
believes it is reasonable, equitable and not unfairly discriminatory to
only offer the Rebate to Remove Liquidity to Customers and not other
market participants as an incentive to attract Customer order flow to
the Exchange. It is an important Exchange function to provide an
opportunity to all market participants to trade against Customer
orders.
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    \10\ The Exchange proposes a Rebate to Add Liquidity for IWM,
QQQ, SPY, BAC, C, CSCO, F, INTC, MSFT, JPM, GLD, SLV, USO of $0.15
per contract and a Rebate to Add Liquidity for all other Penny Pilot
Options of $0.10 per contact.
    \11\ The Exchange proposes a Rebate to Remove Liquidity for IWM,
QQQ, SPY, of $0.12 per contract and a Rebate to Remove Liquidity for
BAC, C, CSCO, F, INTC, MSFT, JPM, GLD, SLV, USO and all other Penny
Pilot Options of $0.32 per contact.
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    With respect to the Rebate to Add Liquidity, the Exchange is only
paying the Rebate to Add Liquidity to a Customer or BX Options Market
Maker when either the Customer or a BX Options Market Maker is contra
to a Non-Customer \12\ or BX Options Market Maker. While the Customer
and BX Options Market Maker are unaware at the time they enter a
transaction whether they would earn a rebate, the Exchange believes
that the possibility of earning a $0.15 or $0.10 per contract Rebate to
Add Liquidity, depending on the security, when trading against a Non-
Customer (Professional, Firm, Broker-Dealer or Non-BX Options Market
Maker) or BX Options Market Maker should incentivize these critical
market participants to add liquidity. Increased liquidity benefits all
market participants. The Exchange believes that offering both Customers
and BX Options Market Makers the opportunity to receive a Rebate to Add
Liquidity is reasonable because these market participants differ from
other market participants. Customer order flow benefits all market
participants by improving liquidity, the quality of order interaction
and executions at the Exchange. BX Options Market Makers have
obligations to the market and regulatory requirements,\13\ which
normally do not apply to other market participants. A BX Options Market
Maker has the obligation to make continuous markets, engage in course
of dealings reasonably calculated to contribute to the maintenance of a
fair and orderly market, and not make bids or offers or enter into
transactions that are inconsistent with course of dealings. The
proposed differentiation as between Customers and BX Options Market
Makers and other market participants recognizes the differing
contributions made to the liquidity and trading environment on the
Exchange by Customers and BX Options Market Makers, as well as the
differing mix of orders entered. Further, as noted herein, the Customer
and BX Options Market Maker are unaware at the time the order is
entered whether they would receive a $0.15 or $0.10 per contract Rebate
to Add Liquidity, depending on the security, because they are unaware
of the identity of the contra-party, which would determine whether they
receive a rebate. The Exchange believes that the Customer and BX
Options Market Maker rebate is equitable and not unfairly
discriminatory because the Rebate to Add Liquidity, which is only being
offered to Customers and BX Options Market Makers, would reward these
participants for posting liquidity when they are contra to a Non-
Customer (Professionals, Firms, Broker-Dealer or Non-BX Options Market
Makers) or a BX Options Market Maker.
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    \12\ For purposes of these fees and rebates in Chapter XV,
Section 2(1), a Non-Customer includes a Professional, Firm, Broker-
Dealer and Non-BX Options Market Maker.
    \13\ Pursuant to Chapter VII (Market Participants), Section 5
(Obligations of Market Makers), in registering as a Market Maker, an
Options Participant commits himself to various obligations.
Transactions of a Market Maker in its market making capacity must
constitute a course of dealings reasonably calculated to contribute
to the maintenance of a fair and orderly market, and Market Makers
should not make bids or offers or enter into transactions that are
inconsistent with such course of dealings. Further, all Market
Makers are designated as specialists on BX for all purposes under
the Act or rules thereunder. See Chapter VII, Section 5.
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    The Exchange believes that offering certain market participants a
Rebate to Add Liquidity of $0.15 per contract for IWM, QQQ, SPY, BAC,
C, CSCO, F, INTC, MSFT, JPM, GLD, SLV, USO and a Rebate to Add
Liquidity of $0.10 per contract for all other Penny Pilot Options is
reasonable, equitable and not unfairly discriminatory because options
overlying IWM, QQQ, SPY, BAC, C, CSCO, F, INTC, MSFT, JPM, GLD, SLV,
USO are more liquid, with tighter bid/ask differentials and therefore
the Exchange believes a higher Rebate to Add Liquidity is required to
incentivize Customers or BX Options Market Makers to post liquidity for
the opportunity to obtain a rebate. The Exchange believes that offering
a $0.32 per contract Rebate to Remove Liquidity for options overlying
BAC, C, CSCO, F, INTC, MSFT, JPM, GLD, SLV, USO and all other Penny
Pilot Options is reasonable, equitable and not unfairly discriminatory
because the Exchange desires to incentivize participants to transact
Customer orders on the Exchange and obtain this rebate. The Exchange
believes that this rebate will incentivize members to bring order flow
and increase the liquidity on the Exchange to the benefit of all market
participants. The Exchange believes that offering Customers a $0.12 per
contract Rebate to Remove Liquidity for IWM, QQQ and SPY is reasonable,
equitable and not unfairly discriminatory because the Exchange believes
that the rebate will incentivize market participants to transact
business on the Exchange and the opportunity to receive the rebate will
bring liquidity to BX to the benefit of all market participants.
    The Exchange's proposal to create Fees to Add Liquidity, in certain
circumstances, and Fees to Remove Liquidity for IWM, QQQ, SPY, BAC, C,
CSCO, F, INTC, MSFT, JPM, GLD, SLV, USO and all other Penny Pilot
Options is reasonable because the fees would enable the Exchange to
reward Customers and in some cases BX Options Market Makers that add or
remove liquidity with rebates. The advantage of increased Customer
order flow benefits all market participants. In addition, the proposed
Fees to Add and Remove Liquidity are less than the rates assessed by
other exchanges for similar fees.\14\ The Exchange's proposal to only
assess the Fee to Add Liquidity to a Customer or BX Options Market
Maker

when the Customer or BX Options Market Maker is contra to a Customer is
reasonable, equitable and not unfairly discriminatory because the
Exchange would only pay a Rebate to Remove Liquidity to a Customer and
this fee enables the Exchange to reward Customers by offering a rebate.
As previously, mentioned, attracting Customer order flow to the
Exchange benefits all market participants. Also, BX Options Market
Makers have burdens, as previously noted, that do not apply to other
market participants. All Non-Customer market participants
(Professionals, Firms, Broker-Dealers and Non-BX Options Market Makers)
would be assessed the same Fee to Add Liquidity on every transaction.
The Exchange's proposal to create Fees to Add Liquidity and Fees to
Remove Liquidity for IWM, QQQ, SPY, BAC, C, CSCO, F, INTC, MSFT, JPM,
GLD, SLV, USO and all other Penny Pilot Options is equitable and not
unfairly discriminatory for the reasons which follow hereafter. The
Exchange is not assessing Customers a Fee to Remove Liquidity for any
security. The Exchange believes that attracting Customer orders to BX
benefits all market participants and it is an important Exchange
function to provide an opportunity to all market participants to trade
against Customer orders. The Exchange is also uniformly assessing all
other market participants (BX Options Market Makers, Professionals,
Firms, Broker-Dealers and Non-BX Options Market Makers) the same $0.43
per contract Fee to Remove Liquidity.
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    \14\ See BATS Exchange, Inc.'s Fee Schedule. See also NOM
Chapter XV, Section 2 (the Penny Pilot Fees to Remove Liquidity are
$0.45 per contract for all market participants).
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    The Exchange is assessing Customers and BX Options Market Makers
lower Fees to Add Liquidity, and only when contra a Customer, as
compared to other market participants because as previously stated
Customers and BX Options Market Makers make different contributions to
the liquidity and trading environment on the Exchange as compared to
other market participants. Non-Customer participants do not bring the
unique benefits that Customer order flow provides the market nor do
these participants have the obligations that were described herein for
BX Options Market Makers. The Exchange is uniformly assessing all other
market participants (Professionals, Firms, Broker-Dealers and Non-BX
Options Market Makers) a $0.43 per contract Fee to Add Liquidity,
similar to the Fee to Remove Liquidity.
    The Exchange's proposal to pay Customers a Rebate to Remove
Liquidity during the Opening Cross \15\ except when contra to a
Customer, while all market participants except the Customer, the Non-
Customer and BX Options Market Maker are assessed the Fee to Remove
Liquidity, is reasonable because the Exchange seeks to continue to
incentivize market participants to transact orders at the Exchange
during the Opening Cross. Further, the Exchange's proposal to assess
Non-Customers and BX Options Market Makers a Fee to Remove Liquidity
enables the Exchange to reward those Customer orders that remove
liquidity. While the Customer is unaware at the time the transaction is
entered whether a rebate would be earned, the Exchange believes that
the possibility of earning a Rebate to Remove Liquidity when trading
against a Non-Customer should incentivize Customer order flow to the
benefit of all market participants.
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    \15\ The Opening Cross is the process for determining the price
at which orders shall be executed at the open and for executing
those orders.
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    The Exchange's proposal to pay a Customer a Rebate to Remove
Liquidity during the Opening Cross except when contra to a Customer,
while all market participants except the Customer, the Non-Customer and
BX Options Market Maker are assessed the Fee to Remove Liquidity, is
equitable and not unfairly discriminatory because as mentioned
previously Customer order flow benefits all market participants and
similar to other rebates proposed herein, the Customer traditionally
pays lower fees. Customer order flow benefits all market participants
by improving liquidity, the quality of order interaction and executions
at the Exchange. Also, the Exchange is proposing to assess a Fee to
Remove Liquidity on all market participants uniformly, other than a
Customer, during the Opening Cross to fund the proposed rebate. This is
similar to a rebate and fee offered in the Opening Cross on the
NOM.\16\
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    \16\ See The NASDAQ Stock Market, LLC Rules at Chapter XV,
Section 2.
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    The Exchange's proposed requirement that a BX Options Market Maker
must be registered as a BX Options Market Maker in at least one
security to qualify for the fees and rebates applicable to a BX Options
Market Maker in Chapter XV, Section 2 is reasonable, equitable and not
unfairly discriminatory because the Exchange desires to incentivize BX
Options Market Makers to be actively engaged in market making to
qualify for the fees and rebates proposed herein. Also, NOM has the
same requirement for its transaction fees in Chapter XV, Section 2 of
the NOM Rules.\17\ The Exchange would uniformly apply this standard in
paying rebates and assessing fees to BX Options Market Makers.
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    \17\ See Securities Exchange Act Release No. 62543 (July 21,
2010), 75 FR 44037 (July 27, 2010) (SR-NASDAQ-2012-075).
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Routing Fees
    The proposed Routing Fees are reasonable because they seek to
recoup costs that are incurred by the Exchange when routing Customer,
Firm, Market Maker, Broker-Dealer and Professional orders to away
markets on behalf of members. Each destination market's transaction
charge varies and there is a standard clearing charge for each
transaction incurred by the Exchange along with other administrative
and technical costs \18\ that are incurred by the Exchange. The
Exchange believes that the proposed Routing Fees would enable the
Exchange to recover the remove fees assessed to each market participant
by the away market, plus clearing and other administrative and
technical fees \19\ for the execution of orders routed to BX and
executed on an away market.
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    \18\ The Exchange utilizes the Nasdaq Options Services LLC
(``NOS''), a member of the Exchange and the Exchange's exclusive
order router to route orders in options listed and open for trading
on the BX to destination markets. See Securities Exchange Act
Release No. 67256 (June 26, 2012) (SR-BX-2012-030).
    \19\ The Exchange assesses the away market's remove fee plus a
$0.06 clearing cost and another $0.05 per contract associated with
administrative and technical costs associated with operating NOS.
Each time NOS routes to away markets NOS is charged a $0.06 clearing
fee and, in the case of certain exchanges, a transaction fee is also
charged in certain symbols, which fees are passed through to the
Exchange. There are also membership fees at away markets, and
technical costs associated with routing.
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    The Exchange also believes that the proposed Routing Fees are
equitable and not unfairly discriminatory because they would be
uniformly applied to all market participant orders that are routed to
an away market and to cover the respective cost to route the order. The
Exchange applied a similar methodology in calculating the Routing Fees
for each market participant by adding not more than a $0.11 per
contract fee to the away market's remove fee to determine the Routing
Fees.
    The Exchange operates in a highly competitive market comprised of
ten U.S. options exchanges in which sophisticated and knowledgeable
market participants can and do send order flow to competing exchanges
if they deem fee levels at a particular exchange to be excessive. The
Exchange believes that the proposed fee and rebate scheme is
competitive and

similar to other fees and rebates in place on other exchanges. The
Exchange believes that this competitive marketplace materially impacts
the fees and rebates present on the Exchange today and substantially
influences the proposal set forth above.

B. Self-Regulatory Organization's Statement on Burden on Competition

    BX does not believe that the proposed rule change will impose any
burden on competition not necessary or appropriate in furtherance of
the purposes of the Act. To the contrary, BX has designed its fees and
rebates to compete effectively for the execution and routing of options
contracts and to reduce the overall cost to investors of options
trading. The Exchange believes that the proposed fee/rebate pricing
structure would attract liquidity to and benefit order interaction at
the Exchange to the benefit of all market participants.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\20\ At any time within 60 days of the
filing of the proposed rule change, the Commission summarily may
temporarily suspend such rule change if it appears to the Commission
that such action is necessary or appropriate in the public interest,
for the protection of investors, or otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved.
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    \20\ 15 U.S.C. 78s(b)(3)(A)(ii).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-BX-2012-043 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.

All submissions should refer to File Number SR-BX-2012-043. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-BX-2012-043 and should be
submitted on or before July 31, 2012.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\21\
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    \21\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-16762 Filed 7-9-12; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: March 6, 2006 (Volume 71, Number 43)]
[Notices]
[Page 11236]
[DOCID:fr06mr06-71]

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SECURITIES AND EXCHANGE COMMISSION

Submission for OMB Review; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of Filings and Information Services, Washington, DC
20549.

Extension: Rule 15c1-7; SEC File No. 270-146; OMB Control No. 3235-
0134.

    Notice is hereby given that pursuant to the Paperwork Reduction Act
of 1995 (44 U.S.C. 3501 et seq.), the Securities and Exchange
Commission (``Commission'') is soliciting comments on the collection of
information summarized below. The Commission plans to submit this
existing collection of information to the Office of Management and
Budget for extension and approval.
    Rule 15c1-7 (17 CFR 240.15c1-7) under the Securities Exchange Act
of 1934 (15 U.S.C. 78a et seq.) provides that any act of a broker-
dealer designed to effect securities transactions with or for a
customer account over which the broker-dealer (directly or through an
agent or employee) has discretion will be considered a fraudulent,
manipulative, or deceptive practice under the Federal securities laws,
unless a record is made of the transaction immediately by the broker-
dealer. The record must include (a) the name of the customer, (b) the
name, amount, and price of the security, and (c) the date and time when
such transaction took place. The Commission estimates that 500
respondents collect information annually under Rule 15c1-7 and that
approximately 33,333 hours would be required annually for these
collections.
    An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a
currently valid control number.
    General comments regarding the estimated burden hours should be
directed to the Desk Officer for the Securities and Exchange
Commission, Office of Information and Regulatory Affairs, Office of
Management and Budget, Room 10102, New Executive Office Building,
Washington, DC 20503 or by sending an e-mail to:
<EMAIL_ADDRESS>Any comments concerning the accuracy of the

estimated average burden hours for compliance with Commission rules and
forms should be directed to R. Corey Booth, Director/Chief Information
Officer, Office of Information Technology, Securities and Exchange
Commission, 100 F Street, NE., Washington, DC 20549. Comments must be
submitted to the Office of Management and Budget within 30 days of this
notice.

    Dated: February 27, 2006.
Nancy M. Morris,
Secretary.
[FR Doc. E6-3110 Filed 3-3-06; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register: September 13, 2007 (Volume 72, Number 177)]
[Proposed Rules]
[Page 52320-52324]
[DOCID:fr13se07-18]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R05-OAR-2006-0976; FRL-8467-4]

Approval and Promulgation of Air Quality Implementation Plans;
Ohio; Oxides of Nitrogen Budget Trading Program

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: EPA is proposing to approve Ohio's request to permanently
retire 240 oxides of nitrogen (NOX) allowances from the
State's 2005 new source set aside, which would otherwise have been
distributed to existing sources that are required participants in the
State of Ohio's NOX budget. Under the Federal NOX
Budget Trading Program, each participating state receives a main pool
of `allowances', which are credits that permit a source to emit one ton
of NOX per allowance. Allowances are apportioned state-wide
to electricity generating units and other large NOX sources
which are subject to the budget trading program. Each year, a certain
number of allowances are set aside from the main pool by the State,
specifically for use by any new sources subject to the trading program
which may come

on-line during that year. If no new sources are created, and no new
source set aside allowances are used, the new source set aside
allowances are returned to the main pool of allowances for use the
following year.
    Retiring 240 new source set aside allowances will provide surplus
emission reductions to help compensate for the discontinuation of
Ohio's `E-Check' motor vehicle inspection and maintenance (I/M) program
in the Cincinnati and Dayton areas for the year 2006 (Ohio is in the
process of seeking approval of the removal of E-Check from the State
Implementation Plan (SIP), which will be addressed in a separate
action). Withholding and permanently retiring 240 new source set aside
allowances from the year 2006 control period will provide 240 tons of
surplus NOX emission reductions that are creditable for
replacing reductions that otherwise would have occurred from the E-
Check program during the 2006 ozone season.

DATES: Comments must be received on or before October 15, 2007.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R05-
OAR-2006-0976, by one of the following methods:
    1. http://www.regulations.gov: Follow the on-line instructions for

submitting comments.
    2. E-mail<EMAIL_ADDRESS>    3. Fax:<PHONE_NUMBER>.
    4. Mail: John M. Mooney, Chief, Criteria Pollutant Section, Air
Programs Branch (AR-18J), U.S. Environmental Protection Agency, 77 West
Jackson Boulevard, Chicago, Illinois 60604.
    5. Hand Delivery: John M. Mooney, Chief, Criteria Pollutant
Section, Air Programs Branch (AR-18J), U.S. Environmental Protection
Agency, 77 West Jackson Boulevard, Chicago, Illinois 60604. Such
deliveries are only accepted during the Regional Office normal hours of
operation, and special arrangements should be made for deliveries of
boxed information. The Regional Office official hours of business are
Monday through Friday, 8:30 a.m. to 4:30 p.m. excluding Federal
holidays.
    Instructions: Direct your comments to Docket ID No. EPA-R05-OAR-
2006-0976. EPA's policy is that all comments received will be included
in the public docket without change and may be made available online at
http://www.regulations.gov, including any personal information provided,

unless the comment includes information claimed to be Confidential
Business Information (CBI) or other information whose disclosure is
restricted by statute. Do not submit information that you consider to
be CBI or otherwise protected through http://www.regulations.gov or e-mail.

The http://www.regulations.gov Web site is an ``anonymous access'' system,

which means EPA will not know your identity or contact information
unless you provide it in the body of your comment. If you send an e-
mail comment directly to EPA without going through http://www.regulations.gov

your e-mail address will be automatically captured and included as part
of the comment that is placed in the public docket and made available
on the Internet. If you submit an electronic comment, EPA recommends
that you include your name and other contact information in the body of
your comment and with any disk or CD-ROM you submit. If EPA cannot read
your comment due to technical difficulties and cannot contact you for
clarification, EPA may not be able to consider your comment. Electronic
files should avoid the use of special characters, any form of
encryption, and be free of any defects or viruses. For additional
instructions on submitting comments, go to Section I of the
SUPPLEMENTARY INFORMATION section of this document.
    Docket: All documents in the docket are listed in the
http://www.regulations.gov index. Although listed in the index, some

information is not publicly available, e.g., CBI or other information
whose disclosure is restricted by statute. Certain other material, such
as copyrighted material, will be publicly available only in hard copy.
Publicly available docket materials are available either electronically
in http://www.regulations.gov or in hard copy at the Environmental Protection

Agency, Region 5, Air and Radiation Division, 77 West Jackson
Boulevard, Chicago, Illinois 60604. This Facility is open from 8:30
a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. We
recommend that you telephone Anthony Maietta, Life Scientist, at (312)
353-8777 before visiting the Region 5 office.

FOR FURTHER INFORMATION CONTACT: Anthony Maietta, Life Scientist,
Criteria Pollutant Section, Air Programs Branch (AR-18J), Environmental
Protection Agency, Region 5, 77 West Jackson Boulevard, Chicago,
Illinois 60604,<PHONE_NUMBER><EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Throughout this document whenever ``we,''
``us,'' or ``our'' is used, we mean EPA. This supplementary information
section is arranged as follows:

I. What should I consider as I prepare my comments for EPA?
II. Does this proposed rule apply to me?
III. Background
    A. Why has the State requested revisions to this rule?
    B. When did the State submit the requested rule revisions to
EPA?
    C. When did the State adopt these rule revisions, and have they
become effective?
    D. When were public hearings held?
    E. What comments did the State receive, and how did the State
respond?
IV. Review of the State's Submittal
V. What action is EPA taking?
VI. Statutory and Executive Order Reviews

I. What should I consider as I prepare my comments for EPA?

    When submitting comments, remember to:
    1. Identify the rulemaking by docket number and other identifying
information (subject heading, Federal Register date and page number).
    2. Follow directions--The EPA may ask you to respond to specific
questions or organize comments by referencing a Code of Federal
Regulations (CFR) part or section number.
    3. Explain why you agree or disagree; suggest alternatives and
substitute language for your requested changes.
    4. Describe any assumptions and provide any technical information
and/or data that you used.
    5. If you estimate potential costs or burdens, explain how you
arrived at your estimate in sufficient detail to allow for it to be
reproduced.
    6. Provide specific examples to illustrate your concerns, and
suggest alternatives.
    7. Explain your views as clearly as possible, avoiding the use of
profanity or personal threats.
    8. Make sure to submit your comments by the comment period deadline
identified.

II. Does this proposed rule apply to me?

    This proposed rule affects electrical generation units (EGUs) as
well as large boilers which are subject to Ohio's NOX budget
trading program and are not considered to be ``new'' units under the
guidelines of the trading program. Affected units will not receive
certain excess new unit set aside allowances for the year 2006.

III. Background

A. Why has the State requested revisions to this rule?

    On December 31, 2005, Ohio discontinued the motor vehicle
inspection and maintenance (I/M) programs, otherwise known as E-Check,
in the Cincinnati and Dayton areas. According to section 110(l) of the
Clean Air Act, EPA may not approve the

discontinuation of this program unless the State can demonstrate that
the revision will not interfere with attainment of the health-based
National Ambient Air Quality Standards. For this purpose, Ohio is
providing emission reductions that compensate for the emission increase
expected to result from discontinuation of E-Check. It should be noted
that Ohio is currently seeking approval of the removal of E-Check from
the SIP, which will be addressed in a separate rulemaking.
    As compensation for the emissions reductions lost through the
discontinuation of E-Check, Ohio adopted requirements for low-
volatility gasoline and requirements for lower emissions from gas cans,
solvent degreasing, and automobile refinishing. EPA approved the gas
can, solvent degreasing, and automobile refinishing measures in a
rulemaking action published on March 30, 2007, (72 FR 15045). The
lower-volatility gasoline requirement was originally intended to be
implemented in 2006, but was delayed until June 2008. (For more
information see rulemaking published on May 25, 2007, at 72 FR 29269).
    Without the low-volatility gasoline program to compensate for
emissions in 2006 resulting from discontinuation of E-Check, Ohio asked
EPA, in a May 6, 2005, letter, if emission control devices that were
installed on various power plants around the Cincinnati-Dayton area
could provide the compensatory NOX emissions reduction. In
our response, dated September 20, 2005, EPA noted that, while the
reductions clearly occurred and clearly provide both local and regional
air quality benefits, these actions would not be considered surplus
emission reductions because these reductions would have occurred anyway
through regular implementation of the Regional NOX Budget
Trading Program, otherwise known as the NOX SIP Call.
    The NOX SIP Call created a market-based cap and trade
program to reduce NOX emissions from power plants and other
large sources across the Eastern half of the United States. The program
is designed to allow states to have greater flexibility to achieve
state-wide emission reductions with local as well as regional benefits.
Because the NOX SIP Call garners reductions which are not
source-specific, Ohio does not have the ability to decide exactly where
reductions will take place.
    However, we noted that if Ohio were to withdraw and retire new
source set aside allowances, this action would yield surplus
reductions. By retiring new source set aside allowances that would
otherwise have been redistributed the following year for use by
existing sources subject to the trading program, Ohio has mandated a
reduction in emissions that EPA considers surplus reductions beyond the
reductions of the existing NOX SIP Call.
    Ohio adopted changes to Ohio Administrative Code (OAC) Chapters
3745-72-01 and 3745-14-05, and submitted them for approval on October
11, 2006. These rules provide a revised start date for the use of low-
volatility gasoline and provide the necessary quantity of interim,
surplus NOX emission reductions through the permanent
retirement of new source set aside allowances from the State's
NOX budget trading program.
    Withholding and retiring new source set aside allowances from the
year 2005 ensured that these allowances would not return to existing
NOX budget trading program sources in 2006, therefore
providing surplus emission reductions for 2006. As indicated above, the
portion of the submittal concerning low-volatility gasoline has been
addressed by EPA in a separate rulemaking action.

B. When did the State submit the requested rule revisions to EPA?

    The Director of the Ohio Environmental Protection Agency (Ohio EPA)
submitted a request for EPA to approve revisions to OAC 3745-14-05
(NOX allowance allocations) in a letter dated October 11,
2006.

C. When did the State adopt these rule revisions, and have they become
effective?

    The proposed rule language was filed as an emergency rule on April
24, 2006. A proposed permanent adoption package for this rule was filed
the same day. The Director of the Ohio Environmental Protection Agency
issued an order of adoption for permanent revisions to OAC 3745-14-05
on July 10, 2006. The effective date of this order was July 17, 2006.
EPA is rulemaking on the permanent rule revisions and is not acting on
the emergency rules.

D. When were public hearings held?

    A public hearing on revisions to OAC 3745-14-05 was held on June 2,
2006, in Columbus, Ohio.

E. What comments did the State receive, and how did the State respond?

    A commenter questioned the necessity of amending OAC rule 3745-14-
05; the commenter stated that the Cincinnati/Dayton area had already
monitored attainment, so meeting anti-backsliding regulations is not
necessary. Ohio EPA disagreed with the commenter, noting that the
Cincinnati area may still be monitoring nonattainment air quality at
four sites. Also, OEPA noted that the anti-backsliding elements of the
areas' 1-hour ozone nonattainment requirements cannot be removed;
therefore the State's proposed rule revisions are, in fact, necessary.
    A commenter representing Buckeye Power, Inc., Columbus Southern
Power Company, Dayton Power & Light Company, Duke Energy, Ohio Power
Company, and Ohio Valley Electric Corporation (hereafter described as
the `Utilities') objected to the proposed rule revisions because local
reductions were being realized by applying regional reductions to
NOX budgets, which wouldn't necessarily have local benefit
to the Cincinnati/Dayton areas. Ohio EPA responded by noting that air
quality modeling indicates that the optimum scenario for reducing ozone
in the Cincinnati/Dayton areas is a combination of regional
NOX reductions coupled with local VOC reductions. Ohio EPA
also noted that EPA had commented on the regionalism of the retired new
source set aside allowances.
    The `Utilities' believe that withdrawal and retirement of 240 new
source set aside allowances undermines the stability of the regional
NOX trading program. Ohio EPA disagreed, and noted that the
retired allowances were set aside, and unused, by new sources in the
specified time period, and that such a small amount of retired new
source set aside allowances would not have an impact on the budget
trading program.
    The `Utilities' commented that they believe the retirement of
NOX allowances is unlawful under Ohio statute, and that the
Ohio EPA has no authority to retire or otherwise remove allowances from
the pool. Ohio EPA disagreed, noting that they have indeed had the
authority to retire or remove allowances since the program's inception
in 2002. Additionally, Ohio EPA found it important to make clear that a
NOX budget allowance does not constitute a property right.
    The `Utilities' commented that they believe retiring allowances
will not create emission reductions because sources can simply purchase
more allowances from anywhere in the U.S. at the end of the ozone
season. Ohio EPA responded by noting that the point of the
NOX Budget Trading Program is not to limit individual
sources, but to limit regional emissions, which-as they had already
stated-will benefit Cincinnati and Dayton.

    The `Utilities' comment that they had provided Ohio EPA with an
alternative proposal for emission reductions in 2005, but Ohio EPA
chose not to adopt the proposal. Ohio EPA responded by noting that the
utilities' proposal to reduce emissions through compliance with the
NOX Budget Trading Program could not be considered to garner
surplus emissions unless allowances were retired to make those
reductions surplus. Ohio EPA noted that the utilities did not appear to
be willing to retire the associated allowances.
    A commenter representing American Municipal Power (AMP) Ohio stated
that Ohio EPA had not demonstrated that low-RVP gasoline was not
available for the 2006 ozone season. Ohio EPA responded by noting the
multitude of issues which caused it to conclude that institution of 7.8
RVP fuel was not an option for the 2006 ozone season. The reasons
included a U.S. EPA survey indicating that refinery production
capabilities for 7.8 RVP gasoline would fall short for the Cincinnati
and Dayton areas, as well as lack of a preemption waiver from U.S. EPA
allowing the adoption of low-RVP fuel. Additionally, Ohio EPA noted
that if it were to allow noncompliant fuel into the area, compliant
suppliers providing low-RVP fuel would be at a disadvantage.
    A commenter representing AMP Ohio stated that the Ohio EPA targeted
NOX budget sources for NOX reductions without
fully evaluating other appropriate reduction sources. Ohio EPA
disagreed, noting that prior to establishing the RVP fuel program for
Cincinnati and Dayton, they fully evaluated numerous control strategies
to offset the emissions reduction shortfall that resulted from closing
the E-Check program.
    A commenter representing the Ohio Manufacturers' Association (OMA)
stated that Ohio's manufacturing sector only represents 7% of the
state's total NOX emissions, yet the manufacturing sector is
being called on to, in their own words, ``solve the problem''. Ohio EPA
noted that the effect of retiring 240 allowances on non-EGU's would be
very small for a one-time allocation adjustment. Ohio EPA noted that 15
non-EGU's are participating in Ohio's NOX trading program,
and two of those units are shut down. Furthermore, of the 240
allowances being retired, non-EGU's represent 19 of the 240 allowances
spread across the 15 non-EGU facilities whether still in operation or
not.

IV. Review of the State's Submittal

    The State of Ohio has adopted revisions to its NOX
budget trading program regulations. On October 11, 2006, the State
requested that EPA approve these rule revisions for incorporation into
Ohio's SIP. Specifically, Ohio's revisions to this rule are:
    OAC 3745-14-05 (C)(7):
    Ohio inserted this new paragraph which withholds and permanently
retires 240 new source set aside allowances from the 2005 control
period to offset emission increases associated with the termination of
the E-Check program in Cincinnati and Dayton. These withheld and
retired allowances would normally have been allocated to existing Ohio
NOX budget sources in 2006.
    On February 23, 2007, Ohio supplemented its submittal with
information regarding NOX emission reductions that have
occurred in the Cincinnati/Dayton area. This letter identifies several
actions that substantially reduced NOX emissions starting
from before the 2006 ozone season, which include installation of
selective catalytic reduction controls at 3 units and installation of
low NOX burners at 9 other units. Ohio estimates that the
total emission reduction from these actions is over 10,000 tons per
ozone season.
    In ordinary circumstances, an emission limit can be imposed on a
specific source, and the surplus emission reduction clearly occurs at
the location of that source. However, a different relationship between
regulatory action and resulting emission reductions applies to power
plants and other sources regulated under the NOX SIP Call.
The NOX SIP Call provides a restricted set of allowances
that allow a reduced quantity of NOX emissions across the
entire NOX SIP Call region, while maximizing the flexibility
of participants in the program to decide where these reductions will
occur. In particular, allowances may be bought and sold and used
anywhere in the NOX SIP Call region. Since the allowances
are not assigned to particular locations, Ohio posed the question to
EPA of how best to pursue utility emission reductions in the
Cincinnati/Dayton area to obtain creditable reductions. EPA responded
that reductions at utilities could not be considered surplus to the
NOX SIP Call unless Ohio provided for retirement of
allowances, but EPA added that Ohio had substantial flexibility in what
allowances to retire.
    Ohio's action creates a surplus reduction of 240 tons of
NOX emissions. This action fully conforms with EPA
regulations concerning the NOX SIP Call and other relevant
regulations, and so this action is fully approvable. More at issue is
whether this action may be treated as fully offsetting the loss of 240
tons of NOX emission reductions (or its VOC equivalent) from
the discontinuation of E-Check in the Cincinnati and Dayton areas.
    An important underpinning of the NOX SIP Call is the
interchangeability of emission reductions, i.e. a finding that the
impacts of the emissions are sufficiently regional in nature and
sufficiently insensitive to the spatial distribution of the emission
reductions that EPA need not restrict where allowances are used. This
finding underlying the NOX SIP Call has important
implications for Ohio's action in retiring allowances. EPA believes
that Ohio's retirement of 240 allowances may be credited to make 240
tons of the actual emission reductions occurring in the Cincinnati/
Dayton area surplus. We find that the retirement benefits Cincinnati/
Dayton air quality, and is reasonable under the circumstances,
including the actual emissions reductions in the area.
    EPA believes that Ohio may reasonably assign the surplus reductions
it has mandated to actual emission reductions that have occurred in the
Cincinnati/Dayton area. Allowances have no inherent geographic
location. That is, the allowances have no inherent properties that
dictate the location of the emission reduction that is attributed to a
particular retirement of a particular allowance. Substantial emission
reductions have occurred in the Cincinnati/Dayton area. While most of
the reductions would be attributable to the NOX SIP Call,
EPA believes that Ohio has latitude to attribute 240 tons of the 2006
NOX emission reductions in the Cincinnati/Dayton area to its
retirement of 240 allowances. Furthermore, even if Ohio or EPA were to
associate the allowance retirement with emission reductions in a
geographically broader area, EPA believes that the corresponding air
quality benefit in the Cincinnati/Dayton area would be similar to the
benefit of 240 tons of NOX emission reductions within the
Cincinnati/Dayton area. Indeed, the regional influence of
NOX emissions is the fundamental basis for EPA to establish
the NOX trading program as a regional program without
restriction on where (within the trading area) allowances may be used.
    EPA views Ohio as having made surplus 240 tons of the emission
reductions in 2006. The surplus reductions that result from this
retirement provide significant benefit to the Cincinnati/Dayton area,
and it is reasonable to assign 240 tons of NOX emission
reductions credit to the

Cincinnati/Dayton area, and to count 240 tons of the area's actual
reductions as attributable to the retirement of 240 allowances.
Therefore, EPA proposes to approve this rule change, and to conclude
that Ohio has provided compensatory emissions decreases for
discontinuing the E-Check program in this area in the amount of 240
tons of NOX emission reduction for the year 2006.
    EPA received a January 12, 2007, letter commenting on this issue
from a law firm on behalf of the Environmental Committee of the Ohio
Electric Utility Institute. This law firm submitted additional comments
on February 15, 2007, and on March 13, 2007. EPA views these letters as
commenting on the action being proposed here. EPA will review these
comments, and address any comments it receives during the comment
period, as we prepare final rulemaking on Ohio's submittal.
    OAC 3745-14-05 (C)(8) through (C)(10):
    Ohio renumbered the existing paragraphs (C)(7) through (C)(9) to
(C)(8) through (C)(10), in order to accommodate the inclusion of the
new paragraph (C)(7). As the addition of a new paragraph (C)(7)
necessitates renumbering the existing paragraphs, we find this rule
change to be acceptable and approvable.

V. What action is EPA taking?

    EPA is proposing to approve the addition of paragraph (C)(7) to OAC
3745-14-05, and its incorporation into the Ohio SIP, as adopted by the
State of Ohio, as defined in Ohio's October 11, 2006, submittal. EPA is
also proposing to approve the renumbering of the original OAC 3745-14-
05 paragraphs (C)(7) through (C)(9) to (C)(8) through (C)(10),
respectively. If EPA takes final action as proposed here, EPA would
then retire 240 allowances from Ohio's new source set aside as
instructed in this rule. EPA proposes to conclude that Ohio has thereby
provided compensatory emissions decreases for discontinuing the E-Check
program in this area in the amount of 240 tons of NOX
emission reduction for the year 2006.

VI. Statutory and Executive Order Reviews

Executive Order 12866: Regulatory Planning and Review

    Under Executive Order 12866 (58 FR 51735, September 30, 1993), this
action is not a ``significant regulatory action'' and, therefore, is
not subject to review by the Office of Management and Budget.

Paperwork Reduction Act

    This proposed rule does not impose an information collection burden
under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C.
3501 et seq.).

Regulatory Flexibility Act

    This proposed action merely proposes to approve state law as
meeting Federal requirements and imposes no additional requirements
beyond those imposed by state law. Accordingly, the Administrator
certifies that this proposed rule will not have a significant economic
impact on a substantial number of small entities under the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.).

Unfunded Mandates Reform Act

    Because this rule proposes to approve pre-existing requirements
under state law and does not impose any additional enforceable duty
beyond that required by state law, it does not contain any unfunded
mandate or significantly or uniquely affect small governments, as
described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4).

Executive Order 13132: Federalism

    This action also does not have Federalism implications because it
does not have substantial direct effects on the states, on the
relationship between the national government and the states, or on the
distribution of power and responsibilities among the various levels of
government, as specified in Executive Order 13132 (64 FR 43255, August
10, 1999). This action merely proposes to approve a state rule
implementing a Federal standard, and does not alter the relationship or
the distribution of power and responsibilities established in the Clean
Air Act.

Executive Order 13175: Consultation and Coordination With Indian Tribal
Governments

    This proposed rule also does not have tribal implications because
it will not have a substantial direct effect on one or more Indian
tribes, on the relationship between the Federal Government and Indian
tribes, or on the distribution of power and responsibilities between
the Federal Government and Indian tribes, as specified by Executive
Order 13175 (65 FR 67249, November 9, 2000).

Executive Order 13045: Protection of Children From Environmental Health
and Safety Risks

    This proposed rule also is not subject to Executive Order 13045
``Protection of Children from Environmental Health Risks and Safety
Risks'' (62 FR 19885, April 23, 1997), because it is not economically
significant.

Executive Order 13211: Actions That Significantly Affect Energy Supply,
Distribution, or Use

    Because it is not a ``significant regulatory action'' under
Executive Order 12866 or a ``significant regulatory action,'' this
action is also not subject to Executive Order 13211, ``Actions
Concerning Regulations That Significantly Affect Energy Supply,
Distribution, or Use'' (66 FR 28355, May 22, 2001).

National Technology Transfer Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (NTTAA), 15 U.S.C. 272, requires Federal agencies to use
technical standards that are developed or adopted by voluntary
consensus to carry out policy objectives, so long as such standards are
not inconsistent with applicable law or otherwise impractical. In
reviewing SIP submissions, EPA's role is to approve state choices,
provided that they meet the criteria of the Clean Air Act. Absent a
prior existing requirement for the state to use voluntary consensus
standards, EPA has no authority to disapprove a SIP submission for
failure to use such standards, and it would thus be inconsistent with
applicable law for EPA to use voluntary consensus standards in place of
a program submission that otherwise satisfies the provisions of the
Clean Air Act. Therefore, the requirements of section 12(d) of the NTTA
do not apply.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Intergovernmental
relations, Nitrogen dioxide, Reporting and recordkeeping requirements.

    Dated: September 4, 2007.
Bharat Mathur,
Acting Regional Administrator, Region 5.
[FR Doc. E7-18061 Filed 9-12-07; 8:45 am]

BILLING CODE 6560-50-P


                           United States Environmental Protection Agency (EPA)
		       INFORMATION COLLECTION REQUEST (ICR)
                                          Part A of the Supporting Statement
		                      (Draft  -  September 2018)

1. 	IDENTIFICATION OF THE INFORMATION COLLECTION

      1(a)	Title: Recordkeeping and Reporting Requirements for the Performance-Based Measurement System for Fuels (Renewal)
      EPA ICR Number 2459.03
      OMB Control Number 2060-0692
      Docket ID Number EPA-HQ-OAR-2018-0663

	1(b) 	Abstract

	EPA regulations at 40 CFR 80 restrict certain properties of gasoline and diesel fuel, such as sulfur content, to limit harmful vehicle emissions.  To promote compliance, the regulations require fuel producers and importers to test for these properties and report the results. (Reporting the results is covered by another information collection.) The regulations at 40 CFR 80.47 (Performance-based Analytical Test Method Approach), 40 CFR 80.584 (precision and accuracy criteria), and 40 CFR 80.585 (process for approval of a test method) require each test method to demonstrate compliance with performance-based accuracy and precision criteria. (Certain test methods specified in the regulations and in use prior to October 28, 2013 are recognized as meeting the criteria and are exempt from the precision and accuracy demonstrations. These are known as "designated primary" test methods.) This ICR covers the recordkeeping and reporting requirements for the test methods employed by refiners' and importers' fuel testing laboratories, and independent fuel testing laboratories, to measure certain fuel properties.  This program is known as the Performance-based Measurement System (PBMS).

	In the past, a test method for measuring compliance with a fuel property was designated in the regulations.  Typically, this method was an American Society for Testing and Materials (ASTM) procedure used by an EPA laboratory.  Regulated parties would have to use this method for compliance purposes.  In certain circumstances, alternative test methods were named in the regulations.  If a regulated party used a named alternative test method, all results would have to be correlated to the designated test method.  The party would have to develop and apply a correlation equation to all its results to bring them in line with the designated test method.  A limited performance-based test method approach was adopted to address the measurement of sulfur in diesel fuel per 40 CFR 80.584-.585. However, outside of the diesel program, there was no opportunity for a laboratory to use a test method not designated in the regulations. The regulations at 40 CFR 80.47 permit a laboratory to qualify itself to use an alternative test method if the method meets the precision, accuracy, and other criteria specified in 40 CFR 80.47.

      To be qualified to use an alternative test method, a refiner's or importer's laboratory, or an independent laboratory, is required to develop certain information. Having to report to EPA, or just retain the information, will depend upon the nature of the method.  A test method developed by a voluntary consensus-based standards body (VCSB) will self-qualify provided it meets performance-based requirements for accuracy and precision specified in the regulations. A laboratory will only need to generate and store the records specified in the regulations. Likewise, for a non-VCSB method for an absolute fuel parameter. For a non-VCSB test method for a method-defined fuel parameter, essentially one developed "in-house," the laboratory will be required to generate, store, and submit certain records to EPA, and obtain approval, to become qualified.  In addition, the regulations require a laboratories with to engage in statistical quality control (SQC) activities.  While SQC activities are a customary business practice (CBP) for a laboratory, they are not necessarily as stringent as required by the regulations.  Thus, there is an estimated burden for the development of the SQC records required by the regulations and their retention for five years.

2.  NEED FOR AND USE OF THE COLLECTION

      2(a) 	Need/Authority for the Collection

	Vehicle emissions constitute a significant source of air pollution in the United States.  The regulations at 40 CFR 80, Regulation of Fuels and Fuel Additives, restrict certain properties of gasoline and diesel fuel to limit harmful emissions and their impact on public health.  Accurate measurements of these properties, and the recordkeeping and reporting requirements, are essential for enforcement and compliance. Sections 114 and 208 of the Clean Air Act (CAA), 42 U.S.C. §§ 7414 and 7542, authorize EPA to require recordkeeping and reporting regarding enforcement of the provisions of Title II of the CAA.

	2(b) 	Practical Utility/Uses of the Data

	The data will:

 Enable laboratories to self-qualify certain test methods based upon accuracy and precision criteria.

 Enable EPA to qualify certain non-VCSB test methods based upon accuracy and precision criteria.

	3)  Promote compliance with the reformulated gasoline (RFG), conventional gasoline (CG) and diesel fuel standards at 40 CFR 80 and the associated benefits to human health and the environment.

3.  NONDUPLICATION, CONSULTATION, AND OTHER COLLECTION CRITERIA

	3(a) 	Nonduplication

	Efforts have been made to eliminate duplication in this information collection. The information collected is unique to the closed EPA database.  EPA has provided a spreadsheet in which the parties can submit data in the Unified Report Form (XLS) to EPA's Central Data Exchange (CDX).  VCSB test methods self-qualify and the records are maintained by the laboratory for five years. Non-VCSB test methods need to provide data, usually confidential, to obtain EPA approval.  Since these test methods have not undergone the peer review associated with VCSB test methods, the data relate to individual lab results in the testing of fuel parameters and are not available from another source.

	3(b)	Public Notice

	A notice will be published in the Federal Register announcing this ICR and inviting public comment.

	3(c) 	Consultations

	We have consulted with industry contacts on burdens. No public comments were received for the previous ICR.

	3(d) 	Effects of Less Frequent Collection

	The frequency of response is controlled by the individual laboratory.  A laboratory will determine how many test methods it wishes to qualify.  For existing laboratories, it is reasonable to conclude that this has essentially occurred over the past three years and little new activity from them is expected. All qualified methods since 2015 have been VCSB methods.  We are not aware of new laboratories entering the market.

	3(e)	General Guidelines

	The regulations require record retention for five years. Records can be kept either electronically or on paper. EPA needs to make sure regulated parties keep records long enough to be evaluated for compliance during this time.  Section 40 CFR Part 80.47(q) requires record retention for five years from the date the records were created.  Any information submitted to EPA and claimed as confidential will be treated in accordance with 40 CFR 2 and established EPA procedures.  Information that is received without a claim of confidentiality may be made available to the public without further notice to the submitter under 40 CFR 2.203.

	3(f) 	 Confidentiality

	EPA informs respondents that they may assert claims of business confidentiality for any of the information they submit.  Information claimed as confidential will be treated in accordance with 40 CFR 2 and established procedures.  Information that is received without a claim of confidentiality may be made available to the public without further notice to the submitter under 40 CFR 2.203.

      3(g)	Sensitive Information

	This information collection does not require submission of any sensitive information such as social security numbers or credit card information.

4.	THE RESPONDENTS AND THE INFORMATION COLLECTED

	4(a)	Respondents/SIC Codes

The respondents to this information collection are:
 Refiners' testing laboratories (i.e., refiners)
 Importers' testing laboratories (i.e., importers)
 Independent fuel testing laboratories (i.e., laboratories)

	Recordkeeping and reporting are required by the following industries, with SIC Code/2002 NAICS Code indicated in parentheses:  refiners (2911/324110), importers (5172/424720), and laboratories (8734/541380).

      We estimate that there are 1,000 fuel testing labs for gasoline and diesel fuel. All are required to engage in SQC activities.  These labs test for compliance with various fuel properties. Fuel refiners and importers are required to hire independent certified public accountants or certified internal auditors to audit all fuel test results, volume reports, and other information that is submitted. (These requirements are covered by a separate information collection.) EPA rules place liability on refiners, importers, distributors, carriers, resellers, retail and wholesale purchase-consumers to sell or use gasoline and diesel fuel that meet the sulfur, benzene, volatility, toxics, and lead contamination standards. When a violation is found, not only the party in possession of the non-compliant fuel, but all upstream parties in the fuel distribution system as well, are presumed liable, unless they establish a credible defense. This leads many refiners and importers, whose brands appear at retail outlets, often to implement a downstream quality assurance program to ensure compliance. EPA can file criminal charges against refiners, importers and independent labs should they be found to have falsified, or assisted in falsifying, test results.

	4(b)	Information Requested

 Data Items

Knowledge of the following definitions at 40 CFR 80.47(a) is important for a thorough understanding of the recordkeeping and reporting requirements:

    (1) Performance-based Analytical Test Method Approach means a measurement system based upon established performance criteria for accuracy and precision with use of analytical test methods. As used in this subpart, this is a measurement system used by laboratories to demonstrate that a particular analytical test method is acceptable for demonstrating compliance.
    (2) Accuracy means the closeness of agreement between an observed value from a single test measurement and an accepted reference value.
    (3) Precision means the degree of agreement in a set of measurements performed on the same property of identical test material.
    (4) Absolute fuel parameter means a fuel parameter for which a gravimetric standard is practical to construct and use. Sulfur content of gasoline, butane, or diesel fuel are examples of an absolute fuel parameter.
    (5) Gravimetric standard means a test material made by adding a carefully weighed quantity of the analyte to a measured quantity of another substance known not to contain any of the analyte, resulting in a solution with an accurately known concentrate of the analyte.
    (6) Consensus named fuels are homogeneous quantities of fuel that have been analyzed by a number of different laboratories (by sending around small samples). The average concentration of some parameter of interest across all of the different laboratories is then used as the "consensus name" for that material.
    (7) Locally-named reference materials are gasoline or diesel fuels that are usually from the regular production of the facility where they are used in laboratory quality control efforts and have been analyzed using the designated method (either by the facility's lab or by a reference lab) to obtain an estimate of their concentration.
    (8) Method-defined fuel parameter means a fuel parameter for which an EPA-prescribed primary test method or designated method defines the regulatory standard. Examples of method-defined fuel parameters include olefin content in gasoline, Reid vapor pressure (RVP) of gasoline, distillation parameters of gasoline, benzene content of gasoline, aromatic content of gasoline and diesel fuel, and oxygen/oxygenates content of gasoline.
    (9) Reference installations are designated test method installations that are used to qualify the accuracy of other method-defined parameter instruments. Reference installations of the designated test method will be used to evaluate the accuracy of other method-defined alternative test methods and to establish correlation equations if necessary.
    (10) Correlation equation is a correction equation as determined by the use of ASTM D6708. This standard practice determines whether the comparison between the alternative test method and the designated test method is a null result. If the comparison is not null, then the standard practice provides for a correlation equation that predicts designated test method results from the applicable method-defined alternative test method.
    (11) Statistical quality control (SQC) means a planned system of activities whose purpose is to provide a level of quality that meets the needs of compliance with the standards of this part. This subpart prescribes specific SQC requirements for both absolute and method driven fuel parameters for both voluntary and non-voluntary consensus-based standards bodies.
    (12) Voluntary consensus-based standards body (VCSB) means a domestic or international organization that plans, develops, establishes, or coordinates voluntary consensus standards using agreed-upon procedures and which possesses the attributes of openness, balance of interest, due process, and consensus, as explained in OMB Circular A-119 and the National Technology Transfer and Advancement Act of 1995, P.L. 104-113, sec. 12(d).
    (13) Non-voluntary consensus-based standards body (non-VCSB) means a domestic or international regulated party that has developed a proprietary analytical test method that has not been adopted by a VCSB organization.
2. Recordkeeping and Reporting Requirements for a Laboratory (generation, storage, and reporting of test method records per the cited regulations below in 40 CFR 80)

 Sulfur in Gasoline (absolute fuel parameter)
         (Designated Primary Test Method (DPTM)  -  ASTM D2622-10)

         VCSB Alternative Test Method (ATM)  -  Self-qualification
         	Precision and accuracy  -  80.47(b)
         			       SQC- 80.47(n)
         		  Recordkeeping  -  80.47(q)

         Non-VCSB ATM  -  Self-qualification
         	Precision and accuracy  -  80.47(b)
         		    Qualification  -  80.47(l)
         			     SQC  -  80.47(n)
         		Recordkeeping  -  80.47(q)

 Sulfur in Butane (absolute fuel parameter)
         (DPTM  -  ASTM D6667-10)

         VCSB ATM  -  Self-qualification
         	Precision and accuracy  -  80.47(c)
         			     SQC  -  80.47(n)
         		  Recordkeeping- 80.47(q)

         Non-VCSB ATM  -  Self-qualification
         	Precision and accuracy  -  80.47(c)
         		    Qualification  -  80.47(l)
         			     SQC  -  80.47(n)
         		 Recordkeeping  -  80.47(q)

 Olefins in Gasoline (method-defined fuel parameter)
         (DPTM  -  ASTM D1319-13)

         VCSB ATM  -  Self-qualified
         		Precision  -  80.47(d)
         		Accuracy  -  80.47(k) (reference installations/labs required)
         	       Qualification  -  80.47(l)
         		        SQC  -  80.47(o)
                   Recordkeeping  -  80.47(q)

         Non-VCSB ATM  -  EPA approval required
         		Precision  -  80.47(d)
         		Accuracy  -  80.47(k) (reference installations required)
                      Qualification  -  80.47(m) (report to EPA)
                                   SQC  -  80.47(p)
                   Recordkeeping  -  80.47(q) (lab seeking approval)
         	    Recordkeeping  -  80.47(m) (reference installations)

 Aromatics in Gasoline (method-defined fuel parameter)
         (DPMT  -  ASTM D5769-10)

         VCSB ATM  -  Self-qualified
         		Precision  -  80.47(e)
         		Accuracy  -  80.47(k) (reference installations required)
         	      Qualification  -  80.47(l)
                       SQC  -  80.47(o)
		    Recordkeeping  -  80.47(q)

	       Non -VCSB ATM  -  EPA approval required
			Precision  -  80.47(e)
			Accuracy  -  80.47(k) (reference installations required)
		      Qualification  -  80.47(m) (report to EPA)
			        SQC  -  80.47(p)
		    Recordkeeping  -  80.47(q) (lab seeking approval)
		    Recordkeeping  -  80.47(m) (reference installations)

  Oxygen and Oxygen Content in Gasoline (method-defined fuel parameters)
         (DPMT  -  ASTM D5599-00 (Reapproved 2010))

         VCSB ATM  -  Self-qualified
         		Precision  -  80.47(f)
         		Accuracy  -  80.47(k) (reference installations required)
         	      Qualification  -  80.47(l)
                                  SQC  -  80.47(o)
                  Recordkeeping  -  80.47(q)

         Non-VCSB ATM  -  EPA approval required
         		Precision  -  80.47(f)
         		Accuracy  -  80.47(k) (reference installations required)
         	      Qualification  -  80.47(m) (report to EPA)
                                  SQC  -  80.47(p)
                  Recordkeeping  -  80.47(q) (lab seeking approval)
                  Recordkeeping  -  80.47(m) (reference installations)

  Reid Vapor Pressure (RVP) in Gasoline (method-defined fuel parameter)
         (DPTM  -  ASTM D5191-13)

         VCSB ATM  -  Self-qualified
         		Precision  -  80.47(g)
         		Accuracy  -  80.47(k) (reference installations required)
                     Qualification  -  80.47(l)
                                  SQC  -  80.47(o)
                  Recordkeeping  -  80.47(q)

         Non-VCSB ATM  -  EPA approval required
         		Precision  -  80.47(g)
         		Accuracy  -  80.47(k) (reference installations required)
                     Qualification  -  80.47(m) (report to EPA)
                                  SQC  -  80.47(p)
                  Recordkeeping  -  80.47(q) (lab seeking approval)
                  Recordkeeping  -  80.47(m) (reference installations)

  Gasoline Distillation (method-defined fuel parameter)
         (DPTM  -  ASTM D86-12)

         VCSB ATM  -  Self-qualified
         		Precision  -  80.47(h)
         		Accuracy  -  80.47(k) (reference installations required)
                     Qualification  -  80.47(l)
                                  SQC  -  80.47(o)
                  Recordkeeping  -  80.47(q)

         Non-VCSB ATM  -  EPA approval required
         		Precision  -  80.47(h)
         		Accuracy  -  80.47(k) (reference installations required)
                      Qualification  -  80.47(m) (report to EPA)
                                   SQC  -  80.47(p)
                   Recordkeeping  -  80.47(q) (lab seeking approval)
                   Recordkeeping  -  80.47(m) (reference installations)

  Benzene in Gasoline (method-defined fuel parameter)
         (DPTM  -  ASTM D3606-10)

         VCSB ATM  -  Self-qualified
         		Precision  -  80.47(i)
         		Accuracy  -  80.47(k) (reference installations required)
                     Qualification  -  80.47(l)
                                  SQC  -  80.47(o)
                  Recordkeeping  -  80.47(q)

         Non-VCSB ATM  -  EPA approval required
         		Precision  -  80.47(i)
         		Accuracy -80.47(k) (reference installations required)
         Qualification  -  80.47(m) (report to EPA)
         SQC  -  80.47(p)
         Recordkeeping  -  80.47(q) (lab seeking approval)
         Recordkeeping  -  80.47(m) (reference installations)

  Aromatics in Diesel (method-defined fuel parameter)
         (DPTM  -  ASTM D1319-13)

         VCSB ATM  -  Self-qualified
         		Precision  -  80.47(j)
         		Accuracy  -  80.47(k) (reference installations required)
                     Qualification  -  80.47(l)
                                  SQC  -  80.47(o)
                  Recordkeeping  -  80.47(q)

         Non-VCSB ATM  -  EPA approval required
         		Precision  -  80.47(j)
         	            Accuracy  -  80.47(k) (reference installations required)
                     Qualification  -  80.47(m) (report to EPA)
                                  SQC  -  80.47(p)
                  Recordkeeping  -  80.47(q) (lab seeking approval)
                   Recordkeeping - 80.47(m) (reference installations)

  Sulfur in Diesel (absolute fuel parameter)
         (DPTM  -  Not applicable)

         VCSB ATM  -  Self-qualified
         		Precision  -  80.584(a)
         		Accuracy  -  80.584(b)
         	   Recordkeeping  -  80.585(a)(2)
                  QC procedures  -  80.585(e)

         Non-VCSB ATM  -  EPA approval required
         		Precision  -  80.584(a)
         		Accuracy  -  80.584(b)
                     Qualification  -  80.585(b) (report to EPA)
                  QC procedures  -  80.585(e)

		To summarize, to qualify a test method, the following information must be stored or, in certain cases, provided to the EPA:

		A)	Reporting: laboratories must submit information that will establish that certain non-VCSB test methods meet the accuracy and precision requirements. They must also generate and retain the subsequent SQC records for five years.

		B)	Recordkeeping: laboratories must retain the information that will establish that VCSB test methods and certain non-VCSB test methods meet the accuracy and precision requirements. They must also generate and maintain the subsequent SQC records for five years.  This period is consistent with the required record retention for all 40 CFR fuels programs.

		It is estimated that the average burden to qualify a new alternative test method is 180 hours.  The bulk of new-qualification activity occurred in the 2016-2108 timeframe.  We estimate two new qualifications annually, one VCSB method and one non-VCSB method, primarily as placeholders for a total of 360 hours.  There appears to be little new activity in this area.  The previous ICR estimated 52 new methods but at only 6.66 hours per qualification, for a total of 346 hours. We believe that the 6.66 figure was in error.

	We estimate that each of the 1,000 fuel test labs will spend one-half hour per week in the generation and retention of SQC records. Thus, 26 hours per lab per year by 1,000 labs gives an annual burden of 26,000 hours.  The previous ICR estimated only 52 labs for a total of 5, 408 hours.  We believe that the only 52 labs was in error.

	Reference installations/labs are required for certain qualifications.  For two annual qualifications we estimate that 12 installations would be involved, at 24 hours each annually, for a total of 288 hours.  The previous ICR estimated 52 installations for a total of 1,248 hours.

	A non-VCSB method may require a third-party engineering review.  We estimate one annually at 48 hours.  The previous ICR estimated 52 annually at 48 hours each for a total of 2,496 hours.

5.  THE INFORMATION COLLECTED  -  AGENCY ACTIVITIES, COLLECTION METHODOLOGY, AND INFORMATION MANAGEMENT - The Information Collected, Agency Activities, Collection Methodology, and Information Management

	5(a)	Agency Activities

          All reported data will be reviewed by EPA.
          EPA will review the data to determine if the non-VCSB test method meets the accuracy and precision criteria of the regulation and whether a correlation is necessary for the candidate alternative test method.
          EPA will prepare a written response qualifying (or not qualifying) the laboratory to perform the test method.
          The data will be stored.

	5(b) 	Collection and Methodology and Management

	Data will be collected by industry and reported to EPA in the form of a template, typically submitted with an accompanying letter and contact information.  Sample templets are on our web site for each eligible fuel parameter.

	5(c)	Small Entity Flexibility

	This collection will not adversely affect small entities.  The regulation provides a means of qualifying alternative test methods that may encourage development of new test methods by entities of all sizes.

      5(d)	Collection Schedule

	Test methods are expected to be submitted on a one-time basis by parties wishing to seek approval of non-VCSB test methods.  The time of collection is driven by the respondent.  Laboratories have qualified VCSB methods in the previous three years and we are not aware of recent activity.  There have been no applications for qualification of a non-VCSB method since 2015.

6.	Estimating the Burden and Cost of Collection

	a.	We drew upon experience implementing similar regulations among the same entities to develop estimates of the burden associated with this collection.  We estimated 1,000 laboratories would be impacted by the SQC requirements, based upon registration data and industry knowledge.

	b.	Three labor categories are involved:  managerial (includes legal and professional review), technical, and clerical. Estimates were derived from average wages reported in the Bureau of Labor Statistics - May 2017 National Industry-Specific Occupational Employment and Wage Estimates NAICS; 541380  -  Testing Laboratories  found at http:/www.bls.gov/oes/current/naics5_541380.htm with a 3% annual inflation factor applied to bring the values to the present.  Using this method, the following wages and benefits apply by category:

Wages and Benefits

Managerial 		$65.69 per hour
Technical		$50.49 per hour
Clerical		$20.57 per hour

Doubling for company overhead beyond wages and benefits, and for convenience, rounding to the dollar, gives the following rates for this final ICR:

Total Employer Cost

Managerial		$ 131   per hour
Technical		$ 101	per hour
Clerical		$   41   per hour

It is assumed that for each hour of activity the mix will be about 0.1 hour managerial, 0.7 hour technical, and 0.2 hour clerical.  This gives an average labor cost of $92 per hour, which will be used in this ICR. For purchased services related to laboratory testing, third party engineering review, we have doubled this hourly cost to $184 in order to more accurately reflect the overhead cost associated with this service, but in this collection there is no O&M associated with the cost.  We estimate the following burden:

Table 1  (hours in previous ICR)

Collection	No. of		Annual Reports per	Hours per		Cost
Activity	Respondents	Respondent/Total	Report/Total

ATMs		2		1/2			180/360  (346)		$33,120

SQC		1,000		26/26,000		1/26,000  (5,408)	$2,392,000

Ref. Instls.	12		1/12			24/288     (1,248)	$26,496

Eng. Rev.	1		1/1			48/48	     (2,496)	$8,838

Totals		1,015		26,015	reports		26,696	   (9,498)	$2,460,454

c. Estimating the Agency Burden and Cost

	Due to the significant reduction in anticipated activity, the EPA burden is estimated to consist of one GS-13 chemist and one GS-13 statistician (estimated at $150/hour, including overhead, each) for 40 hours per year each.

GS-13 chemist	 (40 hours)			$6,000
GS-13 statistician (40 hours)			$6,000

TOTAL					$12,000

      d.	Estimating the Respondent Universe

	We were able to estimate the number of regulated entities drawing upon experience regulating the same entities.

	e.	Bottom Line Annual Burden Hours and Costs

	From the table, we estimate the following annual totals:

TOTAL NO. OF RESPONDENTS:			  1,015
TOTAL NO. OF RESPONSES:			26,015
TOTAL BURDEN HOURS:				26,696
TOTAL COST TO RESPONDENTS:	      $2,460454

      Importers and refiners with fuel testing laboratories and independent fuel testing laboratories have the burden to qualify by testing the identified fuel parameters describing the precision of a VCSB method or non-VCSB method to comply with the Performance-Based Measurement System for Fuels Rule.  EPA has identified a laboratory party size of 2 respondents preparing 2 laboratory qualification submissions.  The respondents will produce 2 reports describing VCSB methods precision and documentation on method evaluation as it relates to the comparability to ASTM D6708. The cost to industry to report in this collection is estimated to be $33,120 and 360 total burden hours per year.

We estimate an annual recordkeeping associated with statistical quality control with one record generated every two weeks and taking one hour for each report to produce a burden of 26,000 hours and a cost to industry of $2,392,000.  For those laboratories that wish to be reference installations, with one response per respondent, we estimate 288 hours costing $26,496. For third party engineering reviews EPA estimates one per respondent a year requiring 48 hours costing industry $8,838.

f.	Reason for Change in Burden

	The burden increased due to a significant increase in the number of labs generating and retaining SQC data.

g.	Burden Statement

	We estimate an average annual reporting burden of one hour per response.  For those laboratories that elect to be reference installations, the annual reporting burden would be 48 hours per response.  For an ATM the estimate is 180 hours.

	Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency.  This includes the time needed to review the instructions; develop, acquire, install, and utilize technology and systems for the purpose of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transit or otherwise disclose the information.

	An Agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number.  The OMB control numbers for EPA's regulations are listed in 40 CFR Part 9 and 48 CFR Chapter 15.

	Interested parties are urged to comment on the Agency's need for this information collection, the accuracy of the provided burden estimates, and any suggested methods for minimizing respondent burden, including the use of automated collection technique.

	To comment on the Agency's need for this information, the accuracy of the provided burden estimates, and any suggested methods for minimizing respondent burden, including the use of automated collection techniques, EPA has established a public docket for this ICR under Docket ID Number EPA-HQ-OAR-2018-0663, which is available for online viewing at www.regulations.gov, or in person viewing at the Air and Radiation Docket in the EPA Docket Center (EPA/DC), EPA West, Room 3334, 1301 Constitution Avenue, NW, Washington, D.C.  The EPA Docket Center Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays.  The telephone number for the Reading Room is<PHONE_NUMBER>, and the telephone number for the Air and Radiation Docket is<PHONE_NUMBER>.  An electronic version of the public docket is available at www.regulations.gov.  This site can be used to submit or view public comments, access the index listing of the contents of the public docket, and to access those documents in the public docket that are available electronically.  When in the system, select "search," then key in the Docket ID Number identified above.  Also, you can send comments to the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street, NW, Washington, D.C. 20503, Attention: Desk Officer for EPA.  Please include the EPA Docket ID Number EPA-HQ-OAR-2018-0663 and OMB Control Number 2060-0692 in any correspondence.

Part B of the Supporting Statement

This part of the supporting statement is not applicable.