  SEQ CHAPTER \h \r 1 6560-50-P

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 81

[EPA-HQ-OAR-2003-0090; FRL-      ]

RIN 2060-AO05

Final Extension of the Deferred Effective Date for 8-hour Ozone National
Ambient Air Quality Standards for the Denver Early Action Compact

AGENCY:  Environmental Protection Agency (EPA).

ACTION:  Final Rule.

SUMMARY:  The EPA is finalizing the extension of the deferral of the
effective date of the 8-hour ozone National Ambient Air Quality Standard
(NAAQS) designation for the Denver Early Action Compact (EAC) from July
1, 2007 to April 15, 2008.  The EAC areas have agreed to reduce
ground-level ozone pollution earlier than the Clean Air Act (CAA)
requires.  On November 29, 2006, EPA extended the deferred effective
date for the Denver EAC area from December 31, 2006, to July 1, 2007.
In that final rulemaking, EPA noted that there were issues with
Denver’s EAC that would need to be addressed before EPA would extend
their deferral until April 15, 2008.  Those issues have been addressed
and EPA is now extending the effective date of Denver’s designation
for the 8-hour ozone standard from July 1, 2007 to April 15, 2008.

EFFECTIVE DATE: This final rule is effective on [INSERT DATE 30 DAYS
AFTER PUBLICATION IN THE FEDERAL REGISTER].

ADDRESSES:  EPA has established a docket for this action under Docket ID
No.EPA-HQ-OAR-2003-0090.  All documents in the docket are listed on the
 HYPERLINK "http://www.regulations.gov"  www.regulations.gov  web site.
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, is
not placed on the Internet and will be publicly available only in hard
copy form.  Publicly available docket materials are available either
electronically through   HYPERLINK "http://www.regulations.gov"
www.regulations.gov  or in hard copy at the Docket, EPA/DC, EPA West,
Room 3334, 1301 Constitution Ave., NW, Washington, DC.  The 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 Public Reading
Room is<PHONE_NUMBER>, and the telephone number for the Office of Air
and Radiation Docket is<PHONE_NUMBER>.  In addition, we have placed a
copy of the rule and a variety of materials relevant to Early Action
Compact areas on EPA’s Web site at
http://www.epa.gov/ttn/naaqs/ozone/eac/.

FOR FURTHER INFORMATION CONTACT: Ms. Barbara Driscoll, Office of Air
Quality Planning and Standards, U.S. Environmental Protection Agency,
Mail Code C539-04, Research Triangle Park, NC 27711, phone number (919)
54l-1051 or by e-mail at:     HYPERLINK<EMAIL_ADDRESS><EMAIL_ADDRESS>or Mr. David Cole, Office of Air Quality
Planning and Standards, U.S. Environmental Protection Agency, Mail Code
C304-05, Research Triangle Park, NC 27711, phone number (919) 54l-5565
or by e-mail at:     HYPERLINK<EMAIL_ADDRESS><EMAIL_ADDRESS>.

SUPPLEMENTARY INFORMATION:

General Information

 Does this Action Apply to me?

This action applies only to the Denver EAC area.

B.  How is This Notice Organized?

	The information presented in this preamble is organized as follows:

Outline

General Information

A.  Does this Action Apply to Me?

B.  How is This Notice Organized?

II.  What is the Purpose of This document?

III. What Action has EPA Taken to Date for Early Action Compact Areas?

IV.  What Progress has the Denver Early Action Compact Area Made?

V.	What comments did EPA receive on the March 1, 2007 proposal to extend
the deferral of the effective date of the nonattainment designation for
the Denver Early Action Compact?

VI.  What is the Final Action for the Denver Early Action Compact Area?

VII. What is EPA’s Schedule for Taking Further Action for Early Action
Compact Areas?

VIII. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

B. Paperwork Reduction Act

C. Regulatory Flexibility Act

D. Unfunded Mandates Reform Act

E. Executive Order 13132: Federalism

F. Executive Order 13175: Consultation and

                                                Coordination with Indian
Tribal Governments

G. Executive Order 13045: Protection of Children from Environmental
Health and Safety Risks

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

I. National Technology Transfer Advancement Act

J.  Executive Order 12898: Federal Actions to Address Environmental
Justice in Minority Populations and Low-Income Populations

K. Congressional Review Act

L. Petitions for Judicial Review

II. 	What is the Purpose of this Document?

	The purpose of this document is to finalize the deferred effective date
of the 8-hour ozone nonattainment designation for the Denver EAC area
from July 1, 2007 to April 15, 2008.

III.	What Action has EPA Taken to Date for Early Action Compact Areas?

	This section discusses EPA’s actions to date with respect to
deferring the effective date of nonattainment designations for certain
areas of the country that are participating in the EAC program.  The
EPA’s April 30, 2004, air quality designation rule (69 FR 23858)
provides a description of the compact approach, the requirements for
areas participating in the compact and the impacts of the compact on
those areas.

	On December 31, 2002, we entered into compacts with  33 communities.
To receive the first deferral, these EAC areas agreed to reduce
ground-level ozone pollution earlier than the CAA would require.  The
EPA agreed to provide an initial deferral of the nonattainment
designations for those EAC areas that did not meet the 8-hour ozone
NAAQS as of April 30, 2004, and to provide subsequent deferrals
contingent on performance vis-à-vis certain milestones.  On December
16, 2003 (68 FR 70108), we published our proposed rule to defer until
September 30, 2005, the effective date of designation for EAC areas that
did not meet the 8-hour ozone NAAQS.  Fourteen of the 33 compact areas
did not meet the 8-hour ozone NAAQS.

	Our final designation rule published April 30, 2004 (69 FR 23858), as
amended June 18, 2004 (69 FR 34080), included the following actions for
compact areas: deferred the effective date of nonattainment designation
for       14 compact areas until September 30, 2005; detailed the
progress compact areas had made toward completing their milestones;
described the actions/milestones required for compact areas in order to
remain eligible for a deferred effective date for a nonattainment
designation; detailed EPA’s schedule for taking further action to
determine whether to further defer the effective date of nonattainment
designations; and described the consequences for compact areas that do
not meet a milestone.

	In the April 2004 action, we also discussed three compact areas which
did not meet the March 31, 2004, milestone; Knoxville, Memphis, and
Chattanooga, Tennessee.  Knoxville and Memphis were designated
nonattainment effective June 15, 2004.  Chattanooga was later determined
to have met the March 31, 2004, milestone, and we deferred the
designation date until September 30, 2005 (69 FR 34080).  This brought
the number of participating compact areas to 31.  Since then, two
additional areas, Haywood and Putnam Counties, Tennessee have withdrawn
from the program leaving the participating number of compact areas at
29.

On August 29, 2005, we published a final rule extending the deferred
effective date of designation from September 30, 2005, to December 31,
2006, for the same    14 compact areas.  In order to receive this second
deferral, EAC areas needed to submit a State Implementation Plan (SIP)
with locally adopted measures and a modeled attainment demonstration by
December 31, 2004.  The EPA approved the SIP revisions as meeting the
EAC Protocol and EPA’s EAC regulations at 40 CFR 81.300, and these
approvals were the basis for extending the deferred effective date until
December 31, 2006.  Information on local measures, SIP submittals and
background on the EAC program may be found on EPA’s website
at:/www.epa.gov/ttn/naaqs/ozone/eac/.

On November 29, 2006, we published a final rule extending the deferred
effective date of designation for 13 EAC areas from December 31, 2006,
to April 15, 2008, and for the Denver EAC area until July 1, 2007.  For
that deferral, all compact areas were required to submit two progress
reports, one by December 30, 2005, and the other by June 30, 2006.  In
these progress reports, the States provided information on progress
towards implementing local control measures that were incorporated in
their SIPs.  Each of the EAC areas submitted the required progress
reports and these reports are available at   HYPERLINK
"http://www.epa.gov/ttn/naaqs/ozone/eac/"
http://www.epa.gov/ttn/naaqs/ozone/eac/ .   Issues were noted by the
State of Colorado with the Denver EAC area regarding emissions from oil
and gas exploration and production condensate tanks.  In a report and
action plan submitted by the State of Colorado to EPA, dated June 2,
2006, the State provided information that indicated volatile organic
compound (VOC) emissions from oil and gas operations within the Denver
EAC area were higher than had been estimated in the attainment
demonstration modeling.  In response to this issue, the State of
Colorado initiated public rulemaking activities to amend Colorado’s
Regulation No. 7 to require additional emissions reductions from oil and
gas exploration and production condensate tanks to achieve the level of
reductions relied on in the EPA-approved modeled attainment
demonstration.  However, an issue arose because the State’s rulemaking
efforts before the Colorado Air Quality Commission (AQCC) in the latter
part of 2006 would not be completed before EPA needed to publish a final
rule for the last deferral of the effective date of the nonattainment
designations for all of the EAC areas (see 71 FR 69022, November 29,
2006).

Based on the above information, EPA decided to defer the effective date
of the nonattainment designation for the Denver EAC area only until July
1, 2007.  This decision was designed to accommodate the necessary State
rulemaking activities and to also ensure that continued progress was
made on the Regulation No. 7 rulemaking actions as they proceeded before
the AQCC and State Legislature.  In our November 29, 2006, final
rulemaking, we detailed a timeline for subsequent rulemaking action for
the Denver EAC area which included finalizing any rulemaking by the end
of May 2007 and then publication in the Federal Register of that
rulemaking by June 1, 2007, with a 30-day effective date.

Since the November 29, 2006, rulemaking, all compact areas submitted
their six month progress reports in December 2006 as required.  These
reports were reviewed and approved by EPA.  You may find copies of the
December progress reports at   HYPERLINK
"http://www.epa.gov/ttn/naaqs/ozone/eac/index.htm#List"
http://www.epa.gov/ttn/naaqs/ozone/eac/index.htm#List

IV. What Progress has the Denver Early Action Compact Area 	Made?

On December 31, 2006, the State of Colorado submitted their progress
report for the Denver EAC area to EPA indicting that progress had been
made in several areas.   On September 21, 2006 the Colorado Department
of Public Health and Environment’s (CDPHE) Air Pollution Control
Division (APCD) presented proposed revisions to Colorado’s Regulation
No. 7, before the Colorado AQCC, for a more stringent regulatory scheme
to control VOC’s from oil and gas exploration and production
condensate tanks located in the Denver EAC area.  These proposed
revisions to Section XII of Regulation No. 7 were amended and adopted by
the AQCC on December 17, 2006 along with associated revisions to the
EPA-approved Denver EAC Ozone Action Plan.  These AQCC rulemaking
actions will achieve the required VOC emissions reductions from the oil
and gas exploration and production condensate tanks that are located
within the Denver EAC area boundary.  In addition, the State continues
working with all parties to reduce emissions of ozone and its
precursors.

The EPA’s final deferral of the effective date of the nonattainment
designation of the Denver EAC area to April 15, 2008, was based upon the
actions of the AQCC on December 17, 2006, to approve revisions to
Colorado’s Regulation No.7 and also in consideration of the review of
those AQCC-approved revisions, from January 15, 2007, to February 15,
2007, by the Colorado State Legislature.  The State Legislature did not
object or seek further review of the December 17, 2006, actions of the
AQCC, which meant that the all changes to Regulation No.7 were
automatically adopted and to be submitted to EPA for final approval and
incorporation into the SIP.  The changes in Regulation 7 contain a
compliance date of May 1, 2007, which is just before the beginning of
the Colorado high ozone season. The CDHPE submitted their revised SIP
for EPA approval in late May 2007.

V.  What comments did EPA receive on the March 1, 2007 proposal to
extend the deferral of the effective date of the nonattainment
designation for the Denver Early Action Compact?

We received 12 comments on the proposed rule to extend the deferred
effective date of the nonattainment designation for the Denver EAC to
April 15, 2008.  We have responded to the comments in this section.

Comment: Two commenters stated that EPA lacks authority under the CAA to
defer the effective date of nonattainment designations (in particular as
this applies to the Denver EAC); enter into EACs with areas; and allow
areas to be relieved of obligations under Title I, Part D of the CAA
while they are violating the 8-hour ozone standard or are designated
nonattainment for that standard.

Response:  We have determined that EACs as designed, give local areas
and the State the flexibility to develop their own approach to meeting
the 8-hour ozone standard. In this case, the State of Colorado is
serious in its commitment and has made progress implementing State and
local measures for controlling emissions from sources earlier than the
CAA would otherwise require.  People living in the Denver metropolitan
area and other EAC areas are already breathing healthier air due to
reductions in ozone pollution achieved by the EAC attainment plan and
these benefits would not otherwise have been realized until after June
2007 if the Denver EAC and other EAC areas had been designated
nonattainment.

Comment: One commenter expressed concerns that if Denver violated the
8-hour ozone standard, EPA would not designate the area nonattainment.

Response:  EPA’s requirements for EAC areas are codified at 40.CFR
81.300, and ensure that if Denver violates the 8-hour ozone standard,
the nonattainment designation for the area will take effect.  The State
has until December 31, 2007, to demonstrate attainment of the 8-hour
ozone NAAQS.  If Denver does not attain the 8-hour ozone standard, the
nonattainment designation becomes effective as of the deferred effective
date (which under this rule would be April 15, 2008).  See 40 CFR
81.300(e)(3)(ii)(C).  The area will then be subject to the full planning
requirements of title I, part D of the CAA.  40 CFR 81.300 requires
former EAC areas that are designated nonattainment to submit a revised
attainment demonstration SIP within 1 year of the effective date of the
nonattainment designation.

Comment:  The emissions reductions from the final revised Regulation No.
7 will be less than reductions that would have been achieved by the
original proposed revisions.

Response:  We believe the modeled attainment demonstration is the
appropriate benchmark for our consideration, not whether the original
proposed revisions would have achieved a 77% reduction versus a 75%
reduction achieved by the adopted rules.  After EPA initially approved
the attainment demonstration for the area, the State and EPA realized
that the rules requiring reductions of VOC emissions from condensate
tanks did not achieve the level of reduction relied on as part of the
modeled attainment demonstration.  This is because growth in condensate
tank flash emissions was significantly greater than anticipated.
According to the State’s updated inventory projections and
calculations, the 75% reduction of VOC emissions required by Section XII
of Colorado’s revised Regulation No.7 is consistent with the control
scenario inventory value for 2007(91.3 tons per day)relied on in the
modeled attainment demonstration. See the Colorado Air Pollution Control
Division’s presentation for the rulemaking hearing on the revisions to
Regulation No. 7, which can be found at   HYPERLINK
"http://www.cdphe.state.co.us/ap/reg7/Reg7AQCCDec.pdf"
http://www.cdphe.state.co.us/ap/reg7/Reg7AQCCDec.pdf .

Comment:  Due to the change to weekly calculations of emissions and the
use of a system-wide approach, APCD and citizens won’t know if
required reductions are met until after the fact.  Citizens will not be
able to react in time to prevent unhealthy ozone pollution if companies
fail to meet the required emissions reductions.

Response:   While we originally favored the threshold approach, we
believe the system-wide approach is enforceable and will lead to the
projected reductions.  We already approved a system-wide approach when
we approved the previous revisions to Regulation No.7 (See 70 FR 48652,
August 19, 2005).  We believe the current revisions make significant
improvements to the original approach that will lead to improved
compliance.  We note that with any emission limit, compliance is judged
after the fact.  The commenter did not provide (and EPA is not aware of)
any support for his concern that weekly calculations will significantly
alter EPA’s, the State’s or a citizen’s ability to address
violations in a timely way.

Comment:  The commenter is concerned that the Denver EAC area’s ozone
levels approached unhealthy levels in 2006.

Response:  EPA agrees that several exceedances of the 8-hour ozone NAAQS
were observed in the Denver EAC area’s air quality monitoring network
in 2006.  However, even with these exceedances none of the ambient air
quality monitors in the 8-hour ozone monitoring network recorded a
violation of the 8-hour ozone NAAQS.  Further, we note that the ambient
air quality monitors for the Denver EAC area have shown attainment of
the 8-hour ozone NAAQS for the periods, 2002 through 2004, 2003 through
2005, and 2004 through 2006.  Although the Denver EAC area has not
violated the standard for the past three 3-year periods, EPA notes that
air quality in the area remains very close to the standard, indicating
that the additional emission reductions revised Regulation No.7 will
achieve are important to ensure that air quality in the area remains
below the standard.  EPA notes the commenter’s concerns for the
potential for a violation of the 8-hour ozone NAAQS during the 2007
ozone season.  If this happens, the area will be designated
nonattainment.

Comment:  It is unclear how deferring Denver’s nonattainment
designation will further the goal of reducing ozone pollution/protecting
health.

Response:  We believe that the EAC has already achieved reductions in
ozone precursor emissions that would not yet have been achieved had
Denver followed the traditional nonattainment designation pathway. The
State’s and the area’s desire to achieve an attainment designation
has led to two rounds of significant revisions to Colorado’s
Regulation No.7, revisions that are already reducing ozone pollution in
the area.  If the area had been designated nonattainment on June 15,
2004, an attainment demonstration SIP wouldn’t have been due until
June 15, 2007.  Thus, with the EAC, emission reductions have been
achieved earlier than they would have been under the standard
designation procedures.

Comment:  The commenter notes that the Denver EAC has fallen short of
achieving the planned reductions in emissions of ozone forming compounds
from condensate tanks.

Response:  The commenter is correct that actual growth in flash
emissions of VOCs has significantly exceeded the State’s projections
in the original Denver EAC SIP as approved by EPA on August 19, 2005 (70
FR 48652).  The State identified this issue in its June 2, 2006, EAC
progress report and has since taken steps to address it.

We explain this more fully in our final rule of November 29, 2006 (71 FR
69022).  In that final rule, we discuss the State’s acknowledgement of
the increase in VOC emissions from oil and gas activities, the State’s
report of June 2, 2006, detailing these findings (see 71 FR 69023), and
the State’s rulemaking efforts to achieve the necessary additional
emission reductions to meet the projections relied upon in the
EPA-approved attainment demonstration (see 71 FR 69025.)  As noted in
our proposed rule of March 1, 2007 (72 FR 9285), the State revised
Colorado’s Regulation No.7, “Emissions of Volatile Organic
Compounds,” to require additional emission reductions from oil and gas
exploration and production condensate tanks to achieve the level of
reductions relied on in the EPA-approved modeled attainment
demonstration.  The Colorado AQCC approved these revisions to Regulation
No. 7 on December 17, 2006.  Thus, the State has taken the steps
necessary to address the shortfall in emission reductions under the
prior version of Colorado’s Regulation No. 7.

Comment:  The commenter expresses concerns with emissions of ozone
forming compounds from other oil and gas exploration and production
activities that were not addressed as part of the Denver EAC attainment
demonstration, such as emissions from drill rigs, well completions,
fugitive leaks, water tanks, and heater treaters.  According to the
commenter, oil and gas drilling has increased north of Denver, and
infrared photography shows the potentially large amount of fugitive
emissions from condensate tanks.

Response:  We note that the State is not required to control all
emission sources as part of its SIP.  Instead, the goal of the SIP
program is to ensure that sources are controlled to ensure that the area
will attain and maintain the relevant NAAQS. The State is free to choose
the mix of sources necessary to achieve that goal and EPA cannot second
guess the State if the plan demonstrates compliance with the NAAQS.  At
the time the State was conducting the modeling for the attainment
demonstration, flash emissions from condensate tanks were considered the
most significant source of largely uncontrolled VOC emissions. As a
result, the State targeted control of these emissions as the best means
to attain the 8-hour ozone standard. By correcting the defects in the
regulation regulating these sources, we believe the State’s plan
demonstrates attainment and maintenance of the 8-hour NAAQS and we
cannot disapprove the plan on the basis that the State has not chosen to
regulate certain other sources to reach this goal.

Regarding fugitive emissions and infrared photography, we note that
photos at one source may not be representative of emissions at another
source, and the infrared photos shown tell us nothing about the VOC
concentrations in the emissions.

 Comment:  The commenter is concerned that 29 reciprocating internal
combustion engines have been granted exemptions from installing
pollution controls to reduce emissions of VOCs and nitrogen oxide (NOx).
 The commenter indicates that Kerr-McGee has simply failed to install
the controls at 11 of its internal combustions engines.

Response:  Certain reciprocating internal combustion engines have been
granted exemptions from controlling emissions of VOCs because they meet
the exemption criteria stipulated in section XVI of Colorado’s
Regulation No. 7.  EPA approved the control requirements and these
exemption criteria for internal combustion engines when it approved the
rest of Colorado’s Regulation No. 7 on August 19, 2005 (see 70 FR
48652).

Regarding Kerr-McGee’s 11 engines, the State has issued a Notice of
Violation and is currently negotiating a settlement with Kerr-McGee to
control emissions from these engines.  In other words, the State is
taking appropriate steps to ensure compliance with the EAC plan and
Colorado’s Regulation No. 7.

Comment:  The commenter is concerned that the modeling for the EAC may
have underestimated emissions due to the reactivity of VOC emissions.

Response:  The reactivity of VOC emissions is embedded as a function in
the EPA-approved CAMx dispersion model that the State used to model
attainment in the Denver EAC area.  Measured values for the various VOCs
are input into the CAMx model, and the model’s embedded Carbon Bond
photochemical algorithm processes these values to produce an estimate of
ozone concentrations. This algorithm has reactivity profiles for each
VOC chemical species already built into it. We don't adjust the
reactivities for individual SIP applications - the Carbon Bond mechanism
is a "canned" algorithm. While the commenter is correct that alkanes as
a group may be more reactive as an ozone precursor in an urban
atmosphere where there are more compounds with which to react, the
Carbon Bond mechanism already accounts for this; the reactivity profiles
account for a higher degree of chemical reactivity in a polluted urban
environment. We note that the State’s contractor utilized the most
current version of CAMx when it conducted the dispersion modeling in
2003 and early 2004.

Comment:  The commenter noted that industry is failing to fully comply
with the required emission reductions from flash emissions from
condensate tanks as required under the EAC.

Response:  While EPA agrees that compliance with the control
requirements in the approved attainment demonstration has not been 100%,
we note that the State is taking appropriate steps to achieve the
compliance effectiveness to support the EAC. We note the table provided
in the commenter’s letter presents historical information from 2005.

On December 31, 2006, the State submitted a progress report for the
Denver EAC area to EPA indicating that progress has been made in several
areas. Additional compliance data collected by the State indicated
overall control for the 2006 ozone season met Regulation No. 7’s 47.5%
VOC emission reduction requirement. This is because some larger sources
achieved greater reductions than required. For those sources that did
not meet the regulation’s requirements, the State is pursuing
enforcement/negotiations to ensure compliance.

Additionally, the table the commenter cites may not accurately address
those condensate tanks that were exempt from the requirements of section
XII of Regulation No. 7.  For example, the entry for Machii Ross shows
uncontrolled emissions of 17.04 tons per year which would have made this
an exempt facility; at that time, controls were only required if
emissions were 30 tons per year or greater.

Finally, compliance shortcomings are not unusual when an activity or
industry is first regulated.  We have no reason to think that compliance
would have been better if the area had been designated nonattainment.
If the State had not moved to rectify the problems, we would be very
concerned.  However, we believe the State is taking appropriate steps to
ensure compliance with the EAC attainment plan and Colorado’s
Regulation No. 7, and we believe these steps will result in rates of
compliance consistent with projections.

 Comment:  The commenter raises a concern that the revisions to
Colorado’s Regulation No. 7, adopted by the AQCC on December 17, 2006,
have not been incorporated into the Colorado SIP.

Response:  The commenter is correct that the revisions to Regulation No.
7 have not been federally-approved and incorporated into Colorado’s
SIP.  However, as described in our proposed rule of March 1, 2007 (72 FR
9285), the revisions to Colorado’s Regulation No. 7 made it through
Colorado’s Legislative review process without changes, and we expect
to receive the Governor’s submittal of the revisions for our approval
shortly.  Once we receive the submittal, we intend to expedite our
action on it.

In the meantime, the Regulation No. 7 revisions have been adopted by the
State and are fully enforceable by the State.  Sources must start
complying with the revised regulation by May 1, 2007.  As indicated in
response to previous comments, the State is taking appropriate steps to
ensure compliance with the regulation and we fully expect the State will
continue its efforts.

VI. What is the Final Action for the Denver Early Action Compact Area?

	We are extending the deferred effective date of the nonattainment
designation for the Denver EAC from July 1, 2007 to April 15, 2008.  We
have considered the actions of the State of Colorado and determined that
they have made good progress by passing Regulation No. 7 and
implementing State and local measures in controlling emissions from
sources.  People in the Denver EAC area are breathing healthier air as a
result of these State actions.

VII. What is EPA’s Schedule for Taking Further Action for Early Action
Compact Areas?

All EAC areas have one remaining milestone which is to demonstrate
attainment with the 8-hour ozone NAAQS by December 31, 2007.  No later
than April 15, 2008, we will determine whether the compact areas that
received a deferred effective date of April 15, 2008, attained the
8-hour ozone NAAQS by December 31, 2007, and met all compact milestones.
 If the area did not attain the standard, the nonattainment designation
will take effect.  If the compact area attained the standard, EPA will
designate the area as attainment.  Any compact area that did not attain
the NAAQS and thus has an effective nonattainment designation will be
subject to the full planning requirements of title I, part D of the CAA,
and the area will be required to submit a revised attainment
demonstration SIP within 1 year of the effective date of designation.

VIII. Statutory and Executive Order Reviews

A.  Executive Order 12866: Regulatory Planning and Review

	Under Executive Order (EO) 12866   SEQ CHAPTER \h \r 1 (58 FR 51735,
October 4, 1993), this action is a "significant regulatory action”
SEQ CHAPTER \h \r 1 in that it may raise novel legal or policy issues
arising out of legal mandates, the Presidents priorities, or the
principles set forth in the EO.  Accordingly, EPA submitted this action
to the Office of Management and Budget (OMB) for review under EO 12866
and any changes made in response to OMB recommendations have been
documented in the docket for this action.

B.  Paperwork Reduction Act

This action does not impose an information collection burden under the
provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.  This
final rule does not require the collection of any information.

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; 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.

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 Office of Management and Budget (OMB) control number.  The OMB
control numbers for EPA’s regulations in 40 CFR are listed in 40 CFR
 part 9.

C.  Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA) generally requires an Agency to
prepare a regulatory flexibility analysis of any rule subject to notice
and comment rulemaking requirements under the Administrative Procedures
Act or any other statute unless the Agency certifies the rule will not
have a significant economic impact on a substantial number of small
entities.  Small entities include small businesses, small organizations,
and small governmental jurisdictions.

For purposes of assessing the impacts of this proposed rule on small
entities, small entity is defined as: (1) a small business that is a
small industrial entity as defined in the Small Business
Administration’s (SBA) regulations at 13 CFR 121.201; (2) a small
governmental jurisdiction that is a government of a city, county, town,
school district or special district with a population of less than
50,000; and (3) a small organization that is any not-for-profit
enterprise which is independently owned and operated and is not dominant
in its field.

After considering the economic impacts of this proposed rule on small
entities, I certify that this rule will not have a significant economic
impact on a substantial number of small entities.  This final rule will
not impose any requirements on small entities.  Rather, this rule would
extend the deferred effective date of the nonattainment designation for
the Denver area to implement control measures and achieve emissions
reductions earlier than otherwise required by the CAA in order to attain
the 8-hour ozone NAAQS.

D.  Unfunded Mandates Reform Act

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law
104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and Tribal
governments and the private sector.  Under section 202 of the UMRA, EPA
generally must prepare a written statement, including a cost-benefit
analysis, for proposed and final rules with “Federal mandates” that
may result in expenditures to State, local, and Tribal governments, in
the aggregate, or to the private sector, of $100 million or more in any
1 year.  Before promulgating an EPA rule for which a written statement
is needed, section 205 of the UMRA generally requires EPA to identify
and consider a reasonable number of regulatory alternatives and adopt
the least costly, most cost-effective or least burdensome alternative
that achieves the objectives of the rule.  The provisions of section 205
do not apply when they are inconsistent with applicable law.  Moreover,
section 205 allows EPA to adopt an alternative other than the least
costly, most cost-effective or least burdensome alternative if the
Administrator publishes with the final rule an explanation why that
alternative was not adopted.  Before EPA establishes any regulatory
requirements that may significantly or uniquely affect small
governments, including Tribal governments, it must have developed under
section 203 of the UMRA a small government agency plan.  The plan must
provide for notifying potentially affected small governments, enabling
officials of affected small governments to have meaningful and timely
input in the development of EPA regulatory proposals with significant
Federal intergovernmental mandates, and informing, educating, and
advising small governments on compliance with the regulatory
requirements.

This final rule does not contain a Federal mandate that may result in
expenditures of $100 million or more for State, local, and Tribal
governments, in the aggregate, or the private sector in any 1 year.  In
this final rule, EPA is deferring the effective date of nonattainment
designation for the Denver EAC.  Thus, this final rulemaking is not
subject to the requirements of sections 202 and 205 of the UMRA.

EPA has determined that this rule contains no regulatory requirements
that might significantly or uniquely affect small governments because
this rule does not contain Federal mandates.

E.  Executive Order 13132: Federalism

Executive Order 13132, entitled “Federalism” (64 FR 43255, August
10, 1999), requires EPA to develop an accountable process to ensure
“meaningful and timely input by State and local officials in the
development of regulatory policies that have federalism implications.”
 “Policies that have federalism implications” is defined in the E.O.
to include regulations that 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.”

This final rule does not have federalism implications.  It will 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.  The CAA establishes the scheme
whereby States take the lead in developing plans to meet the NAAQS.
This proposed rule would not modify the relationship of the States and
EPA for purposes of developing programs to implement the NAAQS.  Thus,
E.O. 13132 does not apply to this proposed rule.

F.  Executive Order 13175: Consultation and Coordination with Indian
Tribal Governments

Executive Order 13175, entitled “Consultation and Coordination with
Indian Tribal Governments” (65 FR 67249, November 9, 2000), requires
EPA to develop an accountable process to ensure “meaningful and timely
input by tribal officials in the development of regulatory policies that
have tribal implications.”  This final rule does not have “Tribal
implications” as specified in E.O. 13175.  It does not have a
substantial direct effect on one or more Indian Tribes, since no Tribe
has implemented a CAA program to attain the 8-hour ozone NAAQS at this
time or has participated in a compact.

G.  Executive Order 13045: Protection of Children from Environmental
Health and Safety Risks

Executive Order 13045: “Protection of Children From Environmental
Health and Safety Risks” (62 FR 19885,   April 23, 1997) applies to
any rule that (1) is determined to be “economically significant” as
defined under E.O. 12866, and (2) concerns an environmental health or
safety risk that EPA has reason to believe may have disproportionate
effect on children.  If the regulatory action meets both criteria, the
Agency must evaluate the environmental health or safety effects of the
planned rule on children, and explain why the planned regulation is
preferable to other potentially effective and reasonably feasible
alternatives considered by the Agency.

This final rule is not subject to the Executive Order because it is not
economically significant as defined in Executive Order 12866, and
because the Agency does not have reason to believe the environmental
health or safety risks addressed by this action present a
disproportionate risk to children.  This final rule is not subject to
E.O. 13045 because it does not establish an environmental standard
intended to mitigate health or safety risks.

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

	This final rule is not subject to E.O. 13211, “Actions Concerning
Regulations That Significantly Affect Energy Supply, Distribution, or
Use” (66 FR 28355; May 22, 2001 because it is not a significant
regulatory action under E.O. 12866.

I.  National Technology Transfer Advancement Act

Section 12(d) of the National Technology Transfer Advancement Act of
1995 (NTTAA), Public Law No. 104-113, section 12(d) (15 U.S.C. 272 note)
directs EPA to use voluntary consensus standards (VCS) in its regulatory
activities unless to do so would be inconsistent with applicable law or
otherwise impractical.  Voluntary consensus standards are technical
standards (e.g., materials specifications, test methods, sampling
procedures, and business practices) that are developed or adopted by VCS
bodies.  The NTTAA directs EPA to provide Congress, through OMB,
explanations when the Agency decides not to use available and applicable
VCS.

This final rule does not involve technical standards.  Therefore, EPA is
not considering the use of any VCS.  The EPA will encourage States that
have compact areas to consider the use of such standards, where
appropriate, in the development of their SIPs.

J.  Executive Order 12898: Federal Actions to Address Environmental
Justice in Minority Populations and Low-Income Populations

Executive Order 12898 (59 FR 7629; Feb. 16, 1994 establishes Federal
executive policy on environmental justice.  Its main provision directs
Federal agencies, to the greatest extent practicable and permitted by
law, to make environmental justice part of their mission by identifying
and addressing, as appropriate, disproportionately high and adverse
human health or environmental effects of their programs, policies, and
activities on minority populations and low-income populations in the
United States.

The EPA has determined that this final rule will not have
disproportionately high and adverse human health or environmental
effects on minority or low-income populations because it does not affect
the level of protection provided to human health or the environment.
The health and environmental risks associated with ozone were considered
in the establishment of the 8-hour, 0.08 ppm ozone NAAQS.  The level is
designed to be protective with an adequate margin of safety.

K. Congressional Review Act

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating the
rule must submit a rule report, which includes a copy of the rule, to
each House of the Congress and to the Comptroller General of the United
States.   The EPA will submit a report containing this rule and other
required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the United States prior
to publication of the rule in the Federal Register.  A major rule cannot
take effect until 60 days after it is published in the Federal Register.
 This action is not a “major rule” as defined by 5 U.S.C. 804(2).
This rule will be effective [INSERT DATE 30 DAYS AFTER DATE OF
PUBLICATION IN THE FEDERAL REGISTER]

L. Petitions for Judicial Review

Under section 307(b)(1) of the CAA, petitions for judicial review of
this action must be filed in the United States Court of Appeals for the
District of Columbia Circuit by [INSERT DATE 60 DAYS AFTER DATE OF
PUBLICATION IN THE FEDERAL REGISTER]. Filing a petition for
reconsideration by the Administrator of this final rule does not affect
the finality of this rule for the purposes of judicial review nor does
it extend the time within which a petition for judicial review must be
filed, and shall not postpone the effectiveness of such rule or action.
This action may not be challenged later in proceedings to enforce its
requirements.  See CAA Section 307(b)(2).

Final Extension of the Deferred Effective Date for 8-Hour Ozone NAAQS
for the Denver EAC – page 36 of 38

LIST OF SUBJECTS in 40 CFR PART 81

	Environmental protection, Air pollution control.

AUTHORITY: 42 U.S.C. 7408; 42 U.S.C. 7410; 42 U.S.C. 7501-7511f; 42
U.S.C. 7601(a)(1).

________________________________

Dated:

________________________________

Stephen L. Johnson,

Administrator.

For the reason set out in the preamble, title 40, chapter I of the Code
of Federal Regulations is amended as follows:

PART 81 - [Amended]

1.   The authority citation for part 81 continues to read as follows:

	Authority: 42 U.S.C. 7401, et seq.

Subpart C - Section 107 Attainment Status Designations

2.   Section 81.300 is amended by revising paragraphs (e)(3)(i) and
(e)(3)(ii)(B) and (C) to read as follows:

§81.300 Scope.

* * * * *

(e) * * *

(3) * * *

(i) General.  Notwithstanding clauses (i) through (iv) of section
107(d)(1)(B) of the Clean Air Act (42 U.S.C. 7407(d)(1)(B)), the
Administrator shall defer until April 15, 2008, the effective date of a
nonattainment designation of any area subject to a compact that does not
meet (or that contributes to ambient air quality in a nearby area that
does not meet) the 8-hour ozone national ambient air quality standard if
the Administrator determines that the area subject to a compact has met
the requirements in paragraphs (e)(2)(i) through (v) of this section.

(ii) * * *

* * * * *

3.  In §81.306, the table entitled “Colorado-Ozone (8-Hour
Standard)” is amended by revising footnote 2 to read as follows:

§81.306 Colorado.

* * * * *

Colorado-Ozone (8-Hour Standard)

* * * * * * *

2 Early Action Compact Area, effective date deferred until April 15,
2008.

* * * * *

 PAGE

 PAGE   32


[Federal Register: December 6, 2007 (Volume 72, Number 234)]
[Notices]
[Page 68875-68876]
[DOCID:fr06de07-46]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. CP08-25-000]

Transcontinental Gas Pipe Line Corporation; Notice of Application

November 28, 2007.
    Take notice that on November 13, 2007, Transcontinental Gas Pipe
Line Corporation (Transco), P.O. Box 1396, Houston, Texas 77251, filed
in Docket No. CP08-25-000 an application pursuant to section 7(b) of
the Natural Gas Act (NGA) and Part 157 of the Commission's regulations
for permission and approval to abandon by sale to DCP Midstream, LP
(DCP Midstream),\1\ Transco's onshore pipeline facilities in South
Texas upstream of Transco's La Gloria lateral in Jim Wells County,
Texas, and to abandon the related transportation and exchange services,
all as more fully set forth in the application which is on file with
the Commission and open to public inspection. The filing may also be
viewed on the Web at http://www.ferc.gov using the ``eLibrary'' link.

Enter the docket number excluding the last three digits in the docket
number field to access the document. For assistance, contact FERC at
<EMAIL_ADDRESS>or call toll-free,<PHONE_NUMBER> or TYY,

(202) 502-8659.
---------------------------------------------------------------------------

    \1\ Concurrently, DCP Midstream, LP, filed a Petition for
Declaratory Order with the Commission on November 13, 2007, in
Docket No. CP08-22-000.
---------------------------------------------------------------------------

    Transco proposes to abandon by sale to DCP Midstream and that DCP
Midstream has agreed to purchase Transco's 100 percent undivided
ownership interest in the following facilities, referred to as the
``South Texas facilities'': (1) The South Texas central line between
milepost 0.00 and 78.89, which consists of 37.63 miles of 10-inch
diameter pipeline and 41.26 miles of 14-inch diameter pipeline; (2) the
Starr lateral and loop, which consists of 23.17 miles of 10-inch
diameter pipeline and 18.7 miles of 20-inch diameter pipeline; (3) the
Carter Ranch lateral, which is comprised of the North Rucias lateral,
consisting of 7.9 miles of 8-inch diameter pipeline; the Carter Ranch
line, consisting of 1.63 miles of 6-inch pipeline and 0.38 miles of 4-
inch pipeline; and the North Rucias line, consisting of 0.72 miles of
6-inch diameter pipeline and 2.23 miles of 4-inch diameter pipeline;
(4) the Lacy-Tesoro-Inexco lateral, which consists of 1.94 miles of 6-
inch diameter pipeline; and (5) meter stations, valves, miscellaneous
field and tie-in piping, other appurtenances along the above pipeline
segments, and related realty and easement rights. Transco states that
the requested abandonment would have no impact on the daily design
capacity of, or operating conditions, on Transco's pipeline system.
    Transco also states that the proposed abandonment would enable
Transco to transfer facilities that are no longer integral to its
provision of natural gas transportation service and allow DCP
Midstream, a current owner and operator of natural gas gathering
facilities in Texas, to integrate the South Texas facilities with its
existing system to provide natural gas gathering and processing options
not currently available to customers on the facilities while
maintaining the ability to deliver natural gas to Transco's pipeline
system at the tailgate of the La Gloria processing plant.
    Any questions regarding this application should be directed to
Ingrid Germany, Staff Analyst, Certificates & Tariffs, P.O. Box 1396,
Houston, Texas 77251, at<PHONE_NUMBER>.
    There are two ways to become involved in the Commission's review of
this project. First, any person wishing to obtain legal status by
becoming a party to the proceedings for this project should, on or
before the comment date stated below, file with the Federal Energy
Regulatory Commission, 888 First Street, NE., Washington, DC 20426, a
motion to intervene in accordance with the requirements of the
Commission's Rules of Practice and Procedure (18 CFR 385.214 or
385.211) and the Regulations under the NGA (18 CFR 157.10). A person
obtaining party status will be placed on the service list maintained by
the Secretary of the Commission and will receive copies of

all documents filed by the applicant and by all other parties. A party
must submit 14 copies of filings made with the Commission and must mail
a copy to the applicant and to every other party in the proceeding.
Only parties to the proceeding can ask for court review of Commission
orders in the proceeding.
    However, a person does not have to intervene in order to have
comments considered. The second way to participate is by filing with
the Secretary of the Commission, as soon as possible, an original and
two copies of comments in support of or in opposition to this project.
The Commission will consider these comments in determining the
appropriate action to be taken, but the filing of a comment alone will
not serve to make the filer a party to the proceeding. The Commission's
rules require that persons filing comments in opposition to the project
provide copies of their protests only to the party or parties directly
involved in the protest.
    Persons who wish to comment only on the environmental review of
this project should submit an original and two copies of their comments
to the Secretary of the Commission. Environmental commenters will be
placed on the Commission's environmental mailing list, will receive
copies of the environmental documents, and will be notified of meetings
associated with the Commission's environmental review process.
Environmental commenters will not be required to serve copies of filed
documents on all other parties. However, the non-party commenters will
not receive copies of all documents filed by other parties or issued by
the Commission (except for the mailing of environmental documents
issued by the Commission) and will not have the right to seek court
review of the Commission's final order.
    Comments, protests and interventions may be filed electronically
via the Internet in lieu of paper. See, 18 CFR 385.2001(a)(1)(iii) and
the instructions on the Commission's Web site under the ``e-Filing''
link.
    Comment Date: December 19, 2007.

Kimberly D. Bose,
Secretary.
[FR Doc. E7-23619 Filed 12-5-07; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register Volume 81, Number 24 (Friday, February 5, 2016)]
[Notices]
[Pages 6322-6324]
[FR Doc No: 2016-02222]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 31977; 812-14458]

Medallion Financial Corp.; Notice of Application

February 1, 2016.
AGENCY: Securities and Exchange Commission (the ``Commission'').

ACTION: Notice of an application for an order under section 61(a)(3)(B)
of the Investment Company Act of 1940 (the ``Act'').

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Summary of Application: Applicant, Medallion Financial Corp., requests
an order approving a proposal to grant certain stock options to
directors who are not also employees or officers of Applicant (the
``Eligible Directors'') under its 2015 Non-Employee Director Stock
Option Plan (the ``Director Plan'').

Filing Dates: The application was filed on May 12, 2015, and amended on
September 25, 2015 and January 14, 2016.

Hearing or Notification of Hearing: An order granting the application
will be issued unless the Commission orders a hearing. Interested
persons may request a hearing by writing to the Commission's Secretary
and serving Applicant with a copy of the request, personally or by
mail. Hearing requests should be received by the Commission by 5:30
p.m. on February 26, 2016, and should be accompanied by proof of
service on Applicant, in the form of an affidavit or, for lawyers, a
certificate of service. Pursuant to rule 0-5 under the Act, hearing
requests should state the nature of the writer's interest, any facts
bearing upon the desirability of a hearing on the matter, the reason
for the request, and the issues contested. Persons who wish to be
notified of a hearing may request notification by writing to the
Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F
Street NE., Washington, DC 20549-1090; Applicant, 437 Madison Avenue,
38th Floor, New York, New York 10022.

FOR FURTHER INFORMATION CONTACT: Deepak T. Pai, Senior Counsel, at
(202) 551-6876, or Mary Kay Frech, Branch Chief, at<PHONE_NUMBER>
(Division of Investment Management, Office of Chief Counsel).

SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's Web site by searching for the file number, or an applicant
using the Company name box, at http://www.sec.gov/search/search.htm or
by calling<PHONE_NUMBER>.

Applicant's Representations

    1. Applicant, a Delaware corporation, is a business development
company (``BDC'') within the meaning of section 2(a)(48) of the Act.\1\
Applicant is a specialty finance company that has a leading position in
originating, acquiring and servicing loans that finance taxicab
medallions and various types of commercial businesses. Applicant
operates its businesses through four wholly-owned subsidiaries,
Medallion Funding LLC, Medallion Capital, Inc., Freshstart Venture
Capital Corp., and Medallion Bank.\2\ Applicant is managed by its
executive officers under the supervision of its board of directors
(``Board''). Applicant's investment decisions are made by its executive
officers under authority delegated by the Board. Applicant does not
have an external investment adviser within the meaning of section
2(a)(20) of the Act. Applicant's common stock is listed on the NASDAQ
Global Select Market.
---------------------------------------------------------------------------

    \1\ Section 2(a)(48) defines a BDC to be any closed-end
investment company that operates for the purpose of making
investments in securities described in sections 55(a)(1) through
55(a)(3) of the Act and makes available significant managerial
assistance with respect to the issuers of such securities.
    \2\ Applicant also conducts business through its asset-based
lending division, Medallion Business Credit, an originator of loans
to small businesses for the purpose of financing inventory and
receivables.
---------------------------------------------------------------------------

    2. Applicant requests an order under section 61(a)(3)(B) of the Act
approving its proposal to grant certain stock options under the
Director Plan to its Eligible Directors.\3\ Applicant has an eight
member Board, six of whom are Eligible Directors. Five of the six
Eligible Directors on the Board are not ``interested persons'' (as
defined in section 2(a)(19) of the Act) of Applicant. The Board
approved the Director Plan at a meeting held on March 12, 2015, and
Applicant's stockholders approved the Director Plan at the annual
meeting of stockholders held on June 5, 2015. The Director Plan will
become effective on the date on which the Commission issues an order on
the application (the ``Order Date'').\4\
---------------------------------------------------------------------------

    \3\ The Eligible Directors receive a $39,655 per year retainer
payment, $3,965 for each Board meeting attended, $1,130 for each
telephonic Board meeting, from $1,700 to $3,965 for each committee
meeting attended, and reimbursement for related expenses.
    \4\ Applicant previously obtained similar relief for its Amended
and Restated 1996 Non-Employee Director Stock Option Plan (the
``1996 Director Plan''), the 2006 Non-Employee Director Stock Option
Plan (the ``2006 Director Plan''), and the First Amended and
Restated 2006 Non-Employee Director Stock Option Plan (the ``2006
Amended Director Plan'').
---------------------------------------------------------------------------

    3. Applicant's Eligible Directors currently are eligible to receive
stock options under the 2006 Amended Director Plan and will be eligible
to receive options under the Director Plan on the Order Date. Under the
Director Plan, a maximum of 300,000 shares of Applicant's common stock,
in the aggregate, may be issued to Eligible Directors and there is no
limit on the number of shares of Applicant's common stock that may be
issued to any one Eligible Director. The Director Plan provides for
automatic grants of stock options to Eligible Directors. At each annual
meeting of Applicant's stockholders after the Order Date, each Eligible
Director elected or re-elected at such meeting to a three-year term
will automatically be granted an option to purchase 12,000 shares of
Applicant's common stock. Upon the election, reelection or appointment
of an Eligible Director to the Board other than at the

annual stockholders' meeting, that Eligible Director will be granted an
option to purchase that number of shares of common stock determined by
multiplying 12,000 by a fraction, the numerator of which is equal to
the number of whole months remaining in the new director's term and the
denominator of which is 36. The options granted under the Director Plan
will vest and become exercisable with respect to one-third of the
number of shares covered by such option on each of the first three
anniversaries of the date of the grant.
    4. Under the terms of the Director Plan, the exercise price of an
option will be the ``Fair Market Value'' of Applicant's common stock,
which is the closing price of the common stock as reported in the Wall
Street Journal, Northeast Edition, as quoted on the NASDAQ Global
Select Market on the date of grant, or if no such market value exists,
the fair market value of a share of common stock as determined by the
Board pursuant to a reasonable method adopted in good faith for such
purpose. Options granted under the Director Plan will expire ten years
from the date of grant and may not be transferred other than by will or
the laws of descent and distribution. Any Eligible Director holding
exercisable options under the Director Plan who ceases to be an
Eligible Director for any reason, other than permanent disability,
death or removal for cause, may exercise the rights the director had
under the options on the date the director ceased to be an Eligible
Director for a period of up to three months following that date. No
additional options held by the director will become exercisable after
the three month period. In the event of removal of an Eligible Director
for cause, all outstanding options held by such director shall
terminate as of the date of the director's removal. Upon the permanent
disability or death of an Eligible Director, those entitled to do so
under the director's will or the laws of descent and distribution will
have the right, at any time within twelve months after the date of
permanent disability or death, to exercise in whole or in part any
rights which were available to the director at the time of the
director's permanent disability or death.
    5. Applicant's officers and employees, including employee
directors, are currently eligible to receive options under Applicant's
Amended and Restated 2006 Employee Stock Option Plan (the ``2006
Employee Plan''), which replaced the Amended and Restated 1996 Stock
Option Plan (the ``1996 Employee Plan''), which expired on May 21,
2006. Applicant's employees are also eligible to receive grants of
restricted stock under its 2009 Employee Restricted Stock Plan (the
``2009 Restricted Stock Plan'').\5\ Eligible Directors are not eligible
to receive restricted stock under the 2009 Restricted Stock Plan or
stock options under the 2006 Employee Plan and are only eligible to
receive stock options under the 2006 Amended Director Plan currently
and under the Director Plan on the Order Date.
---------------------------------------------------------------------------

    \5\ The 2009 Restricted Stock Plan provides for the periodic
grant of shares of restricted stock (i.e., stock that, at the time
of issuance, is subject to certain forfeiture restrictions and thus
is restricted as to its transferability until such forfeiture
restrictions have lapsed) to employees. On February 13, 2015 the
Board approved the 2015 Employee Restricted Stock Plan (the ``2015
Restricted Stock Plan''), providing for the periodic grants of
shares of restricted stock for its employees, which will become
effective when approved by both Applicant's stockholders and the
Commission.
---------------------------------------------------------------------------

    6. Under the Director Plan, the 2015 Restricted Stock Plan, the
2009 Restricted Stock Plan, the 2006 Amended Director Plan and the 2006
Employee Plan, an aggregate of 2,545,909 shares of Applicant's common
stock have been reserved for issuance to Applicant's directors,
officers and employees (300,000 shares are reserved for issuance under
the Director Plan, 700,000 shares are reserved for issuance under the
2015 Restricted Stock Plan, 545,909 shares are reserved for issuance
under the 2009 Restricted Stock Plan,\6\ 200,000 shares are reserved
for issuance under the 2006 Amended Director Plan, and 800,000 shares
are reserved for issuance under the 2006 Employee Plan). Applicant has
no restricted stock, warrants, options or rights to purchase its
outstanding voting securities other than those granted or to be granted
to its directors, officers and employees pursuant to the 2015
Restricted Stock Plan, the 2009 Restricted Stock Plan, the Director
Plan, the 2006 Amended Director Plan, the 2006 Employee Plan and the
1996 Employee Plan.\7\
---------------------------------------------------------------------------

    \6\ Under the 2009 Restricted Stock Plan, 800,000 shares were
initially reserved for issuance, but as of June 11, 2015, no future
issuances of grants are permitted under the 2009 Restricted Stock
Plan.
    \7\ No options remain issued, issuable or exercisable under the
1996 Director Plan or the 2006 Director Plan.
---------------------------------------------------------------------------

    7. The amount of voting securities of Applicant that would, on the
Order Date, result from the grant of all restricted stock issued or
issuable under the 2009 Restricted Stock Plan and 2015 Restricted Stock
Plan is 1,245,909 shares; from the exercise of all options issued or
issuable to Applicant's directors under the Director Plan is 300,000
shares; from the exercise of all options issued or issuable to
Applicant's directors under the 2006 Amended Director Plan is 153,000
shares; from the exercise of all options issued or issuable to
Applicant's officers and employees under the 2006 Employee Plan is
422,520 shares; and from the exercise of all options issued or issuable
to Applicant's officers and employees under the 1996 Employee Plan is
58,442 shares, which totals approximately 5.12%, 1.23%, 0.63%, 1.74%,
and 0.24%, respectively, of the 24,346,693 shares of Applicant's common
stock outstanding on December 31, 2015. This totals 2,179,871 shares in
the aggregate, or approximately 8.95% of the 24,346,693 shares of
Applicant's common stock outstanding on December 31, 2015.

Applicant's Legal Analysis

    1. Section 63(3) of the Act permits a BDC to sell its common stock
at a price below current net asset value upon the exercise of any
option issued in accordance with section 61(a)(3). Section 61(a)(3)(B)
of the Act provides, in pertinent part, that a BDC may issue to its
non-employee directors options to purchase its voting securities
pursuant to an executive compensation plan, provided that: (a) The
options expire by their terms within ten years; (b) the exercise price
of the options is not less than the current market value of the
underlying securities at the date of the issuance of the options, or if
no market exists, the current net asset value of the voting securities;
(c) the proposal to issue the options is authorized by the BDC's
shareholders, and is approved by order of the Commission upon
application; (d) the options are not transferable except for
disposition by gift, will or intestacy; (e) no investment adviser of
the BDC receives any compensation described in section 205(a)(1) of the
Investment Advisers Act of 1940, except to the extent permitted by
paragraph (b)(1) or (b)(2) of that section; and (f) the BDC does not
have a profit-sharing plan as described in section 57(n) of the Act.
    2. In addition, section 61(a)(3) provides that the amount of the
BDC's voting securities that would result from the exercise of all
outstanding warrants, options, and rights at the time of issuance may
not exceed 25% of the BDC's outstanding voting securities, except that
if the amount of voting securities that would result from the exercise
of all outstanding warrants, options, and rights issued to the BDC's
directors, officers, and employees pursuant to any executive
compensation plan would exceed 15% of the BDC's outstanding voting
securities, then the total amount of voting securities that would
result from the exercise of all

outstanding warrants, options, and rights at the time of issuance will
not exceed 20% of the outstanding voting securities of the BDC.
    3. Applicant represents that its proposal to grant certain stock
options to Eligible Directors under the Director Plan meets all the
requirements of section 61(a)(3) of the Act. Applicant states that the
Board is actively involved in the oversight of Applicant's affairs and
that it relies extensively on the judgment and experience of its Board.
In addition to their duties as Board members generally, Applicant
states that the Eligible Directors provide guidance and advice on
financial and operational issues, credit and loan policies, asset
valuation and strategic direction, as well as serving on committees.
Applicant believes that the availability of options under the Director
Plan will provide significant at-risk incentives to Eligible Directors
to remain on the Board and devote their best efforts to ensure
Applicant's success. Applicant states that the options will provide a
means for the Eligible Directors to increase their ownership interests
in Applicant, thereby ensuring close alignment of their interests with
those of Applicant and its stockholders. Applicant asserts that by
providing incentives such as options, Applicant will be better able to
maintain continuity in the Board's membership and to attract and retain
the highly experienced, successful and motivated business and
professional people who are critical to Applicant's success as a BDC.
    4. As noted above, Applicant states that the amount of voting
securities that would on the Order Date result from the grant of all
restricted stock issued or issuable under the 2009 Restricted Stock
Plan and 2015 Restricted Stock Plan and the exercise of all outstanding
options issued or issuable to the directors, officers, and employees
under the Director Plan, 2006 Amended Director Plan, the 2006 Employee
Plan and the 1996 Employee Plan would be 2,179,871 shares of
Applicant's common stock, or approximately 8.95% of Applicant's shares
of common stock outstanding on December 31, 2015, which is below the
percentage limitations in the Act. Applicant asserts that, given the
relatively small amount of common stock issuable to Eligible Directors
upon their exercise of options under the Director Plan, the exercise of
such options would not, absent extraordinary circumstances, have a
substantial dilutive effect on the net asset value of Applicant's
common stock.

    For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-02222 Filed 2-4-16; 8:45 am]
BILLING CODE 8011-01-P


Assessing the Effect of Five Gasoline Properties on Exhaust Emissions from Light-Duty Vehicles certified to Tier-2 Standards

                       Analysis of Data from EPA Phase 3

                                (EPAct/V2/E-89)

                                 Appendix J.6
                              Final Model Fitting
                        Particulate Matter (PM) (Bag 3)

No. Observations:			   871
No. Vehicles:		  		     15
No. censored measurements:		     82
No. missing measurements:		       2
No. measurements removed:		       1
Model Type:				Tobit regression

J.6.1  Model Fitting based on the 11-term design model.

     Models fit for PM (Bag 3): (Grand Intercept not fit by Tobit models).
Model Term
                                   Notation
                                     Model

                                     Full
                                    FM1[1]
                                      FM2
                                      FM3
                                      FM4
                                      FM5
                                     etOH
Ze
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                     Arom
Za
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      RVP
Zr
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      T50
Z5
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      T90
Z9
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      x
                                 etOH x etOH
ZZee
                                      ●
                                      ●
                                      x

                                  T50 x T50
ZZ55
                                      ●
                                      ●
                                      ●
                                      x

                                 etOH x Arom
ZZea
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                  etOH x RVP
ZZer
                                      ●
                                      ●
                                      ●
                                      ●
                                      x

                                  etOH x T50
ZZe5
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                  etOH x T90
ZZe9
                                      ●
                                      x

1 Indicates "Full minus 1," etc.

  PM (Bag 3): Model fitting history, starting with the 11-term design model.
                                Fit Parameters

                             Test with respect to
                                Previous Model
Model
                                                                         p-1[1]
                                     -2lnL

                                                                           Dev.
                                                                              d
                                                                    Pr>χ[2]
Full Model
                                                                             11
                                   3224.082

FM1
                                                                             10
                                   3224.175

                                     0.093
                                       1
                                     0.760
FM2
                                                                              9
                                   3224.623

                                     0.448
                                       1
                                     0.503
FM3
                                                                              8
                                    3224.86

                                     0.237
                                       1
                                     0.626
FM4
                                                                              7
                                   3225.436

                                     0.576
                                       1
                                     0.448
FM5
                                                                              6
                                   3226.131

                                     0.695
                                       1
                                     0.404

[1] Total number of terms excludes the intercept, as the Tobit
models do not fit intercepts.
[2] Best fit with respect to the 17-term extended model.

PM (Bag 3): Coefficients and Tests of Effect for the Full and Reduced Models, with respect to the 11-term design model.

J.6.2 Model Fitting based on the 17-term extended model.

     Models fit for PM (Bag 3): (Grand Intercept not fit by Tobit models).
Model Term
                                   Notation
                                     Model

                                     Full
                                    FM4[1]
                                      FM5
                                      FM6
                                      FM7
                                      FM8
                                      FM9
                                     FM10
                                     etOH
Ze
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                     Arom
Za
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      RVP
Zr
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      T50
Z5
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      T90
Z9
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      x
                                 etOH x etOH
ZZee
                                      ●
                                      ●
                                      x

                                  T50 x T50
ZZ55
                                      ●
                                      ●
                                      ●
                                      ●
                                      x

                                 etOH x Arom
ZZea
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                  etOH x RVP
ZZer
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      x

                                  etOH x T50
ZZe5
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                  etOH x T90
ZZe9
                                      ●
                                      ●
                                      ●
                                      x

                                  T90 x T90
ZZ99
                                      ●
                                      x

                                  Arom x RVP
ZZar
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                  Arom x T50
ZZa5
                                      ●
                                      x

                                  Arom x T90
ZZa9
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      ●
                                      x

                                  T50 x T90
ZZ59
                                      ●
                                      x

                                  RVP x T90
ZZr9
                                      ●
                                      x

1 Indicates "Full minus 4," etc.

 PM (Bag 3): Model fitting history, starting with the 17-term extended model.
                                Fit Parameters

                             Test with respect to
                                Previous Model
Model
                                                                         p-1[1]
                                     -2lnL

                                                                           Dev.
                                                                              d
                                                                    Pr>χ[2]
Full Model
                                                                             17
                                   3215.611

FM4
                                                                             13
                                   3215.883

                                     0.272
                                       4
0.992
FM5
                                                                             12
                                   3216.627

                                     0.744
                                       1
0.388
FM6
                                                                             11
                                   3217.959

                                     1.332
                                       1
0.248
FM7
                                                                             10
                                   3219.173

                                     1.214
                                       1
0.271
FM8
                                                                              9
                                   3220.762

                                     1.589
                                       1
0.207
FM9
                                                                              8
                                   3222.431

                                     1.669
                                       1
0.196
FM10
                                                                              7
                                   3222.609

                                     0.178
                                       1
0.673

[1] Total number of terms excludes the intercept, as the Tobit
Models do not fit intercepts.
[2] Best fit with respect to the 17-term extended model.

PM (Bag 3): Coefficients and Tests of Effect for the Full and Reduced Models, with respect to the 17-term extended model.