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The document was marked with 62 Deletions, 73 Insertions, 0 Moves. V. Determination of State Emissions Budgets EPA outlined in the NPR and SNPR its proposals regarding a methodology for setting both regional and State level SO2 and NOx budgets. Section IV explains how the region wide budgets were developed. This section V describes how EPA apportions the regionwide emissions reductions   and the associated EGU caps   on a State by

State basis, so that the affected States may determine the necessary controls of SO2 and NOx emissions.

In the NPR and SNPR, EPA proposed annual SO2 and NOx caps for States contributing to fine particle non attainment and separate ozone season only caps for States contributing to ozone   but not fine particle   non attainment. EPA is finalizing an annual cap for both SO2 and NOx for States that contribute to fine particle non attainment. In addition, EPA is finalizing an ozone season only cap for NOx for all States that contribute to ozone non attainment.

States have several options for reducing emissions that significantly contribute to downwind non attainment. They can adopt EPA's approach of reducing the emissions in a cost effective manner through an interstate cap and trade program. This approach would, by definition, achieve the required cost effective reductions. Alternately, States could achieve all of the necessary emissions reduction from EGUs, but choose not use EPA's interstate emissions trading program. In this case, a State would need to demonstrate that it is meeting the EGU budgets outlined in this section.

Finally, States could obtain at least some of their required emissions reductions from sources other than EGUs.

Additional detail on these options is provided in Section VII.

A. What Is the Approach for Setting State by State Annual Emissions Reductions Requirements and EGU Budgets?

This section presents the final methodologies used for apportioning regionwide emission reduction requirements or budgets to the individual States.

In the CAIR NPR, EPA proposed methods for determining the SO2 and NOx emission reduction requirements or budgets for each affected State. In the June 2004 SNPR, EPA proposed corrections and improvements to the proposals in the CAIR NPR. In the August 2004 NODA, EPA presented the corrected NOx budgets resulting from the improvements proposed in the SNPR.

1. SO2 Emissions Budgets a. State Annual SO2 Emission Budget Methodology.

As noted elsewhere in today's preamble, the regionwide annual budget for 2015 and beyond is based on a 65 percent reduction of Title IV allowances allocated to units in the CAIR States for SO2 control. The regionwide annual SO2 budget for the years 2010 2014 is based on a 50 percent reduction from Title IV allocations for all units in affected States.

In the NPR and SNPR, EPA also proposed also calculating annual State SO2 budgets based on each State's allowances under Title IV of the CAA Amendments. We are finalizing this proposed approach for determining State annual SO2 budgets.

State annual budgets for the years 2010 2014 ( Phase I)

are based on a 50 percent reduction from Title IV allocations for all units in the affected State. The State annual budget for 2015 and beyond ( Phase II) is based on a 65 percent reduction of Title IV allowances allocated to units in the affected State for SO2 control.

Some commenters criticized EPA's basing State budgets on Title IV allocations since these were based largely on 1985 1987 historic heat input data. Commenters argue that the initial allocation was not equitable and that in any event, the electric power sector has changed significantly.

They conclude that State budgets should reflect those differences. Commenters have also commented that tying SO2 allocations to Title IV also does not let States account for units that are exempt from Title IV or for new units that have come online since 1990.

While acknowledging these concerns, EPA believes, for a number of reasons, that setting state budgets according to Title IV allowances represents a reasonable approach.

EPA believes that basing budgets on Title IV allowances is necessary in order to ensure the preservation of a viable Title IV program, which is important for reasons discussed in Section IX of this preamble. Such reasons include the desire to maintain the trust and confidence that has developed in the functioning market for Title IV allowances.

EPA believes it is important not to undermine such confidence ( which is an essential underpinning to a viable market based system) recognizing that it is a key to the success of a trading program under CAIR.

The Title IV program represents a logical starting point for assessing emission reductions for SO2, since it is the current effective cap on SO2 emissions for Acid Rain units, which make up the large majority of affected EGU CAIR units. It is from this starting emissions cap, that further CAIR reductions are required. Consequently, EPA proposes State level reductions based on reductions from the initial allocations of Title IV allowances to individual units at sources ( power plants) in States covered by CAIR.

The setting of SO2 budgets differs from the setting of NOx budgets for CAIR, in part, because of this difference in starting points  since there is no existing NOx regional annual cap, and no currency for emissions, on which sources rely. Furthermore, Congress, as part of Title IV of the CAA, decided upon the allocations of Title IV allowances specifically for the control of SO2, and not for NOx.

Moreover, Congress decided to allocate Title IV allowances in perpetuity, realizing that the electricity sector would not remain static over this time period.

Congress clearly did not choose a policy to regularly revisit and revise these allocations, believing that its allocations methodology for Title IV allowances would be appropriate for future time periods.

EPA realizes, putting aside concerns of linkage to Title IV, that there are numerous potential methodologies of dividing up the regional budgets among the States. EPA also believes, that while initial allocations of State budgets are important for distributional reasons, under a cap

andtrade system, they would not impact the attainment of the environmental objectives or the overall cost of this rule.

Each of the alternate methods also has certain shortcomings, many of which have been identified by commenters. Basing allowances on historic emissions, for instance, would penalize States that have already gone through significant efforts to clean up their sources.

Basing allowances on heat input has advantages, but cannot accommodate States that have worked to improve their energy efficiency. Basing allowances on output would provide gas fired units with many more allowances than they need, rather than giving them to the coal fired units that will be incurring the greatest costs from the tighter caps.

EPA did look at a number of allowance outcomes using alternate potential methods for allocating SO2 allowances.

These methods included allocating on the basis of historic emissions, heat input ( with alternatives based on heat input from all fossil generation, and heat input from coal and oil fired generation only) and output ( with alternatives based on all generation, and all fossil fired generation,

and coal and oil fired generation only). Allocating allowances based on Title IV yields results that fall within a reasonable range of results obtained from using these alternate methodologies. In fact, calculating State budgets using Title IV allowances yields budgets generally at or within the ranges of budgets calculated using the other methods in more than two thirds of the States, which account for over 85% of the total heat input in the region from 1999 2002. This analysis is included in the " Regional and State SO2 and NOx Emissions Budgets" Technical Support Documentdiscussed further in the response to comments document.

b. Final SO2 State Emission Budget Methodology.

EPA is finalizing the budgets as noted in the SNPR, adjusting for the proper inclusion of States covered under the final CAIR. The final State Budgets are included in Table V 1 below. Details of the data and methodology used to calculate these budgets are included in the accompanying " Regional and State SO2 and NOx Emissions Budgets" Technical Support Document.

Table V 1 Final Annual Electric Generating Units SO2 Budgets State State SO2 Budget 2010*

( tons) State SO2 Budget 2015**

( tons) Alabama 157,582 110,307 District of Columbia 708 495 Florida 253,450 177,415 Georgia 213,057 149,140 Illinois 192,671 134,869 Indiana 254,599 178,219 Iowa 64,095 44,866 Kentucky 188,773 132,141 Louisiana 59,948 41,963 Maryland 70,697 49,488 Michigan 178,605 125,024 Minnesota 49,987 34,991 Mississippi 33,763 23,634 Missouri 137,214 96,050 New York 135,139 94,597 North Carolina 137,342 96,139 Ohio 333,520 233,464 Pennsylvania 275,990 193,193 South Carolina 57,271 40,089 Tennessee 137,216 96,051 Texas 320,946 224,662 Virginia 63,478 44,435 West Virginia 215,881 151,117 Wisconsin 87,264 61,085 Total 3,619,198 2,533,436 * Annual budget for SO2 tons covered by allowances for 2010 2014.

** Annual budget for SO2 tons covered by allowances for 2015 and thereafter. c. Use of SO2 budgets These specific levels of the proposed State budgets would actually provide binding statewide caps on EGU emissions for States that choose to control only EGUs but do not want to participate in the trading program. For States choosing to participate in the trading program, these State budgets would not be binding, instead, the States' SO2 reductions would be achieved solely through the application of required retirement ratios as discussed in Section VII of this Preamble. For States controlling both EGUs and non

EGUs ( or controlling only non EGUs), these State budgets would be used to calculate the emissions reduction requirements for non EGUs and the remaining reduction requirement for EGUs. This is described in more detail in the Section VII discussion on SIP approvability.

2. NOx Annual Emissions Budgets a. Overview In this section, EPA discusses the apportioning of regionwide NOx annual emission reduction requirements or budgets to the individual States. In the January 2004 proposal, we proposed State EGU annual NOx budgets based on each State's average share of recent historic heat input.

In the SNPR, we proposed the same input based methodology,

but revised the budgets based on more complete heat input data. EPA also took comment on an alternative methodology that determines State budgets by multiplying heat input data by adjustment factors for different fuels. In the August NODA, EPA presented the corrected annual NOx budgets resulting from the improved methodology proposed in the SNPR.

b. State Annual NOx Emissions Budget Methodology 1. Proposed and Discussed NOx Emission Budget Methodology As noted elsewhere in today's preamble, the EPA determined historical annual heat input data for Acid Rain Program units in the applicable States and multiplied by 0.15 lb/ mmBtu ( for 2009) and 0.125 lb/ mmBtu ( for 2015) to determine total annual NOx regionwide budget for the CAIR region. EPA applied these rates to each individual State's total highest annual heat input for any year from 1999 through 2002. Thus, EPA used the heat input total for the year in which a State's total heat input was the highest.

In the January 2004 proposal, we proposed annual NOx State budgets for a 28 State ( and D. C.) region based on each jurisdiction's average heat input   using heat input data from Acid Rain Program units  over the years 1999 through 2002. We summed the average heat input from each of the applicable jurisdictions to obtain a regional total average annual heat input. Then, each State received a pro rata share of the regional NOx emissions budget based on the ratio of its average annual heat input to the regional total average annual heat input.

In the SNPR, EPA proposed to revise its determination of State NOx budgets by supplementing Acid Rain Program unit data with annual heat input data from the U. S. Energy Information Administration ( EIA), for the non Acid Rain unit data. A number of commenters had suggested that this would better reflect the heat input of the units that will be controlled under CAIR, and EPA agrees.

In the SNPR, EPA asked for, and subsequently received,

comments on determining State budgets by multiplying heat input data by adjustment factors for different fuels. The factors would reflect the inherently higher emissions rate of coal fired units, and consequently the greater burden on coal units to control emissions.

2. Today's Rule As noted earlier in the case of SO2, EPA recognizes that the choice of method in setting State budgets, with a given regionwide total annual budget, makes little difference in terms of the levels of resulting regionwide annual SO2 and NOx emissions reductions. If States choose to control EGUs and participate in the cap and trade program, allowances could be freely traded, encouraging least cost compliance over the entire region. In such a case, the least cost outcome would not depend on the relative levels of individual State budgets.

A number of commenters have stated, without supporting analysis or evidence, that budgets based on heat input, ( and particularly those that would use different fuel factors) do not encourage efficiency. Economic theory indicates that neither a heat input, nor an output based approach, if allocated once and based on a historical baseline, would provide any incentives for more or less efficient generation ( changes in future behavior would have no impact on allocations). The cap and trade system itself, regardless of how the allowances are distributed, provides the primary incentive for more efficient, cleaner generation of electricity.

EPA is finalizing an approach of calculating State budgets through a fuel adjusted heat input basis. State budgets would be determined by multiplying historic heat input data ( summed by fuel) by different adjustment factors for the different fuels. These factors reflect for each fuel ( coal, gas and oil), the 1999 2002 average emissions by State, summed for the CAIR region, divided by average heat input by fuel by State, summed for the CAIR region. The resulting adjustment factors from this calculation are 1.0 for coal, 0.4 for gas and 0.6 for oil. The factors would reflect the inherently higher emissions rate of coal fired plants, and consequently the greater burden on coal plants 1 States receiving larger budgets under this approach are generally expected to be those having to make the most reductions. to control emissions.

Such an approach provides States with allowances more in proportion with their historical emissions. It provides for a more equitable budget distribution by recognizing that different States are facing the reduction requirements with different starting stocks of generation, with different starting emission profiles. 1 The fuel burned is a key factor in differentiating the generation.

However, this approach is not equivalent to an approach based strictly on historical emissions ( which would give fewer allowances to States which have already cleaned up their coal plants). Under the approach we are finalizing today, heat input from all coal, whether clean or uncontrolled, would be counted equally in determining State budgets.

EPA believes that such an approach provides more allowances to States which are expected to face the greatest costs of installing controls. It would also better match each State's projected need for allowances in the future ( after installing controls) with the number of allowances they would receive Likewise, all heat input from gas,

whether clean or uncontrolled, from a steam gas unit or from a combined cycle plant, would be counted equally in 2 With a methodology similar to that used in the NOx SIP Call, annual State NOx budgets would be set by using a base heat input data, then adjusting it by a calculated growth rate for each jurisdiction's annual EGU heat inputs determining State budgets.

It is not expected that this decision would disadvantage States with significant gas fired generation.

One reason is that the calculation of the adjusted heat input for natural gas generation generally includes significant historic heat input and emissions from older,

less efficient and dirtier steam gas units. These units'

capacity factors are declining and are expected to decline further over time as new, cleaner and more efficient combined cycle gas units ramp upincrease their generation.

It is important to note that the methodology by which the NOx State budgets are determined need not be used by individual States in determining allocations to specific sources. As discussed in Section VIII of this document ( Model Trading Rule) EPA is offering States the flexibility to allocate allowances from their budgets as they see fit.

Finally, the EPA discussed in the January 2004 proposal a methodology used in the NOx SIP Call ( 67 FR 21868) that applied State specific growth rates for heat input in setting State budgets2. The EPA, in the SNPR, noted that it is not proposing to use this method for the CAIR because we believe that other methods are reasonable, and that methods involving State specific growth rates present certain challenges due to the inherent difficulties in predicting State specific growth in heat input over a lengthy period,

especially for jurisdictions that are only a part of a larger regional electric power dispatch region. Several commenters stated their support for incorporating growth,

believing that not taking growth into account would penalize States with higher growth. However, a significant number of commenters stated their opposition to using growth in setting state budgets, noting the problems that arose in the SIP call. EPA believes that setting budgets using a heat input approach, without a growth adjustment, is fair, would be simpler and would involve less risk of resulting litigation.

c. Final Annual State NOx Emission Budgets The final annual State NOx budgets following this method are included in Table V 2 below. Details of the numbers and methodology used to calculate these budgets are included in the " Regional and State SO2 and NOx Emissions Budgets" Technical Support Document.

Table V 2. Final Annual Electric Generating Units NOx Budgets State State NOx Budget 2009*

( tons) State NOx Budget 2015** ( tons) Alabama 69,020 57,517 District of Columbia 144 120 Florida 99,445 82,871 Georgia 66,321 55,268 Illinois 76,230 63,525 Indiana 108,935 90,779 Iowa 32,692 27,243 Kentucky 83,205 69,337 Louisiana 35,512 29,593 Maryland 27,724 23,104 Michigan 65,304 54,420 Minnesota 31,443 26,203 Mississippi 17,807 14,839 Missouri 59,871 49,892 New York 45,617 38,014 North Carolina 62,183 51,819 Ohio 108,667 90,556 Pennsylvania 99,049 82,541 South Carolina 32,662 27,219 Tennessee 50,973 42,478 Texas 181,014 150,845 Virginia 36,074 30,062 West Virginia 74,220 61,850 Wisconsin 40,759 33,966 Total 1,504,871 1,254,061 * Annual budget for NOx tons covered by allowances for 2009 2014.

** Annual budget for NOx tons covered by allowances for 2015 and thereafter.

d. Use of Annual NOx Budgets These proposed State budgets would serve as be effective binding caps on State emissions, if States chose to control only EGUs, but did not want to participate in the trading program. For States controlling both EGUs and non

EGUs ( or controlling only non EGUs), these budgets would be compared to a baseline level of emissions to calculate the emissions reduction requirements for non EGUs and the required caps for EGUs. This process is described in more detail in the Section VII discussion on SIP approvability. e. NOx Compliance Supplement Pool As is discussed in Section II, EPA is establishing a NOx compliance supplement pool of 1958,582494 tons, which would result in a total compliance supplement pool of approximately 200,000 tons of NOx when combined with EPA's proposed rulemaking to include Delaware, and New Jersey, and Arkansas. EPA is apportioning the compliance supplement pool to States based on the assumption that a State's need for allowances from the pool is proportional to the magnitude of the State's required emissions reductions ( as calculated using the State's base case emissions and annual NOX budget). EPA is apportioning the 200,000 tons of NOx on a pro rata basis, based on each State's share of the total emissions reduction requirement for the region in 2009.

This is consistent with the methodology used in the NOx SIP Call. Table V 3 presents each State's compliance supplement pool.

Table V 3 State NOx Compliance Supplement Pools ( tons)

State Base Case 2009 Emissions 2009 State Annual NOX Budget Emission Reductions Requirement Compliance Supplement Pool* Alabama 132,019 69,020 62,999 910,998166 District Of Columbia 0 144 0 0 Florida 151,094 99,445 51,649 8,197335 Georgia 143,140 66,321 76,819 12,191397 Illinois 146,248 76,230 70,018 11,112299 Indiana 233,833 108,935 124,898 19,82120,155 Iowa 75,934 32,692 43,242 6,863978 Kentucky 175,754 83,205 92,549 14,687935 Louisiana 49,500460 35,512 13,9848 2,22051 Maryland 56,662 27,724 28,938 4,592670 Michigan 117,531031 65,304 521,227727 8,288347 Minnesota 71,896 31,443 40,453 6,420528 Mississippi 36,807 17,807 19,000 3,01566 Missouri 115,916 59,871 56,045 89,894044 New York 45,145 45,617 0 0 North Carolina 59,751 62,183 0 0 Ohio 263,814 108,667 155,147 245,622037 Pennsylvania 198,255 99,049 99,206 156,744009 South Carolina 48,776 32,662 16,114 2,557600 Tennessee 106,398 50,973 55,425 8,796944 Texas 185,800798 181,014 4,7864 76072 Virginia 67,890 36,074 31,816 5,049134 West Virginia 179,125 74,220 104,905 16,648929 Wisconsin 72,94371,1 12 40,759 320,1845,108 353 4,898 CAIR Region Subtotal 1958,582Arkansas43,57225,04918,5232,940494 Delaware 9,389 4,166 5,1894,20066 7223 843 New Jersey 16,760 112,648670 4,090 5,112660 811Total 200199,000997 * Note: Rounding to the nearest whole allowance results in a total compliance supplement pool of 199,997 tons.

B. What Is the Approach for Setting State by State Emissions Reductions Requirements and EGU Budgets for States with NOx Ozone Season Reduction Requirements?

1. States Subject to Ozone season Requirements In the NPR, EPA proposed that Connecticut contributes significantly to ozone non attainment in another State, but not to fine particle non attainment. As a result of subsequent air quality modeling, EPA has also found that Massachusetts, New Jersey, Delaware and Arkansas contribute significantly to ozone non attainment in another State, but not to fine particle non attainment. In this final rule, EPA is establishing a regionwide ozone season budget for all States that contribute significantly to ozone non attainment in another State, regardless of their contribution to fine particle non attainment. The following 25 States, plus the District of Columbia, are found to contribute significantly to ozone non attainment: Alabama, Arkansas, Connecticut, Delaware, Florida, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Virginia, West Virginia, and Wisconsin. These States are subject to an ozone season onlyseason NOx cap, which covers the five months of May through September. EPA is calculating the ozone season cap level for the 25 State plus DC region by multiplying the region's ozone season heat input by 0.15 lb/ mmBtu for 2009 and 0.125 lb/ mmBtu for 2015. Heat input for the region was estimated by looking at reported ozone season Acid Rain heat inputs for each State for the years 1999 through 2002, and selecting the single year highest heat input for each State as a whole. As is the case for the annual NOx State Budgets, EPA is finalizing an approach of calculating ozone season NOx State budgets through a fuel adjusted heat input basis. State budgets would be determined by multiplying State level average historic ozone season heat input data ( summed by fuel) by different adjustment factors for the different fuels ( 1.0 for coal, 0.4 for gas, and 0.6 for oil). The total ozone season State budgets are then determined by calculating each State's share of total fuel adjusted heat input, and multiplying this share by the regionwide budget. The budgets for these States in 2009 and 2015 are included in Table V 4 below.

Table V 4. Final Seasonal Electricity Generating Unit NOx Budgets ( tons)

State State NOx Budget 2009* ( tons) State NOx Budget 2015** ( tons) Alabama 32,182 26,818 Arkansas 11,515 9,596 Connecticut 2,559 2,751559 Delaware 2,226 1,855 District of Columbia 112 94 Florida 47,912 39,926 Illinois 30,701 28,981 Indiana 45,952 39,273 Iowa 14,263 11,886 Kentucky 36,045 30,587 Louisiana 17,085 14,238 Maryland 12,834 10,695 Massachusetts 7,551 6,293 Michigan 28,971 24,142 Mississippi 8,714 7,262 Missouri 26,678 22,231 New Jersey 6,654 5,545 New York 20,632 17,193 North Carolina 28,392 23,660 Ohio 45,664 39,945 Pennsylvania 42,171 35,143 South Carolina 15,249 12,707 Tennessee 22,842 19,035 Virginia 15,994 13,328 West Virginia 26,859 26,525 Wisconsin 17,987 14,989 Total 567,744 484,698506 * Seasonal budget for NOx tons covered by allowances for 2009 2014. For States that have lower EGU budgets under the SIP Call than their 2009 CAIR budget, table V 4 includes their SIP Call budget. For Connecticut, the SIP Call budget is also used for 2015 and beyond. ** Seasonal budget for NOx tons covered by allowances for 2015 and thereafter.


[Federal Register Volume 86, Number 238 (Wednesday, December 15, 2021)]
[Notices]
[Page 71316]
[FR Doc No: 2021-27051]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

Noise Exposure Map Notice; Naples Municipal Airport, Naples,
Florida

AGENCY: Federal Aviation Administration, DOT.

ACTION: Notice.

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SUMMARY: The Federal Aviation Administration (FAA) announces its
determination that the Noise Exposure Maps submitted by the Naples
Airport Authority for the Naples Municipal Airport under the provisions
of the Aviation Safety and Noise Abatement Act and are in compliance
with applicable requirements.

DATES:  The effective date of the FAA's determination on the Noise
Exposure Maps is December 9, 2021.

FOR FURTHER INFORMATION CONTACT: Peter Green, Federal Aviation
Administration, Southern Region/Orlando Airports District Office, 8427
SouthPark Circle, Orlando, Florida 32819,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: This notice announces that the FAA finds
that the Noise Exposure Maps submitted for the Naples Municipal Airport
are in compliance with applicable requirements of Title 14 Code of
Federal Regulations (CFR) Part 150, effective December 9, 2021. Under
49 U.S.C. 47503 of the Aviation Safety and Noise Abatement Act (``the
Act''), an airport operator may submit to the FAA Noise Exposure Maps
which meet applicable regulations and which depict non-compatible land
uses as of the date of submission of such maps, a description of
projected aircraft operations, and the ways in which such operations
will affect such maps. The Act requires such maps to be developed in
consultation with interested and affected parties in the local
community, government agencies, and persons using the airport. An
airport operator who has submitted Noise Exposure Maps that are found
by FAA to be in compliance with the requirements of 14 CFR part 150,
promulgated pursuant to the Act, may submit a Noise Compatibility
Program for FAA approval which sets forth the measures the airport
operator has taken or proposes to take to reduce existing non-
compatible uses and prevent the introduction of additional non-
compatible uses.
    The FAA has completed its review of the Noise Exposure Maps and
accompanying documentation submitted by the Naples Airport Authority.
The documentation that constitutes the ``Noise Exposure Maps'' as
defined in 14 CFR 150.7 includes: 2021 Existing Conditions Noise
Exposure Map (Map 1 of 5); 2026 Future Conditions Noise Exposure Map
(Map 2 of 5); Modeled Fixed Wing Flight Tracks, Runway 5-23 (Map 3 of
5); Modeled Fixed Wing Flight Tracks, Runway 14-32 (Map 4 of 5);
Modeled Helicopter Flight Tracks, All Runways (Map 5 of 5); and the
Final Noise Exposure Map Report and its appendices. The FAA has
determined that these Noise Exposure Maps and accompanying
documentation are in compliance with applicable requirements. This
determination is effective on December 9, 2021.
    FAA's determination on the airport operator's Noise Exposure Maps
is limited to a finding that the maps were developed in accordance with
the procedures contained in Appendix A of 14 CFR part 150. Such
determination does not constitute approval of the airport operator's
data, information or plans, or a commitment to approve a Noise
Compatibility Program or to fund the implementation of that Program. If
questions arise concerning the precise relationship of specific
properties to noise exposure contours depicted on a Noise Exposure Map
submitted under Section 47503 of the Act, it should be noted that the
FAA is not involved in any way in determining the relative locations of
specific properties with regard to the depicted noise exposure
contours, or in interpreting the Noise Exposure Maps to resolve
questions concerning, for example, which properties should be covered
by the provisions of Section 47506 of the Act. These functions are
inseparable from the ultimate land use control and planning
responsibilities of local government. These local responsibilities are
not changed in any way under 14 CFR part 150 or through FAA's review of
Noise Exposure Maps. Therefore, the responsibility for the detailed
overlaying of noise exposure contours onto the map depicting properties
on the surface rests exclusively with the airport operator that
submitted those maps, or with those public agencies and planning
agencies with which consultation is required under Section 47503 of the
Act. The FAA has relied on the certification by the airport operator,
under 14 CFR 150.21, that the statutorily required consultation has
been accomplished.
    Copies of the full Noise Exposure Maps documentation and of the
FAA's evaluation of the maps are available for examination by
appointment at the following location: Federal Aviation Administration,
Orlando Airports District Office, 8427 SouthPark Circle, 5th Floor,
Orlando, Florida 32819.
    To arrange an appointment to review the Noise Exposure Maps
documentation, contact Peter Green, Federal Aviation Administration,
Southern Region/Orlando Airports District Office, 8427 SouthPark
Circle, Orlando, FL, 32819,<PHONE_NUMBER>. Questions may be directed
to the individual named above under the heading, FOR FURTHER
INFORMATION CONTACT.

    Issued in Orlando Airports District Office, Orlando, FL, on
December 9, 2021.
Bartholomew Vernace,
Manager, FAA/Orlando Airports District Office.
[FR Doc. 2021-27051 Filed 12-14-21; 8:45 am]
BILLING CODE P


[Federal Register Volume 80, Number 44 (Friday, March 6, 2015)]
[Notices]
[Pages 12215-12221]
[FR Doc No: 2015-05117]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74387; File No. SR-OCC-2014-813]

Self-Regulatory Organizations; The Options Clearing Corporation;
Notice of No Objection to Advance Notice Filing, as Modified by
Amendment No. 1, Concerning a Proposed Capital Plan for Raising
Additional Capital That Would Support The Options Clearing
Corporation's Function as a Systemically Important Financial Market
Utility

February 26, 2015.
    On December 29, 2014, The Options Clearing Corporation (``OCC'')
filed with the Securities and Exchange Commission (``Commission'') the
advance notice File No. SR-OCC-2014-813 pursuant to Section
806(e)(1)(A) of the Payment, Clearing, and Settlement Supervision Act
of 2010 (``Payment, Clearing and Settlement Supervision Act'') \1\ and
Rule 19b-4(n)(1)(i) under the Securities Exchange Act of 1934
(``Act'').\2\ On January 14, 2015, OCC filed Amendment No. 1 to the
advance notice.\3\ The advance notice was published for comment in the
Federal Register on February 9, 2015.\4\ The Commission received eight
comment letters on OCC's proposal.\5\ This publication serves as a
notice of no objection to proposal discussed in the advance notice.
---------------------------------------------------------------------------

    \1\ 12 U.S.C. 5465(e)(1)(A). The Financial Stability Oversight
Council designated OCC a systemically important financial market
utility on July 18, 2012. See Financial Stability Oversight Council
2012 Annual Report, Appendix A, http://www.treasury.gov/initiatives/fsoc/Documents/2012%20Annual%20Report.pdf. Therefore, OCC is
required to comply with the Payment, Clearing and Settlement
Supervision Act and file advance notices with the Commission.
    \2\ 17 CFR 240.19b-4(n)(1)(i). As the Commission noted in the
notice of filing of the advance notice, as modified by Amendment No.
1, OCC stated that the purpose of this proposal is, in part, to
facilitate compliance with proposed Commission rules and address
Principle 15 of the Principles for Financial Market Infrastructures
(``PMFIs''). The proposed Commission rules are pending. See
Securities Exchange Act Release No. 71699 (March 12, 2014), 79 FR
29508 (May 22, 2014) (S7-03-14). Therefore, the Commission has
evaluated this advance notice under the Payment, Clearing and
Settlement Supervision Act and the rules currently in force
thereunder. See Securities Exchange Act Release No. 74202 (February
4, 2015), 80 FR 7056 (February 9, 2015) (SR-OCC-2014-813) at note 3.
    \3\ According to OCC, OCC filed Amendment No. 1 to: (i) Update
OCC's plan for raising additional capital (``Capital Plan'') in
connection with negotiations between OCC and the options exchanges
that own equity in OCC (``Stockholder Exchanges'' or
``stockholders'') and that would contribute additional capital under
the Capital Plan, (ii) correct typographical errors, and (iii)
update the Term Sheet included as an exhibit, which summarizes
material features of the Capital Plan.
    \4\ Securities Exchange Act Release No. 74202 (February 4,
2015), 80 FR 7056 (February 9, 2015) (SR-OCC-2014-813). In
conjunction with this advance notice, OCC filed a corresponding
proposed rule change seeking approval of changes to its By-Laws,
Certificate of Incorporation and relevant agreements, including its
Stockholders Agreement, necessary to implement the Capital Plan.
This proposed rule change was published in the Federal Register on
January 30, 2015. Securities Exchange Act Release No. 74136 (January
26, 2015), 80 FR 5171 (January 30, 2015) (SR-OCC-2015-02).
    \5\ See Letter from Eric Swanson, General Counsel & Secretary,
BATS Global Markets, Inc., (February 19, 2015) (``BATS Letter'');
Letter from Tony McCormick, Chief Executive Officer, BOX Options
Exchange, (February 19, 2015) (``BOX Letter''); Letter from Howard
L. Kramer on behalf of Belvedere Trading, CTC Trading Group, IMC
Financial Markets, Integral Derivatives, Susquehanna Investment
Group, and Wolverine Trading, (February 20, 2015) (``MM Letter'');
Letter from Ellen Greene, Managing Director, Financial Services
Operations, SIFMA, (February 20, 2015) (``SIFMA Letter''); Letter
from James E. Brown, General Counsel, OCC, (February 23, 2015)
(responding to BATS Letter and BOX Letter) (``OCC Letter I'');
Letter from James E. Brown, General Counsel, OCC, (February 23,
2015) (responding to MM Letter) (``OCC Letter II''); Letter from
Barbara J. Comly, Executive Vice President, General Counsel &
Corporate Secretary, Miami International Securities Exchange, LLC
(February 24, 2015) (``MIAX Letter''); Letter from James E. Brown,
General Counsel, OCC, (February 24, 2015) (responding to SIFMA
Letter) (``OCC Letter III''). Since the proposal was filed as both
an advance notice and proposed rule change, the Commission
considered all comments received on the proposal, regardless of
whether the comments were submitted to the proposed rule change or
advance notice. In its assessment of the advance notice, the
Commission assessed whether the issues raised by the commenters
relate to the level or nature of risks presented to OCC by the
Capital Plan. See comments on the advance notice (File No. SR-OCC-
2014-813), http://www.sec.gov/comments/sr-occ-2014-813/occ2014813.shtml and comments on the proposed rule change (File No.
SR-OCC-2015-02), http://www.sec.gov/comments/sr-occ-2015-02/occ201502.shtml.
---------------------------------------------------------------------------

I. Description of the Advance Notice

    Pursuant to this advance notice, OCC is implementing a Capital Plan
under which the Stockholder Exchanges will make an additional capital
contribution and commit to replenishment capital (``Replenishment
Capital'') in circumstances discussed below, and will receive, among
other things, the right to receive dividends from OCC. In addition to
the additional capital contribution and Replenishment Capital, the main
features of the Capital Plan include: (i) A policy establishing OCC's
clearing fees at a level that would be sufficient to cover OCC's
estimated operating expenses plus a ``business risk buffer'' as
described below (``Fee Policy''), (ii) a policy establishing the amount
of the annual refund to clearing members of OCC's fees (``Refund
Policy''), and (iii) a policy for calculating the amount of dividends
to be paid to the options exchanges owning equity in OCC (``Dividend
Policy''). OCC stated that it intends to implement the Capital Plan on
or about February 27, 2015, subject to all necessary regulatory
approvals.\6\
---------------------------------------------------------------------------

    \6\ OCC filed a proposed rule change seeking approval of changes
to its By-Laws, Certificate of Incorporation and relevant
agreements, including its Stockholders Agreement, necessary to
implement the Capital Plan. See supra note 4.
---------------------------------------------------------------------------

    OCC states in its proposal that it is implementing this Capital
Plan, in part, to increase significantly OCC's capital in connection
with its increased responsibilities as a systemically important
financial market utility. OCC's proposal includes an infusion of
substantial additional equity capital by the Stockholder Exchanges to
be made prior to February 27, 2015, subject to regulatory approval,
that when added to retained earnings accumulated by OCC in 2014 will
significantly increase OCC's capital levels as compared to historical
levels. Additionally, the proposed change includes the Replenishment
Capital commitment, which will provide OCC with access to additional
equity contributed by the Stockholder Exchanges should OCC's equity
fall close to or below the amount that OCC determines to be appropriate
to support its business and manage business risk.

A. Background

    OCC is a clearing agency registered with the Commission and is also
a derivatives clearing organization (``DCO'') regulated in its capacity
as such by the Commodity Futures Trading Commission (``CFTC''). OCC is
a Delaware business corporation and is owned equally by the Stockholder
Exchanges, five national securities exchanges for which OCC provides
clearing services.\7\ In addition, OCC provides clearing services for
seven other national securities exchanges that trade options (``Non-
Stockholder Exchanges''). In its capacity as a DCO, OCC provides
clearing services to four futures exchanges. OCC also has been
designated systemically important by the Financial Stability Oversight
Council pursuant to the Payment, Clearing and Settlement Supervision

Act, and the Commission is OCC's ``Supervisory Agency'' under Section
803(8) of the Payment, Clearing and Settlement Supervision Act.\8\
---------------------------------------------------------------------------

    \7\ The Stockholder Exchanges are: Chicago Board Options
Exchange, Incorporated; International Securities Exchange, LLC;
NASDAQ OMX PHLX LLC; NYSE MKT LLC; and NYSE Arca, Inc.
    \8\ 12 U.S.C. 5462(8).
---------------------------------------------------------------------------

    According to OCC, it has devoted substantial efforts during the
past year to: (1) Develop a 5-year forward looking model of expenses;
(2) quantify maximum recovery and wind-down costs under OCC's recovery
and wind-down plan; (3) assess and quantify OCC's operational and
business risks; (4) model projected capital accumulation taking into
account varying assumptions concerning business conditions, fee levels,
buffer margin levels and refunds; and (5) develop an effective
mechanism that provides OCC access to replenishment capital in the
event of losses. Incorporating the results of those efforts, the
Capital Plan is intended to provide OCC with the means to increase its
stockholder equity.

B. OCC's Projected Capital Requirement

    According to OCC, using the methods described in detail below, OCC
will annually determine a target capital requirement consisting of (i)
a baseline capital requirement equal to the greatest of (x) six months
operating expenses for the following year, (y) the maximum cost of the
recovery scenario from OCC's recovery and wind-down plan, and (z) the
cost to OCC of winding down operations as set forth in the recovery and
wind-down plan (``Baseline Capital Requirement''), plus (ii) a target
capital buffer linked to plausible loss scenarios from operational
risk, business risk and pension risk (``Target Capital Buffer'')
(collectively, ``Target Capital Requirement''). OCC determined that the
appropriate Target Capital Requirement is $247 million, reflecting a
Baseline Capital Requirement of $117 million, which is equal to six
months of projected operating expenses, plus a Target Capital Buffer of
$130 million. This Target Capital Buffer would provide a significant
capital cushion to offset potential business losses.
    According to OCC, it had total shareholders' equity of
approximately $25 million as of December 31, 2013,\9\ meaning that OCC
proposes to add additional capital of $222 million to meet its 2015
Target Capital Requirement. OCC determined that a viable plan for
Replenishment Capital should provide for a replenishment capital amount
which would give OCC access to additional capital as needed up to a
maximum of the Baseline Capital Requirement (``Replenishment Capital
Amount'').\10\ Therefore, OCC's Capital Plan will include the following
in order to provide OCC in 2015 with ready access to approximately $364
million in equity capital:
---------------------------------------------------------------------------

    \9\ See OCC 2013 Annual Report, Financial Statements, Statements
of Financial Condition, available on OCC's Web site, http://optionsclearing.com/components/docs/about/annual-reports/occ_2013_annual_report.pdf.
    \10\ The obligation to provide Replenishment Capital will be
capped at $200 million, which OCC projects will account for
increases in its capital requirements for the foreseeable future.

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

------------------------------------------------------------------------
Baseline Capital Requirement............................    $117,000,000
Target Capital Buffer...................................    $130,000,000
Target Capital Requirement..............................    $247,000,000
Replenishment Capital Amount............................    $117,000,000
                                                         ---------------
    Total OCC Capital Resources.........................    $364,000,000
------------------------------------------------------------------------

C. Procedures Followed in Order To Determine Capital Requirement

    According to OCC, various measures were used in determining the
appropriate level of capital. An outside consultant conducted a
``bottom-up'' analysis of OCC's risks and quantified the appropriate
amount of capital to be held against each risk. The analysis was
comprehensive across risk types, including credit, market, pension,
operation, and business risk. Based on internal operational risk
scenarios and loss modeling at or above the 99% confidence level, OCC's
operational risk was quantified at $226 million and pension risk at $21
million, resulting in the total Target Capital Requirement of $247
million. Business risk was addressed by taking into consideration that
OCC has the ability to fully offset potential revenue volatility and
manage business risk to zero by adjusting the levels at which fees and
refunds are set and by adopting a Business Risk Buffer of 25% when
setting fees. Other risks, such as counterparty risk and on-balance
sheet credit and market risk, were considered to be immaterial for
purposes of requiring additional capital based on means available to
OCC to address those risks that did not require use of OCC's capital.
As discussed in more detail below in the context of OCC's Fee Policy,
the Business Risk Buffer of 25% is achieved by setting OCC's fees at a
level intended to achieve target annual revenue that will result in a
25% buffer for the year after paying all operating expenses.
    Additionally, OCC determined that its maximum recovery costs would
be $100 million and projected wind-down costs would be $73 million. OCC
projected its expenses for 2015 will be $234 million, so that six
months projected expenses are $234 million/2 = $117 million. The
greater of recovery or wind-down costs and six months of operating
expenses is therefore $117 million, and OCC's Baseline Capital
Requirement (minimum regulatory requirement) is therefore $117 million.
According to OCC, it then computed the appropriate amount of a Target
Capital Buffer from operational risk, business risk, and pension risk,
resulting in a determination that the current Target Capital Buffer
should be $130 million. Thus, the Target Capital Requirement is $117
million + $130 million = $247 million.

D. Overview of, and Basis for, OCC's Proposal To Acquire Additional
Equity Capital

    According to OCC, in order to meet its Target Capital Requirement,
and after consideration of alternatives, OCC's Board of Directors
approved a proposal from OCC's Stockholder Exchanges pursuant to which
OCC would meet its Target Capital Requirement of $247 million in early
2015 as follows:

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

------------------------------------------------------------------------
Shareholders' Equity as of 1/1/2014..................        $25,000,000
Shareholders Equity Accumulated Through Retained             $72,000,000
 Earnings \11\.......................................
Additional Contribution from Stockholder Exchanges...       $150,000,000
                                                      ------------------
Target Capital Requirement...........................       $247,000,000
Replenishment Capital Amount.........................       $117,000,000
------------------------------------------------------------------------
    Total OCC Capital Resources......................       $364,000,000
------------------------------------------------------------------------

    The additional contribution of the Stockholder Exchanges will be
made in respect of their Class B Common Stock on a pro rata basis. The
Stockholder Exchanges will also commit to provide additional equity
capital up to the Replenishment Capital Amount, which is currently $117
million, in the event Replenishment Capital is needed. While the
Replenishment Capital Amount will increase as the Baseline Capital
Requirement increases, under OCC's proposal, it would be capped at a
total of $200 million, which could be outstanding at any point in time.
OCC estimates that the Baseline Capital Requirement will not exceed
this amount before 2022. When the limit is

being approached, OCC will revise the Capital Plan as needed to address
future needs. In consideration for their capital contributions and
replenishment commitments, the Stockholder Exchanges will receive
dividends as described in the Dividend Policy discussed below for so
long as they remain stockholders, and maintain their contributed
capital and commitment to replenish capital up to the Replenishment
Capital Amount, subject to the $200 million cap.
---------------------------------------------------------------------------

    \11\ According to OCC, ``the $72 million is after giving effect
to the approximately $40 million refund'' expected to be made for
2014. Securities Exchange Act Release No. 74202 (February 4, 2015),
80 FR 7056, 7058 at note 15 (February 9, 2015) (SR-OCC-2014-813).
---------------------------------------------------------------------------

E. Fee, Refund, and Dividend Policies

    Upon reaching the Target Capital Requirement, the Capital Plan
requires OCC to set its fees at a level that utilizes a Business Risk
Buffer of 25%. The purpose of this Business Risk Buffer is to ensure
that OCC accumulates sufficient capital to cover unexpected
fluctuations in operating expenses, business capital needs, and
regulatory capital requirements. Furthermore, the Capital Plan requires
OCC to maintain Fee, Refund, and Dividend Policies, described in more
detail below, which are designed to ensure that OCC's shareholders'
equity remains well above the Baseline Capital Requirement.
    The required Business Risk Buffer of 25% is below OCC's 10-year
historical pre-refund average buffer of 31%. The target will remain 25%
so long as OCC's shareholders' equity remains above the Target Capital
Requirement amount. The reduction in buffer margin from OCC's 10-year
average of 31% to 25% reflects OCC's commitment to operating as an
industry utility and ensuring that market participants benefit as much
as possible from OCC's operational efficiencies in the future. This
reduction will permit OCC to charge lower fees to market participants
rather than maximize refunds to clearing members and dividend
distributions to Stockholder Exchanges. OCC will review its fee
schedule on a quarterly basis to manage revenue as closely to this
target as possible.\12\ For example, if the Business Risk Buffer is
materially above 25% after the first quarter of a particular year, OCC
may decrease fees for the remainder of the year, and conversely if the
Business Risk Buffer is materially below 25% at this time, OCC may
increase fees for the remainder of the year.
---------------------------------------------------------------------------

    \12\ If OCC's fee schedule needs to be changed in order to
achieve the 25% Business Risk Buffer, OCC would file a proposed rule
change seeking approval of the revised fee schedule.
---------------------------------------------------------------------------

    The Capital Plan will allow OCC to refund approximately $40 million
from 2014 fees to clearing members in 2015 and to reduce fees in an
amount to be determined by OCC's Board of Directors, effective in the
second quarter of 2015. OCC will announce new fee levels early in 2015
and will make such fees effective following notification to clearing
members, making any necessary filings, and receiving any necessary
approvals from the Commission. OCC will endeavor to provide clearing
members with no less than 60-day notice in advance of the effectiveness
of changes to fee levels, particularly those that result in increases
to fee levels. No dividends will be declared until December 2015 and no
dividends will be paid until 2016.
    Changes to the Fee, Refund or Dividend Policies will require the
affirmative vote of two-thirds of the directors then in office and
approval of the shareholders of all of OCC's outstanding Class B Common
Stock. The formulas for determining the amount of refunds and dividends
under the Refund and Dividend Policies, respectively, which are
described in more detail below, are based on, among other things, the
current tax treatment of refunds as a deductible expense. The Refund
and Dividend Policies will provide that in the event that refunds
payable under the Refund Policy are not tax deductible, the policies
would be amended to restore the relative economic benefits between the
recipients of the refunds and the Stockholder Exchanges.
1. Fee Policy
    Under the Fee Policy, in setting fees each year, OCC will calculate
an annual revenue target based on a forward twelve months expense
forecast divided by the difference between one and the Business Risk
Buffer of 25% (i.e., OCC will divide the expense forecast by .75).
Establishing a Business Risk Buffer at 25% will allow OCC to manage the
risk that fees may generate less revenue than expected due to lower-
than-expected trading volume or other factors, or that expenses may be
higher than projected. The Fee Policy also will include provisions from
existing Article IX, Section 9, of OCC's By-Laws to effectively state
that the fee schedule also may include additional amounts necessary to
(i) maintain such reserves as are deemed reasonably necessary by OCC's
Board of Directors to provide facilities for the conduct of OCC's
business and to conduct development and capital planning activities in
connection with OCC's services to the options exchanges, clearing
members and the general public, and (ii) accumulate such additional
surplus as the Board of Directors may deem advisable to permit OCC to
meet its obligations to clearing members and the general public.
However, OCC states that these provisions will be used only in
extraordinary circumstances and to the extent that the Board of
Directors has determined that the required amount of such additional
reserves or additional surplus will exceed the full amount that will be
accumulated through the Business Risk Buffer (prior to payment of
refunds or dividends) so OCC's fees will ordinarily be based on its
projected operating expenses and the Business Risk Buffer of 25%.
    Under the advance notice proposal, OCC will use the following
formula to calculate its annual revenue target as follows:
    Annual Revenue Target = Forward 12 Months Expense Forecast/(1-.25).
    Because OCC's clearing fee schedules typically reflect different
rates for different categories of transactions, fee projections will
include projections as to relative volume in each such category. The
clearing fee schedule will therefore be set to achieve a blended or
average rate per contract sufficient, when multiplied by total
projected contract volume, to achieve the Annual Revenue Target. Under
extraordinary circumstances, OCC will add any amount determined to be
necessary for additional reserves or surplus and divide the resulting
number by the projected contract volume to determine the applicable
average fee per cleared contract needed to achieve the additional
amounts required. Consistent with past practice, OCC will notify its
clearing members of the fees OCC determines it will apply for any
particular period by describing the change in an information memorandum
distributed to all clearing members. Consistent with past practice, OCC
also will notify regulators of the fees it determines would apply for
any particular period by filing an amendment to its schedule of fees as
a proposed rule change for immediate effectiveness under Section
19(b)(3)(A) of the Act and Rule 19b-4(f)(2) thereunder.
2. Refund Policy
    Under the Refund Policy, except at a time when Replenishment
Capital is outstanding as described below, OCC will declare a refund to
clearing members in December of each year, beginning in 2015, in an
amount equal to 50% of the excess, if any, of (i) the pre-tax income
for the year prior to the refund over (ii) the sum of (x) the amount of
pre-tax income after the refund necessary to produce after-tax income
sufficient to maintain

shareholders' equity at the Target Capital Requirement for the
following year plus (y) the amount of pre-tax income after the refund
necessary to fund any additional reserves or additional surplus not
already included in the Target Capital Requirement. Such refund will be
paid in the year following the declaration after the issuance of OCC's
audited financial statements, provided that (i) the payment does not
result in total shareholders' equity falling below the Target Capital
Requirement, and (ii) such payment is otherwise permitted by applicable
Delaware law and applicable federal laws and regulations. OCC will not
be able to pay a refund on a particular date unless dividends were paid
on the same date. If Replenishment Capital has been contributed and
remains outstanding, OCC will not pay refunds until such time as the
Target Capital Requirement is restored through the accumulation of
retained earnings. Refunds in accordance with the Refund Policy will
resume once the Target Capital Requirement is restored and all
Replenishment Capital is repaid in full, provided that the restoration
of the Target Capital Requirement and the repayment of Replenishment
Capital occurred within 24 months of the issuance date of the
Replenishment Capital. If within 24 months of the issuance date of any
Replenishment Capital, such Replenishment Capital has not been repaid
in full or shareholders' equity has not been restored to the Target
Capital Requirement, OCC will no longer pay refunds to clearing
members, even if the Target Capital Requirement is restored and all
Replenishment Capital is repaid at a later date.
3. Dividend Policy
    The Dividend Policy provides that, except at a time when
Replenishment Capital is outstanding, OCC will declare a dividend on
its Class B Common Stock in December of each year in an aggregate
amount equal to the excess, if any, of (i) after-tax income for the
year, after application of the Refund Policy (unless the Refund Policy
has been eliminated, in which case the refunds shall be deemed to be
$0) over (ii) the sum of (A) the amount required to be retained in
order to maintain total shareholders' equity at the Target Capital
Requirement for the following year, plus (B) the amount of any
additional reserves or additional surplus not already included in the
Target Capital Requirement. Such dividend will be paid in the year
following the declaration after the issuance of OCC's audited financial
statements, provided that (i) the payment does not result in total
shareholders' equity falling below the Target Capital Requirement, and
(ii) such payment is otherwise permitted by applicable Delaware law and
applicable federal laws and regulations. If Replenishment Capital has
been contributed and remains outstanding, OCC would not pay dividends
until such time as the Target Capital Requirement is restored.

F. OCC's Status as an Industry Utility

    According to OCC, OCC has always been operated on an ``industry
utility'' model. The Stockholder Exchanges have contributed only
minimal capital to OCC.\13\ OCC's By-Laws currently require that OCC
set its clearing fees at a level that is designed to cover operating
expenses and to maintain such reserves and accumulate such additional
capital as are deemed reasonably necessary for OCC to meet its
obligations to its clearing members and the public. Clearing fees that
are collected in excess of these amounts are refunded annually on a pro
rata basis to the clearing members that paid them. Under this model,
OCC has never paid dividends to the Stockholder Exchanges, but has paid
significant refunds to clearing members each year. OCC is aware that
some portion of those refunds may not be passed through by the clearing
members to their end user customers. Accordingly, OCC believes that by
adopting an approach that pays dividends to the Stockholder Exchanges,
which have invested a significant amount of additional capital ($150
million), but that reduces the historical pre-refund average buffer of
31% by adopting a Business Risk Buffer of 25%, the approach outlined in
its Capital Plan maintains, and perhaps better aligns with, an industry
utility model.
---------------------------------------------------------------------------

    \13\ According to OCC, its common stock and paid in capital
total $2,659,999. See OCC 2013 Annual Report, Financial Statements,
Statements of Financial Condition, available on OCC's Web site,
http://optionsclearing.com/components/docs/about/annual-reports/occ_2013_annual_report.pdf.
---------------------------------------------------------------------------

    According to OCC, given the very large increase in capital that OCC
has determined to be appropriate and to meet the increased
responsibilities imposed upon it as a systemically important financial
market utility, OCC has decided that the best alternative available to
it is to obtain a substantial further capital contribution from the
Stockholder Exchanges. OCC believes that this cannot be accomplished
without modification of the past practice of not providing dividends to
stockholders. Accordingly, OCC is establishing a new Fee Policy, Refund
Policy, and Dividend Policy. Because of the Business Risk Buffer being
set at 25%, the combination of the Fee, Refund and Dividend Policies
will effectively cap the dividends to be paid to the Stockholder
Exchanges at a level that OCC's Board of Directors (with the advice of
outside financial experts) has determined results in a reasonable rate
of return on contributed capital, particularly in comparison to the
implied cost of capital to the clearing members and their customers of
an alternative approach considered by the Board of Directors that would
require the accumulation of retained earnings through higher fees and
no refunds for several years. OCC will continue to refund a percentage
of excess clearing fees to clearing members, thereby benefiting both
clearing members and their customers.
    OCC believes that the Capital Plan therefore effectively preserves
OCC's industry utility model of providing its services in an efficient
manner, while also enhancing the benefits to the end user customers by
charging lower initial fees due to the decrease in the buffer margin
from OCC's 10-year average of 31% to 25%. OCC states that it believes
clearing members and customers will benefit from the proposed Capital
Plan because the plan will allow OCC to continue to provide clearing
services at low cost, including through a significant refund of 2014
fees, a reduction of fees beginning in 2015 and projected continuing
refunds and lower fees for the foreseeable future.
    According to OCC, it believes that Stockholder Exchanges will
benefit from the dividend they receive and, perhaps more importantly,
they will be assured that OCC is in a position to provide clearing
services for their markets on an on-going basis within the same basic
structure that has served these markets well since their inception and
without the need to radically change the structure to address potential
demands of outside equity investors. Non-Stockholder Exchanges also
will benefit by continuing to receive OCC's clearing services for their
products on the same basis as they presently do.\14\
---------------------------------------------------------------------------

    \14\ According to OCC, Non-Stockholder Exchanges contribute
capital by purchasing a promissory note in the principal amount of
$1,000,000. See Section 2 of Article VIIB of OCC's By-Laws. The
required Capital Contribution of Non-Stockholder exchanges will not
change under the Capital Plan.
---------------------------------------------------------------------------

    OCC also believes that the Capital Plan will better align the
interests of Stockholder Exchanges and clearing members with respect to
expenses, because changes to the level of operating expenses directly
affect the Target Capital Requirement. In short,

OCC believes that the present proposal represents a fair and reasonable
balancing of the interests of the Stockholder Exchanges, the other
exchanges for which OCC provides clearing services, clearing members,
customers, and the general public while providing an immediate infusion
of capital and a structure within which OCC can meet its obligations to
the public as a systemically important financial market utility.

G. Replenishment Capital Plan

    OCC is establishing a Replenishment Capital Plan whereby OCC's
Stockholder Exchanges are obligated to provide on a pro rata basis a
committed amount of Replenishment Capital should OCC's total
shareholders' equity fall below the hard trigger, as described
below.\15\ The aggregate committed amount for all five Stockholder
Exchanges in the form of Replenishment Capital that could be
outstanding at any time will be capped at the excess of (i) the lesser
of (A) the Baseline Capital Requirement, which is currently $117
million, at the time of the relevant funding, or (B) $200 million, over
(ii) amounts of outstanding Replenishment Capital (``Cap Formula'').
The $200 million figure in the Cap Formula takes into account projected
growth in the Baseline Capital Requirement for the foreseeable future.
The commitment to provide Replenishment Capital will not be limited by
time, but rather only by the Cap Formula. Replenishment Capital will be
called in whole or in part after the occurrence of a ``hard trigger''
event described below. If the Baseline Capital Requirement approaches
or exceeds $200 million, OCC's Board of Directors may consider, as part
of its annual review of the Replenishment Capital Plan, alternative
arrangements to obtain replenishment capital in excess of the $200
million committed under the Replenishment Capital Plan. In addition,
the Refund Policy and the Dividend Policy will provide that, in the
absence of obtaining any such alternative arrangements, the amount of
the difference will be subtracted from amounts that would otherwise be
available for the payment of refunds and dividends.
---------------------------------------------------------------------------

    \15\ The Replenishment Capital Plan is a component of the
Capital Plan.
---------------------------------------------------------------------------

    Replenishment Capital contributed to OCC under the Replenishment
Capital Plan will take the form of a new class of common stock (``Class
C Common Stock'') of OCC to be issued to the Stockholder Exchanges
solely in exchange for Replenishment Capital contributions.
    The Replenishment Capital Plan is a component of OCC's overall
Capital Plan. In implementing the Replenishment Capital Plan, OCC's
management would monitor OCC's levels of shareholders' equity to
identify certain triggers, or reduced capital levels, that might
require action. OCC has identified two key triggers--a soft trigger and
a hard trigger--and proposes that OCC will take certain steps upon the
occurrence of either. The ``soft trigger'' for re-evaluating OCC's
capital will occur if OCC's shareholders' equity falls below the sum of
(i) the Baseline Capital Requirement and (ii) 75% of the Target Capital
Buffer. The soft trigger will be a warning sign that OCC's capital had
fallen to a level that requires attention and responsive action to
prevent it from falling to unacceptable levels. Upon a breach of the
soft trigger, OCC's senior management and OCC's Board of Directors will
review alternatives to increasing capital, and take appropriate action
as necessary, including increasing fees or decreasing expenses, to
restore shareholders' equity to the Target Capital Requirement.
    The ``hard trigger'' for making a mandatory Replenishment Capital
call will occur if shareholders' equity falls below 125% of the
Baseline Capital Requirement (``Hard Trigger Threshold''). OCC
considers that a breach of the Hard Trigger Threshold is a sign that
significant corrective action, with a more immediate impact than
increasing fees or decreasing expenses, should be taken to increase
OCC's capital, either as part of a recovery plan or a wind-down plan
for OCC's business. OCC's shareholders' equity will have to fall more
than $100,000,000 below the fully funded capital amount described above
in order to breach the Hard Trigger Threshold. As a result, OCC views
the breach of the Hard Trigger Threshold as unlikely and occurring only
as a result of a significant, unexpected event. In the event of such a
breach, OCC's Board of Directors must determine whether to attempt a
recovery, a wind-down of OCC's operations, or a sale or similar
transaction, subject in each case to any necessary stockholder
consent.\16\ If the Board of Directors decides to wind-down OCC's
operations, OCC will access the Replenishment Capital in an amount
sufficient to fund the wind-down, as determined by the Board and
subject to the Cap Formula. If the Board of Directors decides to
attempt a recovery of OCC's capital and business, OCC will access the
Replenishment Capital in an amount sufficient to return shareholders'
equity to an amount equal to $20 million above the Hard Trigger
Threshold, subject to the Cap Formula.
---------------------------------------------------------------------------

    \16\ The requirement for stockholder consent would arise under
OCC's Restated Certificate of Incorporation, which would provide
that any decision to attempt a recovery would require separate
approval by the stockholders, while a decision to wind-down would
require separate approval by the stockholders.
---------------------------------------------------------------------------

    While Replenishment Capital is outstanding, no refunds or dividends
will be paid and, if any Replenishment Capital remains outstanding for
more than 24 months or the Target Capital Requirement is not restored
during that period, changes to how OCC calculates refunds and dividends
may be necessary (as described in more detail in OCC's Refund Policy
and Dividend Policy). In addition, while Replenishment Capital is
outstanding, OCC will first utilize the entire amount of available
funds to repurchase, on a pro rata basis from each Stockholder
Exchange, to the extent permitted by applicable Delaware and federal
law and regulations, outstanding shares of Class C Common Stock as soon
as practicable after completion of the financial statements following
the end of each calendar quarter at a price equal to the original
amount paid for such shares, plus an additional ``gross up'' amount to
compensate the holders of the Class C Common Stock for taxes on
dividend income (if any) that they may have to recognize as a result of
such repurchase.\17\ For this purpose, ``Available Funds'' will equal,
as of the end of any calendar quarter, the excess, if any, of (x)
shareholders' equity over (y) the Minimum Replenishment Level. The
``Minimum Replenishment Level'' will mean $20 million above the Hard
Trigger Threshold, so that OCC's shareholders' equity will remain at or
above the Minimum Replenishment Level after giving effect to the
repurchase.
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    \17\ According to OCC, based on current federal tax rates, if
the full amount of the payment is classified as a dividend and the
recipient is entitled to a dividends received deduction, this gross
up is estimated to be approximately 12% of the payment.
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    According to OCC, the capital base described above will permit OCC
to hold at all times cash and other assets of high quality and
sufficiently liquid to allow OCC to meet its current and projected
operating expenses under a range of scenarios, including adverse market
conditions. OCC expects it will hold at all times liquid net assets
funded by equity sufficient to cover potential general business losses
so that OCC can continue operations and services as a going concern if
those losses materialize, which assets will always be greater than
either (x) six months of the covered clearing agency's

current operating expenses, or (y) the amount determined by the Board
of Directors to be sufficient to ensure a recovery or orderly wind-down
of critical operations and services. These assets will be held in
addition to resources held to cover participant defaults, among other
risks.\18\
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    \18\ OCC stated that these assets will be held in addition to
resources held to cover participant defaults or other risks covered
under certain credit risk standards and liquidity risk standards set
forth in proposed Commission rules. See Securities Exchange Act
Release No. 74202 (February 4, 2015), 80 FR 7056 (February 9, 2015)
(SR-OCC-2014-813).
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II. Summary of Comments Received

    The Commission received five comment letters on OCC's proposal and
three comment letters from OCC responding to the issues raised by the
commenters.\19\ Three of the five commenters generally supported OCC's
need to raise additional capital,\20\ but all five commenters opposed
how the Capital Plan raised the additional capital.\21\ After careful
review of those comments, the Commission has determined that most of
the issues raised by the commenters do not relate to the nature or
level of risks presented by OCC.
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    \19\ The Commission received one comment letter on the proposed
rule change and advance notice (See SIFMA Letter) and four comment
letters on the proposed rule change only (See BOX Letter; BATS
Letter; MM Letter; and MIAX Letter). See supra note 5.
    \20\ See BOX Letter; SIFMA Letter; and MM Letter.
    \21\ See BOX Letter; SIFMA Letter; BATS Letter; MM Letter; and
MIAX Letter.
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    One commenter, however, raised the issue that the Replenishment
Capital Plan may create a misalignment of interests between the
exchanges and clearing members, which could in turn create an imbalance
in the management of certain risks.\22\ Specifically, this commenter
stated that because no refunds are paid to clearing members while any
portion of that Replenishment Capital remains outstanding and that
refunds are discontinued permanently if the Replenishment Capital
remains outstanding for two years, the plan effectively uses the fees
to maximize and prioritize the dividends payable to the Stockholder
Exchanges, which is at the expense of the clearing members.\23\
Further, this commenter notes that the proposed amendments to OCC's By-
Laws would allow the Stockholder Exchanges to manage the risk of their
Replenishment Capital being required by determining whether retained
earnings could be used to compensate for a loss or deficiency in the
clearing fund, thereby also allowing the Stockholder Exchanges to
determine to fund clearing fund deficiencies through additional
retained earnings rather than risk having to fund their required
Replenishment Capital commitment.\24\ As a result, this commenter
believes that the Replenishment Capital Plan may create a misalignment
of interests between the Stockholder Exchanges and clearing members,
which could in turn create an imbalance in the management of certain
risks.\25\
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    \22\ See SIFMA Letter.
    \23\ Id.
    \24\ Id.
    \25\ Id.
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    OCC asserts in its response that these concerns regarding
Replenishment Capital are misplaced.\26\ OCC contends that its By-Laws
provide that in lieu of charging a loss or deficiency proportionately
to the clearing fund computed contributions of non-defaulting clearing
members, OCC may, in its discretion, and subject to the unanimous
approval of the holders of Class A Common Stock and Class B Common
Stock, elect to charge such loss or deficiency in whole or in part to
OCC's current earning or retained earnings.\27\ Accordingly, OCC
considers the net effect of its Replenishment Capital Plan to be simply
a timing effect, with Replenishment Capital treated as an advance
against the refunds to which Stockholder Exchanges otherwise would have
been entitled.\28\ OCC contends that it is neither the purpose nor the
effect of the Replenishment Capital Plan to shift the potential loss
from a clearing member default, which has always been mutualized, so
long as OCC remains solvent.\29\
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    \26\ See OCC Letter III.
    \27\ Id.
    \28\ Id.
    \29\ Id.
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III. Discussion and Commission Findings

    Although the Payment, Clearing and Settlement Supervision Act does
not specify a standard of review for an advance notice, its stated
purpose is instructive.\30\ The stated purpose is to mitigate systemic
risk in the financial system and promote financial stability by, among
other things, promoting uniform risk management standards for
systemically-important financial market utilities and strengthening the
liquidity of systemically important financial market utilities.\31\
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    \30\ See 12 U.S.C. 5461(b).
    \31\ Id.
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    Section 805(a)(2) of the Payment, Clearing and Settlement
Supervision Act \32\ authorizes the Commission to prescribe risk
management standards for the payment, clearing, and settlement
activities of designated clearing entities and financial institutions
engaged in designated activities for which it is the supervisory agency
or the appropriate financial regulator. Section 805(b) of the Payment,
Clearing and Settlement Supervision Act \33\ states that the objectives
and principles for the risk management standards prescribed under
Section 805(a) shall be to:
---------------------------------------------------------------------------

    \32\ 12 U.S.C. 5464(a)(2).
    \33\ 12 U.S.C. 5464(b).
---------------------------------------------------------------------------

     Promote robust risk management;
     promote safety and soundness;
     reduce systemic risks; and
     support the stability of the broader financial system.
    After carefully considering OCC's proposal, the comments received,
and OCC's responses thereto, the Commission finds that OCC's Capital
Plan is consistent with the objectives and principles described in
Section 805(b) of the Payment, Clearing and Settlement Supervision
Act.\34\
---------------------------------------------------------------------------

    \34\ Id.
---------------------------------------------------------------------------

    While most of the issues raised by the commenters do not relate to
the nature or level of risks presented by OCC, one commenter raised a
specific concern with respect to OCC's Replenishment Capital Plan. The
Commission, however, believes that OCC's Capital Plan, when considered
in its totality, does not adversely change the nature or level of risks
presented by OCC. Although this commenter alleged a potential
misalignment of interests between the Stockholder Exchanges and
clearing members when Replenishment Capital is outstanding, decisions
made regarding the capitalization of OCC are made by the Board of
Directors. OCC's By-Laws address the use of capital to cover clearing
member defaults in lieu of using the clearing fund and address the
power of the Board of Directors to make decisions in such
circumstances. Further, the Board of Directors' obligations under
corporate law will require the Board of Directors to revisit on a
periodic basis material provisions of the Capital Plan in the future,
including those related to decisions regarding Replenishment Capital,
and to review any credible new capital proposals that may be brought
forward by management or members of the Board of Directors from time to
time. The Commission believes such processes create a reasonable
expectation that the potential concerns described by the commenter can
be controlled by OCC, and therefore the Commission agrees with OCC that
the commenter's contentions regarding the purpose and use of the
Replenishment Capital are misplaced.
    The Capital Plan will provide OCC with an immediate injection of
capital

and future committed capital to help ensure that it can continue to
provide its clearing services if it suffers business losses as a result
of a decline in revenues or otherwise. Given that OCC has been
designated as a systemically important financial market utility, OCC's
ability to provide its clearing services if it suffers business losses
contributes to reducing systemic risks and supporting the stability of
the broader financial system. In so doing, OCC's Capital Plan is
consistent with the objectives of Section 805(b) of the Payment,
Clearing and Settlement Supervision Act, \35\ which are to promote
robust risk management, promote safety and soundness, reduce systemic
risks, and support the stability of the broader financial system.
---------------------------------------------------------------------------

    \35\ 12 U.S.C. 5464(b).
---------------------------------------------------------------------------

IV. Conclusion

    It is therefore noticed, pursuant to Section 806(e)(1)(I) of the
Payment, Clearing and Settlement Supervision Act,\36\ that the
Commission does not object to advance notice proposal (File No. SR-OCC-
2014-813) and that OCC is authorized to implement the proposal as of
the date of this notice or the date of an order by the Commission
approving a proposed rule change that reflects rule changes that are
consistent with this advance notice proposal (File No. SR-OCC-2015-02),
whichever is later.
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    \36\ 12 U.S.C. 5465(e)(1)(I).

    By the Commission.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2015-05117 Filed 3-5-15; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register: October 16, 2008 (Volume 73, Number 201)]
[Notices]
[Page 61416]
[DOCID:fr16oc08-47]

=======================================================================
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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Project No. 2390-056]

Northern States Power Company of Wisconsin, d/b/a Excel Energy
Inc.; Notice of Availability of Environmental Assessment

October 8, 2008.
    In accordance with the National Environmental Policy Act of 1969,
as amended, and the Federal Energy Regulatory Commission's (Commission)
regulations (18 CFR Part 380), the Office of Energy Projects has
reviewed an application for amendment of license and has prepared an
environmental assessment (EA) regarding the licensee's request to amend
the project license to include the jurisdictional Turtle-Flambeau
Storage Reservoir as a project feature of the Big Falls Project. The
Big Falls Project is located on the Flambeau River in Rusk County,
Wisconsin. This EA concludes that the proposed action, with recommended
measures, would not constitute a major Federal action significantly
affecting the quality of the human environment.
    Copies of the EA are available in the Public Reference Room of the
Commission's offices at 888 First Street, NE., Room 1-A, Washington, DC
204265. The EA also may be viewed on the Commission's Internet Web site
(http://www.ferc.gov) using the ``eLibrary'' link. Enter the docket
number ``P-2390'' in the docket number field to access the document.
For assistance with eLibrary, contact<EMAIL_ADDRESS>or
call toll-free at<PHONE_NUMBER>, or for TTY contact<PHONE_NUMBER>.
    For further information regarding this notice, please contact
CarLisa Linton at<PHONE_NUMBER>.

Kimberly D. Bose,
Secretary.
[FR Doc. E8-24490 Filed 10-15-08; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register Volume 77, Number 35 (Wednesday, February 22, 2012)]
[Notices]
[Pages 10508-10509]
[FR Doc No: 2012-4022]

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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OARM-2011-0803, FRL-9512-3]

Agency Information Collection Activities; Proposed Collection;
Comment Request; Background Checks for Contractor Employees (Renewal)

AGENCY: Environmental Protection Agency.

ACTION: Notice.

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SUMMARY: In compliance with the Paperwork Reduction Act (PRA) (44
U.S.C. 3501 et seq.), this document announces that an Information
Collection Request (ICR) has been forwarded to the Office of Management
and Budget (OMB) for review and approval. This is a request to renew an
existing approved collection. The ICR, which is abstracted below,
describes the nature of the information collection and its estimated
burden and cost.

DATES: Comments must be submitted on or before March 23, 2012.

ADDRESSES: Submit your comments, referencing Docket ID No. EPA-HQ-OARM-
2011-0803 to, (1) EPA online using www.regulations.gov (our preferred
method), by email to<EMAIL_ADDRESS>or by mail to: EPA Docket
Center, Environmental Protection Agency, Office of Environmental
Information (OEI) Docket, Mailcode 2822T, 1200 Pennsylvania Ave. NW.,
Washington, DC 20460, and (2) OMB by mail to: Office of Information and
Regulatory Affairs, Office of Management and Budget (OMB), Attention:
Desk Officer for EPA, 725 17th Street NW., Washington, DC 20503.

FOR FURTHER INFORMATION CONTACT: Staci Ramrakha, Policy Training and
Oversight Division, Office of Acquisition Management (3802R),
Environmental Protection Agency, 1200 Pennsylvania Ave. NW.,
Washington, DC 20460; telephone number:<PHONE_NUMBER>; email address:
<EMAIL_ADDRESS>    EPA has submitted the following ICR to OMB for review and approval
according to the procedures prescribed in 5 CFR 1320.12. On October 31,
2011, 76 FR 67182, EPA sought comments on this ICR pursuant to 5 CFR
1320.8(d). EPA received two comments, which are addressed in the ICR.
Any additional comments on this ICR should be submitted to EPA and OMB
within 30 days of this notice.
    EPA has established a public docket for this ICR under Docket ID
No. EPA-HQ-OARM-2011-0803, which is available for online viewing at
www.regulations.gov, or in person viewing at the Office of
Environmental Information Docket in the EPA Docket Center (EPA/DC), EPA
West, Room 3334, 1301 Constitution Ave. NW., Washington, DC. The EPA/DC
Public Reading Room is open from 8 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 Office of
Environmental Information Docket is<PHONE_NUMBER>.
    Use EPA's electronic docket and comment system at
www.regulations.gov, to submit or view public comments, access the
index listing of the contents of the docket, and to access those
documents in the docket that are available electronically. Once in the
system, select ``docket search,'' then

key in the docket ID number identified above. Please note that EPA's
policy is that public comments, whether submitted electronically or in
paper, will be made available for public viewing at www.regulations.gov
as EPA receives them and without change, unless the comment contains
copyrighted material, confidential business information (CBI), or other
information whose public disclosure is restricted by statute. For
further information about the electronic docket, go to
www.regulations.gov.
    Title: Background Checks for Contractor Employees.
    ICR numbers: EPA ICR No. 2159.05, OMB Control No. 2030-0043.
    ICR Status: This ICR is scheduled to expire on April 30, 2012.
Under OMB regulations, the Agency may continue to conduct or sponsor
the collection of information while this submission is pending at OMB.
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
in title 40 of the CFR, after appearing in the Federal Register when
approved, are listed in 40 CFR part 9, are displayed either by
publication in the Federal Register or by other appropriate means, such
as on the related collection instrument or form, if applicable. The
display of OMB control numbers in certain EPA regulations is
consolidated in 40 CFR part 9.
    Abstract: The EPA uses contractors to perform services throughout
the nation with regard to environmental emergencies involving the
release, or threatened release, of oil, radioactive materials, or
hazardous chemicals that may potentially affect communities and the
surrounding environment. The Agency may request contractors responding
to any of these types of incidents to conduct background checks and
apply Government-established suitability criteria in determining
whether employees are acceptable to perform on given sites or on
specific projects. In addition to emergency response contractors, EPA
may require background checks for contractor personnel working in
sensitive sites or sensitive projects. The background checks and
application of the Government's suitability criteria must be completed
prior to contract employee performance. The contractor shall maintain
records associated with all background checks. Background checks cover
citizenship or valid visa status, criminal convictions, weapons
offenses, felony convictions, and parties prohibited from receiving
federal contracts.
    Burden Statement: The annual public reporting and recordkeeping
burden for this collection of information is estimated on average to be
one hour per response. 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 instructions; develop, acquire,
install, and utilize technology and systems for the purposes 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 which have subsequently changed; train
personnel to be able to respond to a collection of information; search
data sources; complete and review the collection of information; and
transmit or otherwise disclose the information.
    Respondents/Affected Entities: EPA Contractor Employee Who Work at
Sensitive Sites.
    Estimated Number of Respondents: 1,000.
    Frequency of Response: Annual.
    Estimated Total Annual Hour Burden: 1,000.
    Estimated Total Annual Cost: $186,730 includes $0 annualized
capital or O&M costs.
    Changes in the Estimates: There is no change in the hours in the
total estimated burden currently identified in the OMB Inventory of
Approved ICR Burdens.

John Moses,
Director, Collection Strategies Division.
[FR Doc. 2012-4022 Filed 2-21-12; 8:45 am]
BILLING CODE 6560-50-P